be the full and fair equivalent of the property taken from the owner by the expropriator, the
equivalent being real, substantial, full and ample. (Land Bank of the Philippines vs.
Natividad, 458 SCRA 441 [2005])

——o0o——

G.R. No. 164108.  May 8, 2009.*

ALFREDO HILADO, LOPEZ SUGAR CORPORATION, FIRST FARMERS HOLDING

CORPORATION, petitioners,  vs. THE HONORABLE COURT OF  APPEALS, THE
HONORABLE AMOR A. REYES, Presiding Judge, Regional Trial Court of Manila, Branch 21
and ADMINISTRATRIX JULITA CAMPOS BENEDICTO, respondents.

Wills and Succession; Settlement of Estates; Intervention; Notwithstanding Section 2 of Rule 72,
intervention as set forth under Rule 19 does not extend to creditors of a decedent whose credit is based on a
contingent claim—the definition of “intervention” under Rule 19 simply does not accommodate contingent
claims.—It is not immediately evident that intervention under the Rules of Civil Procedure necessarily
comes into operation in special proceedings. The settlement of estates of deceased persons fall within the
rules of special proceedings under the Rules of Court, not the Rules on Civil Procedure. Section 2, Rule 72
further provides that “[i]n the absence of special provisions, the rules provided for in ordinary actions shall
be, as far as practicable, applicable to special proceedings.” We can readily conclude that notwithstanding
Section 2 of Rule 72, intervention as set forth under Rule 19 does not extend to creditors of a decedent whose
credit is based on a contingent claim. The definition of “intervention” under Rule 19 simply does not
accommodate contingent claims.

_______________

* SECOND DIVISION.

465

VOL. 587, MAY 8, 2009 465

Hilado vs. Court of Appeals

Same; Same; Same; Torts; Actions for tort or quasi-delict, being as they are civil, survive the death of the
decedent and may be commenced against the administrator pursuant to Section 1, Rule 87.—Had the claims
of petitioners against Benedicto been based on contract, whether express or implied, then they should have
filed their claim, even if contingent, under the aegis of the notice to creditors to be issued by the court
immediately after granting letters of administration and published by the administrator immediately after
the issuance of such notice. However, it appears that the claims against Benedicto were based on tort, as
they arose from his actions in connection with Philsucom, Nasutra and Traders Royal Bank. Civil actions for
tort or quasi-delict do not fall within the class of claims to be filed under the notice to creditors required
under Rule 86. These actions, being as they are civil, survive the death of the decedent and may be
commenced against the administrator pursuant to Section 1, Rule 87. Indeed, the records indicate that the
intestate estate of Benedicto, as represented by its administrator, was successfully impleaded in Civil Case
No. 11178, whereas the other civil case was already pending review before this Court at the time of
Benedicto’s death.
Same; Same; Same; While there is no general right on the part of a creditor or any person interested in
the estate to intervene on the part of the petitioners, they may be allowed to seek certain prayers or reliefs from
the intestate court not explicitly provided for under the Rules, if the prayer or relief sought is necessary to
protect their interest in the estate, and there is no other modality under the Rules by which such interests can
be protected—it is under this standard that we assess the three prayers sought by petitioners.—In the same
manner that the Rules on Special Proceedings do not provide a creditor or any person interested in the
estate, the right to participate in every aspect of the testate or intestate proceedings, but instead provides
for specific instances when such persons may accordingly act in those proceedings, we deem that while there
is no general right to intervene on the part of the petitioners, they may be allowed to seek certain prayers or
reliefs from the intestate court not explicitly provided for under the Rules, if the prayer or relief sought is
necessary to protect their interest in the estate, and there is no other modality under the Rules by which
such interests can be protected. It is under this standard that we assess the three prayers sought by
petitioners.
466

