Republic of the Philippines 1.

The decision of the Public Service Commission is not in

G.R. No. L-770 April 27, 1948 3. The Public Service Commission erred in not giving petitioner
and the Ice and Cold Storage Industries of the Philippines, Inc.,
ANGEL T. LIMJOCO, petitioner, as existing operators, a reasonable opportunity to meet the
vs. increased demand.
INTESTATE ESTATE OF PEDRO O. FRAGRANTE,
deceased, respondent. 4. The decision of the Public Service Commission is an
unwarranted departure from its announced policy with respect to
Angel Limjoco, Jr. and Delfin L. Gonzales for petitioner. the establishment and operation of ice plant. (Pp. 1-2, petitioner's
Bienvenido A. Tan for respondent. brief.)

HILADO, J.: In his argument petitioner contends that it was error on the part of the
commission to allow the substitution of the legal representative of the
Under date of May 21, 1946, the Public Service Commission, through estate of Pedro O. Fragante for the latter as party applicant in the case
Deputy Commissioner Fidel Ibañez, rendered its decision in case No. then pending before the commission, and in subsequently granting to
4572 of Pedro O. Fragante, as applicant for a certificate of public said estate the certificate applied for, which is said to be in contravention
convenience to install, maintain and operate an ice plant in San Juan, of law.
Rizal, whereby said commission held that the evidence therein showed
that the public interest and convenience will be promoted in a proper and If Pedro O. Fragante had not died, there can be no question that he
suitable manner "by authorizing the operation and maintenance of would have had the right to prosecute his application before the
another ice plant of two and one-half (2-½) tons in the municipality of San commission to its final conclusion. No one would have denied him that
Juan; that the original applicant Pedro O. Fragante was a Filipino Citizen right. As declared by the commission in its decision, he had invested in
at the time of his death; and that his intestate estate is financially capable the ice plant in question P 35,000, and from what the commission said
of maintaining the proposed service". The commission, therefore, regarding his other properties and business, he would certainly have
overruled the opposition filed in the case and ordered "that under the been financially able to maintain and operate said plant had he not died.
provisions of section 15 of Commonwealth Act No. 146, as amended a His transportation business alone was netting him about P1,440 a month.
certificate of public convenience be issued to the Intestate Estate of the He was a Filipino citizen and continued to be such till his demise. The
deceased Pedro Fragante, authorizing said Intestate Estate through its commission declared in its decision, in view of the evidence before it, that
Special or Judicial Administrator, appointed by the proper court of his estate was financially able to maintain and operate the ice plant. The
competent jurisdiction, to maintain and operate an ice plant with a daily aforesaid right of Pedro O. Fragante to prosecute said application to its
productive capacity of two and one-half (2-1/2) tons in the Municipality of conclusion was one which by its nature did not lapse through his death.
San Juan and to sell the ice produced from said plant in the said Hence, it constitutes a part of the assets of his estate, for which a right
Municipality of San Juan and in the Municipality of Mandaluyong, Rizal, was property despite the possibility that in the end the commission might
and in Quezon City", subject to the conditions therein set forth in detail have denied application, although under the facts of the case, the
(petitioner's brief, pp. 33-34). commission granted the application in view of the financial ability of the
estate to maintain and operate the ice plant. Petitioner, in his
Petitioner makes four assignments of error in his brief as follows: memorandum of March 19, 1947, admits (page 3) that the certificate of
public convenience once granted "as a rule, should descend to his estate
as an asset". Such certificate would certainly be property, and the right to money, debt or interest thereon, or unless, by its very nature, it
acquire such a certificate, by complying with the requisites of the law, cannot survive, because death extinguishes the right . . . .
