RULE 96 GENERAL POWERS AND DUTIES OF GUARDIANS

SECTIONS 5-8

Section 5. Guardian may be authorized to join in partition proceedings after

hearing. — The court may authorized the guardian to join in an assent to a partition
of real or personal estate held by the ward jointly or in common with others, but such
authority shall only be granted after hearing, upon such notice to relatives of the
ward as the court may direct, and a careful investigation as to the necessity and
propriety of the proposed action.

EXPLANATION: Under this provision, the guardian may be allowed by the court to
institute action for the partition of real or personal property of which the ward may
hold in common or jointly with others, provided that:

a. Such permission or authorization by the court be granted only after hearing the
petition for the grant of such authority;
b. The relatives of the ward be duly notified of such petition for partition; and
c. Such authorization be granted only after a careful investigation as to the
necessity and propriety of the proposed action.

Section 6. Proceedings when the person suspected of embezzling or

concealing property of ward. — Upon complaint of the guardian or ward, or of any
person having actual or prospective interest in the estate of the ward as creditor,
heir, or otherwise, that anyone is suspected of having embezzled, concealed, or
conveyed away any money, goods, or interest, or a written instrument, belonging to
the ward or his estate, the court may cite the suspected person to appear for
examination touching such money, goods, interest, or instrument, and make such
orders as will secure the estate against such embezzlement, concealment or
conveyance.

EXPLANATION: The purpose of this provision is to secure evidence from persons

suspected of embezzling, concealing or conveying away any property of the ward or
the deceased so as to enable said guardian or administrator to institute the
appropriate action to obtain the possession of and secure title to said property, all for
the protection of the interests of the wards and the estate of the deceased.

Section 7. Inventories and accounts of guardians, and appraisement of

estates. — A guardian must render to the court an inventory of the estate of his
ward within three (3) months after his appointment, and annually after such
appointment an inventory and account, the rendition of any of which may be
compelled upon the application of an interested person. Such inventories and
accounts shall be sworn to by the guardian. All the estate of the ward described in
the first inventory shall be appraised. In the appraisement the court may request the
assistance of one or more of the inheritance tax appraisers. And whenever any
property of the ward not included in an inventory already rendered is discovered, or
suceeded to, or acquired by the ward, like proceedings shall be had for securing an
inventory and appraisement thereof within three (3) months after such discovery,
succession, or acquisition.

EXPLANATION: The guardian is required under the rules to render verified

inventory of the ward’s estate within three months after his appointment and annually
thereafter upon application of interested persons. This inventory will constitute the
basis of subsequent accountings and settlement.

In the event that the guardian fails to include in the inventory a property which
belongs to the ward, any interested person may file a petition before the court
compelling the guardian to include such additional property into inventory.

Section 8. When guardian's accounts presented for settlement. Expenses and

compensation allowed. — Upon the expiration of a year from the time of his
appointment, and as often thereafter as may be required, a guardian must present
his account to the court for settlement and allowance. In the settlement of the
account, the guardian, other than a parent, shall be allowed the amount of his
reasonable expenses incurred in the execution of his trust and also such
compensation for his services as the court deems just, not exceeding fifteen per
centum of the net income of the ward.

EXPLANATION: The guardian, as a trustee of the ward’s property, is required to

render an account thereof so long as the property remains in his possession
unaccounted for, and he is not entitled to a credit for expenditures until he has filed
an account showing its terms. The safety of the guardian, the requirements of
business prudence, and the welfare of the ward and his estate demand that this be
done. So on termination of the trust, it is the duty of the guardian to exhibit a final
account of his guardianship to the court. Also, a guardian is entitled to compensation
for his services but to entitle him to compensation for the same, they must be such
as he has authority to render.

.  FULL TEXT OF CASE

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-5131             July 31, 1952

ANTONIO MA. CUI, and MERCEDES CUI DE RAMAS, petitioners, 

vs.
EDMUNDO S. PICCIO, as Judge of the Court of First Instance of Cebu, EUGENIO RODIL, as
sheriff of the incompetent Don Mariano Cui, respondents.