466 SUPREME COURT REPORTS

ANNOTATED

Hilado vs. Court of Appeals

Same; Same; Same; Allowing creditors, contingent or otherwise, access to the records of the intestate
proceedings is an eminently preferable precedent than mandating the service of court processes and pleadings
upon them; Nonetheless, in the instances that the Rules on Special Proceedings do require notice to any or all
“interested parties, petitioners as “interested parties” will be entitled to such notice.—Allowing creditors,
contingent or otherwise, access to the records of the intestate proceedings is an eminently preferable
precedent than mandating the service of court processes and pleadings upon them. In either case, the
interest of the creditor in seeing to it that the assets are being preserved and disposed of in accordance with
the rules will be duly satisfied. Acknowledging their right to access the records, rather than entitling them
to the service of every court order or pleading no matter how relevant to their individual claim, will be less
cumbersome on the intestate court, the administrator and the heirs of the decedent, while providing a viable
means by which the interests of the creditors in the estate are preserved. Nonetheless, in the instances that
the Rules on Special Proceedings do require notice to any or all “interested parties” the petitioners as
“interested parties” will be entitled to such notice. The instances when notice has to be given to interested
parties are provided in: (1) Sec. 10, Rule 85 in reference to the time and place of examining and allowing the
account of the executor or administrator; (2) Sec. 7(b) of Rule 89 concerning the petition to authorize the
executor or administrator to sell personal estate, or to sell, mortgage or otherwise encumber real estates;
and; (3) Sec. 1, Rule 90 regarding the hearing for the application for an order for distribution of the estate
residue. After all, even the administratrix has acknowledged in her submitted inventory, the existence of the
pending cases filed by the petitioners.
Same; Same; Same; There are reliefs available to compel an administrator to return to the court a true
inventory and appraisal of all the real and personal estate of the deceased within three (3) months from
appointment and to render an account of his administration within one (1) year from receipt of the letters
testamentary or of administration, but a person whose claim against the estate is still contingent is not the
party entitled to do so.—Section 1 of Rule 83 requires the administrator to return to the court a true
inventory and appraisal of all the real and personal estate of the deceased within three (3) months from
appointment, while Section 8 of Rule
467

VOL. 587, MAY 8, 2009 467

 Hilado vs. Court of Appeals

85 requires the administrator to render an account of his administration within one (1) year from
receipt of the letters testamentary or of administration. We do not doubt that there are reliefs available to
compel an administrator to perform either duty, but a person whose claim against the estate is still
contingent is not the party entitled to do so. Still, even if the administrator did delay in the performance of
these duties in the context of dissipating the assets of the estate, there are protections enforced and
available under Rule 88 to protect the interests of those with contingent claims against the estate.
Same; Same; Same; While Section 2, Rule 82 is silent as to who may seek with the court the removal of
the administrator, the Court does not doubt that a creditor, even a contingent one, would have the personality
to seek such relief.—Concerning complaints against the general competence of the administrator, the proper
remedy is to seek the removal of the administrator in accordance with Section 2, Rule 82. While the
provision is silent as to who may seek with the court the removal of the administrator, we do not doubt that
a creditor, even a contingent one, would have the personality to seek such relief. After all, the interest of the
creditor in the estate relates to the preservation of sufficient assets to answer for the debt, and the general
competence or good faith of the administrator is necessary to fulfill such purpose.

PETITION for review on certiorari of a decision of the Court of Appeals.

   The facts are stated in the opinion of the Court.
  Andres H. Hagad, Daniel H. Hagad, Victor Cabalusa & Ralph A. Sarmiento for petitioners.
  Dominador R. Santiago for respondent.

TINGA,  J.:
The well-known sugar magnate Roberto S. Benedicto died intestate on 15 May 2000. He was
survived by his wife, private respondent Julita Campos Benedicto (administratrix
468

468 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

Benedicto), and his only daughter, Francisca Benedicto-Paulino.1 At the time of his death, there
were two pending civil cases against Benedicto involving the petitioners. The first, Civil Case No.
95-9137, was then pending with the Regional Trial Court (RTC) of Bacolod City, Branch 44, with
petitioner Alfredo Hilado as one of the plaintiffs therein. The second, Civil Case No. 11178, was
then pending with the RTC of Bacolod City, Branch 44, with petitioners Lopez Sugar Corporation
and First Farmers Holding Corporation as one of the plaintiffs therein.2
On 25 May 2000, private respondent Julita Campos Benedicto filed with the RTC of Manila a
petition for the issuance of letters of administration in her favor, pursuant to Section 6, Rule 78 of
the Revised Rules of Court. The petition was raffled to Branch 21, presided by respondent Judge
Amor A. Reyes. Said petition acknowledged the value of the assets of the decedent to be P5
Million, “net of liabilities.”3  On 2 August 2000, the Manila RTC issued an order appointing
private respondent as administrator of the estate of her deceased husband, and issuing letters of
administration in her favor.4 In January 2001, private respondent submitted an Inventory of the
Estate, Lists of Personal and Real Properties, and Liabilities of the Estate of her deceased
husband.5  In the List of Liabilities attached to the inventory, private respondent included as
among the liabilities, the above-mentioned two pending claims then being litigated before the
Bacolod City courts.6 Private respondent stated that the amounts of liability corresponding to the
two cases as P136,045,772.50 for Civil Case No. 95-9137 and P35,198,697.40 for Civil Case No.
_______________