belonged to the decedent in his lifetime, and survived to his estate and
judicial administrator after his death. It is true that a proceeding upon the application for a certificate of public
convenience before the Public Service Commission is not an "action". But
If Pedro O. Fragrante had in his lifetime secured an option to buy a piece the foregoing provisions and citations go to prove that the decedent's
of land and during the life of the option he died, if the option had been rights which by their nature are not extinguished by death go to make up
given him in the ordinary course of business and not out of special a part and parcel of the assets of his estate which, being placed under
consideration for his person, there would be no doubt that said option the control and management of the executor or administrator, can not be
and the right to exercise it would have survived to his estate and legal exercised but by him in representation of the estate for the benefit of the
representatives. In such a case there would also be the possibility of creditors, devisees or legatees, if any, and the heirs of the decedent. And
failure to acquire the property should he or his estate or legal if the right involved happens to consist in the prosecution of an unfinished
representative fail to comply with the conditions of the option. In the case proceeding upon an application for a certificate of public convenience of
at bar Pedro O. Fragrante's undoubted right to apply for and acquire the the deceased before the Public Service Commission, it is but logical that
desired certificate of public convenience — the evidence established that the legal representative be empowered and entitled in behalf of the
the public needed the ice plant — was under the law conditioned only estate to make the right effective in that proceeding.
upon the requisite citizenship and economic ability to maintain and
operate the service. Of course, such right to acquire or obtain such Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and article
certificate of public convenience was subject to failure to secure its 336 of the Civil Code, respectively, consider as immovable and movable
objective through nonfulfillment of the legal conditions, but the situation things rights which are not material. The same eminent commentator
here is no different from the legal standpoint from that of the option in the says in the cited volume (p. 45) that article 336 of the Civil Code has
illustration just given. been deficiently drafted in that it is not sufficiently expressive of all
incorporeal rights which are also property for juridical purposes.
Rule 88, section 2, provides that the executor or administrator may bring
or defend actions, among other cases, for the protection of the property Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the term,
or rights of the deceased which survive, and it says that such actions property includes, among other things, "an option", and "the certificate of
may be brought or defended "in the right of the deceased". the railroad commission permitting the operation of a bus line", and on
page 748 of the same volume we read:
Rule 82, section 1, paragraph (a), mentions among the duties of the
executor or administrator, the making of an inventory of all goods, However, these terms (real property, as estate or interest) have
chattels, rights, credits, and estate of the deceased which shall come to also been declared to include every species of title, inchoate or
his possession or knowledge, or to the possession of any other person complete, and embrace rights which lie in contract, whether
for him. executory or executed. (Emphasis supplied.)

In his commentaries on the Rules of Court (Volume II, 2nd ed., pages Another important question raised by petitioner is whether the estate of
366, 367) the present chief Justice of this Court draws the following Pedro O. Fragrante is a "person" within the meaning of the Public Service
conclusion from the decisions cited by him: Act.

Therefore, unless otherwise expressly provided by law, any Words and Phrases, First Series, (Vol. 6, p, 5325), states the following
action affecting the property or rights (emphasis supplied) of a doctrine in the jurisdiction of the State of Indiana:
deceased person which may be brought by or against him if he
were alive, may likewise be instituted and prosecuted by or As the estate of the decedent is in law regarded as a person, a
against the administrator, unless the action is for recovery of forgery committed after the death of the man whose name
 purports to be signed to the instrument may be prosecuted as the estate of the decedent, and not the natural persons having
with the intent to defraud the estate. Billings vs. State, 107 Ind., diverse interests in it, since ha cannot be presumed to have
54, 55, 6 N. E. 914, 7 N. E. 763, 57 Am. Rep. 77. known who those persons were, or what was the nature of their
respective interest. The fraudulent intent is against the artificial
The Supreme Court of Indiana in the decision cited above had before it a person, — the estate — and not the natural persons who have
case of forgery committed after the death of one Morgan for the purpose direct or contingent interest in it. (107 Ind. 54, 55, 6 N.E. 914-
of defrauding his estate. The objection was urged that the information did 915.)
