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Luzon Surety Company vs. Quebrar
Luzon Surety Company vs. Quebrar
Quebrar
Facts:
For the first year, from August 9, 1954 to August 9, 1955, the defendants-appellants paid P304.50
under each indemnity agreement or a total of P609.00 for premiums and documentary stamps. On June 6,
1957, the Court of First Instance of Negros Occidental approved the amended Project of Partition and
Accounts of defendant-appellant (p. 87, ROA; p. 9, rec.). On May 8, 1962, the plaintiff-appellee
demanded from the defendants-appellants the payment of the premiums and documentary stamps from
August 9, 1955. On October 17, 1962, the defendants-appellants ordered a motion for cancellation and/or
reduction of executor's bonds on the ground that "the heirs of these testate estates have already received
their respective shares" (pp. 69-70, ROA, p. 9, rec.).
On October 20, 1962, the Court of First Instance of Negros Occidental acting on the motions filed
by the defendants-appellants ordered the bonds cancelled. Plaintiff-appellee's demand amounted to
P2,436.00 in each case, hence, a total of P4,872.00 for the period of August 9, 1955 to October 20, 1962,
the defendants-appellants to pay the said amount of P4,872.00. On January 8, 1963, the plaintiff-appellee
filed the case with the Court of First Instance of Manila During the pre-trial the parties presented their
documentary evidences and agreed on the ultimate issue - "whether or not the administrator's bonds were
in force and effect from and after the year that they were filed and approved by the court up to 1962,
when they were cancelled." The CFI Manila ruled in favor of the plaintiff. Defendants-appellants
appealed to the Court of Appeals. On March 20, 1975, the Court of Appeals in a resolution certified the
herein case to this Court after finding that this case involves only errors or questions of law.
Issue:
Are the bonds still in full force and effect even after the approval of the Project of Partition and
Accounts?
Ruling:
Section 1 of Rule 81 of the Rules of Court requires the administrator/executor to put up a bond for the
purpose of indemnifying the creditors, heirs, legatees and the estate. It is conditioned upon the faithful
performance of the administrator's trust (Mendoza vs. Pacheco, 64 Phil. 134).
Having in mind the purpose and intent of the law, the surety is then liable under the
administrator's bond, for as long as the administrator has duties to do as such administrator/executor.
Since the liability of the sureties is co-extensive with that of the administrator and embraces the
performance of every duty he is called upon to perform in the course of administration, it follows that the
administrator is still duty bound to respect the indemnity agreements entered into by him in consideration
of the suretyship It is shown that the defendant-appellant Pastor T. Quebrar, still had something to do as
an administrator/executor even after the approval of the amended project of partition and accounts on
June 6, 1957.
The contention of the defendants-appellants that the administrator's bond ceased to be of legal
force and effect with the approval of the project of partition and statement of accounts on June 6, 1957 is
without merit. The defendant-appellant Pastor T. Quebrar did not cease as administrator after June 6,
1957, for administration is for the purpose of liquidation of the estate and distribution of the residue
among the heirs and legatees. And liquidation means the determination of all the assets of the estate
and payment of all the debts and expenses (Flores vs. Flores, 48 Phil. 982). It appears that there were still
debts and expenses to be paid after June 6, 1957.