G.R. No. L-2920 January 23, 1951
IN THE TESTATE ESTATE OF DON ISIDRO ARAGON, deceased. JOSEFA A. VDA. DE CLAUDIO, RAMON DIOKNO and MENANDRO QUIOGUE, claimants-appellants, vs. CRISANTO ARAGON, administrator-appellee.

FACTS

Isidro Aragon died on November 26, 1944, leaving a will. Paragraph 7 of the will contained legacies in favor of Josefa Aragon Vda. de Claudio (P10,000), Ramon Diokno (P8,000), and Menandro Quioque (P4,000). Instead of immediately probating the will, the heirs executed a document agreeing to distribute the estate properties according to the will’s terms, including properties not mentioned in it. This agreement included the adjudication of a soap factory in Pasay, Rizal, to the heirs in common, with the charge or burden of paying the mentioned legacies and incidental administration expenses. The factory was to be operated by Crisanto Aragon until sold, with its products used to pay expenses and legacies, after which any remaining proceeds would be divided among the heirs. The heirs later sold some equipment from the factory for P6,000 and leased the factory building, collecting P10,400 in rentals over 26 months. Efforts to sell the factory to pay the legacies were unsuccessful. The legatees filed a motion in court to have the rentals deposited and the legacies paid, leading to the probate of the will and the appointment of Crisanto Aragon as administrator. The administrator repeatedly sought extensions to sell the factory privately instead of at public auction. Eventually, the administrator moved to reduce the legacies proportionally, arguing that the factory’s value had depreciated from the P116,500 value implied by the testator. The lower court granted this motion, ordering the legacies reduced in proportion to the proceeds from the factory’s sale relative to the P116,500 base. The legatees appealed this order.

ISSUE

Whether the lower court erred in ordering the reduction of the testamentary legacies in favor of the appellants in proportion to the reduced sale proceeds of the property charged with their payment.

RULING

Yes, the lower court erred. The Supreme Court set aside the orders dated September 10, 1948, and November 19, 1948 (insofar as it maintained the September order). The administrator was ordered to pay the legacies as ordained in the will without any reduction. The Court held that the power of a testator to dispose of his property is untrammelled provided it does not impair the legitime (the compulsory share) of the forced heirs. The legacies in question were not inofficious (i.e., they did not impair the legitime) as the heirs had already distributed the estate among themselves according to the will and did not dispute that they had received their lawful shares. Therefore, the legacies could not be reduced on that ground. Furthermore, the testator’s mention of a specific value for the property (P116,500) was merely demonstrative of his hope for a good sale price for the benefit of the heirs, not a limiting condition for the payment of the legacies. There was no clear intention expressed by the testator to reduce the legacies if the property sold for less. The legacies were to be paid in full from the proceeds of the property charged with their payment, regardless of any depreciation in its sale value.