CASE DIGEST: Estate of Ruiz v. Court of Appeals

 

Estate of Ruiz v. CA

252 SCRA 541

 

FACTS:

On June 27, 1987, Hilario M. Ruiz executed a holographic will naming as his heirs his only son, Edmond Ruiz, his adopted daughter, private respondent Maria Pilar Ruiz Montes, and his three granddaughters, private respondents Maria Cathryn, Candice Albertine and Maria Angeline, all children of Edmond Ruiz. The testator bequeathed to his heirs substantial cash, personal and real properties and named Edmond Ruiz executor of his estate.

On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash component of his estate was distributed among Edmond Ruiz and private respondents in accordance with the decedent’s will. For unbeknown reasons, Edmond, the named executor, did not take any action for the probate of his father’s holographic will.

On June 29, 1992, four years after the testator’s death, it was private respondent Maria Pilar Ruiz Montes who filed before the RTC of Pasig, a petition for the probate and approval of Hilario Ruiz’s will and for the issuance of letters testamentary to Edmond Ruiz.

One of the properties of the estate — the house and lot at No.  2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed to Maria Cathryn, Candice Albertine and Maria Angeline —was leased out by Edmond Ruiz to third persons.

On January 19, 1993, the probate court ordered Edmond to deposit with the Branch Clerk of Court the rental deposit and payments totalling P540,000.00 representing the one-year lease of the Valle Verde property. In compliance, Edmond turned over the amount of P348,583.56, representing the balance of the rent after deducting P191,416.14 for repair and maintenance expenses on the estate.

In March 1993, Edmond moved for the release of P50,000.00 to pay the real estate taxes on the real properties of the estate. The probate court approved the release of P7,722.00.

On July 28, 1993, petitioner Testate Estate of Hilario Ruiz, with Edmond Ruiz as executor, filed an “Ex-Parte Motion for Release of Funds.” It prayed for the release of the rent payments deposited with the Branch Clerk of Court. Respondent Montes opposed the motion and concurrently filed a “Motion for Release of Funds to Certain Heirs” and “Motion for Issuance of Certificate of Allowance of Probate Will.” Montes prayed for the release of the said rent payments to Maria Cathryn, Candice Albertine and Maria Angeline and for the distribution of the testator’s properties, specifically the Valle Verde property and the Blue Ridge apartments, in accordance with the provisions of the holographic will.

The probate court denied Edmond’s motion but granted Montes’ motion. The probate court, ordered the release of the funds to Edmond but only “such amount as may be necessary to cover the expenses of administration and allowance for support” of the testator’s 3 granddaughters subject to collation and deductible from their share in the inheritance. The court, however, held in abeyance the release of the titles to respondent Montes and the 3 granddaughters until the lapse of 6 months from the date of first publication of the notice to creditors.

Petitioner assailed this order before the CA who dismissed the petition and sustained the probate court’s decision. Hence, this petition.

Petitioner argues that affirming the Probate Court’s order would have the following effect: (1) Disallow the executor/administrator of the estate of the late Hilario M. Ruiz to take possession of all the real and personal properties of the estate; (2) Grant support, during the pendency of the settlement of an estate, to certain persons not entitled thereto; (3) Prematurely partition and distribute the estate pursuant to the provisions of the holographic will even before its intrinsic validity has been determined, and despite the existence of unpaid debts and obligations of the estate.

ISSUE:

Whether the probate court, after admitting the will to probate but before payment of the estate’s debts and obligations, has the authority to grant possession of all properties of the estate to the executor of the will

RULING:

NO. Petitioner cannot correctly claim that the assailed order deprive him  of his right to take possession of all real and personal properties of the estate.  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.

When petitioner moved for further release of the funds deposited with the clerk of court, he had been previously granted by the probate court certain amounts for repair and maintenance expenses on the properties of the estate, and payment of the real estate taxes thereon. But petitioner moved again for the release of additional funds for the same reasons he previously cited. It was correct for the probate court to require him to submit an accounting of the necessary expenses for administration before releasing any further money in his favor.

It was relevantly noted by the probate court that petitioner had deposited with it only a portion of the one year rental income from the Valle Verde property. Petitioner did not deposit its succeeding rents after renewal of the lease.  Neither did he render an accounting of such funds.

Petitioner must be reminded that his right of ownership over the properties of his father is merely inchoate as long as the estate has not been fully settled and partitioned.  As executor, he is a mere trustee of his father’s estate. The funds of the estate in his hands are trust funds and he is held to the duties and responsibilities of a trustee of the highest order.  He cannot unilaterally assign to himself and possess all his parents’ properties and the fruits thereof without first submitting an inventory and appraisal of all real and personal properties of the deceased, rendering a true account of his administration, the expenses of administration, the amount of the obligations and estate tax, all of which are subject to a determination by the court as to their veracity, propriety and justness.