G.R. No. L-9589; January 30, 1959
TESTATE ESTATE of the deceased Eligio Naval. PETRITA PASCUAL, ET AL., co-administratrix-appellees, vs. RUDYARDO SANTIAGO, ET AL., co-administrators-appellants.

FACTS

This is an appeal from a judgment of the Court of First Instance of Rizal disapproving the statements of accounts of administratrix Isabel Gabriel (from 1937 to June 1948) and administrator Rudyardo Santiago (from August 1948 to 1952), finding a gross estate income of P244,249.00 from 1937 to 1953, approving the accounts of co-administratrix Petrita Pascual, and referring the accounts of Gabriel and Santiago to the Provincial Fiscal for investigation of possible falsification and perjury. The trial court found many accounts, especially from 1937 to 1943, inaccurate, exaggerated, and unsupported. The estate’s records were destroyed during the war. Post-liberation, administratrix Isabel Gabriel filed a consolidated statement of accounts for 1937-1945 but later moved to repudiate it, which the court disallowed. During trial, two account books (Annexes A and B) salvaged from the records and admitted by Gabriel as containing estate income and expenditures for many years were presented. The authenticity of these books was not disputed by the oppositor. The Supreme Court, to terminate the long litigation, decided to examine each account independently by calendar year, using Annexes A and B as the basis for 1937-1941 and 1943, modified by authentic documentary evidence submitted by the oppositor. For 1944 and early 1945, transactions were in Japanese war notes; a balance in such notes was found but not charged against Gabriel as the notes became valueless. The Court made specific findings for each year from 1937 to 1952, modifying accounts based on evidence and reasonableness, rejecting the trial court’s method of fixing uniform yearly incomes for properties.

ISSUE

Whether the trial court erred in disapproving in toto the statements of accounts of administratrix Isabel Gabriel and administrator Rudyardo Santiago and in referring the matter for criminal investigation.

RULING

The Supreme Court modified the trial court’s judgment. It held that instead of disapproving the accounts in toto, it was more useful to examine each account independently by calendar year, approving or disapproving specific items to determine the estate’s net income or liability for each year. The Court used the account books (Annexes A and B) as the basis for the years 1937-1941 and 1943, as their authenticity was undisputed and they represented the most reliable available records after the wartime destruction. The Court made specific adjustments to the accounts for various years based on documentary evidence (e.g., Exhibits 15-c, 15-d, 7) and the reasonableness of expenditures, considering the administratrix’s lack of modern accounting methods. The Court declined to rule on the order referring the accounts to the Fiscal, leaving the matter of prosecution to the prosecuting officers. The motion for reconsideration was denied. The dispositive portion detailed the approved incomes, expenditures, and balances for each year from 1937 to 1952, which are incorporated into the body of the decision.