Transcript of Special Proceedings:

Rule 86

Statute of Non-Claims.

There is a period of not less than 6 months and not more that 12 months. IF you are a creditor
not able to claim for such period because of statute of non claims, do you have other remedy?
How would you file for an extension? An application should be filed? Before the order of
the court. What then is the 30 days extension? Which period is to be record? Expiration of
6month and 12 months?

If the court grants the 30 extension? Where should the 30 days be reckoned from? Would it be
from the expiration of the period to file for statute of non-claims? At the date of receipt the
creditor received from the court extending such claim for 30 days. If still failed to file the period?
Do you still have legal remedy or the possibility of collecting the credit in behalf of your client?
What is the remedy to collect or claim against the estate? --- Compulsory counterclaim. If failed
cannot anymore claim.

When there can be offsetting of claims?

What are these actions that survived the death and action that do not survive? Enumerate. And
why are they considered as actions that do not survive?

What is the effect if it is money claims?

If it is filed under the statute of non-claims, can it still be filed in a separate action? ---

Why considered as action as do not survived? ---- MONEY CLAIMS /judgment for money—purely
personal?

You have to remember which actions that survive and actions that do not survive.

Tanga Discuss:

Rule 86 Claims against the Estate, or actions which against executor or administrator. You have
to remember that under rule 87 that these are actions that maybe filed by the executor or
administrator against 3rd persons or an action that maybe filed by the 3rd party against the
exec/admin not necessarily to the estate as a non-claim. A very important thing to remember is
that all the actions that survive and all the actions that do not survive but an ordinary action
which maybe a subject to a statute of limitation and this statute of limitation will also govern the
actions that maybe filed against and by the executor or administrator.

After granting letters testamentary or letters administration the the court would issue an order.
In the order, it is sort to be a notice to all creditors. All creditors to file their respective claims. In
other words, this presupposes that the middle part of the letters testamentary appointed already
an exec or admin. The court issue a notice and it requires all person s having a claim against the
estate of the deceased to file claims. The most important thing to remember here is the period.
The period is not less than 6 months and not more than 12 months reckoned from the first day
of publication. So if I will ask you the question, what then is the effect or the consequence if the
notice in itself has not been published as to the rights of the creditors to file the claims? ---- THERE
IS NO RUNNING OF THE STATUTE OF NON-CLAIMS. Because it should be not less than 6 months
nor more than 12 mon. reckonend from the 1st day of publication. So if the notice has not been
published then there is no reglemenrary period of 6 mo to 12 mo that will commence. So what
is really important here is that you have to know as practitioner that the 6 mo and the 12 mo
period shall be reckoned only from the 1st day of publication and not on the last day of
publication.

The most important thing to remember here are those, according to the rules of court only
money claims are only money claims to be filed as such as claims to the estate in the same testate
or intestate proceedings. So what are money claims? How do you define money claims? What
are these claims that are considered money claims? It is important for you to remember this
because It is always important for you to file the claims within the period or else you will be
barred.

According to Section 1 of Rule 87, money claims is defined as any claims for money, debt or
interest thereon upon a liability contracted by the decedent before his death. So this presupposes
that there was already a contract entered by the decedent before his death. The money claims
within the ambit of these Rule are the ff: All money claims arising from Contract, these contract
may be expressed, it may be implied, may be due or not due or it may be contingent. Now it says
entered by the decedent during his lifetime not after his lifetime. This are the money claims. Now
another case of money claims are all claims for funeral expenses, expenses for last illness of the
decedent. So if you owner of a funeral parlor, and the decedent funeral parlor and the burial
expenses in all those expenses and if the heirs failed to pay you and you file an ordinary action
for collection, that is an improper action. Why is this so? Because this is considered as money
claims. It has to be filed in the testate, intestate proceedings as a money claim. Which means that
it has to be subject to the statute of non-claims. It would not be proper if you file an action for
collection because after all the person is already dead and he is not converted to a juridical entity
called estate.

Another case of a money claims are the judgment for money. This presupposes that there is
already a pending action before death of the decedent, for money. Now, according to the rules
of court, it will proceed, there is a pending action against the decedent and he dies within he
period before it was decided by the court. It will continue until the decided itself will be rendered
by the court. If it is against the defendant, and he dies during the period he will be substituted by
his executor or administrator or heirs. Eventually if the court grants judgment in favor of the
plaintiff against the defendant who was already deceased, these judgment of itself is considered
as money claims and this has to be filed as money claim in the estate of the testator. The
execution thereof of the judgment in an ordinary action for collection will not be made in the
same court but it will have to be considered as money claim before the special proceedings of
intestate or testate proceedings. So there are three and try to memorize them.

There are two points to stress in this, the enumerations here: 1. Contracts 2. Funeral and last
illness expenses and 3. Judgment for money against the decedent.

