Case Summary (G.R. No. L-23145)
Jurisdiction of Ancillary Administrator
Under universally recognized rules, an ancillary administrator may administer property of a decedent within the forum’s territory to satisfy local creditors. The trial court’s exercise of authority over Philippine-situated stock certificates was therefore valid and binding on the Philippine corporation, which is subject to domestic judicial orders.
Enforcement of Judicial Authority
The domiciliary administrator had submitted to Philippine jurisdiction by appearance and petition for relief, yet persistently refused to comply with the CFI’s produce-and-deposit order. To prevent the nullification of its decree and avert paralysis of judicial power, the trial court employed a remedial order—deeming the certificates lost—to compel compliance indirectly.
Use of Legal Fiction to Secure Justice
Recognizing that strict adherence to fact might thwart enforcement, the court invoked a legal fiction. By treating the certificates as lost, it authorized issuance of replacements, thereby ensuring the ancillary administrator could fulfill estate-settlement duties. Such devices, though technically fictions, are permissible tools to achieve legitimate judicial ends.
Corporate Bylaws Versus Court Decree
Benguet Consolidated’s by-law prescribing procedures for lost or contested certificates—including suspension of reissuance pending final court determination—cannot override a valid judicial decree. Where corporate rules conflict with court orders, obedience to the latter is obligatory.
Corporate Status and Subordination to State Authority
A corporation is an artificial entity granted existence by law; it enjoys rights only as conferred and must submit to state organs, including the judiciary. Allowing a corporation t
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Facts of the Case
- Idonah Slade Perkins died in New York City on March 27, 1960, leaving Philippine corporation shares (33,002 shares in Benguet Consolidated, Inc.) represented by stock certificates.
- The County Trust Company of New York was appointed domiciliary administrator of her estate in the United States.
- Prospero Sanidad instituted ancillary administration proceedings in Manila on August 12, 1960; Lazaro A. Marquez was first ancillary administrator, later substituted by Renato D. Tayag on January 22, 1963.
- A dispute arose over possession of the Philippine stock certificates between the domiciliary administrator abroad and the ancillary administrator in the Philippines.
Procedural History
- January 27, 1964: The Court of First Instance of Manila ordered the County Trust Company to produce and deposit the certificates with the ancillary administrator or the Clerk of Court.
- The domiciliary administrator refused to comply with that order.
- February 11, 1964: Ancillary administrator petitioned the court to declare the certificates “lost” for purposes of Philippine estate administration.
- May 18, 1964: Lower court issued an order (1) considering the certificates lost, (2) cancelling them, and (3) directing issuance of new certificates in lieu thereof to the ancillary administrator or the Probate Division.
- Benguet Consolidated, Inc. appealed that order to the Supreme Court.
Issues Presented
- Whether the lower court erred in “considering as lost” existing stock certificates when they remained in the possession of the domiciliary administrator abroad.
- Whether the ancillary administrator has the legal power to require a Philippine corporation to issue new certificates in place of those declared lost.
- Whether corporate by-laws govern