Amador E. Gomez for petitioner.

Claro M. Recto for respondent.
MONTEMAYOR, J.:

Don Mariano Cui, widower, as owner of Lots Nos. 3212,2313 and 2319 situated in the City of
Cebu, with anare of 152 square meters, 144 square meters and 2,362 square meters, respectively,
of a total extension of 2,658 square meters, on March 8, 1946, sold said three lots to three of his
children named Rosario C. de Encarnacion, Mercedes C. de Ramas and Antonio Ma. Cui, pro
indiviso for the sum of P64,000. Because Rosario C. de Encarnacion for lack of funds was unable
to pay her corresponding share of the purchase price, the sale to her was concealed and the one-
third of the property corresponding to her returned to the vendor. These three lots are commercial.
The improvements thereon were destroyed during the last Pacific War so that at the time of the
sale in 1946, there were no buildings or any other improvements on them. Because of the sale of
these lots pro indiviso and because of the cancellation of the sale to one of the three original
vendees, Don Mariano and his children Mercedes and Antonio became co-owners of the whole
mass in equal portions. In the deed of sale vendor Don Mariano retained for himself the usufruct of
the property in the following words:

. . . do hereby sell, transfer, and convey to Messrs. Rosario C. de Encarnacion, Mercedes

C. de Ramas and Antonio Ma. Cui, the above-mentioned parcel of land in equal parts, . . .
and the further consideration, that I, shall enjoy the fruits and rents of the same, as long as
my natural life shall last. Granting and conveying unto the said buyers the full right as
owners to enjoy the constructive possession of the same, improve, construct and erect a
building in the lot, or do whatever they believe to be proper and wise, as long as the same
will not impair nor obstruct my right to enjoy the fruits and rents of the same . . . . (Emphasis
ours.)

Subsequently, a building was erected on a portion of this mass facing Calderon street and was
occupied by a Chinese businessman for which he paid Don Mariano P600 a month as rental. The
date when the building was constructed and by whom do not appear in the record.

Sometime after the sale to Mercedes and Antonio the two applied to the Rehabilitation Finance
Corporation(RFC) for a loan of P130,00 with which to construct a 12-door commercial building
presumably on a portion of the entire parcel corresponding to their share. In order to facilitate the
granting of the loan an inasmuch as only two of the three co-owners applied for the loan, Don
Mariano on January 7, 1947, executed an authority to mortgage (Annex U) authorizing his two
children co-owners to mortgage his share, the pertinent portion of said authority reading thus:

That by virtue of theses presents, I hereby agree, consent, permit, and authorize my said
co-owners to mortgage, pledge my share so that they may be able to construct a house or
building in the said property, provided however, that the rents of the said land shall not be
impaired and will always be received by me. (Emphasis our.)

The loan was eventually granted and was secured by a mortgage on the three lots in question.
Don Mariano being included as one of the three mortgagors and signing the corresponding
promissory note with his two co-owners. He did not however, join in the construction of the 12-door
commercial building as may be gathered from the "Conveniode Asignacion the three co-owners to
assign to Don Mariano that one-third of the whole mass facing Calderon street and on which was
erected the building already referred to as being occupied by a Chinese Businessman and for
which he was paying Don Mariano P600 a month rental. The area of this one-third of the total are
of these three lots. The pertinent portion of this Annex V reads as follows:

Que como quiera que. la propiedad arriba descrita esta actual-mente hipotecada a la
Rehabilitation Finance Corporation paragarantizar la construccion que mis conduenos
construyeron en laparte que les correponde;

Y que como quiera quie, el Sr. Don Mariano Cui, uno de los conduenos, no ha querido
unirse a la construccion de dicho edificio, y desea que la parte que le corresponda sea la
¹/3 que este dandofrente a la Calle Calderon. (Emphasis ours.)
The 12-door commercial building was eventually constructed and the buildder-owners thereof
receive the rents thereof amounting to P4,800 a month and paying therefrom the installments due
for payment on the loan to the Rehabilitation Finance Corporation.

