G.R. No.

174873

August 26, 2008

unmeritorious claim of LCN Construction Corp., now pending before this Honorable Court; (3) That for all their work since April 22, 1988, up to July 1992, or for four (4) years, they were only given the amount of P20,000.00 each on November 28, 1988; and another P50,00.00 each on October 1991; and the amount of P100,000.00 each on July 1992; or a total of P170,000.00 to cover their administration fees, counsel fees and expenses; (4) That through their work, they were able to settle all the testate (sic) claims except the remaining baseless claim of LCN Construction Corp., and were able to dismiss two (2) foreign claims, and were also able to increase the monetary value of the estate from roughly over P1Million to the present P4,738,558.63 as of August 25, 2002 and maturing on September 27, 2002; and the money has always been with the Philippine National Bank, as per the Order of this Honorable Court; (5) That since July 1992, when the co-administrators were paid P100,000.00 each, nothing has been paid to either Administrator Syquia or his client, the widow Consuelo Triviere; nor to the Quasha Law Offices or their clients, the children of the deceased Raymond Triviere; (6) That as this Honorable Court will notice, Administrator Syquia has always been present during the hearings held for the many years of this case; and the Quasha Law Offices has always been represented by its counsel, Atty. Redentor C. Zapata; and after all these years, their clients have not been given a part of their share in the estate; (7) That Administrator Syquia, who is a lawyer, is entitled to additional Administrator's fees since, as provided in Section 7, Rule 85 of the Revised Rules of Court: "x x x where the estate is large, and the settlement has been attended with great difficulty, and has required a high degree of capacity on the part of the executor or administrator, a greater sum may be allowed" In addition, Atty. Zapata has also been present in all the years of this case. In addition, they have spent for all the costs of litigation especially the transcripts, as out-of-pocket expenses. (8) That considering all the foregoing, especially the fact that neither the Administrator or his client, the widow; and the Quasha Law Offices or their clients, the children of the deceased, have received any money for more than ten (10) years now, they respectfully move that the amount of P1Million be taken from the Estate funds, to be divided as follows: a) P450,000.00 as share of the children of the deceased [Triviere] who are represented by the Quasha Ancheta Pea & Nolasco Law Offices; b) P200,000.00 as attorney's fees and litigation expenses for the Quasha Ancheta Pea & Nolasco Law Offices; 1

QUASHA ANCHETA PEA AND NOLASCO LAW OFFICE FOR ITS OWN BEHALF, AND REPRESENTING THE HEIRS OF RAYMOND TRIVIERE, petitioners, vs. LCN CONSTRUCTION CORP., respondent. DECISION CHICO-NAZARIO, J.: This is a Petition for Review under Rule 45 of the Revised Rules of Court with petitioners Quasha Ancheta Pea and Nolasco Law Office (Quasha Law Office) and the Heirs of Raymond Triviere praying for the reversal of the Decision1 dated 11 May 2006 and Resolution2 dated 22 September 2006 of the Court of Appeals granting in part the Petition for Certiorari filed by respondent LCN Construction Corporation (LCN) in CA-G.R. SP No. 81296. The factual antecedents of the case are as follows: Raymond Triviere passed away on 14 December 1987. On 13 January 1988, proceedings for the settlement of his intestate estate were instituted by his widow, Amy Consuelo Triviere, before the Regional Trial Court (RTC) of Makati City, Branch 63 of the National Capital Region (NCR), docketed as Special Proceedings Case No. M-1678. Atty. Enrique P. Syquia (Syquia) and Atty. William H. Quasha (Quasha) of the Quasha Law Office, representing the widow and children of the late Raymond Triviere, respectively, were appointed administrators of the estate of the deceased in April 1988. As administrators, Atty. Syquia and Atty. Quasha incurred expenses for the payment of real estate taxes, security services, and the preservation and administration of the estate, as well as litigation expenses. In February 1995, Atty. Syquia and Atty. Quasha filed before the RTC a Motion for Payment of their litigation expenses. Citing their failure to submit an accounting of the assets and liabilities of the estate under administration, the RTC denied in May 1995 the Motion for Payment of Atty. Syquia and Atty. Quasha. In 1996, Atty. Quasha also passed away. Atty. Redentor Zapata (Zapata), also of the Quasha Law Office, took over as the counsel of the Triviere children, and continued to help Atty. Syquia in the settlement of the estate. On 6 September 2002, Atty. Syquia and Atty. Zapata filed another Motion for Payment,3 for their own behalf and for their respective clients, presenting the following allegations: (1) That the instant Petition was filed on January 13, 1988; and Atty. Enrique P. Syquia was appointed Administrator by the Order of this Honorable Court dated April 12, 1988, and discharged his duties starting April 22, 1988, after properly posting his administrator's bond up to this date, or more than fourteen (14) years later. Previously, there was the co-administrator Atty. William H. Quasha, but he has already passed away. (2) That, together with Co-administrator Atty. William H. Quasha, they have performed diligently and conscientiously their duties as Co-administrators, having paid the required Estate tax and settled the various claims against the Estate, totaling approximately twenty (20) claims, and the only remaining claim is the

c) P150,000.00 as share for the widow of the deceased [Raymond Triviere], Amy Consuelo Triviere; and d) P200,000.00 for the administrator Syquia, who is also the counsel of the widow; and for litigation costs and expenses. LCN, as the only remaining claimant4 against the Intestate Estate of the Late Raymond Triviere in Special Proceedings Case No. M1678, filed its Comment on/Opposition to the afore-quoted Motion on 2 October 2002. LCN countered that the RTC had already resolved the issue of payment of litigation expenses when it denied the first Motion for Payment filed by Atty. Syquia and Atty. Quasha for failure of the administrators to submit an accounting of the assets and expenses of the estate as required by the court. LCN also averred that the administrators and the heirs of the late Raymond Triviere had earlier agreed to fix the former's fees at only 5% of the gross estate, based on which, per the computation of LCN, the administrators were even overpaid P55,000.00. LCN further asserted that contrary to what was stated in the second Motion for Payment, Section 7, Rule 85 of the Revised Rules of Court was inapplicable,5 since the administrators failed to establish that the estate was large, or that its settlement was attended with great difficulty, or required a high degree of capacity on the part of the administrators. Finally, LCN argued that its claims are still outstanding and chargeable against the estate of the late Raymond Triviere; thus, no distribution should be allowed until they have been paid; especially considering that as of 25 August 2002, the claim of LCN against the estate of the late Raymond Triviere amounted to P6,016,570.65 as against the remaining assets of the estate totaling P4,738,558.63, rendering the latter insolvent. On 12 June 2003, the RTC issued its Order6 taking note that "the widow and the heirs of the deceased Triviere, after all the years, have not received their respective share (sic) in the Estate x x x." The RTC declared that there was no more need for accounting of the assets and liabilities of the estate considering that: [T]here appears to be no need for an accounting as the estate has no more assets except the money deposited with the Union Bank of the Philippines under Savings Account No. 12097-000656-0 x x x; on the estate taxes, records shows (sic) that the BIR Revenue Region No. 4-B2 Makati had issued a certificate dated April 27, 1988 indicating that the estate taxes has been fully paid.7 As to the payment of fees of Atty. Syquia and the Quasha Law Office, the RTC found as follows: [B]oth the Co-Administrator and counsel for the deceased (sic) are entitled to the payment for the services they have rendered and accomplished for the estate and the heirs of the deceased as they have over a decade now spent so much time, labor and skill to accomplish the task assigned to them; and the last time the administrators obtained their fees was in 1992.8 Hence, the RTC granted the second Motion for Payment; however, it reduced the sums to be paid, to wit: In view of the foregoing considerations, the instant motion is hereby GRANTED. The sums to be paid to the co-administrator and counsel for the heirs of the deceased Triviere are however reduced.

