Title
Hilado vs. Court of Appeals
Case
G.R. No. 164108
Decision Date
May 8, 2009
Petitioners, contingent creditors, sought intervention in Roberto Benedicto's intestate estate; SC denied intervention but affirmed rights as interested parties under Special Proceedings rules.

Case Summary (G.R. No. 172242)

Key Dates

  • Death of Roberto S. Benedicto: 15 May 2000.
  • Petition for letters of administration filed: 25 May 2000.
  • Letters of administration issued by Manila RTC: 2 August 2000.
  • Inventory submitted by administratrix: January 2001 (included liabilities reflecting the two pending civil cases).
  • RTC denied petitioners’ motions to intervene or to be furnished with processes: 2 January 2002.
  • Court of Appeals dismissed petition for certiorari: 27 February 2004.
  • Supreme Court decision (disposition summarized here): May 8, 2009.

Applicable Law and Governing Constitution

Applicable constitution: 1987 Constitution (case decided in 2009).
Primary procedural rules: Revised Rules of Court — Rules on Settlement of Estates of Deceased Persons (Rules 73–91, inclusive), Rule 19 (Intervention) of the Rules of Civil Procedure, Rule 72 (application of ordinary action rules to special proceedings), Rule 135, Section 2 (public character of court records), and other specific provisions cited in the decision (Rule 83 §1; Rule 85 §8 and §10; Rule 86; Rule 87 §1 & §6; Rule 88 §1; Rule 89 §7(b); Rule 90 §1; Rule 82 §2).

Factual and Procedural Background

After appointment as administratrix, Julita Benedicto filed an inventory listing estate assets (stated at P5 million net of liabilities) and listed as liabilities the two pending civil suits naming the decedent. Petitioners sought access to intestate proceedings records, sought a deadline for filing a complete inventory and appraisal (including BIR appraisers), and sought deadlines for submission and judicial examination of the administratrix’s annual account with notice to them. The Manila RTC denied petitioners’ requests on the ground they were not “interested parties” entitled to intervene. The Court of Appeals affirmed. Petitioners elevated the matter to the Supreme Court.

Issue Presented

Whether petitioners (creditors with contingent claims based on pending civil suits for quasi-delict) had a right to intervene in the intestate proceedings and whether they were entitled to the specific reliefs requested: (1) service or furnishing of all processes/pleadings issued in the intestate proceedings; (2) setting of deadlines for submission of verified and complete inventory and ordering BIR appraisers to assist; and (3) setting deadlines for submission of verified annual accounts and setting examination dates with notice to petitioners.

Threshold Legal Standards — Intervention and Special Proceedings

Rule 19, Section 1 (intervention in ordinary actions) requires an intervenor to have an actual, material, direct and immediate legal interest, not merely contingent or expectant. Settlement of estates is governed by the Rules on Special Proceedings (Rules 73–91). Under Rule 72 §2, rules for ordinary actions apply to special proceedings only “in the absence of special provisions” and “as far as practicable.” The decision emphasizes that intervention under Rule 19 does not readily accommodate contingent claims and that special proceedings provide their own machinery for participation by “any person interested” or “persons interested in the estate.”

Court’s Analytical Distinction Between Intervention and Participation as Interested Persons

The Court agreed with the lower courts that petitioners did not meet the standard for intervention under Rule 19 because their claims were contingent and pending in separate civil actions; hence they lacked the requisite actual and immediate legal interest to intervene as of right under Rule 19. However, the Court distinguished between formal intervention under the Rules of Civil Procedure and the participatory rights expressly provided for in the Rules on Settlement of Estates. The Rules on Special Proceedings permit “any person interested” to act in specified instances (opposition to issuance of letters, notice of hearings, complaints of concealment/embezzlement, notice of examination/allowance of accounts, petitions to sell or encumber estate property, petitions for distribution, etc.).

Relationship of Civil Actions Against Administrator to Intestate Proceedings

The Court reiterated that civil actions for tort or quasi-delict survive the decedent’s death and may be commenced or continued against the administrator under Rule 87 §1 and Rule 88 §1; accordingly, the merits of petitioners’ claims should be litigated in the separate civil cases where they were filed. If petitioners obtain judgment in those civil cases, they may enforce the judgment against the estate. The intestate proceedings are not the forum to resolve the merits of those civil claims, although the intestate court may take cognizance of related civil actions where necessary to protect the estate or prevent premature closing of the estate.

Rights of Petitioners as “Persons Interested” and Access to Court Records

The Court recognized petitioners’ status as persons who have viable, though inchoate and contingent, interests in the estate and held that such persons are entitled to participate in the specific capacities and instances afforded by the Rules on Settlement of Estates. The Supreme Court specifically affirmed that petitioners are “interested persons” entitled to inspect court records under Rule 135 §2 (records of courts are public and available for inspection by any interested person). The Court relied on its earlier decision in Hilado v. Judge Reyes, which held the petitioners (same parties) were entitled to access the intestate records in order to monitor compliance with rules governing preservation and disposition of estate assets.

Denial of Petitioners’ Specific Reliefs Regarding Deadlines and Appraisals

The Court denied petitioners’ requests to have the intestate court set mandatory deadlines for the administratrix to submit a verified and complete inventory (and to require BIR appraisers to assist) and to set deadlines for the submission and judicial examination of annual accounts. The Court observed that Rule 83 §1 already prescribes the administrator’s duty to file an inventory and appraisal within three months of appointment, and Rule 85 §8 prescribes rendering an account within one year. Although remedies exist to compel compliance, the Court held that a creditor with a contingent claim is not the appropriate party to seek such relief as a matter of right in the intestate proceeding. Where complaints arise regarding the administrator’s competence or conduct, the proper remedy is removal under Rule 82 §2; the Court did not foreclose the ability of a creditor (even a contingent one) to seek removal in appropriate circumstances.

Balancing Practical Protections and Court Efficiency

The Court rejected petitioners’ contention that they should receive service of all processes and pleadings in the intestate proceedings, noting that mandating service on every claimant, including contingent claimants, would unduly burden and complicate administration of estates and undermine speedy disposition. Instead, the Court endorsed the less burdensome but effective

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