There are two points to stress here. The enumerations are exclusive which means that claims
other claims other than those enumerated cannot be presented by money claims. Example:
damages arising from torts or negligence, these are not money claims. This will not be subject to
the statute of money claims. All claims arising after the death of the decedent cannot be
presented as money claims. Except, expenses for funeral. Though this claims made after the
death, still they are considered as money claims thus it has to be presented as such in the testate
or intestate proceedings.

Let us discuss the first part of money claims: First, Money claims arising from contracts. It says
there express or implied. The contract itself is expressly entered by the decedent before his death
or expressly or impliedly. Second, Due or not due even if the money claim is not due you can still
file it as a money claim why is this so? In order to prevent the expiration of the statute of money-
claims. Third, if the contract is due or contingent. The contract entered by the decedent during
his lifetime. You engage services of a carpenter to repair tour house, before you pay you died.
Walay makuha na salary. Mga anak man mo bayari ko? NO contract here written, Only verbal.
So it is within the ambit contract of services, the carpenter can file money claims as money claims
against the testate or intestate estate of the deceased. Although this is an implied contract but
still within the ambit of the money claims. Another is sum of money allegedly spend for a
necessary expenses of a property belonging to the decedent, you can also file it as a money claim
against the estate. How about money claims arising from contract not yet due? YES. Why?
Because IN ORDER TO PREVENT THE EXPIRATION OF THE statute.

A borrowed money from B. A died, how can B recovered? Action for collection is improper
because he is already dead. Estate na it is considered as money claims in the testate or intestate
proceeding in order to collect the 500k plus interest and penalty.

Examples of contract which gave rise to MC are: Contract of Loan, Commodatum, lease,
employment and service. (namatay Ang tenant, then money claims na kay arising from contract
of lease man). How about contract merely contingent? Uncertain liability because it depends on
the happening of an event. When can there be a contingent event? Example: Surety in behalf of
the borrower, until such time comes that A will pay the death, it depends upon the contingent
even that C will pay as surety depends upon on A will pay or not. C will have to file money claim
to the estate of A. Contingent because you have to file it within the statute of non-claims against
the estate of A. Witout doing so, you will lose your right the amount you paid in behalf of A.
Foreclosure of Mortgage for example, If nag foreclose ug motgage then wa siya kabayad, and
then surety siya and at that time nag pending pa ang foreclosure of mortgage although wala pa
siya kabayad, he can still file for money claims against the estate of the borrower kung namatay
within the period of the action for foreclosure. This one is contingent because after all kung ma
pilde ang borrower siya man gud gihapon ang mo bayad as surety. Siya man ang nibayad kay
namatay man ang borrower. In order for her to collect bisag wa pa siya nakabayad, it is a
contingent claim against the estate of the borrower. Even if wala pa siya kabayad in behalf of the
borrower, that is a contingent claim na posibilidad he can still pay in behalf of the borrower,
contingent na siya kung mapilde ang borrower.

Another ideal example of MC is with regard to a contract of passenger. One act or omission
resulting to several cause of action. Againt owner, driver, crim action to the owner. You file an
action against the operator for damages during the operators lifetime as moneclaim ug namatay
ang operator thereafter. Will you file it as money claim of ordinary action? Take note that it is
based on breach or carriage, a contract. If you file it during lifetime of the operator, it is not
money claim. If you damages is based on torts? Is it money claim? NO. because this action will
survive so action will be filed against the executor or administrator. So this is an action you can
file directly agaisnt administrator or executor because this is not considered as MC. In order for
you to deermine whether is is a money claim under the statute of non-claim you have to know
what kind of action to be filed. While the case is on going, them Mr Lim died while the action is
pending, There is a cause of action against Mr Lim based on contract of carriage, now if you file
it during the lifetime wala pa namatay si Mr Lim, it is an ordinary action for damages. Now,
namatay si Ms Lim, while proceeding is still on going, what will happen? It will continue until the
judgment itself and if the judgement is favorable to you as plaintiff, this judgement itself is
already considered as money claim and his has to be filed as money claim before the testate or
intestate proceedings. What is interesting here is that, even if before the judgment has been
rendered by the court, you can file it as a contingent claim.. why? Kay basin ma expire ang statute
of non-claims you wont be able to file it as a money claim. Now, supposing that situation wala ka
file ug case against Mr Lim under the contract of carriage, what will happened now? You cannot
file it under ordinary action anymore. You have to file it as money claim and it will be subject to
a statute of NC.

