(Article published in the Apr 14,2003 issue of TODAY, Business Section)
however, A.M. No. 03-02-05-SC also reflects the failure in the law to
recognize the need to deal with the management of the estate of minors as
a separate issue from the care over his person, a failure that is mainly
due to the Philippine trust industry’s inability to play a dominant role
in the management of estates of minors.
No. 03-02-05-SC begins with the affirmation of the joint authority of
father and mother over the person and property of their minor child
without need of court appointment.
the parents’ authority over the person of their minor children has been
joint since the 1950 Civil Code and affirmed in the Child and Youth
Welfare Code (P.D. 603), joint authority over the minor’s property is of
more recent vintage. It was
introduced for the first time in our law in 1988 by the Family Code
(Article 225). The prior rule
made the father the legal administrator of the property of his minor child
(Article 320, Civil Code).
away with the need for court appointment was also the handiwork of the
Family Code. Prior to that,
Section 7 of Rule 93 required court appointment when the property of the
child was worth more than P2,000.00 (a princely sum in good old days of
1964) even if Article 320 of the Civil Code required only, under those
circumstances, the filing of a bond subject to the approval of the Court
of First Instance, now the regional trial court.
has since set in and the threshold amount was raised by the Family Code to
P50,000.00. Court appointment
was dispensed with but the filing of a bond remained. The idea is to avoid the expenses and delays of a judicial
appointment but, at the same time, ensure fidelity in the performance of
the guardian’s obligation by the filing of a bond in a summary
proceeding where, in addition, all incidents and issues regarding the
conduct of the guardianship were to be heard and resolved.
the affirmation of the parents’ privileged position, A.M. No.
03-02-05-SC proceeds to the lawyerly concerns of who may file the
petition, where it is to be filed, the grounds that can be invoked, the
qualification of guardians, and what the petition must contain.
Not much is new in this regard, being as they are demanded by
existing substantive law, except probably a minor procedural change on who
among the relatives of the minor must be named in the petition and thus
given notice of the proceedings. Section
2 of Rule 93 used to require the naming of relatives, without specifying
up to how distant. Section 6
of A.M. No. 03-02-05-SC now says everyone within the 4th civil
degree of the minor should be named in the petition.
guardianship proceeding is not conducted under a combat paradigm.
Thus, the court is given wide discretion in fixing the time and
place for its hearing and in determining to whom notices should be sent.
Moreover, the court asks a social worker to conduct a case study
and make a report before the scheduled hearing.
The case study report has been a feature of family cases since
1974. Article 23 of the Child and Youth Welfare Code (PD 603), in
particular, makes the social worker’s report and recommendation
necessary in minor child guardianship cases. Furthermore, as provided in
Article 25 of Presidential Decree 903, the hearing may be closed to the
public and, in any case, the records are not to be released without the
Court’s heavy hand of supervision over the guardian’s actuations, a
carry-over from the old rules, is evident all throughout the period of the
guardianship, but there are also indications of intent to give the court
some room for flexibility. Thus, new rule seems strict on the presence of
the ward. Under the previous rule, the ward had to be present only “if
able to attend” (Section 5, Rule 93).
In contrast, Section 11 of A.M. No. 03-02-05-SC says “the
prospective ward shall be presented to the court”.
But in other areas, there is laxity.
For instance, Section 1 of the old Rule 94 says that a guardian
“shall give a bond…”. But
now, under Section 14 of A.M. No. 03-02-05-SC, “an appointed guardian
may be required to post a bond…”
the general thrust is still, and correctly so, court intervention in the
affairs of the guardianship. Thus,
sale of the property of the ward, even to pay off just debts, requires
court approval. So do
releasing of debtors, encumbrances on the ward’s property, consenting to
partition of property held in common, investments of the funds of the
new rules, though, fail to address the fundamental difference between the
management of the ward’s property by an individual whose suitability as
guardian, barring moral defects, physical inabilities, and financial
incapacities, is determined by closeness of blood ties (as shown by the
listing in Section 6 of who may be appointed guardians) and the management
that is provided by an institutional guardian, such as a trust company
authorized to conduct trust business in the country.
is absolutely no indication that those revising the rules, just like their
predecessors, were aware of trust industry, the mission of which is
precisely to manage the funds and properties of those who are not able or
inclined to do so. They have,
at the very least, seem to have forgotten that Section 83, subsection
83.2, authorizes a trust entity to act under the order or appointment of
any court as guardian of the estate of a minor.
Only in general terms are trust entities embraced in “any other
person, who in the sound discretion of the court, would serve the best
interests of the minor” as among those who may be appointed as guardian.
And even if a trust entity is arguably covered by such general
description, it remains last in the order of priority.
The irony is, based on technical expertise and professionalism,
trust entities should be on the top of the list.
limitation of the fees to a percentage of the income is an unsound
restriction because it shows a bias for an income driven investment
posture. This type of
strategy may be good for some, particularly the aged, but not for the
young. As a general
proposition, the investment need of the young is for capital appreciation.
This means sacrificing present income for future gains.
Thus, the BSP regulations have taken the neutral standard of
requiring only that the fees “be determined on the basis of the costs of
services rendered and the responsibilities assumed” (Section X423,
manual of Regulations for Banks).
third telltale sign is in the question of the guardian’s bond.
Nowhere in the new rules is a recognition that, because a trust
entity already has a bond filed with the BSP for its faithful performance,
no other bond shall be required by a court, except for special cause
(Section 86, RA 8791).