IN THE MATTER OF THE INTESTATE ESTATE OF FELISA F. HARRIS, DECEASED. ANNE H. MOLL, ADMINISTRATRIX AND APPELLANT, VS. ROSE HARRIS AND WILLIAM HARRIS, PETITIONERS AND APPELLEES.

Moll versus Harris

The Case

This is the case of Moll versus Harris, decided by the Supreme Court in December 1959. It began as a special proceeding for the settlement of the intestate estate of Felisa F. Harris, and it reached the Court as an appeal by the administratrix, Anne Harris Moll, from an order of the Court of First Instance of Rizal removing her from office and ordering her to restore funds to the estate. The case matters because it states a rule every bar candidate must carry: an administrator who obtains money as administrator, under an authority she herself asked for, cannot later escape accountability by attacking the validity of that very authority. She must account for the funds and place them at the disposal of the court.

Procedural History

The administratrix filed a verified ex parte petition with the Court of First Instance of Rizal, asking for authority to mortgage the house and lot under her administration. The court granted the authority. After she disposed of the loan proceeds in a manner the court found to be a grave violation of that authority, the court, on January 30, 1956, issued the order now on appeal: it removed her as administratrix, ordered her to reimburse the estate the sum of 11,687 pesos and 67 centavos within thirty days from notice, and directed her to submit a statement of the value of the fifty five common shares of La Fabrica de Cerveza de San Miguel sold on March 19, 1955, and to deposit with the Clerk of Court the sum of 1,700 pesos placed in her own account at the Commercial Bank and Trust Company.

On February 6, 1956, the administratrix appealed to the Court of Appeals. That Court, in a resolution dated April 28, 1958, certified the case to the Supreme Court, holding that the main questions raised were purely of law and fell within the exclusive appellate jurisdiction of the Supreme Court. The Supreme Court then decided the appeal.

Facts

Felisa F. Harris died, leaving an intestate estate and five surviving children. Her daughter, Anne Harris Moll, served as administratrix. On September 15, 1955, the administratrix filed a verified ex parte petition for authority to mortgage the house and lot under her administration, situated in San Juan, Rizal, with an assessed value of 10,340 pesos. The stated purpose was to secure funds to finish the construction of the house erected on the lot. Two of the surviving children, William and Rose Harris, gave their express conformity. On September 17, 1955, the court granted authority to mortgage the property for a sum not to exceed 20,000 pesos, and it expressly limited the amount to the purpose stated in the petition, namely, finishing the construction of the house and lot.

On September 22, 1955, contrary to the authority granted, the administratrix obtained from the Philippine National Bank an agricultural or commercial loan of 19,000 pesos. Out of the proceeds, she paid her husband, Caruso S. Moll, 6,000 pesos as reimbursement for his alleged advances for the construction of the house during the lifetime of the deceased. She paid 500 pesos each to Rose and William Harris. And she invested the balance of 11,687 pesos and 67 centavos in Moll Enterprises, allegedly to derive profits with which to pay the obligations of the intestacy. The mortgage constituted in favor of the Philippine National Bank to guarantee the loan was never submitted to the court for approval.

Required to explain, the administratrix claimed that the dispositions were made with the verbal conformity of the petitioners. She prayed that the order requiring her to deposit the proceeds with a banking institution be reconsidered, and that the order granting authority be modified to authorize the dispositions she had already made, which she claimed were in good faith and beneficial to the estate. The petitioners opposed her explanation. The trial court found the dispositions to be a grave violation of the authority granted and issued the order of removal and restitution.

Issues

• Whether or not the authority to mortgage was validly granted.
• Whether or not the mortgage contract executed in virtue of that authority is valid and binding upon the estate.
• Whether or not the proceeds of the mortgage are funds of the administration of the estate which the administratrix must account for.

Applicable Provisions

The decision does not quote any statutory provision. It rests on the procedural rule of accountability of an administrator to the court that appointed her, and on the principle of estoppel, which the Court applies directly to the facts. No provision is therefore quoted here, because none is quoted or construed in the text of the decision.

Ruling

The Court held that the three questions certified by the Court of Appeals need not be decided in this instance. The administratrix is in estoppel to invoke the invalidity of the authority granted her at her own behest, as well as the invalidity of the mortgage she executed, especially since the mortgagee, the Philippine National Bank, is not a party to the proceedings. A party cannot take advantage of her own irregular, if not illegal, acts and argue from them that she is not accountable to the estate for the funds she received, on the ground that the authority by which she obtained them was invalid and that the money therefore did not belong to the estate.

The Court stressed the decisive fact: the money was delivered to her and receipted for by her as administratrix of the estate. Whether the authority granted to her was sufficient or not, and whether the estate is bound or not, she must account for the funds and place them under the disposal of the court that extended the authority to her. The trial court did exactly this, and the Court found no reason to disturb its finding.

Doctrine

An administrator who receives money in her official capacity is accountable for it to the estate and to the court that granted her the authority, regardless of any defect in that authority. She cannot invoke the invalidity of an authority she herself sought in order to avoid accounting for the funds. This is the rule of estoppel: a party may not take advantage of her own irregular or illegal acts. The doctrine ties directly to the Court's holding that the administratrix must account for the funds and place them under the disposal of the court, and it explains why the Court did not need to pass upon the validity of the mortgage, especially in the absence of the mortgagee as a party.

Disposition

The Supreme Court affirmed the order of the trial court removing the administratrix and ordering restitution, with costs against the appellant.

Remember This

Memorize this line: an administrator cannot attack the validity of an authority she herself requested in order to escape accountability for funds she received as administrator. Examiners use this case to test estoppel and the accountability of a fiduciary, especially where the validity of the authority or of the mortgage is raised without the mortgagee being a party.