INTESTATE ESTATE OF THE DECEASED ALFONSO M. TIAOQUI. GUILLERMO A. CU UNJIENG AND MARIANO CU UNJIENG, PETITIONERS AND APPELLANTS, VS. JOSE S. TIAOQUI AND ALFREDO HIDALGO RIZAL, A…

In the Court of First Instance of Manila,
Alfonso M. Tiaoqui, in life, instituted civil case No. 40801 against
Guillermo A. Cu Unjieng, Mariano Cu Unjieng and Rafael Fernandez for
the purpose of recovering from them the sum of P140,000. Upon a bond of
P20,000 filed by the plaintiff Tiaoqui, the court ordered the
preliminary attachment of the properties of the defendants. Said
attachment was the fifth preliminary attachment levied on the same
properties of the defendants because the Court of First Instance of
Manila, at the instance of the Hongkong & Shanghai Banking
Corporation, National City Bank, Malabon Sugar Company, and Smith, Bell
& Co., Ltd., and upon the bonds filed by said companies, had
previously issued the resulting writs. During the pendency of said
civil case, Alfonso M. Tiaoqui, died in the City of Manila on March 11,
1933, for which reason his intestate proceedings were commenced in the
Court of First Instance of Manila, special proceedings No. 43947, and
Jose S. Tiaoqui and Alfredo Hidalgo Rizal were appointed joint
administrators. In said civil case, the defendants Guillermo A. Cu
Unjieng and Mariano Cu Unjieng filed an amended answer setting up
special defenses and a counterclaim in the amount of P9,050,000. This
amount is distributed as follows: for losses suffered by them in the
credits, bonds and securities in which they were negotiating in China,
P3,000,000; for damages incurred by them by reason of the paralization
of their credits, bonds and securities business and on other properties
in China as well as in the Philippines, P2,050,000, and for injury to
their reputation, P4,000,000. In the meantime, the intestate
proceedings, followed their ordinary course. Commissioners on claims
and appraisal were appointed, who, after assessing the properties,
submitted their report stating that no claims had been presented
against the deceased. On November 8, 1933, the court, upon being
informed that no claims had been presented against the intestate
estate, ordered the joint administrators to present a final account and
a project of partition within the period of 15 days. On the 24th of
said month, the administrators filed a motion for extension of the
period for the presentation of the final account and the project of
partition, in view of the fact that the balancing of the business would
not be made until January, 1934, and furthermore, because there were
credits and properties of the administration which were the subject
matter of pending litigations. The court, deciding the motion, granted
an extension up to January 31, 1934. On January 27, 1934, the court, by
means of an order, authorized the administrators to substitute the
deceased Alfonso M. Tiaoqui as plaintiffs in civil case No. 40801. On
February 3d of said year, the administrators asked for an extension of
the time for the presentation of the final account and the project of
partition up to the end of said month, for the reason that the balance
sheet was still incomplete and the litigations on credits and
properties of the administration continued to be pending. On the 7th of
said month, the court granted said extension. On February 28th of the
same year, the administrators presented the final account and asked for
another extension of the time for filing the project of partition on
the ground that the litigations on the P140,000 and other properties of
the intestate estate continued to be pending and, therefore, could not
be included in the project of partition. On March 20th of said year,
the court approved the final account and ordered the administrators to
present the project of partition of the properties not involved in the
litigations, within 30 days. On April 20, 1934, the administrators
filed the project of partition so often required of them, and on July
3d of said year the court issued an order approving the project of
partition and requiring the administrators at the same time, after
payment of the inheritance tax, to deliver the properties adjudicated
to the heirs within fifteen (15) days and to verify the delivery of
said properties. On September 21st of the same year, the court ordered
the administrators to appear before it and explain why they had not
theretofore verified the payment of the inheritance tax and delivered
the properties to the heirs in accordance with the approved project of
partition. After the delay had been explained by the administrators,
the court, in an order of October 8th of said year, granted them 15
days to verify the payment of the inheritance tax and provided that the
case would again be called for hearing on the 27th, at 8 o’clock a. m.
On October 23, 1934, the administrators, after having paid the
inheritance tax, presented the deed of delivery of the properties to
the heirs, which deed was ratified oh the 25th of said month. The
acceptance by the heirs appeared thereinbelow. On the 29th of said
month the court issued an order relieving the administrators of their
duties and responsibilities and cancelling their respective bonds, in
view of the verification of the payment of the inheritance tax and the
delivery of the properties to the heirs, and ordered the closing and
final filing of the record of the intestate proceedings. On November
10, 1934, the administrators filed an ex parte petition for
the reopening of the case on the ground that civil case No. 40801
continued to be pending in the court and, were they to cease as such,
the deceased would be left without representation. On said date, the
court issued another order whereby it set aside the former one closing
the intestate proceedings, ordering the final filing of the record
thereof and relieving the administrators of their duties, and directed
that the case remain open for the sole purpose of enabling said
administrators to prosecute civil case No. 40801 to its termination.
The Cu Unjiengs, upon being informed of the latest proceedings followed
in the intestate case, filed a motion on November 17, 1934, praying for
the annulment of the deed of delivery executed by the administrators in
favor of the heirs, and for the return by said heirs, to the intestate
estate, of all the properties received by them, to answer for the
counterclaim in case it should prosper. The motion was objected to by
the administrators and after due hearing, the court, on January 30,
1935, denied it as well as the motion for reconsideration filed by the
defendants. The defendants finally exeepted thereto and interposed the
present appeal.