If the defendant is already dead, before the action can be found the person incharge shall be file
it as money claim arising from contract under the statute of non-claim. Under Section 2 of this
rule of the same Rule this referes to the Statute of Non-Claim. What is really important for you
is to determine the period of statute of non-claims. This period fixed by the probate court is
MANDATORY. This period is specified in the notice of filing claims which shall be published in 3
consecutive weeks in a newspaper of general circulation. What is the purpose of the law in Fixing
the 6 months and 12 months period is in order to ensure a speedy settlement of estate. Why not
less that 6 mo. And not more than 12 mo? So the period actually here is 6 mo. Right? The filing
of the claim should be 6 months. Ngano ingon man not less than 6 months? In order to give time
to notified creditors to file their claims. To give them ample opportunity to collate all the
vouchers and notes or instruments they have to attach together with their claims. So the 6
months period from the first day of publication, they are not required to file a claims only after
the 6 months period until 12 months.

Now, although the period of 6 month to 12 months is fixed, the rules of court also provides for an
extension. It maybe granted if you comply with the requisites in order to determine the extension
of 30 days. What are these: 1. Application; 2. It has to be based on meritorious grounds; 3. It has
to be filed before the order of distribution of the court has been issued so at at any time before the
order of distribution you can file an application for extension.

Important to remember is that the 30 day extension should not be reckoned from the expiration of
the period. So the expiration of the period is march 25 2018 and the court grants the extension of
30 days it should not be reckoned from March 25. So inorder to illustrate this:

Mar 25 2018 – expiration

March 30 – motion for application for extension filed in court
April 10 2018 – court granted for extension
April 15 – you received it

Q: 30 days extension when should it be reckoned from? When 30 day period expires for you to
file your claim?

April 15 – based on the receipt of notice. Now the 30 be May 16. Exclude the first day include the
last.

This issue has been settled In case of Paulin Vs. Aquino 103 Phil 1143. In this case, the court
held that one month period shall begin from the order authorizing the claims and not from the
expiration of the period to file the claims or presentation of the claims.

So to sum it up, the statute of non-claims established a general time barring rule for filing of claims.
It actually supersedes the ordinary statute of limitations for action. As this statutes of non-claims
will only applicable to claims against the estate of the decedent. The general rule is that all money
claims against the estate must be filed not less than 6 months and not more than 12 months from
the date of 1st publication. So if the effect of the non filing within the period. Take note there are
exemption to the statute of non claims. Two instances when statute of Non-Claims is not
applicable: 1. If the claims filed involved properties not included in the inventory ( still can file
even beyond the statute of non claim if property is not in the inventory of the estate). 2. If there is
fraud then you can file your claims even beyond the period of the statute of non claims.

Now, the publication of notice to creditors shall be made once a week for 3 consecutive weeks in
a newspaper of gen circulation. Aside from this publication the rules also requires Posting. Posting
shall be made in 4 conspicuous places in the province and 2 in the municipality where the deceased
last resided.
Now sometimes the executor/admin may file a case against the claimant. When you file a case a
claimant defendant, the latter may file for a counterclaim if he fail to file a claim under a statute
of non-claim or even as a tardy claims. Kung mo file sila exec/admin(EA) against you, you can file
it as a compulsory counter-claim in your answer if the judgment is in favor to you then you collect.

If the decedent is already liable with another debtor, then it is sufficient that you can file your
claims against the decedent claim in the testate or intestate proceedings. Unless, of course the
decedent is only jointly liable with the other 3rd party. This case, the claims is only be limited to
the portion of his debt.

Mortgage debt due to the estate. If you borrow money from A , and A borrowed money from B
secured by a parcel of land. Kung wala ka kabayad? Namatay ka? What happened to mortgagee?
What are the remedies? B – mortgagor, A- mortgagee, A died without paying the debt? What
then is the remedy if you are the counsel of the mortgagee? 3 Remedies are given by the Rules
of Court:
1. Wave the mortgage / abandon the security and claim as monitary or as money
claim against the3 estate.
2. Foreclose judicially the mortgage by court intervention( secure deficiency
judgement, so you can file a contingent claim against the estate ( ex. File kag
foreclosure wala pay judgement, but there is already an on going testate or
intestate proceedings)
3. Rely merely on the security. But this kind of action is extrajudicial without
court intervention. What is advantageous here is that it is easier, convenient
and speedy. It is merely administrative.
Now, what is really important to remember is that you cannot avail of the 3 remedies, you can
only avail one either of the 3 remedies.
Note: if the execution/admin has a claim to the estate he represents: the the court will have to
appoint a special administrator. If you are a creditor of the estate, you may file the claim with
the clerk or court in a written application attached to the documents, vouchers. But if only
duplicate, required to present orig. Incase docs are lost or destroyed, claimants shall execute
affidavit attached to the claim the nature or circumstances of loss. When you file a claim E/A shall
be given also a copy within the 15 day period, EA shall file the answer. It could either be an
admission or a denial of a claim. In this claim also, the EA , this is the time when there is an offset.
Paghatag sa claims sa creditors, ang EA mo ask to admit or not? Now, maybe EA admit but
demand an offset. For example a claimant demands to 50k claim monitary and the EA admits
that deceased is nay utang but then you also have an evidence na ni borrow siya ug 25k. that’s
means to say there is an offset. You only have to admit up to 25k because after all the creditor
borrowed the deceased of 25k. this is what you call OFFSETTING.