1 Rollo, p. 45.
2 Id., at p. 13.
3 Id., at p. 56.
4 Id., at pp. 67-69.
5 Id., at pp. 76-85A.
6 Id., at p. 85-A.

469

VOL. 587, MAY 8, 2009 469

Hilado vs. Court of Appeals

11178.7  Thereafter, the Manila RTC required private respondent to submit a complete and
updated inventory and appraisal report pertaining to the estate.8
On 24 September 2001, petitioners filed with the Manila RTC a Manifestation/Motion  Ex
Abundanti Cautela,9praying that they be furnished with copies of all processes and orders
pertaining to the intestate proceedings. Private respondent opposed the manifestation/motion,
disputing the personality of petitioners to intervene in the intestate proceedings of her husband.
Even before the Manila RTC acted on the manifestation/motion, petitioners filed an omnibus
motion praying that the Manila RTC set a deadline for the submission by private respondent of
the required inventory of the decedent’s estate.10 Petitioners also filed other pleadings or motions
with the Manila RTC, alleging lapses on the part of private respondent in her administration of
the estate, and assailing the inventory that had been submitted thus far as unverified,
incomplete and inaccurate.
On 2 January 2002, the Manila RTC issued an order denying the manifestation/motion, on the
ground that petitioners are not interested parties within the contemplation of the Rules of Court
to intervene in the intestate proceedings.11 After the Manila RTC had denied petitioners’ motion
for reconsideration, a petition for certiorari was filed with the Court of Appeals. The petition
argued in general that petitioners had the right to intervene in the intestate proceedings of
Roberto Benedicto, the latter being the defendant in the civil cases they lodged with the Bacolod
RTC.

_______________

7  Id.
8  Id., at p. 87.
9  Id., at p. 101-104.
10 Id., at pp. 121-125.
11 Id., at pp. 132-133.

470

470 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

On 27 February 2004, the Court of Appeals promulgated a decision12 dismissing the petition

and declaring that the Manila RTC did not abuse its discretion in refusing to allow petitioners to
intervene in the intestate proceedings. The allowance or disallowance of a motion to intervene,
according to the appellate court, is addressed to the sound discretion of the court. The Court of
Appeals cited the fact that the claims of petitioners against the decedent were in fact contingent
or expectant, as these were still pending litigation in separate proceedings before other courts.
Hence, the present petition. In essence, petitioners argue that the lower courts erred in
denying them the right to intervene in the intestate proceedings of the estate of Roberto
Benedicto. Interestingly, the rules of procedure they cite in support of their argument is not the
rule on intervention, but rather various other provisions of the Rules on Special Proceedings.13
To recall, petitioners had sought three specific reliefs that were denied by the courts a quo. First,
they prayed that they be henceforth furnished “copies of all processes and orders issued” by the
intestate court as well as the pleadings filed by administratrix Benedicto with the said
court.14  Second, they prayed that the intestate court set a deadline for the submission by
administratrix Benedicto to submit a verified and complete inventory of the estate, and upon
submission thereof, order the inheritance tax appraisers of the Bureau of Internal Revenue to
assist in the appraisal of the fair market value of the same.15 Third, petitioners moved that the
intestate court set a deadline for the submission by the adminis-

_______________

12  Id., at pp. 45-52. Decision penned by Associate Justice Amelita G. Tolentino of the Sixteenth Division, and
concurred in by Associate Justices Eloy R. Bello, Jr. and Magdangal M. De Leon.
13 More particularly, the Rules on Settlement of Estates of Deceased Persons. See Rules 73 to 91, Revised Rules of
Court.
14 See Rollo, p. 103.
15 Id., at p. 124.

