Pavia vs. de la Rosa

A claim for damages against a deceased person must be prosecuted against the executor or administrator of the deceased’s estate, not against the heirs, until the estate is liquidated, its debts paid, and the residue adjudicated to them.

Pablo Linart e Iturralde left a will naming the minor Carmen Linart y Pavia as only universal heir; Francisco Granda e Iturralde was appointed executor, and after Granda’s death Jose de la Rosa was substituted as executor. Jose de la Rosa later died, leaving Bibiana and Salud de la Rosa as his heirs, with Eusebio Canals as Bibiana’s husband. At the time of De la Rosa’s death, Act No. 190, the Code of Civil Procedure, governed settlement of estates; it required judicial administration, inventory, and payment of claims, and abrogated article 1003 of the Civil Code by making acceptance with benefit of inventory automatic.

Pablo Linart e Iturralde died leaving a will under which the minor Carmen Linart y Pavia was the only universal heir. Francisco Granda e Iturralde was appointed executor, but after Granda died toward the end of December 1893, Jose de la Rosa was substituted as executor. De la Rosa took possession of personal property valued at 10,673 pesos Mexican currency and of the property at No. 27 Calle Solana, Walled City, belonging to the testator.

The amended complaint alleged that Rafaela Pavia, in her own behalf and as guardian of Carmen, executed a power of attorney in favor of Jose de la Rosa, who administered the estate until August 20, 1903. According to the plaintiffs, De la Rosa administered the estate carelessly, neglected their interests, and wasted capital. They alleged that he retired or disposed without necessity of 7,207 pesos Mexican currency plus 360.25 pesos in interest, which would have produced 12,321.90 pesos Mexican currency; that he neglected to appraise, count, and divide the estate; and that he leased house No. 27 Calle Solana to his relatives from December 1893 to August 1903 at a rental lower than could have been obtained, causing losses of 6,570 pesos Mexican currency. The complaint sought more than 15,000 pesos Philippine currency in damages.

Jose de la Rosa died on September 14, 1903, leaving Bibiana and Salud de la Rosa as his only heirs and representatives; Eusebio Canals was Bibiana’s husband. In an additional pleading filed on March 10, 1905, the plaintiffs alleged that the defendants received and accepted De la Rosa’s inheritance without benefit of inventory and divided among themselves all of the estate, property, and effects he left.

The defendants answered by denying specified allegations, admitting others, and setting up special defenses. They maintained that they were not responsible for De la Rosa’s personal acts and that the plaintiffs had neglected to sue him during his lifetime. They alleged that De la Rosa, upon taking charge, received from the widow of the former executor a draft on the Caja de Depositos for 7,207 pesos plus 5% interest, not the amount claimed, and took charge of the property at No. 27. They further alleged that in 1894, with Rafaela Pavia’s authorization and legal formalities, De la Rosa withdrew the capital and interest from the Caja de Depositos to maintain and support the plaintiffs, who were then in Spain; that the sums and rentals were spent for the plaintiffs’ maintenance, care of the building, and other expenses; that De la Rosa rendered accounts twice; that Rafaela Pavia did not object to the first account although she had it for three years; that the rents were adequate because the building stood on land belonging to another; that partition was impracticable because all the money had been spent; and that the plaintiffs were indebted to De la Rosa in the amount of 1,794.42 5/8 pesos Mexican currency as the balance shown in the last account.

After hearing oral and documentary evidence, the Court of First Instance of Manila rendered judgment for the plaintiffs against the defendants for 3,488.27 pesos Mexican currency, equivalent to P3,171.09 Philippine currency, with interest at 6% per annum from June 27, 1904, and costs. The record did not show that the estate or intestate succession of Jose de la Rosa had ever been opened or that an inventory had been presented, although Act No. 190 was in force at his death. It also did not show whether De la Rosa died intestate or left a will, whether the defendants were heirs by will or by law, whether he left properties, who was the executor or administrator, or whether his properties had been adjudicated or partitioned to the defendants.

• Non-liability of Heirs: The defendants-appellants, as the parties seeking reversal, maintained that they were not responsible for the personal acts of Jose de la Rosa, from whom they derived their right and title, against whom the plaintiffs neglected to bring action during his lifetime.
• Use of Estate Funds: They alleged that De la Rosa withdrew the capital and interest from the Caja de Depositos in 1894 with Rafaela Pavia’s authorization and legal formalities, and used the sums and rentals for the plaintiffs’ maintenance and support, care of the building, and other expenses.
• Accounts and Adequate Rents: They alleged that De la Rosa rendered accounts twice, that Rafaela Pavia did not object to the first account though she had it for three years, and that the rents were adequate because the building stood on land belonging to another.
• Counterclaim: They sought 1,794.42 5/8 pesos Mexican currency as the balance due to De la Rosa from the last account.

