Case Digest: Limjoco vs. Intestate of Fragante, G.R. No. L-770, April 27, 1948

                                       Art. 774, 776 | Succession, Legal Personality

Provision:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.

Art. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death.

Principle:

The estate of a deceased person is also considered as having legal personality independent of their heirs.

Ponente:

Hilado, J.

Facts:

Pedro O. Fragante applied for a certificate of public convenience to install, maintain and operate an ice plant in San Juan, Rizal.

On May 21, 1946, the Public Service Commission rendered its decision approving the operation of a new ice plant based on evidence that it would  promote the public interest and convenience.

It was acknowledged that Pedro O. Fragante was a Filipino Citizen at the time of his death.

Fragante's intestate estate was deemed financially capable of maintaining the proposed ice plant service.

The Commission dismissed opposition and directed the issuance of a certificate of public convenienceto be granted to the Intestate Estate of Pedro Fragante, with authorization for its Special or Judicial Administrator.

Nature:

Petition for review of a judgment of the Public Service Commission.

 

Issues:

(1) WoN the decision of the Public Service Commission is in accordance with law.  (YES)

(2) WoN the estate of Pedro O. Fragrante is a "person" within the meaning of the Public Service Act. (YES)

Argument:

(1) The Commission erred in allowing the substitution of the legal representative of Pedro O. Fragante's estate as party applicant in the case.

(2) The proviso thereof expressly and categorically limits the power of the commission to issue certificates of public convenience "only to citizens of the Philippines or of the United States or to corporations, copartnerships, associations, or joint-stock companies constituted and organized under the laws of the Philippines", and the further proviso that sixty per centum of the stock or paid-up capital of such entities must belong entirely to citizens of the Philippines or of the United States.

Held:

Order affirmed.

Both the personality and citizenship of Pedro O. Fragrante must be deemed extended.

(1) If Pedro O. Fragante had not died, there can be no question that he would have had the right to prosecute his application before the commission to its final conclusion. 

The aforesaid right of Pedro O. Fragante to prosecute said application to its conclusion was one which by its nature did not lapse through his death. Hence, it constitutes a part of the assets of his estate, for which a right was property despite the possibility that in the end the commission might have denied application, although under the facts of the case, the commission granted the application in view of the financial ability of the estate to maintain and operate the ice plant. 

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 acquire such a certificate, by complying with the requisites of the law, belonged to the decedent in his lifetime, and survived to his estate and judicial administrator after his death.

If Pedro O. Fragrante had in his lifetime secured an option to buy a piece of land and during the life of the option he died, if the option had been given him in the ordinary course of business and not out of special consideration for his person, there would be no doubt that said option and the right to exercise it would have survived to his estate and legal representatives. 

In such a case there would also be the possibility of failure to acquire the property should he or his estate or legal representative fail to comply with the conditions of the option. 

In the case at bar Pedro O. Fragrante's undoubted right to apply for and acquire the desired certificate of public convenience — the evidence established that the public needed the ice plant — was under the law conditioned only upon the requisite citizenship and economic ability to maintain and operate the service. Of course, such right to acquire or obtain such certificate of public convenience was subject to failure to secure its objective through nonfulfillment of the legal conditions, but the situation here is no different from the legal standpoint from that of the option in the illustration just given.

Therefore, unless otherwise expressly provided by law, any action affecting the property or rights of a deceased person which may be brought by or against him if he were alive, may likewise be instituted and prosecuted by or against the administrator, unless the action is for recovery of money, debt or interest thereon, or unless, by its very nature, it cannot survive, because death extinguishes the right.

(2) There would also be a failure of justice unless the estate of Pedro O. Fragrante is considered a "person", for quashing of the proceedings for no other reason than his death would entail prejudicial results to his investment.

In this jurisdiction there are ample precedents to show that the estate of a deceased person is also considered as having legal personality independent of their heirs. 

In many others cases decided by this Court after the innovations introduced by the Code of Civil Procedure in the matter of estates of deceased persons, it has been the constant doctrine that it is the estate or the mass of property, rights and assets left by the decedent, instead of the heirs directly, that becomes vested and charged with his rights and obligations which survive after his demise.

Hence, we hold that within the framework of the Constitution, the estate of Pedro O. Fragrante should be considered an artificial or juridical person for the purposes of the settlement and distribution of his estate which, of course, include the exercise during the judicial administration thereof of those 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 application before the Public Service Commission in the instant case, consisting in the prosecution of said application to its final conclusion. An injustice would ensue from the opposite course.

If for reasons already stated our law indulges the fiction of extension of personality, if for such reasons the estate of Pedro O. Fragrante should be considered an 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 purposes of this proceeding.