471

VOL. 587, MAY 8, 2009 471

Hilado vs. Court of Appeals

trator of her verified annual account, and, upon submission thereof, set the date for her
examination under oath with respect thereto, with due notice to them and other parties
interested in the collation, preservation and disposition of the estate.16
The Court of Appeals chose to view the matter from a perspective solely informed by the rule
on intervention. We can readily agree with the Court of Appeals on that point. Section 1 of Rule
19 of the 1997 Rules of Civil Procedure requires that an intervenor “has a legal interest in the
matter in litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in the
custody of the court x x x” While the language of Section 1, Rule 19 does not literally preclude
petitioners from intervening in the intestate proceedings, case law has consistently held that the
legal interest required of an intervenor “must be actual and material, direct and immediate, and
not simply contingent and expectant.”17
Nonetheless, it is not immediately evident that intervention under the Rules of Civil
Procedure necessarily comes into operation in special proceedings. The settlement of estates of
deceased persons fall within the rules of special proceedings under the Rules of Court,18 not the
Rules on Civil Procedure. Section 2, Rule 72 further provides that “[i]n the absence of special
provisions, the rules provided for in ordinary actions shall be, as far as practicable, applicable to
special proceedings.”
We can readily conclude that notwithstanding Section 2 of Rule 72, intervention as set forth
under Rule 19 does not

_______________
 16 Id., at pp. 124-125.
17 Batama Farmers’ Cooperative Marketing Association, Inc., et al. v. Hon. Rosal, etc., et al., 149 Phil. 514, 519; 42
SCRA 408, 412 (1971).
18 See Section 1(a), Rule 72, Rules of Court.

472

472 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

extend to creditors of a decedent whose credit is based on a contingent claim. The definition of
“intervention” under Rule 19 simply does not accommodate contingent claims.
Yet, even as petitioners now contend before us that they have the right to intervene in the
intestate proceedings of Roberto Benedicto, the reliefs they had sought then before the RTC, and
also now before us, do not square with their recognition as intervenors. In short, even if it were
declared that petitioners have no right to intervene in accordance with Rule 19, it would not
necessarily mean the disallowance of the reliefs they had sought before the RTC since the right to
intervene is not one of those reliefs.
 To better put across what the ultimate disposition of this petition should be, let us now turn
our focus to the Rules on Special Proceedings.
In several instances, the Rules on Special Proceedings entitle “any interested persons” or “any
persons interested in the estate” to participate in varying capacities in the testate or intestate
proceedings. Petitioners cite these provisions before us, namely: (1) Section 1, Rule 79, which
recognizes the right of “any person interested” to oppose the issuance of letters testamentary and
to file a petition for administration”; (2) Section 3, Rule 79, which mandates the giving of notice of
hearing on the petition for letters of administration to the known heirs, creditors, and “to any
other persons believed to have interest in the estate”; (3) Section 1, Rule 76, which allows a
“person interested in the estate” to petition for the allowance of a will; (4) Section 6 of Rule 87,
which allows an individual interested in the estate of the deceased “to complain to the court of the
concealment, embezzlement, or conveyance of any asset of the decedent, or of evidence of the
decedent’s title or interest therein”; (5) Section 10 of Rule 85, which requires notice of the time
and place of the examination and allowance of the Administrator’s account “to persons
interested”; (6) Section 7(b) of Rule 89, which requires the court to give notice “to the persons
interested” before it may
473

VOL. 587, MAY 8, 2009 473

Hilado vs. Court of Appeals

hear and grant a petition seeking the disposition or encumbrance of the properties of the estate;
and (7) Section 1, Rule 90, which allows “any person interested in the estate” to petition for an
order for the distribution of the residue of the estate of the decedent, after all obligations are
either satisfied or provided for.
Had the claims of petitioners against Benedicto been based on contract, whether express or
implied, then they should have filed their claim, even if contingent, under the aegis of the notice
to creditors to be issued by the court immediately after granting letters of administration and
published by the administrator immediately after the issuance of such notice.19  However, it
appears that the claims against Benedicto were based on tort, as they arose from his actions in
connection with Philsucom, Nasutra and Traders Royal Bank. Civil actions for tort or quasi-delict
do not fall within the class of claims to be filed under the notice to creditors required under Rule
86.20  These actions, being as they are civil, survive the death of the decedent and may be
commenced against the administrator pursuant to Section 1, Rule 87. Indeed, the records
indicate that the intestate estate of Benedicto, as represented by its administrator, was
successfully impleaded in Civil Case No. 11178, whereas the other civil case21  was already
pending review before this Court at the time of Benedicto’s death.
Evidently, the merits of petitioners’ claims against Benedicto are to be settled in the civil cases
where they were raised, and not in the intestate proceedings. In the event the claims for damages
of petitioners are granted, they would have the right to enforce the judgment against the estate.
Yet until such time, to what extent may they be allowed to participate in the intestate
proceedings?