• Careless Administration and Damages: The plaintiffs-appellees alleged that De la Rosa administered the estate carelessly, neglected their interests, wasted capital, and caused damages exceeding 15,000 pesos Philippine currency.
• Unauthorized Disposition and Low Rent: They alleged that he retired or disposed without necessity of 7,207 pesos Mexican currency plus 360.25 pesos in interest, which would have produced 12,321.90 pesos Mexican currency, and leased house No. 27 to relatives from December 1893 to August 1903 at a lower rental, causing 6,570 pesos Mexican currency in losses.
• Failure to Appraise, Count, and Divide: They alleged that De la Rosa neglected to appraise, count, and divide the estate.
• Heirs’ Liability: By additional pleading, they alleged that the defendants received and accepted the inheritance without benefit of inventory and divided the estate, making them liable for the damages.

• Proper Party Defendant: Whether an action to enforce a claim for damages against a deceased person may be brought directly against his heirs, or must be instituted against the executor or administrator of his estate.
• Heirs’ Liability Before Liquidation: Whether the heirs may be held personally liable for the deceased’s obligations before the estate is liquidated, debts paid, and residue adjudicated to them.
• Effect of Acceptance Without Benefit of Inventory: Whether the heirs’ acceptance of the inheritance without benefit of inventory makes them personally liable, in light of Act No. 190.

• Proper Party Defendant: No. The action should have been brought against the executor or administrator of Jose de la Rosa’s estate; under the Code of Civil Procedure, the executor or administrator is the only lawful representative of the estate.
• Heirs’ Liability Before Liquidation: No. The heir succeeds only after liquidation, payment of debts, and adjudication of the residue; before then, claims must be pursued against the executor or administrator.
• Effect of Acceptance Without Benefit of Inventory: No. Act No. 190 abrogated article 1003 of the Civil Code and made acceptance with benefit of inventory automatic; heirs are liable only to the extent of property coming from the estate.

• Proper Party Defendant: The Code of Civil Procedure, Act No. 190, provides that after death the only entity that may lawfully represent a testate or intestate succession is the executor or administrator appointed by the court. Sections 641, 642, 656, 660, 668, and 669 require the opening of the succession, appointment of an executor or administrator, taking of an inventory, and appointment of commissioners to appraise the estate and decide claims. Section 702 authorizes the executor or administrator to commence, prosecute, or defend actions in the right of the deceased that survive and are necessary for the recovery and protection of the deceased’s property or rights. Section 704 restricts actions for recovery of lands or damages to lands against an heir or devisee until a decree assigning the lands or the period for paying the estate’s debts has expired, unless the executor or administrator surrenders possession. Because the record did not show that De la Rosa’s estate had been opened, inventoried, administered, or adjudicated, and did not show who was the executor or administrator, the plaintiffs should not have sued Bibiana and Salud de la Rosa merely as the deceased’s sisters and heirs. The claim had to be prosecuted against the executor or administrator.
• Heirs’ Liability Before Liquidation: Section 753 provides that only after payment of the debts, funeral charges, expenses of administration, and allowances for the family’s maintenance shall the court assign the residue of the estate to the persons entitled, naming the persons and proportions; those persons may then demand and recover their shares from the executor or administrator or from any other person in possession. From these provisions, the heir lawfully succeeds the deceased only after liquidation of the estate, payment of its debts, and adjudication of the residue. In the meantime, the executor or administrator is the only person charged by law to consider claims against the estate. The defendants therefore could not be held directly liable for De la Rosa’s obligations before liquidation and adjudication.
• Effect of Acceptance Without Benefit of Inventory: The plaintiffs’ additional pleading alleged that the defendants accepted the inheritance without benefit of inventory. Act No. 190, however, abrogated article 1003 of the Civil Code and related provisions on simple acceptance and acceptance with benefit of inventory. Under Act No. 190, an estate is always accepted with benefit of inventory, and the heirs, even after taking possession, do not become responsible for the deceased’s debts with their own property but only with property coming from the estate. Section 596 permits extrajudicial division of an intestate estate among heirs of legal age if the estate is free from debts or the debts have been paid, without prejudice to a creditor’s right under section 597 within two years from the partition. No such partition or compliance was shown. Thus, the allegation of acceptance without benefit of inventory did not make the defendants personally liable.

