Ypil vs. Salas

Upon the death of an incompetent ward during the pendency of a civil action instituted by his judicial guardian, the guardian—if subsequently appointed administrator of the ward's estate—must be substituted as the legal representative of the deceased real party in interest under Rule 3, Section 17 of the Rules of Court, and the surviving action must continue rather than be dismissed. The nominal plaintiff's survival does not defeat substitution where the real party in interest is the deceased ward or his estate.

Rev. Fr. Pascual Ypil was the duly appointed judicial guardian of the properties of Antonio Lao, an incompetent, by virtue of an order in Sp. Proc. No. 123-JD dated September 4, 1975. In that representative capacity, he was the legal representative of Lao, who owned the properties involved in the litigation. The dispute concerns the application of Rule 3, Section 17 of the Rules of Court, which governs the substitution of a deceased party's legal representative when the claim survives.

Rev. Fr. Pascual Ypil was the judicial guardian of the properties of Antonio Lao, an incompetent, by virtue of an order in Sp. Proc. No. 123-JD dated September 4, 1975. In that capacity, he filed Civil Case No. DC-105 before the Court of First Instance of Cebu, Branch XVII, in Danao City, against Charlie F. Adlawan and Spouses Ramon M. Durano and Beatriz D. Durano. He filed the original complaint as guardian and later filed an amended complaint in the same capacity. In Civil Case No. DC-125, he likewise instituted a complaint as judicial guardian of Lao against Spouses Gratamena Lao and Jose Nuñez, et al., for annulment of deeds of sale and cancellation of tax declarations. Both complaints alleged that Lao was the original owner of the parcel of land described therein and that its alienation was sought to be annulled on the ground of fraud and illegality and returned to his estate. The captions and the pleadings showed that the actions were filed in a representative capacity, with Lao as the real party in interest.

While the cases were pending, Antonio Lao died intestate on April 5, 1978, at Danao City. He left an estate and his surviving spouse, Rufino Gonzales (second wife), and Dionisio H. Lao (son by the first marriage) and Gratamena Lao (daughter by the second marriage) as his only heirs. On April 28, 1978, heir Dionisio H. Lao filed a petition for letters of administration before Branch XVII of the Court of First Instance of Cebu, presided by respondent Judge, docketed as Special Proceedings No. DC-106. On July 26, 1978, petitioner, then judicial guardian over Lao's properties, was appointed and issued letters of administration.

On June 8, 1978, respondent Judge dismissed Civil Case No. DC-105 without prejudice, stating that the ward was already dead, that a separate action for appointment of an administrator was pending, and that the death of the ward terminated the guardianship, leaving the guardian with only the duty to make a proper accounting and settlement. On June 29, 1978, respondent Judge issued a similar dismissal order in Civil Case No. DC-125. Petitioner moved to reconsider the DC-105 dismissal on June 29, 1978, arguing that the case was a real action that survived the death of the real party in interest under Section 17, Rule 3 of the Rules of Court. The motion was denied on July 5, 1978, with the court reiterating that petitioner's authority stemmed from the guardianship order and that his appointment as administrator had not yet been formally extended.

Petitioner filed notices of appeal in both cases on July 26, 1978. Because the appeals involved purely a question of law, they were directed to the Supreme Court, and the records on appeal were approved and forwarded. In a Resolution dated October 13, 1978, the First Division required petitioner to pay docket and legal research fund fees and to file petitions for review on certiorari, which he did. The facts of the cases were not disputed. The trial court's dismissal orders rested on the fact of Lao's death and the consequent termination of the guardianship; the same judge later appointed petitioner as administrator of Lao's intestate estate and issued the corresponding letters of administration.

• Survival of the Real Action: Petitioner argued that the case is a real action which survives even with the death of the real party in interest who was under guardianship, citing Section 17, Rule 3 of the Rules of Court.

• Non-Applicability of Rule 3, Section 17: Respondents contended that Fr. Ypil is the plaintiff in both civil cases and, not having died, Section 17, Rule 3 of the Rules of Court does not apply.

• Effect of Death of Ward on Pending Actions: Whether the death of the incompetent ward during the pendency of civil actions filed by his judicial guardian requires dismissal of the actions because the guardianship has terminated.
• Applicability of Rule 3, Section 17: Whether Section 17, Rule 3 of the Rules of Court applies when the nominal plaintiff is the guardian and the real party in interest is the deceased incompetent ward.
• Substitution and Continuation of Actions: Whether the guardian, subsequently appointed administrator of the ward's estate, should be substituted as the legal representative and the actions continued without filing new civil actions.

• Effect of Death of Ward on Pending Actions: No. The death of the ward terminates the guardianship, but it does not extinguish a surviving action or require its dismissal; the action may continue through the proper legal representative.
• Applicability of Rule 3, Section 17: Yes. Although Fr. Ypil was the nominal plaintiff, the real party in interest was the incompetent ward or his estate, so the ward's death triggered the substitution rule.
• Substitution and Continuation of Actions: Yes. Petitioner, having been appointed administrator of the estate, should appear as administrator and the captions amended; no new civil actions are necessary.

