Rule 95

Selling and Encumbering Property of Ward

 

Prepared by: Marcko Lim

 

 

Question: What are the Grounds for selling and encumbering the property of ward?

 

a. When income of estate is insufficient to maintain ward and family or to maintain and educate ward when a minor; or

 

b. When it appears that it is for the benefit of the ward.

 

Qustion: What are the requirements?

 

a. petition must be verified;

b. notice must be given to the next of kin; and

c. hearing so that they may show cause why petition should not be granted.

 

       Notice to next of kin and interested persons is JURISDICTIONAL.

 

Note: Next of kin pertains to those relatives who are entitled to share in the estate of the ward under the Law on Intestate succession including those who inherit  per stirpes or by right of representation.

 

 

ANNOTATION

     Sale of the ward’s realty by the guardian without authority from the court is VOID. Under the law, a parent acting merely as legal administrator of the property of his/her children, does NOT have the power to dispose of, or alienate, the property of said minor without judicial approval (Lindain vs. CA, GR No. 95305, Aug. 20, 1992).

 

     Duration of the order for sale and encumbrance of property – Within 1 year from the granting of the order.

 

     It is presumed that if the property was not sold within 1 year, the ward has sufficient income. The authority to sell or encumber shall not extend beyond 1 year unless renewed by the court.

 

Nature of the hearing for sale of Ward Estate

 

The sole object of the inquiry on an application to sell wards real property is whether it is to the best interest of the ward that the sale shall be made.

 

After Court’s full examination

 

     If it appears that it is necessary or would be beneficial to the ward to sell or encumber the estate or some portion of it, The court shall order such that the proceed thereof be expended:

 

a. For the maintenance of the ward and his family;

b. Or the education of the ward if minor or for the putting of the same out at interest or the investment of the same as the circumstances may require.

 

     The order shall specify the cause of why sale or encumbrance is necessary or beneficial to the ward.

 

The sale is Binding upon the minor or ward

 

     There being a presumption that the sale of the ward’s estate is valid, the same cannot be attacked collaterally in the registration proceedings. A separate action to avoid or rescind the sale on the grounds specified by law should have been filed.

 

Remedy against Order of the court authorizing  the Guardian to sell the Ward’s Property

   

     Appeal is the proper remedy against it. 

 

The court may authorize and require guardian to:

 

     To invest the proceeds of sale and encumbrances and any other of his ward’s money  in his hands, in real estate or otherwise as shall be for the best interest of all concerned.

 

Duty of Guardian in Investing the Wards Money

 

     The guardian normally the proper custodian of the moneys arising from the sale of the ward’s land. It is the guardian’s duty to apply the proceeds to the purposes for which the land was sold. If the sale was ordered for reinvestment, the guardian has no right to apply proceeds for the support of the ward unless necessity therefore, arising after the order of sale, is clearly established.

 

Once the ward reaches majority or becomes entitled to the proceeds

 

     It is the duty of the guardian to account for and return them over to him and he cannot refuse to do so.

 

 

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See The Philippine Trust Company v. Roldan, G.R. No. L-8477. May 31, 1956.