Accordingly, the co-administrator Atty. Syquia and aforenamed counsel are authorized to pay to be sourced from the Estate of the deceased as follows: a) P450,000.00 as share of the children of the deceased who are represented by the Quasha, Ancheta, Pena, Nolasco Law Offices; b) P100,000.00 as attorney's fees and litigation expenses for said law firm; c) P150,000.00 as share for the widow of the deceased Amy Consuelo Triviere; and d) P100,000.00 for the Co-administrator Atty. Enrique P. Syquia and for litigation costs and expenses.9 LCN filed a Motion for Reconsideration10 of the foregoing Order on 2 July 2003, but it was denied by the RTC on 29 October 2003.11 On 13 May 2004, LCN sought recourse from the Court of Appeals by assailing in CA-G.R. SP No. 81296, a Petition for Certiorari, the RTC Orders dated 12 June 2003 and 2 July 2003, for having been rendered with grave abuse of discretion.12 LCN maintained that: (1) The administrator's claim for attorney's fees, aside from being prohibited under paragraph 3, Section 7 of Rule 85 is, together with administration and litigation expenses, in the nature of a claim against the estate which should be ventilated and resolved pursuant to Section 8 of Rule 86; (2) The awards violate Section 1, Rule 90 of the Rules of Court, as there still exists its (LCN's) unpaid claim in the sum of P6,016,570.65; and (3) The alleged deliberate failure of the coadministrators to submit an accounting of the assets and liabilities of the estate does not warrant the Court's favorable action on the motion for payment.13 On 11 May 2006, the Court of Appeals promulgated a Decision essentially ruling in favor of LCN. While the Court of Appeals conceded that Atty. Syquia and the Quasha Law Office, as the administrators of the estate of the late Raymond Triviere, were entitled to administrator's fees and litigation expenses, they could not claim the same from the funds of the estate. Referring to Section 7, Rule 85 of the Revised Rules of Court, the appellate court reasoned that the award of expenses and fees in favor of executors and administrators is subject to the qualification that where the executor or administrator is a lawyer, he shall not charge against the estate any professional fees for legal services rendered by him. Instead, the Court of Appeals held that the attorney's fees due Atty. Syquia and the Quasha Law Offices should be borne by their clients, the widow and children of the late Raymond Triviere, respectively. The appellate court likewise revoked the P450,000.00 share and P150,000.00 share awarded by the RTC to the children and widow of the late Raymond Triviere, respectively, on the basis that Section 1, Rule 91 of the Revised Rules of Court proscribes the distribution of the residue of the estate until all its obligations have been paid. 2

The appellate court, however, did not agree in the position of LCN that the administrators' claims against the estate should have been presented and resolved in accordance with Section 8 of Rule 86 of the Revised Rules of Court. Claims against the estate that require presentation under Rule 86 refer to "debts or demands of a pecuniary nature which could have been enforced against the decedent during his lifetime and which could have been reduced to simple judgment and among which are those founded on contracts." The Court of Appeals also found the failure of the administrators to render an accounting excusable on the basis of Section 8, Rule 85 of the Revised Rules of Court.14 Finding the Petition for Certiorari of LCN partly meritorious, the Court of Appeals decreed: WHEREFORE, premises considered, the instant petition is hereby PARTLY GRANTED. The assailed Orders of the public respondent are hereby AFFIRMED with MODIFICATION in that (1) the shares awarded to the heirs of the deceased Triviere in the assailed Order of June 12, 2003 are hereby DELETED; and (2) the attorney's fees awarded in favor of the coadministrators are hereby DELETED. However, inasmuch as the assailed order fails to itemize these fees from the litigation fees/administrator's fees awarded in favor of the co-administrators, public respondent is hereby directed to determine with particularity the fees pertaining to each administrator.15 Petitioner filed a Motion for Reconsideration16 of the 11 May 2006 Decision of the Court of Appeals. The Motion, however, was denied by the appellate court in a Resolution dated 22 September 2006,17explaining that: In sum, private respondents did not earlier dispute [herein respondent LCN's] claim in its petition that the law firm and its lawyers served as co-administrators of the estate of the late Triviere. It is thus quite absurd for the said law firm to now dispute in the motion for reconsideration its being a co-administrator of the estate. [Herein petitioners], through counsel, likewise appear to be adopting in their motion for reconsideration a stance conflicting with their earlier theory submitted to this Court. Notably, the memorandum for [petitioner] heirs states that the claim for attorney's fees is supported by the facts and law. To support such allegation, they contend that Section 7 (3) of Rule 85 of the 1997 Rules of Civil Procedure finds no application to the instant case since "what is being charged are not professional fees for legal services rendered but payment for administration of the Estate which has been under the care and management of the coadministrators for the past fourteen (14) years." Their allegation, therefore, in their motion for reconsideration that Section 7 (3) of Rule 85 is inapplicable to the case of Quasha Law Offices because it is "merely seeking payment for legal services rendered to the estate and for litigation expenses" deserves scant consideration. xxxx