not aver that the forgery was committed with the intent to defraud any
person. The Court, per Elliott, J., disposed of this objection as follows: In the instant case there would also be a failure of justice unless the
estate of Pedro O. Fragrante is considered a "person", for quashing of
. . . The reason advanced in support of this proposition is that the the proceedings for no other reason than his death would entail
law does not regard the estate of a decedent as a person. This prejudicial results to his investment amounting to P35,000.00 as found by
intention (contention) cannot prevail. The estate of the decedent the commission, not counting the expenses and disbursements which the
is a person in legal contemplation. "The word "person" says Mr. proceeding can be presumed to have occasioned him during his lifetime,
Abbot, "in its legal signification, is a generic term, and includes let alone those defrayed by the estate thereafter. In this jurisdiction there
artificial as well as natural persons," 2 Abb. Dict. 271; Douglas vs. are ample precedents to show that the estate of a deceased person is
Pacific, etc. Co., 4 Cal. 304; Planters', etc., Bank vs. Andrews, 8 also considered as having legal personality independent of their heirs.
Port. (Ala.) 404. It said in another work that 'persons are of two Among the most recent cases may be mentioned that of "Estate of Mota
kinds: natural and artificial. A natural person is a human being. vs. Concepcion, 56 Phil., 712, 717, wherein the principal plaintiff was the
Artificial persons include (1) a collection or succession of natural estate of the deceased Lazaro Mota, and this Court gave judgment in
persons forming a corporation; (2) a collection of property to favor of said estate along with the other plaintiffs in these words:
which the law attributes the capacity of having rights and duties.
The latter class of artificial persons is recognized only to a limited . . . the judgment appealed from must be affirmed so far as it
extent in our law. "Examples are the estate of a bankrupt or holds that defendants Concepcion and Whitaker are indebted to
deceased person." 2 Rapalje & L. Law Dict. 954. Our own cases he plaintiffs in the amount of P245,804.69 . . . .
inferentially recognize the correctness of the definition given by
the authors from whom we have quoted, for they declare that it is Under the regime of the Civil Code and before the enactment of the Code
sufficient, in pleading a claim against a decedent's estate, to of Civil Procedure, the heirs of a deceased person were considered in
designate the defendant as the estate of the deceased person, contemplation of law as the continuation of his personality by virtue of the
naming him. Ginn vs. Collins, 43 Ind. 271. Unless we accept this provision of article 661 of the first Code that the heirs succeed to all the
definition as correct, there would be a failure of justice in cases rights and obligations of the decedent by the mere fact of his death. It
where, as here, the forgery is committed after the death of a was so held by this Court in Barrios vs. Dolor, 2 Phil., 44, 46. However,
person whose name is forged; and this is a result to be avoided if after the enactment of the Code of Civil Procedure, article 661 of the Civil
it can be done consistent with principle. We perceive no difficulty Code was abrogated, as held in Suiliong & Co. vs. Chio-Taysan, 12 Phil.,
in avoiding such a result; for, to our minds, it seems reasonable 13, 22. In that case, as well as in many others decided by this Court after
that the estate of a decedent should be regarded as an artificial the innovations introduced by the Code of Civil Procedure in the matter of
person. It is the creation of law for the purpose of enabling a estates of deceased persons, it has been the constant doctrine that it is
disposition of the assets to be properly made, and, although the estate or the mass of property, rights and assets left by the decedent,
natural persons as heirs, devises, or creditors, have an interest in instead of the heirs directly, that becomes vested and charged with his
the property, the artificial creature is a distinct legal entity. The rights and obligations which survive after his demise.