On March 25, 1948, two other children of Don Mariano named Jesus and Jorge brought an action
(civil case No. 59-R) in the Court of First Instance of Cebu for the purpose of annulling the deed of
sale of the three lots in question on the ground that they belonged to the conjugal partnership of
Don Mariano and his deceased wife Antonia Perales. Thereafter, plaintiffs Jesus and Jorge applied
for the appointment of a receiver to take charge of the lots and of the rentals of the building. This
petition was denied on November 8, 1948.

On March 19, 1949, Rosario C. de Encarnacion, that daughter of Don Mariano who was one of the
original vendees filed a petition to declare her father incompetent and to have a guardian
appointed for his property, in Special Proceeding No. 481-R of the Court of First Instance of Cebu.
In May 1949 the petition was granted and Don Mariano was declared incompetent and Victorino
Reynes was appointed in civil case No. 599-R seeking to annul the deed of sale of the three lots in
favor of Mercedes and Antonio was amended so as to include as plaintiffs not only the guardian
Victorino Reyes but also all the other children of Don Mariano.

On June 15, 1949, guardian Victorino Reyes filed a motion in the gurdianship proceedings seeking
authority to collect the rentals from the three lots in question and asking the Court to order Antonio
and Mercedes to deliver to him as guardian all the rentals they had previosly collected from the 12-
door commercial building, together with all the papers belonging to his ward. This motion was
denied by Judge Piccio in his order of July 12, 1949. The guardian did not appeal from this order.

On May 22, 1951, Judge Saguin rendered a decision in civil case No. 599-R and found that the
three lots in question were not conjugal property but belonged to exclusively to Don Mariano and
so upheld the sale of two-thirds of said lots to Antonio and Mercedes. The plaintiffs appealed to the
Court of Appeals where the case is now pending.

On August 1, 1951, after the rendition of judgment in civil case No. 599-R upholding the sale,
guardian Victorino Reynes again presented of filed a motion in the guardianship proceedings No.
481-R asking for the delivery of the rentals of the 12-door commercial building to him and for
authority to collect future rentals thereon. On September 5, 1951, respondent Judge Piccio, the
same Judge who had denied a similar motion about two years before, that is, on July 12, 1949,
granted the motion in his order of the same date directing Antonio and Mercedes to deliver to the
guardian the rentals of the building they had so far collected, at the same time authorizing the
guardian to collect future rentals. The motion to reconsider the order filed by Antonio and
Mercedes was denied in an order dated October 1, 1951. The present petition for certiorari with
preliminary injunction was filed in this court for the purpose of annulling said order of September 5,
1951 and the order of October 1, 1951 denying the motion for reconsideration, on the ground that
the trial court in the guardianship proceedings lacked jurisdiction to issue the order. To decide
whether or not the respondent Judge had jurisdiction to issue the order of September 5, 1951
directing the petitioners herein to deliver to the guardian Victorino Reynes the rentals collected by
them from the building and authorizing said guardian to collect future rentals, we must first
determine the nature and status of said rentals in relation with the guardianship proceedings. Said
determination requires an interpretation of section 6, Rule 97 of the Rules of Court which reads as
follows:

SEC. 6. Proceedings when person suspected of embezzling or conceling property of ward.

— Upon complaint of the guardian or ward, or of any person having an actual or prospective
interest in the estate of the ward as creditor, heir, or otherwise, that anyone is suspected of
having embezzled, concealed, or conveyed away any money, goods, or interest, or a written
instrument, belonging to the ward or his estate, the court may cite the suspected person to
appear for examination, touching such money, goods, interest, or instrument, and make
such orders as will secure the estate against such embezzlement, concealment, or
conveyance.
Chief Justice Moran in his comments on the Rules of Court, Vol. II, 3rd, ed., pp. 478-479, says the
following on this section;

Substantially the same as sec. 573 of Act No. 190.