WHEREFORE, premises considered, private respondents' motion for reconsideration is hereby DENIED for lack of merit. 18 Exhausting all available legal remedies, petitioners filed the present Petition for Review on Certioraribased on the following assignment of errors: I. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE AWARD IN FAVOR OF THE HEIRS OF THE LATE RAYMOND TRIVIERE IS ALREADY A DISTRIBUTION OF THE RESIDUE OF THE ESTATE. II. THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE AWARD OF ATTORNEY'S FEES IN FAVOR OF THE CO-ADMINISTRATORS I The Court of Appeals modified the 12 June 2003 Order of the RTC by deleting the awards ofP450,000.00 and P150,000.00 in favor of the children and widow of the late Raymond Triviere, respectively. The appellate court adopted the position of LCN that the claim of LCN was an obligation of the estate which was yet unpaid and, under Section 1, Rule 90 of the Revised Rules of Court, barred the distribution of the residue of the estate. Petitioners, though, insist that the awards in favor of the petitioner children and widow of the late Raymond Triviere is not a distribution of the residue of the estate, thus, rendering Section 1, Rule 90 of the Revised Rules of Court inapplicable. Section 1, Rule 90 of the Revised Rules of Court provides: Section 1. When order for distribution of residue made. When the debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law, have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such persons may demand and recover their respective shares from the executor or administrator, or any other person having the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be heard and decided as in ordinary cases. No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs. According to petitioners, the 12 June 2003 Order of the RTC should not be construed as a final order of distribution. The 12 June 2003 RTC Order granting the second Motion for Payment is 3

a mere interlocutory order that does not end the estate proceedings. Only an order of distribution directing the delivery of the residue of the estate to the proper distributees brings the intestate proceedings to a close and, consequently, puts an end to the administration and relieves the administrator of his duties. A perusal of the 12 June 2003 RTC Order would immediately reveal that it was not yet distributing the residue of the estate. The said Order grants the payment of certain amounts from the funds of the estate to the petitioner children and widow of the late Raymond Triviere considering that they have not received their respective shares therefrom for more than a decade. Out of the reported P4,738,558.63 value of the estate, the petitioner children and widow were being awarded by the RTC, in its 12 June 2003 Order, their shares in the collective amount of P600,000.00. Evidently, the remaining portion of the estate still needs to be settled. The intestate proceedings were not yet concluded, and the RTC still had to hear and rule on the pending claim of LCN against the estate of the late Raymond Triviere and only thereafter can it distribute the residue of the estate, if any, to his heirs. While the awards in favor of petitioner children and widow made in the RTC Order dated 12 June 2003 was not yet a distribution of the residue of the estate, given that there was still a pending claim against the estate, still, they did constitute a partial and advance distribution of the estate. Virtually, the petitioner children and widow were already being awarded shares in the estate, although not all of its obligations had been paid or provided for. Section 2, Rule 109 of the Revised Rules of Court expressly recognizes advance distribution of the estate, thus: Section 2. Advance distribution in special proceedings. - Notwithstanding a pending controversy or appeal in proceedings to settle the estate of a decedent, the court may, in its discretion and upon such terms as it may deem proper and just, permit that such part of the estate as may not be affected by the controversy or appeal be distributed among the heirs or legatees, upon compliance with the conditions set forth in Rule 90 of these rules. (Emphases supplied.) The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court allows the distribution of the estate prior to the payment of the obligations mentioned therein, provided that "the distributees, or any of them, gives a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs." In sum, although it is within the discretion of the RTC whether or not to permit the advance distribution of the estate, its exercise of such discretion should be qualified by the following: [1] only part of the estate that is not affected by any pending controversy or appeal may be the subject of advance distribution (Section 2, Rule 109); and [2] the distributees must post a bond, fixed by the court, conditioned for the payment of outstanding obligations of the estate (second paragraph of Section 1, Rule 90). There is no showing that the RTC, in awarding to the petitioner children and widow their shares in the estate prior to the settlement of all its obligations, complied with these two requirements or, at the very least, took the same into consideration. Its Order of 12 June 2003 is completely silent on these matters. It justified its grant of the award in a single sentence which stated that petitioner children and widow had not yet received their respective shares from the estate after all these years. Taking into account that the claim of LCN against the estate of the late Raymond Triviere allegedly amounted

to P6,016,570.65, already in excess of the P4,738,558.63 reported total value of the estate, the RTC should have been more prudent in approving the advance distribution of the same. Petitioners earlier invoked Dael v. Intermediate Appellate Court,,19 where the Court sustained an Order granting partial distribution of an estate. However, Dael is not even on all fours with the case at bar, given that the Court therein found that: Where, however, the estate has sufficient assets to ensure equitable distribution of the inheritance in accordance with law and the final judgment in the proceedings and it does not appear there are unpaid obligations, as contemplated in Rule 90, for which provisions should have been made or a bond required, such partial distribution may be allowed. (Emphasis supplied.) No similar determination on sufficiency of assets or absence of any outstanding obligations of the estate of the late Raymond Triviere was made by the RTC in this case. In fact, there is a pending claim by LCN against the estate, and the amount thereof exceeds the value of the entire estate. Furthermore, in Dael, the Court actually cautioned that partial distribution of the decedent's estate pending final termination of the testate or intestate proceeding should as much as possible be discouraged by the courts, and, except in extreme cases, such form of advances of inheritance should not be countenanced. The reason for this rule is that courts should guard with utmost zeal and jealousy the estate of the decedent to the end that the creditors thereof be adequately protected and all the rightful heirs be assured of their shares in the inheritance. Hence, the Court does not find that the Court of Appeals erred in disallowing the advance award of shares by the RTC to petitioner children and the widow of the late Raymond Triviere. II On the second assignment of error, petitioner Quasha Law Office contends that it is entitled to the award of attorney's fees and that the third paragraph of Section 7, Rule 85 of the Revised Rules of Court, which reads: Section 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. x x x. xxxx When the executor or administrator is an attorney, he shall not charge against the estate any professional fees for legal services rendered by him. (Emphasis supplied.) is inapplicable to it. The afore-quoted provision is clear and unequivocal and needs no statutory construction. Here, in attempting to exempt itself from the coverage of said rule, the Quasha Law Office presents conflicting arguments to justify its claim for attorney's fees against the estate. At one point, it alleges that the award of attorney's fees was payment for its 4

