DOLORES C. VDA. DE GIL, ADMINISTRATRIX AND APPELLEE, VS. AGUSTIN CANCIO, CLAIMANT AND APPELLANT.

Vda. de Gil versus Cancio

The Case

This is a case about an estate, a loan taken during the Japanese occupation, and a promise to pay that promise with land. Dolores C. Vda. de Gil, as co-administratrix of the estate of the late Carlos Gil, Senior, opposed the approval of a deed of sale that would have transferred two residential lots and a house in Guagua, Pampanga to Agustin Cancio. Cancio, the claimant, insisted that the sale be approved because the probate court had earlier authorized it. The case matters because it fixes the rule that an heir may sell his interest in property under administration, and that the probate court has jurisdiction to approve such a sale, so that the buyer need not be sent away to file a separate action.

Procedural History

The matter began as a motion filed by the administratrix in the testate proceedings for the settlement of the estate of Carlos Gil, Senior. The probate court, through Judge Ramon R. San Jose, approved the motion and authorized the execution of the deed of transfer, on condition that the original deed be submitted to the court for approval. After the administratrix died, the deed was executed by the co-administratrix, Dolores C. Vda. de Gil, who herself asked the court to approve it. The probate court then directed her to pay the estate and inheritance taxes first. Several years passed and nothing was done. Cancio filed a motion reiterating the request for approval, and the co-administratrix opposed it. The probate court, through Judge Antonio Cañizares, issued an order denying the petition and setting aside the earlier order of approval, on the theory that the obligation was personal to the debtors and had no connection with the estate, so that Cancio's claim should be litigated in a separate action. Cancio appealed to the Court of Appeals, which certified the case to the Supreme Court because it involved only questions of law.

Facts

Carlos Gil, Senior, died testate in Manila in November 1943. In his will he instituted his widow, Isabel Herreros, as his exclusive heir, subject to the condition that upon her death the estate would pass to Carlos Gil, Junior, his adopted son. The will was admitted to probate and the widow was appointed administratrix. Among the properties of the estate were two parcels of residential land and a house in Guagua, Pampanga.

During the Japanese occupation, the widow Isabel and the adopted son Carlos borrowed 89,000 pesos from Agustin Cancio. In payment, they agreed in November 1944 to transfer the two lots to Cancio after the same had been finally adjudicated to both or either of them. Carlos later died. In June 1954, Isabel, as administratrix, filed a motion asking the probate court to authorize her to execute the deed of transfer to Cancio. Dolores C. Vda. de Carlos Gil, Junior, as guardian of her minor children, expressed her conformity. The probate court approved the motion, conditioned on the submission of the original deed for the court's approval.

Isabel died in July 1956 before she could execute the deed. Dolores, as co-administratrix, executed the deed herself and asked the court to approve it. The probate court ordered her to pay the estate and inheritance taxes first. Nothing was done for several years. In April 1959, Cancio filed a motion reiterating the request for approval, and the co-administratrix opposed it, claiming that the agreement had been made without court authority, that the properties had never been finally adjudicated to the vendors, and that the deed should be treated only as an equitable mortgage. The probate court denied the petition and set aside its earlier order of approval.

Issues

• Whether or not the probate court may approve a sale of estate property made by the heirs to pay a loan they contracted, where the sale was earlier authorized by the court.
• Whether or not the co-administratrix is estopped from opposing the very sale she herself asked the court to approve.
• Whether or not the buyer's claim must be threshed out in a separate action rather than in the probate proceedings.

Applicable Provisions

Section 4 of Rule 89 of the Rules of Court provides:

When it appears that the sale of the whole or a part of the real or personal estate, will be beneficial to the heirs, devisees, legatees, and other interested persons, the court may, upon application of the executor or administrator and on written notice to the heirs, devisees, and legatees who are interested in the estate to be sold, authorize the executor or administrator to sell the whole or a part of said estate, although not necessary to pay debts, legacies, or expenses of administration.

This provision supplies the probate court's authority to approve the sale, which the Court found was validly exercised here.

Article 1430 of the Civil Code provides:

Article 1430. The widow and children of the deceased are entitled to certain allowances for their support out of the estate pending its liquidation and until their shares have been delivered to them.

The Court used this provision to explain why the widow and the adopted son borrowed money during the occupation, since the estate was then unproductive and they needed support.

Ruling

On the first issue, the Court held that the probate court had authority to approve the sale. The widow and the adopted son, as prospective heirs, borrowed money to support themselves while the estate was under liquidation, a matter that comes within the purview of Article 1430. The probate court approved the agreement and authorized the administratrix to execute the deed, subject to the court's approval, and this is sanctioned by Section 4 of Rule 89. The objection that the agreement was made without court authority has no factual basis.

On the second issue, the Court held that the co-administratrix is estopped from disputing the sale, because she herself, as co-administratrix, filed the petition asking for its approval. The Court also held that an heir may sell whatever right, interest, or participation he may have in property under administration, a matter that comes under the jurisdiction of the probate court.

On the third issue, the Court held that it was error for the probate court to say that the matter should be threshed out in a separate action. The condition that the properties be finally adjudicated to the heirs was of no consequence, because the properties were in fact inherited first by Isabel and later by the children of Carlos Gil, Junior, charged with the commitment in favor of Cancio.

Doctrine

An heir may sell whatever right, interest, or participation he may have in property under administration, and the probate court has jurisdiction to approve that sale. Under Section 4 of Rule 89, the probate court may authorize the sale of estate property when it appears beneficial to the heirs and other interested persons, even if not necessary to pay debts. A party who asks the court to approve a sale is estopped from later opposing the same sale. The buyer of estate property need not be sent to a separate action where the probate court itself has jurisdiction over the approval of the sale.

Disposition

The Supreme Court set aside the order appealed from and granted Cancio's motion for approval of the deed of sale, without costs. Cancio won.

Remember This

An heir may sell his interest in property under administration, and the probate court may approve that sale under Section 4 of Rule 89. Examiners use this case to test the extent of probate jurisdiction and the application of estoppel against an administrator who turns around and opposes her own petition.