Alcala vs. Pabalan

When heirs extrajudicially partition a decedent’s estate, any property left undivided ceases to be estate property and becomes the private undivided property of the heirs as tenants in common; the majority of such co-owners may appoint an administrator for the common property under Article 398 of the Civil Code, and a probate court is without authority to appoint a judicial administrator over property that no longer forms part of a subsisting estate.

Juan Banatin died on 23 April 1897, survived by his widow Damasa Alcala and seventeen nieces and nephews. On 13 June 1897, without resorting to judicial administration, the widow and sixteen of the seventeen heirs mutually agreed to partition all the decedent’s property. The agreement expressly excluded one house, which was left undivided, gave the widow a lifetime usufruct over one-half of the house, allotted the other-half usufruct equally among the seventeen heirs, and designated Francisco Salgado (a nephew) as administrator of the house tasked with collecting rents and delivering one-half to the widow and the remaining half to the other heirs. Salgado later defaulted on the widow’s share, was sued, and his undivided interest in the house was sold at execution and subsequently repurchased with funds provided by four of the other heirs—Modesta Pabalan, Procopio Pabalan, Basilio Salgado, and Juan Banay-banay. On 25 November 1908, thirteen of the heirs acknowledged by public document the four contributing heirs as owners of the repurchased undivided one-half interest. On the same day, sixteen of the heirs unanimously appointed Modesta Pabalan as administratrix of the whole house in substitution of the late Francisco Salgado. From that time until the action, Modesta Pabalan administered the property, collected rents, and regularly paid one-half to Damasa Alcala. Despite this arrangement, Damasa Alcala petitioned the Court of First Instance of La Laguna on 11 June 1910 to be appointed administratrix of the house, treating it as part of the unsettled estate of Juan Banatin. The lower court granted the petition, prompting the four defendant-heirs to appeal.

• Death and Heirs: Juan Banatin died on 23 April 1897, leaving his widow Damasa Alcala (plaintiff-appellee) and seventeen nieces and nephews as heirs.
• Extrajudicial Partition Agreement: On 13 June 1897, the widow and sixteen of the seventeen heirs (excluding Tranquilina Banatin) voluntarily partitioned the entire estate among themselves. The agreement expressly left a single house undivided, provided that the widow would enjoy half of the usufruct thereof for life while the other half of the usufruct would be divided equally among the seventeen heirs, and named Francisco Salgado (a nephew) as administrator of the house with the obligation to collect rents and pay one-half to the widow and one-half to the other heirs.
• Default and Execution Sale: Francisco Salgado failed to remit the widow’s share of the usufruct. She sued him and obtained a judgment. On execution, the undivided interest of Salgado in the house was sold at public auction in 1907 to Macario Decena.
• Repurchase by Four Heirs: On 22 and 24 October 1908, the half-interest was repurchased from Decena, but the repurchase price was advanced not by the heirs of Francisco Salgado but by four of Juan Banatin’s other heirs: Modesta Pabalan, Procopio Pabalan, Basilio Salgado, and Juan Banay-banay.
• Recognition of Ownership and Appointment of New Administrator: On 25 November 1908, thirteen of the heirs executed a public document recognizing the four contributing heirs as owners of the repurchased undivided one-half interest in the house. On the same day, sixteen of the heirs unanimously appointed Modesta Pabalan as “administradora” of the entire house in substitution of the deceased Francisco Salgado.
• Administration by Modesta Pabalan: From 25 November 1908 until the filing of the action, Modesta Pabalan administered the property, collected the rents, and paid one-half of the rents to Damasa Alcala as the usufructuary of one-half.
• Petition for Probate Administration: On 11 June 1910, Damasa Alcala filed a petition in the Court of First Instance of La Laguna to be appointed administratrix of the house, asserting that the property remained part of the estate of Juan Banatin. The trial court granted the petition on that theory.

• Unsettled Estate: The plaintiff-appellee, Damasa Alcala, did not file a brief on appeal. Her position, as reflected in the petition granted by the lower court, was that the estate of Juan Banatin had not yet been finally settled, that the undivided house still formed part of the estate, and that she was entitled to appointment as judicial administratrix.

• Error in Finding Estate Unsettled: The defendants-appellants argued that the Court of First Instance erred in considering that the estate of Juan Banatin had not been terminated. They maintained that the voluntary extrajudicial partition among the heirs extinguished the estate, converting the undivided house into private property held in common, and that the majority of the co-owners had lawfully appointed Modesta Pabalan as administrator under Article 398 of the Civil Code.

• Jurisdiction to Appoint Administrator: Whether the probate court properly appointed Damasa Alcala as administratrix on the ground that the undivided house remained part of the unsettled estate of Juan Banatin, notwithstanding the extrajudicial partition by the heirs.

• Jurisdiction to Appoint Administrator: The appointment was reversed. The extrajudicial partition of 13 June 1897 fully divided the decedent’s property among the heirs; the undivided house ceased to be an asset of the estate of Juan Banatin and became the common undivided property of the heirs, who held it as tenants in common. No estate remained to be administered by the probate court. The majority of the tenants in common were entitled, under Article 398 of the Civil Code, to agree upon the appointment of an administrator for their common property without judicial intervention.

• Effect of Extrajudicial Partition on the Decedent’s Estate — When heirs by mutual agreement divide the decedent’s property among themselves, whether by actual distribution of specific allotments or by leaving certain items undivided, the property ceases to belong to the estate of the decedent and becomes the private property of the heirs. Any undivided portion is held by them as tenants in common. The estate is deemed fully settled, and the probate court no longer has jurisdiction to appoint an administrator over property that is no longer estate property.
• Administration of Common Property under Article 398, Civil Code — Under Article 398 of the Civil Code of 1889, the majority of co-owners may agree upon the appointment of an administrator for the common property. The right rests on the inherent power of co-owners to manage their own property and does not require leave of the probate court.

• “After the mutual agreement among themselves for the division of the estate, either actually distributing their respective shares or leaving the same undivided, the property in question was no longer the property of the estate of Juan Banatin, but the undivided property of the heirs. They were tenant in common of that portion of the property which remained undivided. As such tenants in common the majority of them had a right to agree upon the appointment of an administrator of their property. (Art. 398, Civil Code.) The property belonged to them. They had a right to administer it.”

• Alcala vs. Salgado, 7 Phil. Rep. 151 — Mentioned as the prior suit in which Damasa Alcala recovered unpaid usufruct from Francisco Salgado; led to the execution sale and subsequent repurchase. Not relied upon as legal authority for the ruling on probate jurisdiction or co-ownership.

• Article 398, Civil Code (1889) — Provides that the majority of the co-owners may agree upon the appointment of an administrator for the common property. Applied to confirm the validity of the majority heirs’ appointment of Modesta Pabalan as administrator of the undivided house, without necessity of probate court intervention.

Torres and Mapa, JJ., concurred fully. Carson and Moreland, JJ., concurred in the dispositive part only.

N/A. Justices Carson and Moreland concurred solely in the result without filing a separate dissenting or concurring opinion.