administration of the estate of the late Raymond Triviere; yet, it would later renounce that it was an administrator. In the pleadings filed by the Quasha Law Office before the Court of Appeals, it referred to itself as co-administrator of the estate. In the Comment submitted to the appellate court by Atty. Doronila, the member-lawyer then assigned by the Quasha Law Office to the case, it stated that: The 12 June 2003 Order granted the Motion for Payment filed by Co-Administrator and counsel Atty. Enrique P. Syquia and the counsel Atty. Cirilo E. Doronila and Co-Administrator for the children of the late Raymond Triviere. x x x.20 (Emphasis supplied.) It would again in the same pleading claim to be the "coadministrator and counsel for the heirs of the late Raymond Triviere."21 Finally, the Memorandum it submitted to the Court of Appeals on behalf of its clients, the petitioner-children of the late Raymond Triviere, the Quasha Law Office alleged that: 2. The petition assails the Order of the Honorable Regional Trial Court of Makati, Branch 63 granting the Motion for Payment filed by Co-Administrators Atty. Enrique P. Syquia and the undersigned counsel together with the children of the deceased Raymond Triviere, and the Order dated 29 October 2003 denying Petitioner's Motion for Reconsideration of the First Order. xxxx I. Statement of Antecedent Facts xxxx 4. On 13 May 2004, Atty. Enrique Syquia, coadministrator and counsel for respondent Amy Consuelo Triviere and the undersigned counsel, coadministrator and counsel for the children of the late Raymond Triviere filed their Comment.22 Petitioner Quasha Law Office asserts that it is not within the purview of Section 7, Rule 85 of the Revised Rules of Court since it is not an appointed administrator of the estate.23 When Atty. Quasha passed away in 1996, Atty. Syquia was left as the sole administrator of the estate of the late Raymond Triviere. The person of Atty. Quasha was distinct from that of petitioner Quasha Law Office; and the appointment of Atty. Quasha as administrator of the estate did not extend to his law office. Neither could petitioner Quasha Law Office be deemed to have substituted Atty. Quasha as administrator upon the latter's death for the same would be in violation of the rules on the appointment and substitution of estate administrators, particularly, Section 2, Rule 82 of the Revised Rules of Court.24 Hence, when Atty. Quasha died, petitioner Quasha Law Office merely helped in the settlement of the estate as counsel for the petitioner children of the late Raymond Triviere. In its Memorandum before this Court, however, petitioner Quasha Law Office argues that "what is being charged are not professional fees for legal services rendered but payment for administration of the Estate which has been under the care and

management of the co-administrators for the past fourteen (14) years."25 On the other hand, in the Motion for Payment filed with the RTC on 3 September 2002, petitioner Quasha Law Office prayed for P200,000.00 as "attorney's fees and litigation expenses." Being lumped together, and absent evidence to the contrary, the P200,000.00 for attorney's fees and litigation expenses prayed for by the petitioner Quasha Law Office can be logically and reasonably presumed to be in connection with cases handled by said law office on behalf of the estate. Simply, petitioner Quasha Law Office is seeking attorney's fees as compensation for the legal services it rendered in these cases, as well as reimbursement of the litigation expenses it incurred therein. The Court notes with disfavor the sudden change in the theory by petitioner Quasha Law Office. Consistent with discussions in the preceding paragraphs, Quasha Law Office initially asserted itself as co-administrator of the estate before the courts. The records do not belie this fact. Petitioner Quasha Law Office later on denied it was substituted in the place of Atty. Quasha as administrator of the estate only upon filing a Motion for Reconsideration with the Court of Appeals, and then again before this Court. As a general rule, a party cannot change his theory of the case or his cause of action on appeal.26 When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process.27 Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage.28 This rule, however, admits of certain exceptions.29 In the interest of justice and within the sound discretion of the appellate court, a party may change his legal theory on appeal, only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory.30 On the foregoing considerations, this Court finds it necessary to exercise leniency on the rule against changing of theory on appeal, consistent with the rules of fair play and in the interest of justice. Petitioner Quasha Law Office presented conflicting arguments with respect to whether or not it was co-administrator of the estate. Nothing in the records, however, reveals that any one of the lawyers of Quasha Law Office was indeed a substitute administrator for Atty. Quasha upon his death. The court has jurisdiction to appoint an administrator of an estate by granting letters of administration to a person not otherwise disqualified or incompetent to serve as such, following the procedure laid down in Section 6, Rule 78 of the Rules of Court. Corollary thereto, Section 2, Rule 82 of the Rules of Court provides in clear and unequivocal terms the modes for replacing an administrator of an estate upon the death of an administrator, to wit: Section 2. Court may remove or accept resignation of executor or administrator. Proceedings upon death, resignation, or removal. x x x. When an executor or administrator dies, resigns, or is removed the remaining executor or administrator may administer the trust alone, unless the court grants letters to someone to act with him. If there is no remaining 5

executor or administrator, administration may be granted to any suitable person. The records of the case are wanting in evidence that Quasha Law Office or any of its lawyers substituted Atty. Quasha as coadministrator of the estate. None of the documents attached pertain to the issuance of letters of administration to petitioner Quasha Law Office or any of its lawyers at any time after the demise of Atty. Quasha in 1996. This Court is thus inclined to give credence to petitioner's contention that while it rendered legal services for the settlement of the estate of Raymond Triviere since the time of Atty. Quasha's death in 1996, it did not serve as co-administrator thereof, granting that it was never even issued letters of administration. The attorney's fees, therefore, cannot be covered by the prohibition in the third paragraph of Section 7, Rule 85 of the Revised Rules of Court against an attorney, to charge against the estate professional fees for legal services rendered by them. However, while petitioner Quasha Law Office, serving as counsel of the Triviere children from the time of death of Atty. Quasha in 1996, is entitled to attorney's fees and litigation expenses of P100,000.00 as prayed for in the Motion for Payment dated 3 September 2002, and as awarded by the RTC in its 12 June 2003 Order, the same may be collected from the shares of the Triviere children, upon final distribution of the estate, in consideration of the fact that the Quasha Law Office, indeed, served as counsel (not anymore as co-administrator), representing and performing legal services for the Triviere children in the settlement of the estate of their deceased father. Finally, LCN prays that as the contractor of the house (which the decedent caused to be built and is now part of the estate) with a preferred claim thereon, it should already be awarded P2,500,000.00, representing one half (1/2) of the proceeds from the sale of said house. The Court shall not take cognizance of and rule on the matter considering that, precisely, the merits of the claim of LCN against the estate are still pending the proper determination by the RTC in the intestate proceedings below. WHEREFORE, premises considered, the Petition for Review on Certiorari is hereby PARTLY GRANTED. The Decision dated 11 May 2006 and Resolution dated 22 September 2006 of the Court of Appeals in CA-G.R. SP No. 81296 are AFFIRMED, with the following MODIFICATIONS: 1) Petitioner Quasha Law Office is entitled to attorney's fees of ONE HUNDRED THOUSAND PESOS (P100,000.00), for legal services rendered for the Triviere children in the settlement of the estate of their deceased father, the same to be paid by the Triviere children in the manner herein discussed; and 2) Attorneys Enrique P. Syquia and William H. Quasha are entitled to the payment of their corresponding administrators' fees, to be determined by the RTC handling Special Proceedings Case No. M-1678, Branch 63 of the Makati RTC, the same to be chargeable to the estate of Raymond Trieviere. SO ORDERED.