_______________

19 See Rules of Court, Rule 86, Secs. 1 & 3.

20 See Aguas v. Llemos, et al., 116 Phil. 112; 5 SCRA 959 (1962); Leung Ben v. O’Brien, 38 Phil. 182, 189-194 (1918).
21 88 Phil. 477 (1951).

474

474 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

Petitioners place heavy reliance on our ruling in Dinglasan v. Ang Chia,22 and it does provide
us with guidance on how to proceed. A brief narration of the facts therein is in order. Dinglasan
had filed an action for reconveyance and damages against respondents, and during a hearing of
the case, learned that the same trial court was hearing the intestate proceedings of Lee Liong to
whom Dinglasan had sold the property years earlier. Dinglasan thus amended his complaint to
implead Ang Chia, administrator of the estate of her late husband. He likewise filed a verified
claim-in-intervention, manifesting the pendency of the civil case, praying that a co-administrator
be appointed, the bond of the administrator be increased, and that the intestate proceedings not
be closed until the civil case had been terminated. When the trial court ordered the increase of
the bond and took cognizance of the pending civil case, the administrator moved to close the
intestate proceedings, on the ground that the heirs had already entered into an extrajudicial
partition of the estate. The trial court refused to close the intestate proceedings pending the
termination of the civil case, and the Court affirmed such action.
“If the appellants filed a claim in intervention in the intestate proceedings it was only
pursuant to their desire to protect their interests it appearing that the property in litigation is
involved in said proceedings and in fact is the only property of the estate left subject of
administration and distribution; and the court is justified in taking cognizance of said civil case
because of the unavoidable fact that whatever is determined in said civil case will necessarily
reflect and have a far reaching consequence in the determination and distribution of the
estate. In so taking cognizance of civil case No. V-331 the court does not assume general jurisdiction over
the case but merely makes of record its existence because of the close interrelation of the two cases and
cannot therefore be branded as having acted in excess of its jurisdiction.

_______________

22 G.R. No. L-3342, 18 April 1951.

475
 VOL. 587, MAY 8, 2009 475
Hilado vs. Court of Appeals

          Appellants’ claim that the lower court erred in holding in abeyance the closing of the intestate
proceedings pending determination of the separate civil action for the reason that there is no rule or
authority justifying the extension of administration proceedings until after the separate action pertaining to
its general jurisdiction has been terminated, cannot be entertained. Section 1, Rule 88, of the Rules of Court,
expressly provides that “action to recover real or personal property from the estate or to enforce a lien
thereon, and actions to recover damages for an injury to person or property, real or personal, may be
commenced against the executor or administrator.” What practical value would this provision have if the
action against the administrator cannot be prosecuted to its termination simply because the heirs desire to
close the intestate proceedings without first taking any step to settle the ordinary civil case? This rule is but
a corollary to the ruling which declares that questions concerning ownership of property alleged to be part of
the estate but claimed by another person should be determined in a separate action and should be submitted
to the court in the exercise of its general jurisdiction. These rules would be rendered nugatory if we are to
hold that an intestate proceedings can be closed by any time at the whim and caprice of the heirs x x
x”23 (Emphasis supplied) [Citations omitted]

It is not clear whether the claim-in-intervention filed by Dinglasan conformed to an action-in-

intervention under the Rules of Civil Procedure, but we can partake of the spirit behind such
pronouncement. Indeed, a few years later, the Court, citing  Dinglasan, stated: “[t]he rulings of
this court have always been to the effect that in the special proceeding for the settlement of the
estate of a deceased person, persons not heirs, intervening therein to protect their interests are
allowed to do so to protect the same, but not for a decision on their action.”24

_______________

23 Id., at pp. 480-481.

24 Baquial v. Amihan, 92 Phil. 501, 503 (1953); citing 2 Moran, 432, 1952 revised edition, citing the case of Intestate
Estate of the Deceased Lee Liong, Dinglasan, et al. v. Ang Chia, et al., G.R. No. L-3342, April 18, 1951.