Now if the claims are admitted, generally it is not subject to a hearing unless there are
clarificatory questions. Once it is admitted, no hearing needed. However, those claims that are
not being admitted or denied this has been a subject to a hearing.
As a general rule, the probate court has no jurisdiction to entertain a claim in favor of the State
against a third person since the action against 3rd person maybe subject to an ordinary action
but the exemption to this rule is provided under Section 10 of Rule 86 where it authorize the
A/E to interpose any counterclaim in his answer as an offset of a claim against the estate. The
counterclaim is regarded as Compulsory CC and failure to file the same shall be barred forever.
If the Estate is the claimant against 3rd person, the probate court has no jurisdiction. However,
the remedy therefore to a claim against 3rd person is, fiel it as a CounterClaim in an action where
it is filed against the debtor. So this is an OFFSET.
Now, the admitted claim and denied claim in a case where the claim was admitted by the EA and
no opposition is filed by the heir. The creditor is required to file for a motion for execution. The
Q: IF the claim is admitted, by the EA is it a requisite for the claimant to file for a motion for
execution for the admitted claim? Do we need writ of execution?
If you are a claimant and your claim is admitted, you don’t have to file for the execution for you
to be paid, this is a special proceeding so no motion for execution is required but there are
exemptions.
Now bisan pag admitted imong claim, dili ka kinahanglan mo WOE. Because the probate court
will just order the payment ot this admitted claim in due course of administration . Dili na mag
WOE. So at any time the probate court may issue the order ofr payments but not WOE.
Exception: there are 4 where WOE must be issued:
1. If made to satisfy the contributive shares of devises, legatees and heirs who are in
possession of the property.
2. To enforce payment of the expenses of partition
3. To satisfy the cost when a person is cited for examination in probate proceedings
4. To compel the heirs who already received their shares in the estate to pay their respective
shares to pay unpaid debts
If there are claims which are contested, that it shall have to be set for trial.
The judgment rendered by a probate court whether to approve or disapprove a claim is
considered as final. Therefore, appealable. That is the remedy. So if your claim has been denied,
then it is appealable. That is why even if the proceedings has not yet been terminated, there is
what you call as multiple appeal .You appeal from the grant of the claim, from the denial of the
claim of the creditors, and you can also appeal from the judgment itself as the principal action.

To sum it up:
After granting letter testamentary or letters of administration, the court issues notice to
creditors. To file the respective claims within the statute of non-claims to the clerk of court, This
notice shall contain the period again, not less than 6 months nor more than 12 mo. Reckoned
from the first day of publication. After notice is issued, the E/A shall cause notice to be published
in 3 weeks successively, in a newspaper of general circulation. And at the same time it will posted
notice of the same period in 4 conspicuous places in province and 2 where the deceased last
resided. And within 10 days after the notice and publication, EA required to file a cause, or filed
a printed copy of the notice and accompanied with an affidavit of publication setting forth the
date when it was published. Affidavit of publication shall be issued by the editor of the
newspaper where it was published. So obviously in a probate proceedings , how many
publications is required? 1. Publication of the notice to file their claims and 2. Publication of
notice of initial hearing . Remember in the same proceedings. There are 2 publication s to be
made within this context of the proceedings.

Rule 87.
Actions by EA, actions against EA , actions that maybe commenced directly against EA. Again
these are the actions that survived. Why is this survive? Because this is not subject to statute of
non-claims. This survives even beyond the period of statute of non-claims. Now it is now subject
to a statute of limitations and these actions that survived will have to be filed directly against the
EA and this are not considered as money claims and what are this? Important for you to
memorize.
1. Action to recover, real property or any interest therein
2. Actions enforced a lien or interest of real or personal property or deceased such as
, mortgage or pledge
3. Recover damage or injury to person or property real or personal
These actions are actions that survived because these are not subject to statute of non-
claims.
Is X required to file his claim to subject property against the E/A if you are a claimant and
you are a 3rd party and you believe that you have a right of ownership over some property
of the estate. You do not file it as money claim but you file it as ordinary action to recover
real property allegedly part of the estate. So ordinary action subject to the limitations of
statute of limitations.
Now, the defendant if the estate but it should be against E/A because they are representing the
estate of the deceased. So if the Funeral parlor has a collectible amount of 200k , can he file a
separate action of collection ? NO. because this is an action that do not survive. Failure to do
so within the statute of non-claims shall bar him to recover. Remember always actions that do
not survive 1. Contact 2. Funeral And 3. Judgment for money.
Actions commenced by EA refers to actions which survived for the protection of the property
rights of the deceased. There are 3 scenario here;
1. If during lifetime of the deceased, action against him accrued which would relate to a
money claim arising from contract, express or implied but before the action would be
filed against the decedent he dies, It is not proper to file said action against EA. The form
is to file it in the form of a money claim under the stature of non-claim.
2. But if during the lifetime of the deceased , action against him accrued which relates to
action that survive, so there is already a pending action to recover personal property , to
enforce a lien of action to recover damages, and he dies before commencement of an
action against him, the plantiff may file an action making the E /A as the defendant before
commencement. In other word this is a proper money claim, it has to be filed as separate
action against the EA.
3. But if during the lifetime of the deceased an action against him has been accrued , which
relates to action that survives and action was filed against him but during the pendency
 of the case, the action will continue and it will be substituted by the EA and if judgment
is favorable to the plaintiff, then the judgment itself will be considered as money claim.