G.R. No. L-6871

January 15, 1912

JOSE McMICKING, administrator of the estate of Margarita Jose, plaintiff-appellant, vs. BENITO SY CONBIENG, administrator of the estate of Pio de la Gurdia Barretto Sy Pioco, defendant-appellee. Haussermann, Cohn D. R. Williams for appellee. MORELAND, J.: On or about the 5th of February, 1902, one Margarita Jose, a native of the Philippine Islands, died at Amoy, in the empire of China, leaving an estate consisting of personal property partly in Hongkong and partly in the Philippine Islands. On the 16th of April, 1902, one Engracio Palanca was appointed administrator with the will annexed of the estate of the said Margarita Jose, deceased, by the Court of First Instance of the city of Manila, and Mariano Ocampo Lao Sempco and Dy Cunyao became his sureties and qualified as such in the sum of P60,000. After the execution of this bond the said Palanca, as such administrator, took possession of all the property of the said Margarita Jose, amounting in all to $58,820.29 Hongkong currency. On the 22d of April, 1904, the Mariano Ocampo Lao Sempco died in the city of Manila, testate. The fact of his death was brought to the attention of the Court of First Instance of said city on the 2nd of November, 1904, by an application made by one of the legatees of said Margarita Jose, deceased, for an order directing said administrator to furnish a new bond. Pursuant to this application the court, on the 10th of November, 1904, made an order directing the said Palanca to furnish a bond in the sum of P60,000 to take the place of the undertaking upon which said Mariano Ocampo, deceased, and Dy Cunyao were sureties. The bond thus required was duly filed on the 22nd of November, 1904, the sureties thereon being Juan Fernandez, Luis Saenz de Vismanos and Alejandro Palanca. On the 11th of May, 1904, one Doroteo Velasco was appointed administrator with the will annexed of said Mariano Ocampo Lao Sempco, deceased, and on July 7 following Mariano Velasco and Pio de la Guardia Barretto qualified as sureties of the said administrator in the sum of P30,000. Said Mariano Ocampo Lao Sempco left him surviving as his heirs at law and devises and legatees one daughter, to whom he devised two-thirds of his estate, and three sons in China, to whom he devised the remaining one-third. On the 27th of July, 1904, said Doroteo Velasco, as such administrator, filed with the court a complete report and inventory of the property of the deceased, together with a statement of all his debts and liabilities. As a part of this report and inventory said administrator filed an instrument signed by all of the persons interested in the estate of the said Mariano Ocampo agreeing to the partition of he estate among themselves without proceedings in court, at the same time assuming the payment of all obligations against the estate. This agreement of partition was drawn and executed under sections 596 and 597 of the Code of Civil Procedure for the purposes and to attain the ends therein mentioned. On the 28th of July, 1904, the Court of First Instance of the city of Manila, upon the request of the administrator with the will annexed and of all parties interested in the estate of the said Mariano Ocampo, deceased, entered an order in said agreement. Pursuant to such agreement and order of the court approving the same, and after all the liabilities under which said estate lay had been fully paid and satisfied, the said Doroteo Velasco, as said administrator, delivered to the devisees and legatees of the said Mariano Ocampo, deceased, all of the property of said decedent pursuant to the terms of said agreement of partition, leaving in the hands of said administrator no property or thing of value whatsoever belonging to the said estate. From that time forward said administrator has not had in his possession or control & Fisher for appellant.

any of the assets of the said estate and has not had any participation in the management thereof. At the time the agreement for participation was made and signed and at the time of the distribution of the property of the estate pursuant thereto, no committee had been appointed to hear claims against the estate of the said Mariano Ocampo, deceased, and no notice had been published to creditors of the said deceased to present their claims against the said estate in the manner prescribed by law. On the 30th of March, 1908, by virtue of an order made by the Court of First Instance of the city of Manila, upon application of all parties interested, the said Engracio Palanca was removed from office as administrator of the estate of said Margarita Jose, deceased, and the plaintiff herein, Jose McMicking, was appointed in his stead. The said Palanca was removed from office by reason of the fact that he failed and refused to render an account of the property and funds of the estate of the said Margarita Jose, deceased, which has come to his possession as such administrator, and failed and refused, on order of the court, to deliver said property and funds or any portion thereof to the court or to the said Jose McMicking, his successor. Instead of so doing, he retained possession of said property and funds, absconded with the same, and never returned to the Philippine Islands. At the time of his removal he was indebted to the estate in the sum of P41,960.15, no part of which has ever been received by the estate or by its representative. On the 30th of June, 1909, Jose McMicking, as administrator, made an application to the court for the appointment of commissioners of the estate of said Mariano Ocampo for the purpose of hearing claims against the estate. The commission having been appointed and qualified, a claim was presented to it by the plaintiff based upon the defalcation of said Engracio Palanca, as administration with the will annexed of Margarita Jose, deceased, which claim was allowed by said commission and later approved by the court, which directed that the said claim be paid by Doroteo Velasco, if he had sufficient funds to make such payment. No part of the sum thus found to be due by the commission has been paid to the representative of the estate of said Margarita Jose, deceased. On the 3rd of November, 1905, Pio de la Barretto, who, it will be remembered, was one of the sureties on the undertaking of Doroteo Velasco, as administrator with the will annexed of Mariano Ocampo, deceased, died in the city of Manila, leaving an estate consisting of real and personal property located in the city. Said deceased left a will which was admitted to probate by the Court of First Instance of the city of Manila on the 3rd day of February, 1906, and letters of administration with the will annexed were issued to Benito Sy Conbieng, the defendant in this case. On the 4th of June, 1909, upon the application of the plaintiff in this case, a committee was appointed by the Court of First Instance of the city of Manila to appraise the estate of the said Pio de la Guardia Barretto, deceased, and to hear claims presented against his estate. Thereafter and within the time prescribed by law the plaintiff herein presented to said committee a claim for the sum of P30,000 "based upon the fact that the claim for the larger amount had been allowed in favor of the estate of said Margarita Jose Sempco, deceased;" and based upon the further fact "that the Court of First Instance had ordered the said Doroteo Velasco, as administrator of the estate of said Mariano Ocampo Lao Sempco, deceased, to pay the said claim if there were funds sufficient to make such payment, but that it has not been paid by the said Doroteo Velasco, or any part thereof," The claim so presented against the estate of Pio de la Guardia Barretto, deceased, was disallowed by the committee thereof. The plaintiff herein within the time allowed by law appealed to the Court of First Instance of the city of Manila from the order of the committee disallowing said claim. 7

