Lim vs. Diaz-Millarez

A person with an adverse interest or hostility to those immediately interested in the estate is unsuitable for appointment as judicial administrator; the appointing court’s determination of suitability will not be disturbed on appeal unless clearly erroneous.

Cirilo Lim claimed to be a nephew of the late Jose Millarez, who died intestate; Basilisa Diaz-Millarez claimed to be Millarez’s widow. The two had conflicting claims to the estate’s properties, which were also the subject of a separate civil action between them. The appointment of a judicial administrator for Millarez’s estate therefore implicated the parties’ competing interests in those properties.

On October 22, 1953, Jose Millarez died intestate. On February 26, 1954, Cirilo Lim, claiming to be a nephew of the deceased, filed with the Court of First Instance of Negros Occidental a petition for appointment as judicial administrator of Millarez’s estate. The petition alleged that the deceased left no relatives such as descendants, ascendants, or surviving spouse, except collaterals.

Basilisa Diaz-Millarez, claiming to be the widow of Jose Millarez, opposed the petition on two grounds: that Cirilo Lim had an adverse interest in the estate, and that the estate’s properties were the subject matter of a litigation between her as plaintiff and Cirilo Lim as defendant in Civil Case No. 2986.

Trial of the administration case was postponed several times. When the case was called for hearing on March 17, 1959, both parties manifested the existence of the civil litigation over the estate properties. The trial court then issued an order dismissing the expediente. It noted that the civil case involved Basilisa’s claim that she was the legitimate widow of Jose Millarez and Cirilo’s contest of that claim; that the civil case had been decided in favor of Cirilo by the Second Sala and was pending appeal in the Court of Appeals; that the administration expediente was of no consequence; that upon final termination of the civil case the parties could file another application without prejudice; and that the expediente had been filed more than five years earlier without any special or regular administrator having been appointed, so dismissal would not prejudice any interested party.

Cirilo Lim’s motion for reconsideration was denied. He brought the case to the Court of Appeals, which certified the appeal to the Supreme Court because no question of fact was involved.

Meanwhile, the civil case between the parties, docketed as CA-G.R. 24561-R, was decided by the Court of Appeals on February 18, 1965. In that case, Basilisa Diaz-Millarez sought to recover from Cirilo Lim one-half of the total amount of P22,000 allegedly delivered to him by her and the deceased Jose Millarez on various occasions, and to be declared owner of one-half of the profits and gains derived therefrom. She claimed that she and Jose Millarez had lived as husband and wife for about 23 years and that she contributed capital and labor to the tobacco business in which she and the deceased were engaged, from which P22,000 in cash was given to Cirilo Lim. Cirilo Lim answered that the money he received from Jose Millarez on various occasions was handed to one Tan Suaco for investment in the tobacco business. The trial court ordered Lim to make an accounting of the P22,000 invested in the tobacco business. The Court of Appeals agreed with the trial court that Basilisa was entitled to one-half of the estate of the late Jose because she contributed labor and capital in the form of cash to a common fund with Jose from 1930 until his death in 1953. It set aside the judgment a quo and remanded the records with instructions to appoint a qualified certified public accountant to examine the documentary evidence and determine how much over and above P12,500 was invested by the late Jose Millarez and Basilisa in the tobacco business together with Cirilo Lim, to assess the extent of profits and gains, to admit such other evidence as material and relevant, and to render judgment anew adjudicating in favor of Basilisa one-half of the capital and one-half of the profits and gains derived therefrom that properly pertain to the late Jose Millarez after accounting.

The Court of Appeals found that Basilisa had contributed labor and capital in the form of cash to a common fund with Jose from 1930 until his death in 1953, and remanded the civil case for an accounting to determine the amounts invested and the profits and gains derived. The administration case was then before the Supreme Court on the certified appeal from the trial court’s dismissal order.

• Adverse Interest: Basilisa Diaz-Millarez opposed the petition on the ground that Cirilo Lim had an adverse interest in the estate.
• Pending Litigation: She also opposed on the ground that the estate’s properties were the subject matter of a litigation between her as plaintiff and Cirilo Lim as defendant in Civil Case No. 2986.