Can the heir sue the AE during the pendency of the administration proceedings?
ADMIN – inventory, liquidate and pay the debts
NO. before the payment of the obligations had been made, the heirs have no right over the
properties of the estate. So they could not sue nor can they recover properties part of the estate
against EA. However, they can file for a termination of the authority of the EA but not necessarily
the recovery of any property within administration.

Sec3 of Rule 87. Except.

1. There is an order of the court assigning such land to such heir
2. Until the time of paying debts has expired
3. If The EA is unwilling to bring the suit and
4. Where EA is made a party defendant where is alleged to have participated in the act
5. When there is no appointed Admin as in the case of Teodora vs CA.

Sometimes, EA compound with the debtor of the deceased of a debt due and the act of giving
discharge, these acts of compounding with the debtor and act of compounding discharge is
considered as act of ownership and dominion therefore they have to ask for the authority of the
court.
Important in Rule 87. A third party is suspected of embezzling, concealing any of the money of
the deceased. Does the probate court has the right to compel delivery of such property?
In Section 6. It is very clear. The person maybe cited to appear in court. The purpose only of
which is to elicit information or secure evidence from the person pero di siya pwede or the
probate court has no authority to compel the delivery of such property.
Foreclosure of mortgage initiated by the EA, the deceased during his lifetime entered into
mortgage the deceased being the mortgagee. The proceeds of such will form part of the estate
deceased and will be part of the distribution to the heirs after payment of debts and obligations.
The deceased before he died conveyed properties, to other 3 rd person with the intention to
defraud creditors. Do the creditors have right if estate is insufficient? Section 9. Rule 87. What
remedy? Prove that there is an intention to defraud. File an application in court for EA to initiate
action. An action to recover the property. File a bond. If EA will not file then creditors will file
themselves still in the name of EA. However, if EA is part of the party defendant to defraud the
creditors then, the creditors themselves will have to file. In this case 4 requisites: such as filing
of bond no longer required because the party defendant here is EA.
Rule 88 – Payment of Debts.

This is the last stage of settlement of estate of the deceased. After determining the assets of the
estate, ascertaining the debts , charges and claims of the creditors whether its valid or not and after
due hearing comes the payment of debts. In he payment debts and claims the probate court is
clothe with the authority to order the sale or to mortgage real or personal properties of the estate
or any of the properties of the estate in order to satisfy debts , charges and expenses of
administration.

This order of the court has been issued only upon application. The court cannot moto propio
ordered a hearing for the sale or mortgage of any property of the estate. It must be initiated by an
application to be submitted by an Executor/Administrator of the same proceedings and upon due
hearing a notices to all interested heirs. Before property can be sold there must be a hearing and
this is jurisdictional.

The ff is the mode and manner of payments of debts mandated under the ROC: 1. If there is a will,
and the will provides that a portion of the estate is used for payment of debts or expenses of
administration, the same should be respected because the will is considered as the express will of
the testator. IF it is not sufficient to pay the stipulated debt in the will, a portion of the estate not
provided for in the will will be used as payment. 2. If the estate is insufficient, and the sale by the
personal property shall be ordered then by the court, the next to be sold is the real properties. If it
is still deficient, what is the course of action here? It shall be charged to the contribution of the
heirs who have taken possession before the debts and actual expenses are paid. If contingent
claims are found, how it is paid? The court shall order EA to retain some properties in order to
satisfy the amount of the Contingent claim. However, when the contingent claim has already been
filed within the reglementary period (within 2 year period). How does the court finds the payment
of this CC which has become absolute? It shall order the same manner as that of other creditors,
as if it is filed as claims during the period stated. That is only tru if there are properties left to pay
the same.

However, if the remaining properties are not sufficient, the remedy of the creditors is to sue the
distributees. The heir who receive the properties. So they may contribute an aliquot portion for the
payment of the claim.