It is disputed in the case that all of the claims against the estate of Mariano Ocampo were fully paid and satisfied at the time of the partition of said estate, with the exception of the alleged claim arising by virtue of his having been a surety of the default Palanca. It nowhere appears in the evidence or the record exactly when this claim arose it may be inferred from the time of presentation in 1909, and we have no means of determining whether the defalcation represented by the said claim occurred before or after the substitution of sureties herefore referred to. Upon these facts it was contended by counsel for plaintiff that the judgment should be rendered in his favor for the sum of P30,000, with costs, while counsel of defendant contended that upon said facts judgment should be rendered in favor of defendant, dismissing the complaint, with costs. The court having heard the evidence and the arguments of counsel, rendered judgment in favor of the defendant and against the plaintiff, dismissing the complaint upon merits, without costs. This appeal is from that judgment. We are of the opinion that the judgment must be affirmed. We base our affirmance upon the ground that Doroteo Velasco, for whom the deceased Pio de la Guardia Barretto was surety, would not have been liable himself had this action been commenced against him. If the principal is not liable upon the obligation, the surety cannot be. At the head of the law of administration of the Philippine Islands stands sections 596 and 597 of the Code of Civil Procedure. They are as follows: SEC. 596. Settlement of intestate estates, without legal proceedings, in certain cases. Whatever all the heirs of a deceased person are of lawful age and legal capacity, and their are no debts due from the intestate estate, or all the debts have been paid by the heirs, the heirs may, by a family council as shown under Spanish law, or by agreement between themselves, duly executed in writing, apportion and divide the estate among themselves, as they may see fit, without proceedings in court. SEC. 597. In such case distributees liable for debts. But if it shall appear, at any time within two years after such settlement and distribution of the estate, that there are debts outstanding against the estate which have not been paid, any creditor may compel the settlement of the estate in the courts in the manner hereinafter provided, unless his debt shall be paid, with interest; and the administrator appointed by the court may recover the assets of the estate from those who have received them, for the purpose of paying the debts; and the real estate belonging to the deceased shall remain charged with the liability to creditors for the full period of two years after such distribution, notwithstanding any transfers thereof that may have been made. These sections provide for the voluntary division of the whole property of the decedent without proceedings in court. The provisions which they contain are extremely important. The wisdom which underlies them is apparent. It is the undisputed policy of every people which maintains the principle of private ownership of property that he who owns a thing shall not be deprived of its possession or use except for the most urgent and imperative reason and then only so long as is necessary to make the rights which underlie those reasons effective. It is a principle of universal acceptance which declares that one has the instant right to occupy and use that which he owns, and it is only in the

presence of reasons of the strongest and most urgent nature that that principle is prevented from accomplishing the purpose which underlies it. The force which gave birth to this stern and imperious principle is the same force which destroyed the feudal despotism and created the democracy of private owners. These provisions should, therefore, be given the most liberal construction so that the intent of the framers may be fully carried out. They should not be straitened or narrowed but should rather be given that wideness and fullness of application without which they cannot produce their most beneficial effects. Standing, as we have said, at the head of the law of administration of these Islands, they are the first provisions to which our attention is directed in seeking a legal method for the division and distribution of the property of deceased persons. They are thus made prominent. And justly so. The purpose which underlies them, as we have already intimated, is to put into one's hands the property which belongs to him not only at the earliest possible moment but also with the least possible expense. By permitting the partition and division without proceedings in court no time is lost and substantially all expense and waste are saved. This is as it should be. The State fails wretchedly in its duty to its citizens if the machinery furnished by it for the division and distribution of the property of a decedent is no cumbersome, unwidely and expensive that a considerable portion of the estate is absorbed in the process of such division. Where administration is necessary, it ought to be accomplished quickly and at very small expense; and a system which consumes any considerable portion of the property which it was designed to distribute is a failure. It being undoubted that the removal of property from the possession of its owner and its deposit in the hands of another for administration is a suspension of some of its most important rights of property and is attended with an expense sometimes entirely useless and unnecessary, such procedure should be avoided whenever and wherever possible. In the case at the bar we are of the opinion that, under the broad and liberal policy which we must adopt in the interpretation and application of the provisions referred to, the decision of the property of Mariano Ocampo, deceased, in the form, in the manner and for the purposes expressed, falls within the provisions of said sections and may be termed, therefore, and we hold it to be, a partition of the property of a decedent without legal proceedings within the meaning of those sections. The fact of the prior appointment of an administrator and the filing of an inventory before such partition is of no consequence so far as the right of the owners to partition is concerned. The only requisite for such petition prescribed by the law is that "there are no debts . . . or all the debts have been paid by the heirs." When the condition is fulfilled the partition can take place, no matter what stage the administration may have reached. By this it is, of course, not meant that the partition after the appointment of an administrator will interfere with the rights acquired by third person dealing with said administrator within the limits of his authority and prior to the partition; nor that the administrator can be deprived of the property of which he is legally in possession without proper proceedings and the consent of the court. As we have already indicated, the basis of the liability of a surety on an administrators' bond is the fault or failure of the principal. The liability of the principal precedes that of the surety. If Velasco incurred no liability, then his surety incurred none. The question that naturally suggests itself is, then, In what was Velasco at fault or in what did he fail? When the persons interested in the estate of Mariano Ocampo agreed voluntarily upon a partition and division of the property of said estate and the actual partition followed, the matter passed out of the hands of Velasco as administrator. The parties to the partition stood invoking their 8

rights under section 596 and 597. Velasco was helpless. He was powerless to prevent the parties from taking the property to which they were entitled under the agreement, it being conceded that they were actually entitled thereto in law. Those sections were applicable to the situation and there was nothing that Velasco could do to prevent the estate from being divided according to their provisions. In giving his consent to the partition and in assisting the parties to obtain the approval of the court thereto he did no wrong. He simply aided in carrying out the provisions of the sections referred to. It is a universal principle that one who follows a law commits no fault, incurs no failure and wounds no rights. If one obeys the law he is free not only in person but in property. Observance of the law discharges obligations; it does not create them; and an obligation once discharged cannot be re-acted by the act of others in which the person as to whom it was discharged takes no part. The proceedings under sections referred to were, after the partition was actually made and the property duly turned over the administrator under the proper proceedings, a complete settlement of the estate of Mariano Ocampo, deceased, as it then stood, so far as the administrator was concerned. Nothing further needed to be done. Every duty which Velasco owed up to the time of the partition had been met. All debts presented or known had been paid. The court had given it approbation to the delivery of the property by the administrator to the partitioning parties. Every obligation which lay upon him had been removed. Nor could there arise against him any obligation in the future in relation to the same property. The instant that the partition occurred, in the form and manner stated, he stood stripped of all responsibility to the estate, to its creditors, to the heirs and to the court. He stood divested o every official duty and obligation, as fully as before his appointment as completely as if he had not been appointed at all. In law, therefore, he was no longer administrator with the will annexed of the estate of Mariano Ocampo, deceased. He was in effect, discharged. As to him the estate had been wiped out as a legal entity. It had ceased to exist. And, while at any time within two years after the partition the property, or a portion thereof, then in the possession of the partitioning persons could have been placed in administration upon the happening of certain events, it would not have been the same estate that had been represented by Velasco, nor would Velasco have been the administrator of the estate by virtue of his appointment in the old. It would have been necessary for the court, upon the proper application setting forth the conditions prescribed by the sections, to appoint another administrator for the purposes specified therein. It might have been Velasco, if he would have accepted the appointment, or it might have been another. The point is that it would have been necessary to appoint a new administrator just as if one had not been named before. The new administrator would have had new duties, some of which would have been quite different from those of the administrator appointed originally. He would have had different sureties, who would have found themselves to different obligations. That on the partition under said section the estate was, in this case, completely wiped out and the administrator as completely discharged cannot be doubted for the following reasons: 1. The whole estate was, by virtue of these sections, taken from the administrator and turned over to the partitioning persons. No security was required or given for its safekeeping or return. 2. The persons to whom the estate was thus turned over became absolute owners of the same, subject to be devastated, wholly or only partly, on the happening of certain events and the taking of certain proceedings thereon. But even such divestiture could not have been avoided by the payment by the parties, or any of

