G.R. No. L-8470; March 19, 1915

FACTS:
Isidro Azarraga died, leaving a will. He appointed his son, Leodegario Azarraga, as the testamentary executor. The will instituted Isidro’s grandchildren (children of his deceased daughter) as universal heirs and included a legacy for Leodegario. As executor, Leodegario collected money belonging to the estate, including a sum from a debtor named Timoteo Unson. From these collected funds, he paid certain estate debts and also paid himself the sum of P8,000, claiming it as payment for his own property (machinery) allegedly sold by his father. He further claimed that certain lands and carabaos listed in the estate inventory were his personal property. These acts were done without prior court approval or authorization from the committee on appraisal. Tomas Sison, as guardian of the minor universal heirs, filed a motion for Leodegario’s removal as executor, arguing his actions endangered the estate. The Court of First Instance granted the motion, removed Leodegario, and ordered him to deliver all estate property, including the P8,000 and the disputed assets, to the newly appointed administrator. The court further ordered Leodegario to subsequently present his claims against the estate to the new administrator for proper adjudication. Leodegario appealed this order.

ISSUE:
Whether the probate court correctly ordered the removed executor to deliver to his successor all property in his possession claimed to be part of the estate, including assets he asserts as his own, and to thereafter present his claims against the estate through the proper judicial channels.

RULING:
Yes, the probate court’s order was correct. The Supreme Court affirmed the lower court’s decision. An executor is a fiduciary of the court and holds estate property in trust for the heirs and creditors. The Code of Civil Procedure does not authorize an executor to adjudicate his own claims against the estate or to pay himself from estate funds without prior court approval. All claims against the estate, including those of the executor, must be presented and proved before the committee on appraisal in accordance with the law (Susan vs. Martinez). The executor’s unsupported assertion of ownership over specific assets is insufficient to exclude them from the estate inventory. The proper procedure is for all property allegedly belonging to the estate to be placed under the custody of the lawful administrator for orderly liquidation. The claimant, including a former executor, must then formally present his claim to the administrator and prove his right to the exclusion or payment in the legally prescribed manner. Probate courts have a duty to safeguard estates and prevent injury to them (Dariano vs. Fernandez Fidalgo). Therefore, Leodegario Azarraga was correctly ordered to turn over all assets and was relegated to filing his claims with the new administrator for proper settlement.