In case the estate is insolvent, would the creditors be paid? If wala gyuy nahabilin , sorry nalang.
But if there are still assets but not enough to pay all the creditors of the estate, the course of action
is to pay the debts in accordance with preference of credits. Under 2239-2251 of civil code. There
are dividends also which would also available if you could not pay the principal amount of the
credit.“ No creditor of anyone class received any payment and to those of the receiving class of
creditors will have to be paid. Now if there are no assets sufficient to pay for anyone class of
creditors, then they will be paid not as principal debts but in a form of dividends in proportion to
their claims.
If the deceased is not a resident, his estate in PH shall be disposed of in such a way that creditors
in the PH and outside may also be certified in the same manner ,bracket and same level as that of
the creditors of other country. Now if there are claims proven outside of the PH, Question: Would
this claims tenable in the Ph where there are claims proven as a valid claims outside PH. Would
this claims be paid for the proceeds remaining found in the PH? YES. As long as this claims are
proven outside of the Phil. against the estate. If the estate outside of insolvent resident here, the
executor or admin in the PH having had the opportunity to contest the claim shall be included in
the certified list of claims proved against the deceased. The procedural rules dictate that, payment
of debts of the deceased shall be made pursuant to the order of payments as issued by the probate
court.

In case the claim is on appeal, the probate may either : 1. Suspend the payment of the claims or 2.
Order the payment of other claims and direct the EA to set aside properties, sufficient assets to pay
the disputed claim which is still on appeal. Remember that, if the claims of the creditors are denied
by the probate court, the remedy of course is APPEAL because this denial in itself is already final.
MR is not a remedy or prerequisite to filing of an appeal.

What is the period mandated by the ROC for the EA to wind up the affairs of the estate? 1 year.
Extension? 6 months. Another extension? Yes, and a total of 2 years. But it maybe 2 and half years,
when that happened? Death of an EA so a total of 2 and a half years maybe granted for extension.
If the death of an original EA, another EA shall be appointed and he may be given an extension of
6 months but of course there must be a hearing and due notices and good/justified reason.

Another query here is that execution be a proper procedure for the payment of debts and expenses
of administration? NO. The probate court need not have to execute valid claims and debts , charges
or expenses of administration. Why? Because the probate court at any time in due course may
order for the payment of such debt. Without any issuance with the writ of execution. If you are the
counsel of the creditor, you ned not have to file for a motion for the Writ of Execution (WOE).
The probate court has no authority to issue WOE. Except: 1. Heirs already entered into possession
of properties and there are still debts payable. The court this time may issue an WOE to order the
heirs to contribute to the payment of the debts and expenses after due notice and hearing. Always
remember that Hearing and notices should always be made in order to give notice to all interested
parties especially the creditors. Now one of the ways for the probate court to pay the debts is the
sale of properties whether personal or real or mortgage.

Rule 89 –Mandatory, failure to comply would render the sale of the property Null and void. The
order of sale of the personalty only for the ff purposes: 1. Paying debts, expenses of administration,
paying legacies, devices found in the will or debts, charges found in the will. 2. Sale maybe made
for the preservation of the property. One must remember however that order may only be issued
by the court for the sale only upon the ff requisites. 1. Upon Application submitted by the EA 2.
Written notice to all persons interested 3. _______. Sale and mortgage, encumbrance of any
property of the estate is an act of dominion and ownership so much so that court approval must be
granted. But then you must have to go to a proper proceedings to obtain the approval of the court
to sell any of the properties. If you are an EA you have no authority to sell not to mortgage or
encumber any properties of the estate unless you ask court’s approval. If AE sold personal property
of the estate without court approval, the sale is considered as void of want of jurisdiction and the
effect does dot conferred title on the purchaser against succeeding administrator.

Mr. X is the Administrator of the estate of Mr. Y. The heirs of deceased Mr. Y who are A and B
executed an SPA in favor of the administrator to sell the parcel of land of the deceased. What is
the status of the sale? NULL and VOID. Once the property is under administration, all the
properties of the estate is now under the custody of the court. Only the court can allow the sale,
mortgage or any property part of the estate. Only the probate court has the exclusive power to
authorize the sale of the property.

When would real property of the estate authorized to be sold?

1. Personal property is not sufficient and there are remaining debts to be paid
2. When the sale of PP will injure the interest of those persons interested in the estate
3. When testator has not made sufficient provision for the payment of his debt, expenses and
legacies
4. When sale of RP is beneficial to the heir
5. When deceased was in his lifetime under contract, binding in law to deed real property
6. When deceased in his lifetime held real property in trust for another person

If the court order the sale encumbrance of real properties (Pls remember this). Any interested
person may prevent the sale by filing a bond. In a sum to be fixed by the court. The condition of
the bond is to pay the debts, charges and legacies and for the security of the creditors , executor
or administrator.