• Executor or Administrator as Sole Representative of the Estate — After death, the only entity that may lawfully represent a testate or intestate succession is the executor or administrator appointed by the court. Claims against the deceased must be prosecuted against that representative, not against the heirs.
• Heirs Succeed Only After Liquidation and Adjudication — Under the Code of Civil Procedure, an heir lawfully succeeds the deceased only after liquidation of the estate, payment of debts, and adjudication of the residue. Until then, the executor or administrator is the proper party to consider claims against the estate.
• Automatic Benefit of Inventory Under Act No. 190 — Act No. 190 abrogated article 1003 of the Civil Code and related provisions; an estate is always accepted with benefit of inventory. Heirs, even after taking possession, are not personally liable for the deceased’s debts beyond the property coming from the estate.
• Extrajudicial Partition and Creditors’ Rights — Section 596 permits extrajudicial division of an intestate estate among heirs of legal age if the estate is free from debts or the debts have been paid, without prejudice to a creditor’s right under section 597 for two years from partition. The provision did not aid the plaintiffs because no partition or compliance was shown.
• Limitations on Actions Against Heirs or Devisees — Section 704 bars an action for recovery of lands or damages to lands against an heir or devisee until a decree assigning the lands or the period for paying the estate’s debts has expired, unless the executor or administrator surrenders possession.

• "From the above it appears evident that whatever may be the rights of action on the part of Rafaela Pavia and the minor, Carmen Linart, the latter represented by the former as guardian, as to the obligations assumed by Jose de la Rosa, now deceased, it must be prosecuted against the executor or administrator of the estate of said deceased Jose de la Rosa, whose executor or administrator is at this time the only representative of the estate or intestate succession of said deceased;" — This passage states the ratio decidendi: the claim against the deceased must be brought against the executor or administrator as the only lawful representative of the estate.
• "In accordance with the provisions of the aforesaid Act No. 190 it is understood that a estate or intestate succession of a deceased person is always accepted and received with benefit of inventory, and his heirs, even after having taken possession of the estate of the deceased, do not make themselves responsible for the debts of said deceased with their own property, but solely with that property coming from the estate or intestate succession of said deceased." — This defines the automatic benefit-of-inventory rule under Act No. 190 and explains why the heirs were not personally liable.
• "From the legal provisions contained in the aforesaid code with regard to estate or intestate succession, it is deduced that the heir lawfully succeeds the deceased from whom he derives his inheritance only after the liquidation of the estate, the payment of the debts of same and the adjudication of the residue of the estate of said deceased, and in the meantime the only person in charge by law to consider all claims against the estate of the deceased and to attend to or consider the same is the executor or administrator appointed by a competent judge or court." — This passage sets out the rule that heirs succeed only after liquidation and adjudication, while the executor or administrator handles claims in the meantime.
• "Wherefore, taking into consideration the reasons and facts hereinbefore given, we reverse the judgment appealed from, and find for the defendants Bibiana and Salud de la Rosa, and Eusebio Canals, without special finding as to the costs herein, reserving to the plaintiffs to right to institute proper action against the executor or administrator of the properties of the estate of the deceased, Jose de la Rosa, in accordance with the provisions of the Code of Civil Procedure now in force covering the subject-matter herein." — This is the dispositive portion, reversing the judgment and preserving the plaintiffs’ right to sue the proper estate representative.

• Act No. 190, Code of Civil Procedure — The governing procedural law at the time of Jose de la Rosa’s death; it required the opening of testate or intestate succession, appointment of an executor or administrator, inventory, and liquidation, and abrogated article 1003 of the Civil Code on acceptance of inheritances.
• Article 1003, Civil Code — Cited as abrogated by the Code of Civil Procedure; the Court held that simple acceptance or acceptance with benefit of inventory and their consequences were superseded by Act No. 190.
• Sections 641, 642, 656, 660, 668, 669, Code of Civil Procedure — Require the opening of a testate or intestate succession immediately after death, the appointment of an executor or administrator, the taking of an inventory, and the appointment of commissioners to appraise the estate and decide claims.
• Section 596, Code of Civil Procedure — Permits extrajudicial division of an intestate estate among heirs of legal age if the estate is free from debts or the debts have been paid, without court proceedings.
• Section 597, Code of Civil Procedure — Recognizes the right of a creditor within two years from the partition of the estate.
• Section 686 and following, Code of Civil Procedure — Establish the powers and duties of the commissioners and the proceedings for admitting, hearing, and examining claims against the estate.
• Section 702, Code of Civil Procedure — Authorizes the executor or administrator to commence, prosecute, or defend, in the right of the deceased, actions that survive and are necessary for the recovery and protection of the deceased’s property or rights.
• Section 704, Code of Civil Procedure — Bars an action for recovery of lands or damages to lands against an heir or devisee until a decree assigning the lands or the period for paying the estate’s debts has expired, unless the executor or administrator surrenders possession.
• Section 753, Code of Civil Procedure — Provides that after payment of debts, funeral charges, expenses of administration, and allowances, the court shall assign the residue of the estate to the persons entitled and name their proportions; those persons may then demand and recover their shares from the executor or administrator or from any other person in possession.

Arellano, C.J., Mapa, Johnson, Willard, and Tracey, JJ., concur.