G.R. No. L-15445 - IN RE: Timbol vs. Cano

Mercedes Cano, the intestate, died in August 1945, leaving behind her only heir, her son Florante C. Timbol, who was then 11 years old.
Jose Cano, the brother of the deceased, was initially appointed as administrator of the estate on September 27, 1946.

On April 13, 1951, Jose Cano, acting as administrator through his counsel (and also an uncle of Florante), filed a petition proposing that the agricultural lands be leased to him for an annual rental of P4,000, with proceeds used for the maintenance of the minor heir and for payment of land taxes and government dues.
Judge Itdilberto Barot approved this motion on April 27, 1951, with conditions that included the assumption of previous deficits and the stipulation that the arrangement would continue only if deemed advantageous to Florante.
On January 14, 1956, and later on April 2, 1957, administrative motions were approved that modified the lease terms – reducing the annual rental to P2,400 and converting 30 hectares of the agricultural lands into a subdivision.
The project of partition was approved designating Florante C. Timbol as the sole and exclusive heir of all the properties of the intestate.

On June 6, 1957, Florante C. Timbol was appointed administrator, replacing Jose Cano.
On January 6, 1958, Florante filed a motion to:

Although the motions were initially approved, the court set aside the approval to allow Jose Cano, by then a lessee, to present objections.

The enlargement of the subdivision would reduce the existing leased area and potentially deprive his tenants of their landholdings.
He claimed that he was in possession under a valid court-authorized lease contract, which he contended could not be summarily altered or revoked by a simple petition.

The trial court ruled that the lease contract entered into by the administrator (Jose Cano) was illegal on two counts:

It was considered immoral by adopting a self-dealing arrangement under the law.
The contract violated statutory provisions (Articles 1646 and 1491 of the Civil Code), which disqualify certain persons—including administrators—from acquiring or leasing estate properties.

The court affirmed the motions of Florante C. Timbol, approved the increased subdivision area and revised plan, and consequently overruled Jose Cano’s later motion for reconsideration.

Whether considering the administrator’s motions of January 6 and 8, 1958 without giving adequate notice to Jose Cano, a lessee, violated the Rules of Court.
The issue was addressed when the court set aside its initial approval to afford Jose Cano adequate opportunity to present his objections.

Whether a probate court, in its supervisory role, possesses jurisdiction to annul or modify lease contracts entered in the administration of an estate.
The contention that only a court of general jurisdiction could affect the rights of a lessee was raised by the appellant.

Whether the lease contract executed by the prior administrator against the interests of the minor heir was lawful or void under the relevant articles of the Civil Code.
Whether the rights of lessee tenants and of Jose Cano, as the holder of that lease, would be unduly prejudiced by the court’s order reducing the leased land area.

Whether the prior approval and finality of the project of partition barred the court’s authority to appoint a new administrator or to direct changes (increasing the subdivision area) affecting the leasehold.

Whether any prejudice suffered by the rights under the lease, especially without a corresponding reduction in rental payments despite a reduction in land area, could be justified in view of the necessity to raise funds for settling estate debts.

Whether the appellant’s prolonged administration of the estate contributed to, or justified, the court’s findings and subsequent orders.