SECOND DIVISION
G.R. No. L-29276 May
18, 1978
Testate Estate of
the Late Felix J. de Guzman. VICTORINO G. DE GUZMAN, administrator-appellee,
vs.
CRISPINA DE
GUZMAN-CARILLO, ARSENIO DE GUZMAN and HONORATA DE GUZMAN-MENDIOLA,
oppositors-appellants.
Emiliano Samson
& R. Balderama-Samson for appellants.
Cezar Paralejo for
appellee.
AQUINO, J.:
This case is about
the propriety of allowing as administration expenses certain disbursements made
by the administrator of the testate
estate of the late Felix J. de Guzman of Gapan, Nueva Ecija.
The deceased testator was survived by eight children named Victorino, Librada, Severino,
Margarita, Josefina, Honorata, Arsenio and Crispina. His will was duly
probated. Letters of
administration were issued to his son, Doctor Victorino G. de Guzman,
pursuant to the order dated September 17, 1964 of the Court of First Instance
of Nueva Ecija in Special Proceeding No. 1431.
One of the properties left by the decedent was a
residential house located in the poblacion. In conformity with his last will, that house and the lot on which it
stands were adjudicated to his eight children, each being given a one-eighth proindiviso share in the
project of partition dated March 19, 1966, which was signed by the eight
heirs and which was approved in the lower court's order of April 14, 1967 but
without prejudice to the final outcome of the accounting.
The administrator
submitted four accounting reports for the period from June 16, 1964 to
September, 1967. Three
heirs Crispina de Guzmans-Carillo Honorata de Guzman-Mendiola and Arsenio de
Guzman interposed objections to the administrator's disbursements in the total
sum of P13,610.48, broken down as follows:
I. Expense for the
improvement and renovation of the decedent's residential house.
1. Construction of
fence — P3,082.07
2. Renovation of
bathroom — P1,389.52
3. Repair of terrace
and
interior of house —
P5,928.00 — P10,399.59
II. Living expenses
of Librada de Guzman while occupying the family home without paying rent:
1. For house helper
— P1,170.00
2. Light bills —
227.41
3. Water bills —
150.80
4. Gas oil, floor
wax
and switch nail —
54.90 — P 1,603.11
III. Other expenses:
1. Lawyer's
subsistence — P 19.30
2. Gratuity pay in
lieu
of medical fee —
144.00
3. For stenographic
notes — 100.00
4. For food served
on
decedent's first
death anniversary —
166.65
5. Cost of
publication of
death anniversary
of decedent — 102.00
6. Representation
expenses — 26.25 —
P558.20
IV. Irrigation fee
P1.049.58
TOTAL P13,610.48
It should be noted that the probate court in its
order of August 29, 1966 directed the administrator "to refrain from
spending the assets of the estate for reconstructing and remodeling the house
of the deceased and to stop spending (sic) any asset of the estate without
first during authority of the court to do so" (pp. 26-27, Record on Appeal).
The lower court in its order
of April 29, 1968 allowed
the d items as legitimate expenses of administration. From that order, the three oppositors appealed to
this Court. Their contention is that the probate court erred in
approving the utilization of the income of the estate (from rice harvests) to
defray those expenditures which allegedly are not allowable under the Rules of
Court.
An executor or administrator is allowed the
necessary expenses in the care, management, and settlement of the estate. He is
entitled to possess and manage the decedent's real and personal estate as long
as it is necessary for the payment of the debts and the expenses of
administration. He is accountable for the whole decedent's estate which has
come into his possession, with all the interest, profit, and income thereof,
and with the proceeds of so much of such estate as is sold by him, at the price
at which it was sold (Sec. 3, Rule 84; Secs. 1 and 7, Rule 85, Rules of Court).
One of the Conditions of the administrator's bond is
that he should render a true and just account of his administration to the
court. The court may examine him
upon oath With respect to every matter relating to his accounting 't and shall
so examine him as to the correctness of his account before the same is allowed,
except when no objection is made to the allowance of the account and its
correctness is satisfactorily established by competent proof. The heirs,
legatees, distributes, and creditors of the estate shall have the same
privilege as the executor or administrator of being examined on oath on any
matter relating to an administration account." (Sec. 1[c] Rule 81 and
secs. 8 and 9, Rule 85, Rules of Court).
A hearing is usually held before an administrator's
account is approved, especially if an interested Party raises objections to
certain items in the accounting report (Sec. 10, Rule 85).
At that hearing, the
practice is for the administrator to take the witness stand, testify under oath
on his accounts and Identify the receipts, vouchers and documents evidencing
his disbursements which are offered as exhibits. He may be interrogated by the
court and crossed by the oppositors's counsel. The oppositors may present
proofs to rebut the ad. administrator's evidence in support of his accounts.