I. In denying the motion of the Cu Unjiengs dated November 17,
1934, praying for the cancellation of the deed of delivery executed by
the administrators and for the return by the heirs, to the intestate
estate, of all the properties received by them, the court declared
that, while the counterclaim of the Cu Unjiengs was proper according to
section 701 of the Code of Civil Procedure and it was not necessary to
present it as a claim before the committee on claims on the ground that
sections 746 and 747 of the same Code are not applicable thereto,
however, as the defendants did not duly appear in the intestate
proceedings and they neither informed the court of their counterclaim
nor asked for the retention of properties sufficient to pay said
counterclaim, in case the court should decide it favorably to them,
said defendants are not entitled to the cancellation of the deed of
delivery or to the return by the heirs, to the intestate estate, of the
properties received by them in the ordinary course of the intestate
proceedings. Against this ruling the defendants-appellants formulate
the first three assignments of error and contend: that they were not in
duty bound to inform the probate court of the pendency of their
counterclaim interposed in civil case No. 40801; that the court should
have ordered the cancellation of the deed of delivery and the return to
the intestate estate of all the properties received by the heirs, and
that, consequently, the court should have acted favorably on their
petition filed to that effect.

In discussing whether or not
the counterclaim of the Cu Unjiengs should have been presented to the
committee on claims and whether or not the same is barred for failure
to do so, the administrators argued that it was a contingent claim
according to section 746 of the Code of Civil Procedure and that it is
now barred for not having been presented to the committee on claims. On
the other hand, the defendants-appellants contended otherwise and
alleged that the counterclaim may be maintained in the civil case where
it was presented, in accordance with section 701 of said Code. Both
provisions read as follows:

” SEC.701. An executor or administrator may sue.—Nothing
in this chapter shall prevent an executor or administrator from
commencing and prosecuting an action commenced by the deceased in his
lifetime, for the recovery of a debt or claim, to final judgment, or
from having execution on a judgment, and in such case the defendant may
plead in offset the claims he has against the deceased, instead of
presenting them to the committee, and mutual claims may be offset in
such action; and if final judgment is rendered in favor of the
defendant, the judgment so rendered shall be considered the true
balance against the estate, as though the claim had been presented
before the committee.

“Such actions shall be prosecuted in
the same province and same court as they would have been if brought by
the deceased person while alive.”

“SEC. 746. Claims may be presented to committee.—If
a person is liable as surety for the deceased, or has other contingent
claims against his estate which can not be proved as a debt before the
committee, the same may be presented with the proof, to the committee,
who shall state in their report that such claim was presented to them.”

The first of the above-quoted legal provisions allows the
defendant, in the cases mentioned therein commenced or continued by the
administrator, to interpose a counterclaim against the deceased without
being bound to present it as a claim before the committee on claims.
This is the procedure followed by the defendants-appellants. Section
746 refers to contingent claims which must be presented to the
committee, to be decided within two years from the time limited for
other creditors in accordance with section 748.