them, of the debt which was the moving cause thereof. From these premises it is the merest conclusion to say that the decedent's estate was merged in their partitioning parties; and this no matter whether the partition occurred before or after the appointment of an administrator. When one has been named to perform certain acts in relation to a given thing, and before said acts have been begun, or, having been begun, are completed, the appointing power has placed the thing upon which those acts were to operate wholly beyond the possession, jurisdiction and control of the one so appointed, there is a complete revocation of such appointment, so far as all subsequent acts are concerned. An administrator cannot be held to any accountability for property over which he has absolutely no power or jurisdiction and in which he has not the slightest legal interest. The thing on which he was appointed to operate having been withdrawn wholly beyond his ken by the very power (the law) which appointed him, there is a complete revocation of the appointment. Moreover, the sureties of an administrator so appointed can not be held liable for property which by force of law has been taken from the principal and its ownership and control turned over to others. Their obligation is that their principal shall obey the law in the handling and distribution of the estate. Their obligation is discharged when the estate is legally turned over to those entitled thereto. The law requires the principal to turn it over to those who bring themselves within the provisions of section 596. Having turned over the whole estate under the compelling power of the law, his obligation ceased. The responsibility of the sureties ceased at the same time. Without their consent another obligation could not be imposed upon them in relation to the same principal, and the same property, or apart thereof, especially after the lapse of two years. Their undertaking was that their principal should discharge one obligation, not two. It requires no argument to demonstrate that the duties and obligations imposed upon an administrator appointed under section 597 might and probably would be different in many respects from those of an administrator appointed in the first instance; and that, therefore, the obligation of his sureties would not be the same as that of the sureties of the administrator appointed originally. The administration contemplated by section 597 is a new administration and one entirely apart from any other administration theretofore had. This section requires the appointment of a new administrator, with a new undertaking. The administration under the section is distinct and separate from any administration which may have been in progress at the time of the partition and division under section 596. This is clear for the following reasons: After the partition and division provided for in sections 596 and 597 have been fully consummated, no further administration of the estate can be had unless there occur the following requisites: 1. There must have been discovered a claim against the estate "within two years after such settlement and distribution of estate." 2. The creditor holding the claim must be the person who moves the court for the appointment of an administrator. If those requisites are lacking, there can be no administration. When one fails the right too such administration does not arise and any person intersted in the estate may oppose any effort to administer under such circumstances. These requisites combined 9

are that and that alone which give to the administrator when appointed the right to recover the assets from the persons who received them on the a partition. Indeed, if these requisites are lacking no administrator can lawfully be appointed, and, if improperly appointed, he fails of legal power to maintain an action to recover the assets in the hands of those among whom they have partitioned; in other words, he is powerless to administer. If these requisites fail, then the real estate in the hands either of the persons among whom it has been partitioned or of their assignees is free from the lien created by section 597 and any attempt to enforce such lien can be successfully opposed by any person interested in such property. The appointment of an administrator without the concurrence of these requisites is without warrant of law and the appointee is powerless to perform any act of administration. The statute must be strictly complied with in every essential before it operates. Every essential requirements must be fulfilled before it will be permitted that a partition which has the clear sanction of the law and which is strictly in accord with the public policy of the estate shall be set aside and destroyed with all the evil consequences thereby entailed. It is necessary deduction from the provisions of the sections mentioned that the appointment of an administrator ought not to be permitted, even when the requisites above mentioned occur, unless the heirs or the persons among whom the property was partitioned have been given an opportunity to be heard on that application. It would be extremely unusual to proceed to the appointment of an administrator under section 597, by virtue of a debt which had been discovered after the partition and division, without giving the heirs an opportunity to avoid such administration by the payment of the debt, it being kept in view that the object of the law in originally giving the right to pay the debts and having partition without proceedings in court was to avoid that every administration. Such a proceeding would be unusual and irrational. Such a course would be in direct opposition to the purposes which animated the provisions authorizing the original partition. (1) In the case at bar no debt was discovered during the prescribed period. It was nearly four years after the partition of the estate and the taking possession by the heirs of their respective portions before it was even discovered that Palanca had been guilty of converting the property of the estate to his own use; and, so far as the records shows, it was nearly five years before the alleged claim against the estate of Mariano Ocampo was fixed. (2) No creditor made his application. The requirements of section 597 not having been met, there could be no administration under section. Therefore, the appointment of commissioners for the hearing of the claim against the estate of Mariano Ocampo presented by the plaintiff in this case was an appointment without warrant or authority of law. It was appointment in respect to an estate that did not exist and in relation to an administration that had never been inaugurated. Under section 597 the commencement of the administration is the application of the creditor and the appointment of the administrator pursuant to such application. Without such appointment there is no administration. As we have before stated, when the property was partitioned a described heretofore, the estate, as such, ceased to exist and the administration thereof by Doroteo Velasco was wiped out. There was no administrator to carry on the administration. By operation of the law the estate had been passed on the heirs who had become the absolute owners of it. They were subject to the orders of the old administrator and they held rights inferior to no one. To be sure, as we have already stated, those rights might

