G.R. No. 27486 , November 18, 1927
HEIRS OF RAFAEL GREGOIRE, claimants-appellants, vs. ALBERT L. BAKER, administrator-appellee.

Ponente: STREET, J.

FACTS

J.H. Ankrom died in Davao on September 18, 1922. Albert L. Baker was appointed administrator of his estate. The initial inventory of the estate included a 930-hectare land valued at nearly P60,000, which appeared sufficient to pay all claims. The appellants, heirs of Rafael Gregoire, had a substantial claim against the estate based on a foreign judgment, which was allowed by the commissioners.

Subsequently, the administrator discovered that before his death, Ankrom had mortgaged the said land to the Philippine Trust Company and, two days later, assigned all his interest in it to J.G. Jung for a nominal consideration. The administrator then filed an amended inventory excluding this property. The court initially ordered the property restored to the inventory but later, upon the administrator’s motion and presentation of the transfer documents, authorized its exclusion. This exclusion rendered the estate insolvent. The appellants, believing the assignment to Jung was fraudulent, appealed the order authorizing the exclusion.

ISSUE

Whether the order of the probate court authorizing the administrator to exclude the subject property from the inventory of the estate is appealable.

RULING

No. The appealed order is interlocutory and not appealable.

The Supreme Court dismissed the appeal. It held that orders concerning the inclusion or exclusion of property in an estate’s inventory are provisional, discretionary, and interlocutory. They are subject to modification during the administration proceedings and are not final judgments that can be appealed.

The Court clarified the proper remedy available to the appellants as creditors. Under Section 713 of the Code of Civil Procedure (now Section 10, Rule 87 of the Rules of Court), if an administrator refuses to act, a creditor may, upon giving an indemnity bond and by leave of court, institute an action in the name of the administrator to set aside a conveyance alleged to be fraudulent. The appealed order was expressly issued without prejudice to this right. Therefore, the appellants’ recourse was to avail themselves of this statutory remedy, not to appeal the non-appealable interlocutory order.