476

476 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

Petitioners’ interests in the estate of Benedicto may be inchoate interests, but they are viable
interests nonetheless. We are mindful that the Rules of Special Proceedings allows not just
creditors, but also “any person interested” or “persons interested in the estate” various specified
capacities to protect their respective interests in the estate. Anybody with a contingent claim
based on a pending action for quasi-delict against a decedent may be reasonably concerned that
by the time judgment is rendered in their favor, the estate of the decedent would have already
been distributed, or diminished to the extent that the judgment could no longer be enforced
against it.
In the same manner that the Rules on Special Proceedings do not provide a creditor or any
person interested in the estate, the right to participate in every aspect of the testate or intestate
proceedings, but instead provides for specific instances when such persons may accordingly act in
those proceedings, we deem that while there is no general right to intervene on the part of the
petitioners, they may be allowed to seek certain prayers or reliefs from the intestate court not
explicitly provided for under the Rules, if the prayer or relief sought is necessary to protect their
interest in the estate, and there is no other modality under the Rules by which such interests can
be protected. It is under this standard that we assess the three prayers sought by petitioners.
The first is that petitioners be furnished with copies of all processes and orders issued in
connection with the intestate proceedings, as well as the pleadings filed by the administrator of
the estate. There is no questioning as to the utility of such relief for the petitioners. They would
be duly alerted of the developments in the intestate proceedings, including the status of the
assets of the estate. Such a running account would allow them to pursue the appropriate
remedies should their interests be compromised, such as the right, under Section 6, Rule 87, to
complain to the intestate court if property of the estate concealed, embezzled, or fraudulently
conveyed.
477

VOL. 587, MAY 8, 2009 477

Hilado vs. Court of Appeals

At the same time, the fact that petitioners’ interests remain inchoate and contingent
counterbalances their ability to participate in the intestate proceedings. We are mindful of
respondent’s submission that if the Court were to entitle petitioners with service of all processes
and pleadings of the intestate court, then anybody claiming to be a creditor, whether contingent
or otherwise, would have the right to be furnished such pleadings, no matter how wanting of
merit the claim may be. Indeed, to impose a precedent that would mandate the service of all court
processes and pleadings to anybody posing a claim to the estate, much less contingent claims,
would unduly complicate and burden the intestate proceedings, and would ultimately offend the
guiding principle of speedy and orderly disposition of cases.
Fortunately, there is a median that not only exists, but also has been recognized by this Court,
with respect to the petitioners herein, that addresses the core concern of petitioners to be
apprised of developments in the intestate proceedings. In  Hilado v. Judge Reyes,25  the Court
heard a petition for mandamus filed by the same petitioners herein against the RTC judge,
praying that they be allowed access to the records of the intestate proceedings, which the
respondent judge had denied from them. Section 2 of Rule 135 came to fore, the provision stating
that “the records of every court of justice shall be public records and shall be available for the
inspection of any interested person x x x.” The Court ruled that petitioners were “interested
persons” entitled to access the court records in the intestate proceedings. We said:
“Petitioners’ stated main purpose for accessing the records to—monitor prompt compliance with the Rules
governing the preservation and proper disposition of the assets of the estate,  e.g., the completion and
appraisal of the Inventory and the submission by the Administratrix of an annual accounting—appears
legitimate, for, as the plaintiffs in the complaints for sum of money against Roberto