• Suitability of Administrator: Whether Cirilo Lim, as a relative of the deceased with an adverse interest to Basilisa Diaz-Millarez and the estate, is unsuitable for appointment as judicial administrator.
• Appellate Review of Suitability: Whether the trial court’s determination of Cirilo Lim’s suitability for appointment as administrator should be interfered with on appeal.
• Dismissal of Petition: Whether the order dismissing the petition for judicial administration should be affirmed.

• Suitability of Administrator: No. One with an adverse interest of some kind or hostility to those immediately interested in the estate is unsuitable for appointment as administrator.
• Appellate Review of Suitability: No. The determination of suitability rests in the sound judgment of the appointing court and will not be interfered with on appeal unless clearly erroneous.
• Dismissal of Petition: Yes. The order appealed from was affirmed, with costs against the petitioner-appellant, because Cirilo Lim was unsuitable for appointment as administrator.

• Suitability of Administrator: The claim of Basilisa against Cirilo in the civil case was based on her declared right to one-half of the estate of the deceased. Cirilo Lim, as a relative of the deceased, had some interest adverse to that of Basilisa. Having been shown to have some liabilities to Basilisa and to the estate as a whole, Cirilo could not compatibly perform the duties of an administrator. In this jurisdiction, one is considered unsuitable for appointment as administrator when he has an adverse interest of some kind or hostility to those immediately interested in the estate, citing Sioca vs. Garcia, 44 Phil. 711, and Arevalo vs. Bustamante, 69 Phil. 656.
• Appellate Review of Suitability: The determination of a person’s suitability for the office of judicial administrator rests, to a great extent, in the sound judgment of the court exercising the power of appointment. That judgment is not to be interfered with on appeal unless the said court is clearly in error, citing Sioca vs. Garcia.
• Dismissal of Petition: Because Cirilo Lim had an adverse interest and could not compatibly perform the duties of administrator, the order appealed from was affirmed, with costs against the petitioner-appellant.

• Adverse Interest or Hostility as Disqualification for Judicial Administrator — A person is considered unsuitable for appointment as administrator when he has an adverse interest of some kind or hostility to those immediately interested in the estate. In this case, Cirilo Lim, as a relative of the deceased, had an adverse interest to Basilisa Diaz-Millarez because her claim in the civil case was based on a declared right to one-half of the estate, and he was shown to have liabilities to her and to the estate as a whole; he could not compatibly perform the duties of administrator.
• Discretion of the Appointing Court in Determining Suitability — The determination of a person’s suitability for the office of judicial administrator rests, to a great extent, in the sound judgment of the court exercising the power of appointment. Such judgment is not to be interfered with on appeal unless the court is clearly in error. The Supreme Court applied this by declining to disturb the trial court’s dismissal of the petition.

• "In this jurisdiction, one is considered to be unsuitable for appointment as administrator when he has adverse interest of some kind or hostility to those immediately interested in the estate. (Sioca v. Garcia, 44 Phil. 711; Arevalo v. Bustamante, 69 Phil. 656)." — This states the controlling disqualification rule applied to Cirilo Lim.
• "Shown to have some liabilities to Basilisa and to the estate as a whole, Cirilo can not compatibly perform the duties of an administrator." — This applies the adverse-interest rule to the facts of the case.
• "The determination of a person's suitability for the office of judicial administrator rests, to a great extent, in the sound judgment of the court exercising the power of appointment and said judgment is not to be interfered with on appeal unless the said court is clearly in error. (Sioca v. Garcia, supra)." — This states the standard of appellate review over the appointing court’s suitability determination.

• Sioca vs. Garcia, 44 Phil. 711 — Cited for the rule that one with an adverse interest or hostility to those immediately interested in the estate is unsuitable for appointment as administrator, and for the principle that the appointing court’s determination of suitability is not to be interfered with on appeal unless clearly erroneous.
• Arevalo vs. Bustamante, 69 Phil. 656 — Cited together with Sioca vs. Garcia for the same disqualification rule based on adverse interest or hostility.

Concepcion, C.J.; Reyes, J.B.L.; Dizon; Makalintal; Bengzon, J.P.; Zaldivar; Sanchez; and Castro, JJ.