interest which natural persons have in it is not complete until
there has been a due administration; and one who forges the The heirs were formerly considered as the continuation of the decedent's
name of the decedent to an instrument purporting to be a personality simply by legal fiction, for they might not have been flesh and
promissory note must be regarded as having intended to defraud blood — the reason was one in the nature of a legal exigency derived
from the principle that the heirs succeeded to the rights and obligations of persons, the term "person" used in section 1 (1) and (2) must be deemed
the decedent. Under the present legal system, such rights and to include artificial or juridical persons, for otherwise these latter would be
obligations as survive after death have to be exercised and fulfilled only without the constitutional guarantee against being deprived of property
by the estate of the deceased. And if the same legal fiction were not without due process of law, or the immunity from unreasonable searches
indulged, there would be no juridical basis for the estate, represented by and seizures. We take it that it was the intendment of the framers to
the executor or administrator, to exercise those rights and to fulfill those include artificial or juridical, no less than natural, persons in these
obligations of the deceased. The reason and purpose for indulging the constitutional immunities and in others of similar nature. Among these
fiction is identical and the same in both cases. This is why according to artificial or juridical persons figure estates of deceased persons. Hence,
the Supreme Court of Indiana in Billings vs. State, supra, citing 2 Rapalje we hold that within the framework of the Constitution, the estate of Pedro
& L. Dictionary, 954, among the artificial persons recognized by law O. Fragrante should be considered an artificial or juridical person for the
figures "a collection of property to which the law attributes the capacity of purposes of the settlement and distribution of his estate which, of course,
having rights and duties", as for instance, the estate of a bankrupt or include the exercise during the judicial administration thereof of those
deceased person. rights and the fulfillment of those obligations of his which survived after
his death. One of those rights was the one involved in his pending
Petitioner raises the decisive question of whether or not the estate of application before the Public Service Commission in the instant case,
Pedro O. Fragrante can be considered a "citizen of the Philippines" within consisting in the prosecution of said application to its final conclusion. As
the meaning of section 16 of the Public Service Act, as amended, stated above, an injustice would ensue from the opposite course.
particularly the proviso thereof expressly and categorically limiting the
power of the commission to issue certificates of public convenience or How about the point of citizenship? If by legal fiction his personality is
certificates of public convenience and necessity "only to citizens of the considered extended so that any debts or obligations left by, and
Philippines or of the United States or to corporations, copartnerships, surviving, him may be paid, and any surviving rights may be exercised for
associations, or joint-stock companies constituted and organized under the benefit of his creditors and heirs, respectively, we find no sound and
the laws of the Philippines", and the further proviso that sixty per centum cogent reason for denying the application of the same fiction to his
of the stock or paid-up capital of such entities must belong entirely to citizenship, and for not considering it as likewise extended for the
citizens of the Philippines or of the United States. purposes of the aforesaid unfinished proceeding before the Public
Service Commission. The outcome of said proceeding, if successful,
Within the Philosophy of the present legal system, the underlying reason would in the end inure to the benefit of the same creditors and the heirs.
for the legal fiction by which, for certain purposes, the estate of the Even in that event petitioner could not allege any prejudice in the legal
deceased person is considered a "person" is the avoidance of injustice or sense, any more than he could have done if Fragrante had lived longer
prejudice resulting from the impossibility of exercising such legal rights and obtained the desired certificate. The fiction of such extension of his
and fulfilling such legal obligations of the decedent as survived after his citizenship is grounded upon the same principle, and motivated by the
death unless the fiction is indulged. Substantially the same reason is same reason, as the fiction of the extension of personality. The fiction is
assigned to support the same rule in the jurisdiction of the State of made necessary to avoid the injustice of subjecting his estate, creditors
Indiana, as announced in Billings vs. State, supra, when the Supreme and heirs, solely by reason of his death to the loss of the investment
Court of said State said: amounting to P35,000, which he has already made in the ice plant, not
counting the other expenses occasioned by the instant proceeding, from
. . . It seems reasonable that the estate of a decedent should be the Public Service Commission of this Court.