_______________

25 G.R. No. 163155, 21 July 2006, 496 SCRA 282.

478

478 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

Benedicto, et al., they have an interest over the outcome of the settlement of his estate. They are in fact
“interested persons” under Rule 135, Sec. 2 of the Rules of Court x x x”26
  Allowing creditors, contingent or otherwise, access to the records of the intestate proceedings
is an eminently preferable precedent than mandating the service of court processes and pleadings
upon them. In either case, the interest of the creditor in seeing to it that the assets are being
preserved and disposed of in accordance with the rules will be duly satisfied. Acknowledging their
right to access the records, rather than entitling them to the service of every court order or
pleading no matter how relevant to their individual claim, will be less cumbersome on the
intestate court, the administrator and the heirs of the decedent, while providing a viable means
by which the interests of the creditors in the estate are preserved.
Nonetheless, in the instances that the Rules on Special Proceedings do require notice to any or
all “interested parties” the petitioners as “interested parties” will be entitled to such notice. The
instances when notice has to be given to interested parties are provided in: (1) Sec. 10, Rule 85 in
reference to the time and place of examining and allowing the account of the executor or
administrator; (2) Sec. 7(b) of Rule 89 concerning the petition to authorize the executor or
administrator to sell personal estate, or to sell, mortgage or otherwise encumber real estates;
and; (3) Sec. 1, Rule 90 regarding the hearing for the application for an order for distribution of
the estate residue. After all, even the administratrix has acknowledged in her submitted
inventory, the existence of the pending cases filed by the petitioners.
We now turn to the remaining reliefs sought by petitioners; that a deadline be set for the
submission by administratrix Benedicto to submit a verified and complete inventory of the estate,
and upon submission thereof: the inheritance tax ap-

_______________

26 Id., at p. 301.

479

VOL. 587, MAY 8, 2009 479

Hilado vs. Court of Appeals

praisers of the Bureau of Internal Revenue be required to assist in the appraisal of the fair
market value of the same; and that the intestate court set a deadline for the submission by the
administratrix of her verified annual account, and, upon submission thereof, set the date for her
examination under oath with respect thereto, with due notice to them and other parties
interested in the collation, preservation and disposition of the estate. We cannot grant said
reliefs.
Section 1 of Rule 83 requires the administrator to return to the court a true inventory and
appraisal of all the real and personal estate of the deceased within three (3) months from
appointment, while Section 8 of Rule 85 requires the administrator to render an account of his
administration within one (1) year from receipt of the letters testamentary or of administration.
We do not doubt that there are reliefs available to compel an administrator to perform either
duty, but a person whose claim against the estate is still contingent is not the party entitled to do
so. Still, even if the administrator did delay in the performance of these duties in the context of
dissipating the assets of the estate, there are protections enforced and available under Rule 88 to
protect the interests of those with contingent claims against the estate.
Concerning complaints against the general competence of the administrator, the proper
remedy is to seek the removal of the administrator in accordance with Section 2, Rule 82. While
the provision is silent as to who may seek with the court the removal of the administrator, we do
not doubt that a creditor, even a contingent one, would have the personality to seek such relief.
After all, the interest of the creditor in the estate relates to the preservation of sufficient assets to
answer for the debt, and the general competence or good faith of the administrator is necessary to
fulfill such purpose.
All told, the ultimate disposition of the RTC and the Court of Appeals is correct. Nonetheless, as
we have explained, petitioners should not be deprived of their prerogatives under
480

480 SUPREME COURT REPORTS ANNOTATED

Hilado vs. Court of Appeals

the Rules on Special Proceedings as enunciated in this decision.

WHEREFORE, the petition is DENIED, subject to the qualification that petitioners, as
persons interested in the intestate estate of Roberto Benedicto, are entitled to such notices and
rights as provided for such interested persons in the Rules on Settlement of Estates of Deceased
Persons under the Rules on Special Proceedings. No pronouncements as to costs.
SO ORDERED.

Carpio-Morales (Acting Chairperson), Velasco, Jr., Leonardo-De Castro**  and  Brion, JJ.,
concur.

Petition denied.

Notes.—The right of an executor or administrator to the possession and management of the

real and personal properties of the deceased is not absolute and can only be exercised “so long as
it is necessary for the payment of the debts and expenses of administration.” (Estate of Hilario M.
Ruiz vs. Court of Appeals, 252 SCRA 541 [1996])
The appointment of a special administrator is interlocutory, discretionary on the part of the
Regional Trial Court and non-appealable, though it may be subject of certiorari if it can be shown
that the RTC committed grave abuse of discretion or lack of or in excess of jurisdiction. (Jamero
vs. Melicor, 459 SCRA 113 [2005])
——o0o——

_______________

**  Per Special Order No. 619, Justice Teresita J. Leonardo-De Castro is hereby designated as additional member of
the Second Division in lieu of Justice Leonardo A. Quisumbing, who is on official leave.