• Effect of Death of Ward on Pending Actions: The lower court dismissed the cases because the death of the ward terminated the guardianship and all powers and duties of the guardian ceased, except the duty to account and settle. The Supreme Court set aside the dismissals. While the death of the ward terminates the guardianship, the pending actions were not thereby extinguished. The claims were for annulment of deeds of sale of real property belonging to the estate, and such claims survive the death of the real party in interest. Dismissal was therefore improper; the proper course was to continue the proceedings with the legal representative of the deceased.
• Applicability of Rule 3, Section 17: The complaints were filed by petitioner in his representative capacity as judicial guardian. The captions and allegations disclosed that his principal, the incompetent Antonio Lao, was the real party in interest. The complaints alleged that Lao was the original owner of the land and that its alienation was sought to be annulled for fraud and illegality and returned to his estate. Because the real party in interest died during the pendency of the cases, Section 17, Rule 3 of the Rules of Court applied. Respondents' contention that the rule did not apply because Fr. Ypil was the plaintiff and had not died was without merit; the nominal plaintiff's survival did not prevent substitution of the deceased real party's legal representative.
• Substitution and Continuation of Actions: Under Rule 3, Section 17, after a party dies and the claim is not extinguished, the court shall order the legal representative of the deceased to appear and be substituted within thirty days or such time as may be granted. Petitioner, who had been the judicial guardian, was later appointed administrator of Lao's intestate estate and issued letters of administration by the same judge. It thus became his duty to appear as administrator of the estate, not as judicial guardian, and the captions of the pleadings had to be amended. No new civil actions were necessary, because that would serve no useful purpose in the speedy and inexpensive administration of justice; the parties were already before the court and the issues had been joined. Any doubt about petitioner's appointment as administrator was resolved when the same judge appointed him and issued the corresponding letters of administration.

• Real Party in Interest — The real party in interest is the party who stands to be benefited or injured by the judgment, not necessarily the nominal plaintiff. Although Fr. Ypil was named plaintiff, he sued only as guardian; the real party in interest was the incompetent Antonio Lao or his estate. This characterization made the death of Lao, not the survival of Fr. Ypil, the operative event for substitution.
• Substitution of Parties upon Death under Rule 3, Section 17 — When a party dies and the claim is not extinguished, the court shall order the legal representative of the deceased to appear and be substituted within thirty days or such time as may be granted. The rule applies where the real party in interest dies even if the nominal plaintiff survives. Here, petitioner as guardian was the legal representative of the real party in interest; after his appointment as administrator, he had to be substituted as administrator and the pleadings amended.
• Survival of Actions for Annulment of Deeds of Sale — Actions for annulment of deeds of sale of real property belonging to an estate survive the death of the party because they involve property rights and claims that are not extinguished by death. The Court held that the actions or claims survived, being for annulment of deeds of sale of real property belonging to the estate, and that no new civil actions were required.
• Termination of Guardianship by Death of Ward — The death of the ward terminates the guardianship, and the guardian's powers and duties cease, except the duty to make a proper accounting and settlement in court. This termination, however, does not automatically require dismissal of a pending action that survives; the guardian may be replaced by the legal representative of the estate under the substitution rule.

• "The real truth and substance of the matter is that as plaintiff, petitioner was suing as guardian, the legal representative of the real party in interest who is the incompetent ward and under the peculiar facts of the case wherein admittedly the real party in interest died during the pendency of the civil cases instituted by his guardian in his behalf and admittedly also said guardian was appointed thereafter administrator of the intestate estate of the incompetent ward and issued letters of administration by the same judge presiding and acting in said civil cases, by the Rule cited above finds clear application and implementation." — This passage states the ratio: the guardian was the legal representative of the real party in interest, and the substitution rule applied after the ward's death and the guardian's appointment as administrator.
• "There is no necessity of filing new civil actions for it would serve no useful purpose in the speedy and inexpensive administration of justice since the parties are already before the court and the issues have already been joined. Moreover, the actions or claims survive, being for annulment of deeds of sale of real property belonging to the estate." — This passage explains why the pending actions should continue instead of being dismissed and refiled.
• "It therefore becomes the duty of petitioner to appear as administrator of the estate and no longer as judicial guardian of the incompetent ward. The captions of the pleadings must thus be amended." — This passage states the operative substitution: petitioner must appear as administrator, and the pleadings must be amended accordingly.

• Rule 3, Section 17, Rules of Court — Provides that after a party dies and the claim is not thereby extinguished, the court shall order the legal representative of the deceased to appear and be substituted within thirty days or such time as may be granted; if the legal representative fails to appear, the court may order the opposing party to procure the appointment of a legal representative; heirs may be substituted without requiring appointment of an executor or administrator, and a guardian ad litem may be appointed for minor heirs. The Court applied this provision because Antonio Lao, the real party in interest, died during the pendency of the civil cases; petitioner, his judicial guardian and later administrator of his estate, had to be substituted as administrator and the pleadings amended.

Teehankee (Chairman), Makasiar, Fernandez, De Castro, and Melencio-Herrera, JJ.