Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-42454 December 21, 1935
Intestate estate of the deceased Mariano G. Veloso. GEORGE CASTRO, assignee of the Involuntary Insolvency of Gabino M. Veloso, appellant,
vs.
CONSUELO CARRATALA VIUDA DE VELOSO, administratrix-appellee.
Johnston and Armstrong for appellant.
Rodriguez and Zacarias for appellee.
IMPERIAL, J.:
This is an appeal taken by the assignee of the Involuntary Insolvency of Gabino M. Veloso from the orders of the Court of First Instance of Cebu of March 31 and April 21, 1934, respectively. The first declared that the appellant had no standing or right to intervene in the intestate of the deceased Mariano G. Veloso, and the second approved the accounts filed by the administratrix-appellee on September 30, 1993 and April 11, 1934, respectively.
Among the ten legitimate heirs of Mariano G. Veloso is Gabino M. Veloso, who, upon petition of various creditors, was declared insolvent by the court in these involuntary insolvency and appeared as such in the intestate of Mariano G. Veloso to safeguard the participation of the insolvent and the rights of all the known creditors who had appeared in the insolvency. The appellee Consuelo Carratala, widow of Mariano G. Veloso was appointed administratrix. The latter, as such administratrix, filed in the intestate sundry accounts and motions asking judicial authority to sell certain real property of said intestate, all of which were objected to and assailed by the assignee-appellant. In the course of the intestate proceedings, the attorneys for the appellee objected to the intervention of the appellant in the intestate and challenged his standing and right to take part therein. The appellant answered the challenge alleging that he had legal capacity to intervene for the protection of the rights of the insolvent as well as those of his known creditors. Notwithstanding his written appearance in the intestate and his petition that he be formally notified of all the pleadings which the appellee, as administratrix, may file, the appellant did not receive copies or notice of hearing of the accounts and motions to sell property filed by the appelle. While the accounts of the administration were pending approval the court, on March 31, 1934, issued an order declaring that the appellant, as assignee, had neither standing nor right to intervene in the intestate. On April 21 of the same year, it issued another order approving the accounts dated September 30, 1993 and April 11, 1934, respectively, and other prior orders approved the appellee's petitions asking for permission to sell real property of the intestate. The accounts and motions were thus approved without affording the appellant an opportunity which he had asked for from the beginning to intervene in the hearings, and without enabling him to adduce evidence in support of his allegations. As was said at the beginning, the appellant excepted to the two orders of 1934 which motivate the present appeal.
In his five assigned errors, the appellant alleges that the court erred in holding that he has neither standing nor right to intervene in the intestate; in permitting the administratrix to squander the estate to the prejudice of the co-heir Gabino M. Veloso and his creditors; in not requiring the administratrix to make a correct and complete report of all the property of the intestate in order to ascertain the net distributable estate; and, finally, in permitting that the accounts and petitions to sell property be heard and determined favorably in violation of the rules of courts and without giving him an opportunity to be heard and to adduce his evidence.
In Hunter, Kerr & Co. vs. Murray (48 Phil., 499), we held that the assignee in insolvency is in effect a special legal agent of the insolvent. Responsive to the spirit underlying the Insolvency Law (Act No. 1956) and pursuant to the provisions of Chapter V thereof relative to the powers and duties of the assignee, this officer represents in a voluntary or involuntary proceeding both the insolvent as well as all his creditors. This same principle prevails in almost all states of the union in which an insolvency law similar to that in force in this jurisdiction has been adopted (32 C.J., sec. 125, p. 859). As legal representative of an heir or legatee, he is entitled to intervene in the proceedings begun to liquidate and distribute the estate in which the former is interested, in order to protect not only the interests of said heir or legatee but also those of his creditors (24 C.J., sec. 2308, p. 930). As a corollary of the principles just enunciated, which are controlling in this jurisdiction, it is undeniable and we so hold that the appellant, as assignee of the co-heir Gabino M. Veloso, was entitled to intervene in the intestate of the latter's father, Mariano G. Veloso, and could ask, as he did, that the administratrix present correct amounts of her administration and that the property of the intestate be partitioned in accordance with law among all the legitimate heirs. Consequently, the court erred in not acknowledging his standing and in denying his right to be heard in connection with the questions raised by him.1awphil.net
It also appears that the appelle was permitted not only to sell the real property of the intestate but also to distribute and spend the proceeds of the sales without the intervention of the appellant, and, lastly, she was allowed to file ex-parte motions without either notifying or serving copies on the attorneys for the appellant being of record, the latter were entitled not only to be informed of all the proceedings but also to be served with copies of all the pleadings to be filed by the appellee as administratrix.
In view of the foregoing, the appealed orders of March 31 and April 21, 1934, respectively, are reversed, and it is held that the herein appellant, as assignee, is entitled to intervene in the intestate of the deceased Mariano G. Veloso. The accounts filed by the appellee, as administratrix, dated September 30, 1933 and April 11, 1934, respectively, challenged by the appellant, shall again be heard, and the parties shall be afforded an opportunity to be heard and to adduce evidence. The appellee in the same capacity, shall be required to render a detailed accounting of all the properties under her administration, and, if necessary, she must present a new inventory containing a statement of all the property, with its value, of the intestate that had come to her possession; with the costs of this instance to the administratrix-appellee. So Ordered.
Malcolm, Villa-Real, Butte, and Goddard, JJ., concur.
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