I. Expenses for the renovation and
improvement of the family residence — P10,399.59. — As already shown
above, these expenses consisted of disbursements for the repair of the terrace
and interior of the family home, the renovation of the bathroom, and the
construction of a fence. The probate court allowed those expenses because an
administrator has the duty to "maintain in tenantable repair the houses
and other structures and fences belonging to the estate, and deliver the same
in such repair to the heirs or devises" when directed to do so by the
court (Sec. 2, Rule 84, Rules of Court).
On the other hand, the
oppositors-appellants contend that the trial court erred in allowing those
expenses because the same did not come within the category of necessary
expenses of administration which are understood to be the reasonable and
necessary expenses of caring for the property and managing it until the debts
are paid and the estate is partitioned and distributed among the heirs
(Lizarraga Hermanos vs. Abada, 40 Phil. 124).
As clarified in the
Lizarraga case, administration expenses should be those which are necessary for
the management of the estate, for protecting it against destruction or
deterioration, and, possibly, for the production of fruits. They are expenses
entailed for the preservation and productivity of the estate and its management
for purposes of liquidation, payment of debts, and distribution of the residue
among the persons entitled thereto.
It should be noted
that the family residence was partitioned proindiviso among the decedent's
eight children. Each one of them was given a one-eighth share in conformity
with the testator's will. Five
of the eight co-owners consented to the use of the funds of the estate for
repair and improvement of the family home. It is obvious that the expenses in
question were incurred to preserve the family home and to maintain the family's
social standing in the community.
Obviously, those expenses redounded to the benefit
of an the co- owners. They were
necessary for the preservation and use of the family residence. As a result of
those expenses, the co-owners, including the three oppositors, would be able to
use the family home in comfort, convenience and security.
We hold that the
probate court did not err in approving the use of the income of the estate to
defray those ex
II. Expenses incurred by Librada de Guzman as occupant
of the family residence without paying rent — P1 603.11 — The probate court
allowed the income of the estate to be used for those expenses on the theory
that the occupancy of the house by one heir did not deprive the other seven
heirs from living in it. Those
expenses consist of the salaries of the house helper, light and water bills,
and the cost of gas, oil floor wax and switch nail
We are of the
opinion that those expenses were personal expenses of Librada de Guzman, inuring to her benefit.
Those expenses, not being reasonable administration expenses incurred by the
administrator, should not be charged against the income of the estate.
Librada de Guzman,
as an heir, is entitled to share in the net income of the estate. She occupied
the house without paying rent. She should use her income for her living
expenses while occupying the family residence.
The trial court
erred in approving those expenses in the administrator's accounts. They should
be, as they are hereby, disallowed (See 33 C.J.S 1239-40).
III. Other expenses
— P558.20. — Among these
expenses is the sum of P100 for stenographic notes which, as admitted by the
administrator on page 24 of his brief, should be disallowed. Another item,
"representation expenses" in the sum of P26.25 (2nd accounting), was
not explained. it should likewise be disallowed.
The probate court
erred in allowing as expenses of administration the sum of P268.65 which was incurred during the celebration
of the first death anniversary of the deceased. Those expenses are disallowed
because they have no connection with the care, management and settlement of the
decedent's estate (Nicolas vs. Nicolas 63 Phil 332).
The other expenses,
namely, P19.30 for the lawyer's
subsistence and P144 as the cost of the gift to the physician who attended to
the testator during his last are allowable expenses.
IV. Irrigation fee —
P1,049.58. —The appellants question the deductibility of that expense on the
ground that it seems to be a duplication of the item of P1,320 as irrigation
fee for the same 1966-67 crop-year.
The administrator in
his comment filed on February 28, 1978 explained that the item of P1,320
represented the "allotments" for irrigation fees to eight tenants who
cultivated the Intan crop, which allotments were treated as "assumed
expenses" deducted as farming expenses from the value of the net harvests.
The explanation is
not quite clear but it was not disputed by the appellants. The fact is that the
said sum of P1,049.58 was paid by the administrator to the Penaranda Irrigation
System as shown in Official Receipt No. 3596378 dated April 28, 1967. It was
included in his accounting as part of the farming expenses. The amount was properly allowed as
a legitimate expense of administration.
WHEREFORE, the lower
court's order of April 29, 1968 is affirmed with the modifications that the sum of (a) P1,603.11 as
the living expenses of Librada de Guzman. (b) P100 for stenographic notes, (c)
P26.25 as representation expenses, and (d) P268.65 as expenses for the
celebration of the first anniversary of the decedent's death are disallowed in
the administrator's accounts. No costs.
SO ORDERED.
Fernando (Chairman),
Barredo, Antonio, Concepcion, Jr., and Santos, JJ., concur.