G.R. No. L-23145 November 29, 1968
TESTATE ESTATE OF IDONAH SLADE PERKINS, deceased. RENATO D. TAYAG, ancillary administrator-appellee, vs. BENGUET CONSOLIDATED, INC., oppositor-appellant.

FACTS

Idonah Slade Perkins died in New York City on March 27, 1960. The County Trust Company of New York is the domiciliary administrator of her estate. Ancillary administration proceedings were instituted in the Court of First Instance of Manila, with Renato D. Tayag appointed as the ancillary administrator. The deceased owned stock certificates covering 33,002 shares in the Philippine corporation Benguet Consolidated, Inc., which were in the possession of the domiciliary administrator in New York. A dispute arose between the domiciliary and ancillary administrators over possession of these certificates. The lower court ordered the domiciliary administrator to produce and deposit the certificates with the ancillary administrator or the Clerk of Court. The domiciliary administrator did not comply. The ancillary administrator then petitioned the court to declare the stock certificates as lost. The lower court issued an order (1) considering the stock certificates as lost for purposes of the estate’s administration, (2) ordering them cancelled, and (3) directing Benguet Consolidated, Inc. to issue new certificates to be delivered to the ancillary administrator or the court. Benguet Consolidated, Inc. appealed this order, arguing the certificates were not factually lost as they were known to be in the domiciliary administrator’s possession, and that certain by-law requirements for issuing new certificates were not met.

ISSUE

Whether the lower court acted correctly in ordering the stock certificates considered as lost and cancelled, and directing the issuance of new certificates to the ancillary administrator, despite the certificates being physically extant but wrongfully withheld by the domiciliary administrator abroad.

RULING

The Supreme Court affirmed the lower court’s order. The appeal lacked merit. The ancillary administrator has the inherent power and duty to take control of all assets of the decedent within the Philippines to settle the estate and satisfy local creditors. The situs of the shares of stock is in the Philippines since Benguet Consolidated, Inc. is domiciled there, making the shares subject to the jurisdiction of Philippine courts. The domiciliary administrator’s persistent refusal to obey a valid court order to surrender the certificates warranted the lower court’s remedial action. The court’s declaration that the certificates were “considered as lost” was a legal fiction employed as a necessary and legitimate device to advance the ends of justice, overcome the defiance of a party beyond the court’s immediate reach, and prevent the paralysis of judicial authority. The corporation’s by-laws could not supersede the court’s lawful order. The challenged order was a proper response to vindicate judicial authority and ensure the effective administration of the local estate.