regarded as an artificial person. it is the creation of law for the
purpose of enabling a disposition of the assets to be properly We can perceive no valid reason for holding that within the intent of the
made . . . . constitution (Article IV), its provisions on Philippine citizenship exclude
the legal principle of extension above adverted to. If for reasons already
Within the framework and principles of the constitution itself, to cite just stated our law indulges the fiction of extension of personality, if for such
one example, under the bill of rights it seems clear that while the civil reasons the estate of Pedro O. Fragrante should be considered an
rights guaranteed therein in the majority of cases relate to natural artificial or juridical person herein, we can find no justification for refusing
to declare a like fiction as to the extension of his citizenship for the franchise, certificate or authorization be exclusive in character or
purposes of this proceeding. for a longer period than fifty years. No franchise granted to any
individual, firm or corporation, except under the condition that it
Pedro O. Fragrante was a Filipino citizen, and as such, if he had lived, in shall be subject to amendment, alteration, or repeal by Congress
view of the evidence of record, he would have obtained from the when the public interest so requires.
commission the certificate for which he was applying. The situation has
suffered but one change, and that is, his death. His estate was that of a The main question in this case is whether the estate of Pedro O.
Filipino citizen. And its economic ability to appropriately and adequately Fragrante fulfills the citizenship requirement. To our mind, the question
operate and maintain the service of an ice plant was the same that it can be restated by asking whether the heirs of Pedro O. Fragrante fulfill
received from the decedent himself. In the absence of a contrary the citizenship requirement of the law.
showing, which does not exist here, his heirs may be assumed to be also
Filipino citizens; and if they are not, there is the simple expedient of The estate is an abstract entity. As such, its legal value depends on what
revoking the certificate or enjoining them from inheriting it. it represents. It is a device by which the law gives a kind of personality
and unity to undetermined tangible persons, the heirs. They inherit and
Upon the whole, we are of the opinion that for the purposes of the replace the deceased at the very moment of his death. As there are
prosecution of said case No. 4572 of the Public Service Commission to procedural requisites for their identification and determination that need
its final conclusion, both the personality and citizenship of Pedro O. time for their compliance, a legal fiction has been devised to represent
Fragrante must be deemed extended, within the meaning and intent of them. That legal fiction is the estate, a liquid condition in process of
the Public Service Act, as amended, in harmony with the constitution: it is solidification.
so adjudged and decreed.
The estate, therefore, has only a representative value. What the law calls
Decision affirmed, without costs. So ordered. estate is, a matter of fact, intended to designate the heirs of the
deceased. The question, therefore, in this case, boils down to the
Moran, C.J., Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur. citizenship of the heirs of Fragrante.
Paras, J., I hereby certify that Mr. Justice Feria voted with the majority.
There is nothing in the record to show conclusively the citizenship of the
heirs of Fragrante. If they are Filipino citizens, the action taken by the
Public Service Commission should be affirmed. If they are not, it should
be reversed.
Separate Opinions
Petitioner alleges that the estate is just a front or dummy for aliens to go
around the citizenship constitutional provision. It is alleged that Gaw Suy,
PERFECTO, J., dissenting:
the special administrator of the estate, is an alien.
Commonwealth Act No. 146 reserves to Filipino citizens the right to
We are of the opinion that the citizenship of the heirs of Fragrante should
obtain a certificate of public convenience to operate an ice plant in San
be determined by the Commission upon evidence that the party should
Juan, Rizal. The limitation is in accordance with section 8 of Article XIV of
be present. It should also determine the dummy question raised by the
the Constitution which provides
petitioner.
No franchise, certificate, or any other form of authorization for the
We are of opinion and so vote that the decision of the Public Service
operation of a public utility shall be granted except to citizens of
Commission of May 21, 1946, be set aside and that the Commission be
the Philippines or to corporations or other entities organized
instructed to receive evidence of the above factual questions and render
under the laws of the Philippines, sixty per centum of the capital
a new decision accordingly.
of which is owned by citizens of the Philippines, nor such