This provision is similar to the procedure in the settlement of the estate of a deceased
person and its purpose is merely to elicit information or secure evidence from the person
suspected of having embezzled, concealed or conveyed any personal property of the ward.
In such proceeding the court has no authority to determine the right of the property or to
order delivery thereof. If after the examination the court finds this sufficient evidence
showing ownership on the part of the ward, it is the duty of the guardian to bring the proper
action.

Section 573 of Act 190 referred to above is now embodied in Rule 88, section 6 of the Rules of
Court, and under said rule, Moran has practically the same comment as that reproduced above. In
other words in his opinion neither in gaurdianship proceedings nor in administration proceedings
may the court determining the ownership of property claimed by the gurdian or administrator to
belong to the ward or to the estate of the deceased, and order its delivery to them. We believe that
the purpose of these two rules, Rule 97, section 6 and Rule 88, section 6 of the Rules of Court is
merely to secure evidence from persons suspected of embezzling, concealing or conveying away
any property of the ward or of the deceased so as to enable said guardian or administrator to
institute the appropriate action to obtain the possession of and secure title to said property, all for
the protection of the interests of the ward and the estate of the deceased.

Counsel for respondents invite our attention to several cases purporting to support the theory that
the court in guardianship proceedings may actually order the delivery of the property of the ward
found to be embezzled, concealed or conveyed. Out of the cases cited, the only one we find to
have some relevancy in that of Castillo vs. Bustamante, 64 Phil., 839. In this case, the court made
a distinction between the provisions of sections 709 and 593 of the Code of Civil Procedure which
now correspond to section 6, Rule 88 and section 6 of Rule 97 of the Rules of Court. This Court in
that case said in effect that while in admission proceedings the court under section 709 may only
question the person suspected of having embezzled, concealed or conveyed away property
belonging to the estate, section 593 of the same Code of Civil Procedure authorizes the Judge or
the court to issue such orders as may be necessary to secure the estate against concealment,
embezzlement and conveyance, and this distinction is now given emphasis by respondents'
counsel. The way we interpret section 573 of the Code of Civil procedures as now embodied in
Rule 97, section 6 of the Rules of Court in the light of the ruling laid down in the case of  Castillo vs.
Bustamante, supra, is that the court may issue an order directing the delivery or return of any
property embezzled, concealed or conveyed which belongs to a ward, where the right or title of
said ward is clear and indisputable. Such was the case of Castillo vs. Bustamante where husband
and wife, parties in litigation, arrived at a compromise whereby they donated their conjugal
property to their only child and this donation was duly accepted. This compromise was approved
by the court and embodied in the decision and the parties were directed to comply with the terms
of the compromise. Later, the husband refused to deliver the property donated. This court affirmed
the order of the trial court requiring the husband to deliver said property to the guardians of the
minor child because the title of the ward of res judicata. "We believe, however, that where title to
any property said to be embezzled, concealed or conveyed is in question as in the present case,
the determination of said title or right whether in favor of the ward or in favor of the persons said to
have embezzled, concealed or conveyed the property must be determined in a separate ordinary
action and not in guardianship proceedings. Incidentally it may be here stated that about a month
after the filing of the present case of certiorari, or rather on November 1, 1951, guardian Victorino
Reynes filed an ordinary action, civil case No. R-1720, in the Court of First Instance of Cebu
against Antonio and Mercedes to recover all the rentals of the 12-door building collected by them
(Annex A-3).

In the present case, is the right of the ward, Don Mariano, to the rentals of the 12-door building,
clear and indisputable? The answer is definitely in the negative. Without any attempt or desire to
determine the rights or lack of right of the ward to said rentals and prejudge the civil action No. R-
1720 brought by the guardian in the Court of First Instance of Cebu to recover said rentals, on the
basis only of the documents involved or presented in this certiorari proceedings and without any
additional evidence, these are reasons to believe that the scales of title instead of favoring the
ward, incline more in favor of and point to the owners of the building. We need not estate those
reasons here.