In the case of E. Gaskell & Co. vs. Tan Sit (43 Phil.,
810), this court defined a contingent claim as that “in which liability
depends on some future event that may or may not happen, and which
makes it uncertain whether there will ever be any liability.”
Elaborating on the idea, it was stated: “The expression is used in
contradistinction to the absolute claim, which’ is subject to no
contingency and may be proved and allowed as a debt by the committee on
claims. The absolute claim is such a claim as, if contested between
living persons, would be proper subject of immediate legal action and
would supply a basis of a judgment for a sum certain. It will be noted
that the term ‘contingent’ has reference to the uncertainty of the
liability and not to the uncertainty in which the realization or
collection of the claim may be involved. The word ‘contingent,’ as used
in the original English, in the Code of Civil Procedure, conveys the
idea of ultimate uncertainty as to the happening of the event upon
which liability will arise; and it is not the precise equivalent of the
Spanish word ‘eventual’ by which it is commonly translated. The idea involved in the word ‘eventual’
may be satisfied with the idea of that which is uncertain only in
respect to the element of time. A thing that is certain to happen at
some time or other will eventually come to pass although the exact time
may be uncertain; to be contingent its happening must be wholly
uncertain until the event which fixes liability occurs.” Some courts of
the American Union have defined a contingent claim as follows: “A
contingent claim is where the liability depends upon some future event
which may or may not happen, and therefore makes it now wholly
uncertain whether there ever will be a liability. (Sargent vs. Kimball, 37 Vt., 320, 321 [quote Converse vs. Elward, 80 Kan., 558, 563; 103 P., 140; Grand Lodge I. O. O. F. vs. Troutman, 80 Kan., 441, 454; 103 P., 94Stevens vs. Stevens, 172 Mo., 28, 36; 72 S. W., 542; Stichter vs. Cox, 52 Nebr., 532, 536; 72 N. W., 848; Curley vs. Hand, 53 Vt., 524, 526.] To same effect Jorgenson vs. Larson, 85 Minn., 134, 136; 88 N. W., 439; Davis vs.
Davis, 137 Wis., 640, 648; 119 N. W., 334.)” (Corpus Juris, vol. 13, p.
114, notes.) “A claim which may never accrue; one which has not accrued
and which is dependent on the happening of some future event; one that
depends for its effect on some future event, which may or may not
happen.” (Corpus Juris, vol. 13, p. 114.)

From the definitions just quoted, it is evident that the
counterclaim of the defendants-appellants is not a contingent claim
because the obligation sought to be enforced against the deceased or
his legal representatives, the administrators, does not depend on an
uncertain or future event. According to the allegations of the
counterclaim contained in the amended answer, the obligation contracted
by the deceased arose from the time the conspiracy was carried out and
from the time the preliminary attachment was obtained illegally and
without any just cause. However, the administrators contend in their
brief that the counterclaim is of the nature of a contingent claim
because it can not be realized until final judgment has been rendered
by the court. This contention is sufficiently refuted by reproducing
what has been stated in the case of E. Gaskell & Co. vs. Tan Sit, supra, to the effect that “the term contingent
has reference to the uncertainty of the liability and not to the
uncertainty in which the realization or collection of the claim may be
involved.”

Referring now to the contention of the defendants-appellants that
they were not in duty bound to inform the probate court that they had
filed a counterclaim against the deceased, it is true that the Code of
Civil Procedure contains no provision directly imposing such duty on
them. However, if under section 602 of the same Code the probate court
alone had acquired jurisdiction to try and decide the settlement,
payment of debts and distribution of the estate of the deceased, to the
exclusion of all other courts, it cannot be denied that if the
defendants-appellants wanted some remedy from said court for the
protection of their rights, they should timely apply to it and ask for
the retention of properties sufficient to pay for the counterclaim in
case it should prosper. This court is not unmindful of the fact that in
this case the administrators were also in duty bound to inform the
probate court of the existence of the counterclaim, which duty was
partly complied with by them when they reiteratedly informed the court
that it was not possible to present a final account or project of
partition on the ground that there were pending litigations, among them
that brought against the defendants Cu Unjiengs, and when they applied
for the reopening of the intestate proceedings and for authority to
continue the suit against said defendants. Such duty, however, was
coextensive with that of the defendants-appellants and the latter were
not relieved thereof by the conduct that might have been observed by
the administrators, which conduct, en the other hand, can not be
considered improper taking into consideration all the circumstances
hereinbefore stated.