Another thing to remember is that. If Mr X a former Filipino citizen who have properties here in
PH but naturalized as Citizen in Italy. When he died, he resided in Italy and died there. At the time
of his death his estate was settled here in PH and in Italy because he has properties to both
countries. What is the remedy? If it turns out that his property in Italy is insufficient to pay the
debts in Italy, Mahilabtan baa ng properties sa Philippines? To pay unpaid debts in Italy? YES as
provided in ROR(Sec 5. Rule 89). It is a general rule that the assets remaining in the hands of
ancilliary administration ( PH) after paying claims of local creditors in the PH are to be transferred
to the jurisdiction of the domiciliary administrator (Italy). After paying debts in the PH, the
ancilliary administrator may file an application before the probate court kung naa pay nabilin sa
properties here after the local. The logic here why the sale is to be conducted in PH and not in Italy
is because the Domicillaiy administrator cannot under his authority sell property outside of its
jurisdiction. Dili siya pwede maka sell dinhi unless he is also given the authority and appointed
as administrator in the property here in PH. That is why the sale have to mbe made an application
will have to be file =d by the ancillary administrator and the sale will have to made in the PH.

Nor the mechanics in the authority to sell, mortgage or encumber property is that, the EA files an
application in the court. The filing of the petition is necessary to enable the court to acquire
jurisdiction over the subject matter of the sale. In this petition the ff. must be averred: a. debts due,
b. expenses of admin. c. legacies, d. value of the personal estate, e. situation of the estate to be sold
or encumbered and f. other circumstances that the sale or encumbrance is necessary or beneficial.
It is important here to remember that the value of the thing to be sold must be stated in the petition
or application because this is jurisdictional. (Very Important). If there is no averment as to the
value, the sale is null and void. Then the court issue an order fixing the time and place of hearing
and post notices to interested person. The court may sometimes required additional bond in this
case because this involves properties of the estate. In its discretion not necessarily mandatory, the
court may require additional bond in a condition that is shall account the proceeds of the sale. Then
the manner of sale maybe public or private which the court may determine which is beneficial to
the heirs. If it is public bidding the highest bidder is preferred. After notice and hearing the court
shall order the approval of the sale and this approval is essencial to the validity of the sale. The
sale of realty together with the certified copy of the order of the court plus the deed executed by
the administrator must be registered in the registry of deeds in the province where the subject
matter is located. Now, important to remember here is that, these procedure and regulations are
mandatory. Failure to do so would render the sale null and void.

If the deceased is in contract during his lifetime to deed real property or any interest therein, the
probate court shall issue an Execution of the Deed (sale, conveyance,assignement). The probate
court may order the execution of the deed in favor of the person in interest by the executor or
administrator. This can only be done by filing an application or petition which shall be filed by
the executor or administrator. If conveyance is to be made in favor of the EA, then the deed shall
be signed and executed by the clerk of court. Now, jurisprudence also dictates that, in all this
conveyances notice of the petition must be served to all interested person and publication maybe
required by the court in its discretion. This time publication for the conveyance is not mandatory.
However, if this conveyance will not be made, if the execution of such contract would greatly
reduced the assets of the estate to the prejudiced of the creditors. This will not be ordered by the
court of the execution of the deed. Even if opposed or controverted by the heirs or the
administrator or Executor, the proper remedy of the person interested in the contract is to file a
separate action not to be threshed out in the same proceedings.

Rule 90 – Distribution and Partition of the Estate

Distribution and Partition will follow after all payment of debts, expenses and charges, the law
provides that probate court is prohibited to assign or distribute the residue before the obligations
of the estate must have been paid. Thus, all debts and obligations, expenses of administration must
be paid before the residue shall be distributed to the heirs whether compulsory or voluntary. Who
are these compulsory heirs: 1. LC and legitimate decendants, 2. In default of LC then LP and
descendants, 3. SS 4. IC. That is the estate of a legitimate child.

Now, it says here that there are cases where the distribution is permitted even before the payment
of debt and charges and subject to the discretion of the court, the court may order for the
distribution for some properties of the estate. But then the distributee must put up a bond. What
are the obligations payable by the EA? – Debts, funeral charges, expenses of administration,
allowance of the widow, inheritance tax.

Aside from the adjudication of the heirs, legacies and devisees and creditors of the same
proceedings can promulgate:
1. Declaration of Heirs ( Separate action is not proper. Generally, declaration must be done
after payment of debts, charges and admin expenses but the court is not precluded if
declaration is made prior payment.)
 2. To entertain question whether a person us an acknowledge natural child of decedent.
3. To decide on several woman who is the lawful spouse
4. Determine the legality or illegality of the testamentary provisions of a will

Judicial Partition (JP)

It is different to the settlement of the estate because this is a special civil action. Now the court in
this case, partition maybe resorted to by the heirs if there are no debts and the heirs does not in
anyway agree among themselves. The court in this case may require the parties to submit the so
called, order or draft of partition. This is designed in order to inform the court of the properties it
has to distribute. In case the EA fails to comply with the order they will be held in contempt of
court. Take note, the draft of order of partition is not mandatory because the the court may
distribute the residue even without this draft. JP take note does not bind the heirs who are not
party. Though the first part of partition is considered proceedings In REM because of publication,
but nevertheless the second stage which is the distribution of the residue is already considered as
an action In Personam, meaning it only bounds those parties involved in the estate distribution.