In conclusion, we hold that the respondent Judge had no jurisdiction to issue his order of
September 5, 1951, in the guardianship proceedings requiring the petitioners to deliver the rentals
collected by them to the guardian and authorizing the latter to collect rentals in the future, for the
reason that the jurisdiction of the court guardianship proceedings, ordinarily, is to cite persons
suspected of having embezzled, concealed or conveyed property belonging to the ward for the
purpose of obtaining information which may be used in an action later to be instituted by the
guardian to protect the right of the ward; and that only in extreme cases, where property clearly
belongs to the ward or where his title thereto has already been judicially decided, may the court
direct its delivery to the guardian.

In view of the foregoing, the petition is granted and the order of respondent Judge of September 5,
1951, and his order of October 1, 1951, are hereby set aside. The writ of preliminary injunction is
hereby made permanent. The respondent-guardian, Victorino Reynes, will pay the costs."

Paras, C.J., Pablo, Bengzon, Tuason, Bautista Angelo, and Labrador, JJ., concur.

DIGESTED CASE

G.R. No. L-5131   July 31, 1952

CUI vs. PICCIO
MONTEMAYOR, J.

Facts:
 On March 8, 1946, Don Mariano Cui, widower, sold his three lots to three of his children (Rosario,
Mercedes and Antonio), pro indiviso. However, Rosario failed to pay so the sale to her was
cancelled and the 1/3 of the property was returned to the vendor. As a result, Don Mariano,
Mercedes and Antonio became co-owners of the property. Sometime after the sale, Mercedes and
Antonio applied for a loan, secured by a mortgage on the three lots, to construct a commercial
building. The building was eventually constructed.
Two years later, two other children of Don Mariano Cui brought an action for the annulment of the
deed of sale of the three lots on the ground that they belonged to the conjugal partnership of Don
Mariano and his deceased wife.
On March 19, 1949 Rosario filed a petition to declare her father incompetent and to have a
guardian appointed for his property. The petition was granted on May 1949 and Victorino Reyes
was appointed as guardian of the property.
On, June 15, 1949 guardian Victorino Reyes filed a motion in the guardianship proceedings
seeking authority to collect the rentals from the three lots in question and asking the Court to order
Antonio and Mercedes to deliver to him as guardian all the rentals they had previously collected
from the 12-door commercial building, together with all the papers belonging to his ward..
On September 5, 1991 Judge Edmundo S. Piccio granted the second motion of Victorino Reyes.
Antonio and Mercedes filed a motion for reconsideration but was denied in an order dated October
1, 1951.

Issue: Whether or not the respondent Judge had jurisdiction to issue the order of September 5,
1951 directing the petitioners herein to deliver to the guardian Victorino Reynes the rentals
collected by them from the building and authorizing said guardian to collect future rentals
Ruling: No. Under Sec 6 of Rule 97, the ward may ask the guardian court to deliver an actual or
prospective interest which was owned by the ward, and was embezzled, concealed, or conveyed
by another. In the case at hand, Sec 6 of Rule 97 does not apply, since the rental payments Is still
a subject of controversy, as to who really owns such payments. This must be litigated in an
ordinary civil action, to which a guardian court does not have jurisdiction.
Where title to any property said to be embezzled, concealed or conveyed is in question as in the
present case, the determination of said title or right whether in favor of the ward or in favor of the
persons said to have embezzled, concealed or conveyed the property must be determined in a
separate ordinary action and not in guardianship proceedings.

Hence, the respondent Judge had no jurisdiction to issue his order of September 5, 1951, in the
guardianship proceedings requiring the petitioners to deliver the rentals collected by them to the
guardian and authorizing the latter to collect rentals in the future, for the reason that the jurisdiction
of the court guardianship proceedings, ordinarily, is to cite persons suspected of having
embezzled, concealed or conveyed property belonging to the ward for the purpose of obtaining
information which may be used in an action later to be instituted by the guardian to protect the right
of the ward; and that only in extreme cases, where property clearly belongs to the ward or where
his title thereto has already been judicially decided, may the court direct its delivery to the
guardian.