be modified to a certain extent by the happening of subsequent events; but until those events transpired their rights were absolute. Those conditions never having been met, a fact admitted by both parties in the case at bar, there was absolutely no estate at all, much less one in the process of administration, at the time the commissioners were appointed to her the claim for P30,000 presented against the estate of Mariano Ocampo, deceased, by the plaintiff herein. Add to this the fact that there was no administrator of said estate in extense at the time, and we have before us the absurdity of the appointment of the commissioners to report on a claim against an estate which did not exist and under the direction of an administrator that had never been appointed. The necessary conclusion is that the appointment of commissioners to hear the claim above referred to was beyond the powers of the court and was without jurisdiction. The finding of the commissioners had no force or effect. It gave no right against the estate and none against the so-called administrator. It must be remembered that it is only debts discovered within the prescribed period that can be made the reason for an administration of the estate subsequent to its partition. The necessary result is t hat a debt not discovered within that period cannot be made the reason for an administration of the estate. The debt in the case at bar having first discovered more than four years after the partition of the estate of Mariano Ocampo, deceased, an administrator, even though appointed under section 57, would not no authority in law, over the objection of one interested, to pay the debt in question or to maintain an action or other proceeding for the recovery of property for that purpose. This section creates a statute of limitations which deprives all debts which are not discovered within the prescribed time of the power of requiring an administration of the estate. The administration of the estate after the partition under the law has been accomplished depends upon the discovery of the debt "at any time within two years after such settlement and distribution of the estate." The law does not operate unless that discovery is made within the time prescribed. We have not overlooked the contention that at the time this partition took place there was a contingent claim against the estate partitioned, namely, the claim which would arise on the contingency that the administrator for whom Mariano Ocampo was surety might default or otherwise fail to perform his duties thus rendering Mariano Ocampo liable on his bond; and that contingent claim, being one expressly recognized by sections 746 to 749 of the Code of Civil Procedure as a claim entirely proper to present, no partition of this estate under section 596 and 597 was legally possible until such claim was provided for by the petitioning parties. This contention goes upon the assumption that a partition under the sections of the Code of Civil Procedure so often referred to is void unlessevery debt is paid or provided for by the petitioning parties, and may therefore be entirely disregarded by the creditor holding a claim either unpaid or provided for. We do not believe that this assumption is warranted. In the first place, we must remember that the partition proceedings in question are proceedings out of court. Consequently there is no prescribed method of ascertaining and settling claims. The appointment of commissioners, the publication of notice to creditors, and all the other proceedings necessary in cases of administration in court are not required in partition out of court. The law is silent as to how the claims are to be ascertained, presented and determined. We must assume, therefore, that the method of ascertaining them and determining their validity was left to the good sense and sound judgment of the persons concerned. Usually no difficulty will be experienced in solving the problem presented by this conclusion. It is obvious that creditors always know who owes them and that debtors generally know whom they owe. It is equally obvious that, generally speaking, a creditor is one of the first to learn of 10

the death of the debtor, and that heirs of the latter are the first to begin to calculate how much of his property they are to receive. This cannot be known until the debts are determined. The heirs know they cannot escape payment of the debts. A surreptitious division behind the backs of the creditors would not avail as the latter have two years thereafter in which to throw at least a portion of the estate into administration and thereby nullify the attempt to overreach them. Even the transfer by the partitioning persons of the property received on the partition to third persons would not profit them, inasmuch as the consideration received on such transfer would, if necessary, be subject to seizure to pay the debt presented and the real estate would go into the hands of the vendees charged with the lien of said debt. The method of ascertaining claims against the defendant's estate not being prescribed, it is apparent that no objection to a partition can be urged by a creditor whose claim has not been paid, due to the faulty method adopted by the partitioning parties to ascertain claims, or, even, the absence of any effort at all to ascertain them. In the second place, it must be on served that express provisions is made by sections 596 and 597 for the payment of a claim discovered by them or presented after the partition. That is one of the main provisions. It is a necessary deduction, therefore, that it was not the intention of the law to pronounce the partition void of no effect simply because not all of the debts were paid before the partition was made. The fact of non payment cannot, then, because by the creditor as a reason for attacking the partition directly; that is, by asserting that, inasmuch as a payment of all the debts is a condition precedent to the right of partition, such partition cannot legally and validly take place while a debt is outstanding. While a partition manifestly fraudulent in inception and result might possibly be attacked directly by an action to set aside, a question which we do not discuss or decide, the manner of attacking the partition prescribed by the law is the one, generally speaking, preferably to be followed; and that is to throw into administration so much of the estate as is necessary to pay the outstanding claim. The method, thoughindirect, accomplishes a better result than a direct attack. The latter, by destroying the validity of the partition, would throw the whole situation into confusion and uncertainty, something always to be avoided. The former does not produce that result. Where there is no fraud, and possibly where there is, a direct attack on the partition is impossible under the provisions under discussion. A claim discovered and presented within the two years serves not to destroy, primarily, the partition. It does not even permit the whole estate to be thrown into administration. Only such portion as is necessary to pay the discovered debt can be administered. This is apparent when it is observed that on such administration the administrator is authorized to recover only the amount of property necessary to pay the debt presented, leaving the partitioning parties in undisturbed possession of the remainder. Moreover, the partitioning parties may still pay the debt and preserve undisturbed the partition in all it parts and thus assure and maintain the rights of the parties thereunder. The mere fact, therefore, that a creditor was not paid before the partition took place furnishes no ground for a revocation of the partition. It simply provides a fact which he may urge as a reason for the appointment of an administrator and the consequent administration of so much of the estate as may be necessary to pay the debt discovered. But, as already seen, in order that it be a reason for such appointment and administration, the claim must be presented within two years from the date of the partition and distribution.

Summarizing, we have seen that lack of opportunity, either by want of notice or otherwise, and the consequent failure to present a claim before partition, is, under the sections we are discussing, of no consequence whatever in so far as the validity of the partition is concerned. We have also seen that the fact that there were debts outstanding and unpaid at the time the partition took place is of no importance so far as the validity of the partition is concerned, leaving out account the question of fraud to which we have already adverted and left undecided. We have also seen that the fact such claim exists and is valid and subsistent against the estate is of no consequence whatever with respect to the right of its holder to require an administration of the estate unless such claim is discovered and presented within two years. The fact that the claim in the case at bar was, during a certain period, a contingent one is of no importance. The sections under discussion make no distinction between claims. The creditor himself is not without duties. In the case at bar it was five years after the petition before the alleged creditor made any attempt whatsoever to "discover" or present his claim. He knew of the death of Ocampo very soon after it occurred. He knew that it was among the possibilities that Ocampo's estate might be called upon to respond for the failure of Palanca to perform his duty as administrator. It was his duty to see to it that he would be protected in that event. Nevertheless he permitted the estate of Ocampo to be partitioned and distributed without protest and without the presentation of his contingent claim, and sat quiet and passive for nearly five years thereafter knowing that it was very probable that the property of the estate was being consumed, incumbered, and transferred by the persons among whom it had been distributed. The judgment appealed from is hereby affirmed, without special finding as to costs.

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