II. In the second place, the defendants-appellants claim that the
court was in duty bound to order the cancellation of the deed of
delivery and the return by the heirs of the properties received by
them. It can not be denied that in the ordinary course of an intestate
proceeding” the probate court should not authorize the delivery of the
properties until after payment has been made of the acknowledged debts
of the deceased and of the expenses of administration, and after the
approval of the project of partition (sec, 758 of the Code of Civil
Procedure), and that, as the counterclaim of the defendants-appellants
was pending decision in another court, it was improper to order either
the distribution of the inheritance or the delivery thereof to the
heirs, but in this case, we should not lose sight of the fact that, as
the court had not theretofore been directly informed of said
counterclaim, it understood that the inheritance was ready for
distribution, it appearing from the report of the committee that there
were no debts to be paid and it being inferable from the record that
the expenses of administration, including the inheritance tax, had
already been paid. If the defendants-appellants had no effective remedy
under the law in case their counterclaim should prosper, this court
would not hesitate to take another action and would order the
cancellation of the deed of delivery and the return of the properties
to the intestate estate. But the fact is that said appellants have
available the remedy afforded by section 731 of the Code of Civil
Procedure under which they may, after having obtained favorable
judgment, ask that the heirs contribute in proportion to the value of
the properties received by them, to pay their counterclaim (Pavia vs. De la Rosa, 8 Phil., 70; Lopez vs. Enriquez, 16 Phil., 336; Fabie vs.
Yulo, 24 Phil., 240). It may be argued that the remedy is not effective
because the heirs may in the meantime dispose of said properties, to
which it may be remarked that the risk, if any, may well be prevented
by adopting the precautionary measures authorized by law. In so
deciding the question, this court has furthermore taken into
consideration the fact that the preliminary attachment levied by the
deceased upon the properties of the defendants-appellants was in effect
nominal, having been the fifth, because prior to the issuance thereof
said properties had likewise been preliminarily attached by the
Hongkong & Shanghai Banking Corporation, National City Bank,
Malabon Sugar Co. and Smith, Bell & Co., Ltd. Under these
circumstances, it seems unnecessary to adopt so drastic a measure as to
result in depriving the heirs of their possession of the properties
received by them by order of the court and to the delivery of which the
appellants themselves have contributed in the manner already stated.

III. The last contention of the appellants does not require further
and extended consideration because it is a mere corollary of the
previous ones.

IV. With respect to the fourth and last assignment of error,
neither is it necessary to discuss it anew because it merely refers to
the denial of the motion for reconsideration filed by the
defendants-appellants.

The appealed order being in accordance with law, it is hereby
affirmed, with the costs of this instance to the defendants-appellants.
So ordered.

Avancena, C. J., Villa-Real, Abad Santos, Diaz, and Laurel, JJ., concur.

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CONCEPCION, J.,

I concur with the majority in the result. I am of the opinion that
the proper remedy that the appellants should have applied for is the
annulment of the order of the court of July 3, 1934, approving the
project of partition of the properties of the deceased Tiaoqui and
requiring the administrators, after payment of the inheritance tax, to
deliver said properties to the heirs of said deceased in accordance
with the approved partition. To ask, as the appellants have done, for
the annulment of the deed of delivery of the properties to the heirs
and for the return of said properties by the latter to the
administration of the intestate estate of Tiaoqui, without asking for
the annulment of the order approving the partition which is the root
and legal reason for said delivery of the properties to the heirs, was
to ask for an inadequate and ineffective remedy for the protection of
their rights, that is, to secure the payment of their counterclaim in
case it should prosper against the heirs. However, as the appellants,
for some unknown reason, failed to file any motion to set aside said
order of July 3, 1934, or to appeal therefrom the only remedy open to
them, in my opinion, was to bring a separate civil action for the
annulment of the order in question, utilizing, in the meantime and from
the commencement of the action, the preventive measures prescribed by
the Code of Civil Procedure to restrain the heirs from disposing of the
properties of resulting in leaving the decision that may be rendered
entirely ineffective thereby annulling the partition.