Now, the distribution proper, before the distribution of the residue the ff. must be complied first:

1. Debts, funeral charges, expenses of administration, allowance to the widow and

inheritance tax must be paid;
2. The executor or administrator or person interested shall file an application with the court;
3. Notice and Hearing shall be set and the project of partition is approved.

Rule 91-ESCHEAT

ESCHEAT Define- a special proceedings whereby the real and personal property of a person who
dies without any will or any other legal heirs becomes the property of the STATE upon his death.

If a person died without any legal heir, the State cannot automatically take possession of the
property unless it has to undergo a proceeding called Escheat.

Under the same rule Eschaet may also be defined as that special proceedings whereby property
alienated in violation of the Constitution or any of the statute also becomes the property of the
State. This proceeding is called Acton for Reversion.

The following are the requisites of Escheat Proceedings:

1. That the person dies intestate (without will,void will, revoked will);
2. He left no heirs or persons by law entitled to the same; and
3. He left properties, real and or personal.

This Escheat proceeding is not an ordinary action nor a special civil action, but it is a special
proceedings. It is not initiate by a complaint by initiated by a petition. The point to stress here is
that, the filing of the petition and the publication of the notice of hearing is jurisdictional. Non-
filing of the petition and the publication affects the validity of the entire proceedings. The
procedure prescribed in this rule is also jurisdictional so there are 2 thing to remember: 1. Escheat
proceeding is that that filing of the petition and the publication of notice of hearing is jurisdictional;
2. Another matter that is jurisdictional is the procedure as prescribed under Rule 91. This is the
reason why escheat cannot be ordered in an ordinary settlement proceedings which means that the
probate court is devoid of any jurisdiction to order the estate of the person escheated in favor of
the State in the same proceedings. It has to undergo separate proceedings.

But, it has jurisprudential exceptions. The court said, if in the settlement proceeding the requisite
for escheat proceeding has also been complied with. Then the escheat can be ordered in the same
settlement proceedings.

Jurisdiction and venue. ( I will include this in the exam)

If you are going to file for petition who is entitled to file one? Ans: SolGen or his representative
in behalf of the Republic of PH.

Where filed?

a. If the deceased is a resident of PH, in the RTC of the province where deceased last resided;
b. If decedent was not a resident of PH, in the RTC of the province where his property is
located;
c. and if the escheat is due to unlawful alienation, then filed in the RTC of the province
where the land is situated, in whole or in part.

Notices shall also be sent to the occupants and the adjoining owners of the property. If the court
files a petition, sufficient in form and substance, the court shall set the date, time and place for
hearing which shall not be more than 6 mo. After entry of the order of hearing.

The court order shall be published once a week for 6 consecutive weeks in a newspaper of general
circulation published in the province.

During the hearing, the party must present proof of jurisdictional facts : a. person died without a
will and person died without will is without legal heirs; b. satisfactory proof that the order of
hearing was duly published and c. debts and charges already been paid.

If the court grants the petition the Estate shall be escheated as follows:

1. If deceased is a resident of PH
a. Personal Property – assigned to the municipality where deceased last resided
b. Real Property – assigned to the city or mun. in which the same is situated
2. If deceased in Non-Resident of PH
a. Real and Personal Property – shall be assigned to respective cities and mun.
where the same is located.

What is the use of escheated property: To establish public schools, charitable institutions or for
public centers or for the establishment of trust where only the income of the trust shall be used for
public purposes.
Now, if you discover that you have a right over the property of the estate whose already been
escheated, do you have the remedy to claim? YES. Within 5 years from the date the property was
delivered to the State.

Section 5 of Rule 91. Is modified by the provision of Art. 1049 of the New Civil Code which
provides that:

Article 101 “If a person legally entitled to the estate of the deceased appears and files a claim
thereto with the court within five years from the date the property was delivered to the State, such
person shall be entitled to the possession of the same, or if sold the municipality or city shall be
accountable to him for such part of the proceeds as may not have been lawfully spent.”

In brief, a person entitled to claim appears and filed a claim for reversion within a period
prescribed by the rule, he is not entitled to all the proceeds thereby. Only he is entitled to the
remaining proceeds and if the property was sold, he can get only the proceeds net of the expenses
lawfully spent by the government.

Only intestate heirs entitled to file a claim for reversion.