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SPECIAL PROCEEDINGS REVIEWER

RULE 78 to RULE 90 (references: Tabingan and Festin)

Rule 78: Letters Testamentary and Letters of Administration

I. Definitions
a. Executor – appointed by the testator in his will
b. Administrator – appointed by the court in case there is no will
c. Administrator with a will annexed – appointed by the court although there is a will but
the said will (1) does not appoint any executor or (2) the said person is either
incapacitated or unwilling to serve
d. Letters Testamentary- authority issued to an executor named in the will to administer
the estate
e. Letters of Administration- authority issued by the court to compel persons to administer
the estate

II. Qualifications of Executors and Administrators

a. Resident of the Philippines (including resident aliens)
b. Legal age
c. Not unfit to execute the duties of trust by any of the ff reasons:
i. Drunkenness
ii. Improvidence
iii. Want of understanding or integrity
iv. Conviction of an offense involving moral turpitude
v. Sound discretion of the court

III. Unsuitability as a ground for the court to refuse appointment

The court may refuse to appoint on the grounds of unsuitability
e.g. adverse interest or hostile

IV. Extent of drunkenness to disqualify

It is only when their drinking habits are carried as far as to cloud their brains and weaken
their respect for honesty and integrity that the courts are called upon to take cognizance of
their use of liquor.

V. Passing on executorship not allowed

The executor of an executor shall not as such administer the estate of the first testator

Remedy: appoint an administrator to continue administration of the estate

VI. Married woman as executor

i. Married woman may act as an administratrix or executrix
ii. Marriage of a single woman shall not affect authority to serve under a previous
appointment

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VII. Issuance of Letters of testamentary

a. When issued? – when the will has been proven and allowed
b. Executor shall be allowed to assume duty only if:
i. He is competent
ii. Accepts the trust
iii. Gives bond as required by the rules

VIII. ORDER OF PREFERENCE: When and to whom the letters of administration is granted (BASED
ON WHO HAS THE GREATER INTEREST)
a. Order of Preference
i. Surviving husband or wife, or next of kin or both, or to such person as such
surviving spouse or next of kin requests to have appointed, IF competent an
willing to serve
ii. If (1) incompetent or unwilling; (2) or neglects for 30 days after the death to
request that some other person be appointed ----- it may be granted to one or
more of the principal creditors
iii. Such person that the court may select
b. ORDER OF PREFERENCE NOT ABSOLUTE: depends on the attendant facts and
circumstances of each case.
i. E.g. if not competent or willing
c. REASON FOR THE RULE: those who will reap the benefits have the highest and most
influential benefits to administer the estate correctly

IX. Grant of Formal authority

a. Executor – giving of the letters of testamentary
b. Administrator- letters of administration
c. Administrator with a will annexed – letters of administration with a will annexed
d. File a bond
i. Exception: when the testator has so provided that no bond is required because
the testator has trust and confidence in the executor
e. Scope of authority – only assets of the estate found within the State
X. Two instances when administration may be granted
a. Decedent died with a will but not executor has been named; or there is an executor but
the said executor is incompetent, unwilling to accept the trust or could not give a bond
b. Decedent died without a will whatsoever
i. EXCEPTIONS
1. Extrajudicial settlement of estate has already been agreed upon by the
heirs
2. Adjudication of property (sec 2, rule 74) summary settlement of estate
of small value

RULE 79: Opposition to issuance of Letters Testamentary

I. Opposition to issuance of letters testamentary. Simultaneous petition for administration

a. Who may oppose – any interested person

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b. On what grounds
i. Incompetency of petitioner
ii. Oppositor’s own right to administration
c. As a general rule, a person intervening in the probate of a will must show his interest in
the will, must have a material and direct interest.
d. May be cured by subsequent appearance of a proper interested person
e. Earnest effort not required in special proceedings
f. Remedy of the creditor to protect the estate or his interest
i. Gen Rule: The rule on special proceedings does not provide for a right to
intervene
ii. BUT creditors may be allowed to seek certain prayers or relief
g. Live-in Partners
i. Are interested persons under the property regime of a union without marriage
(Art 147/148 FC)

II. Contents of a Petition for letters of Administration

a. Jurisdictional facts
b. The person on whose estate the letters are prayed for is in fact dead
c. At the time death, he was a resident of the country wherein the letters are prayed for;
or if non-resident, he left assets in the Philippines
d. Names, ages, and residences of the heirs; and the names and residence of creditors of
the decedent
e. The probate value and character of the property of the estate
f. The name of the person for whom letters of administration are prayed
III. Court to set time for hearing
a. Court shall fix time and place for hearing the petition + notice to those who have
interest in the estate (creditors+heirs)
b. Proof that notice Was given to all parties – required
IV. Any interested person may file written opposition to a petition for letters of administration
on the grounds that:
a. The person being nominated as administrator is incompetent
b. Or he has the right to be administrator and in the same opposition, he may nominate
himself or that of another person to be appointed administrator
V. Hearing and order for Letters to issue
a. Notice
b. Proof to support allegations
c. No will, no competent or willing executor – issuance of the letters of administration
d. Burden of proof falls on the person who seeks to establish a fact
e. Defect of lack of notice may be cured. Motion for recon-accorded full hearing

RULE 80: Special administrator

I. Appointment of Special Administrator

a. Definition

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i. Special Administrator – Representative of the decedent appointed by the

probate court to care for and preserve the estate until an executor or
administrator is appointed.
b. Role of a Special administrator
i. Subject to the supervision of the court
1. Work for the best interest of the estate
2. Smooth administration and speedy settlement
c. When may there be a special administrator?
i. When there is a delay in granting the letters of admin
ii. Delay may be caused by an appeal from the allowance or disallowance of the
will
iii. When the executor or administrator is a CLAIMANT against the estate he
represents
iv. Executor cannot post a bond
v. Executor failed to render accounts
vi. When there is any other cause, arising from the probate of the will
d. Only one Administrator at a time
e. Appointment is a interlocutory order- not appealable
f. Is the rule on the ORDER OF APPOINTMENT applicable to special administrators?
i. NO. the court has the option to appoint a special administrator it sees fit
ii. PROVIDED that
1. It is without grave abuse of discretion
2. Guided with equity and justice
II. Powers and Duties of Special Administrator
a. To take POSSESSION and charge of the GOODS, CHATTELS, RIGHTS, CREDITS and ESTATE
of the deceased and preserve the same for the executor or administrator appointed
afterwards
b. To COMMENCE and maintain suits for the preservation of the estate during the time a
regular administrator or executor has not yet been appointed.
c. SELL perishable or other property as the court orders sold
d. TO PAY such debts of the deceased only upon orders of the court
i. Special administrator shall not be liable to pay any debts of the deceased unless
so ordered by the court
ii. Cannot be sued by the creditor of the deceased.
III. When may the court appoint a special co-administrator
a. To have different interests represented
b. Opposing parties or factions be represented in the management of the estate
c. Estate is large or intricate or perplexing on to settle
d. For the best interest of the estate
e. When the person entitled to administer the estate desires to have another competent
person associated with him in the office
IV. Regular v Special Administrator
a. Appointment
i. Regular: intestate/decedent did not appoint an executor in the will

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ii. Special: there is a delay in the granting of the letter testamentary or letter of
administration
b. Obligation to pay debts
i. Regular: obliged to pay the debts of the estate
ii. Special: not obliged to pay the debts of the estate
c. Appoint subject to appeal
i. Regular: may be subject of appeal
ii. Special: not subject of appeal because it is an interlocutory order
1. Remedy: certiorari – grave abuse of discretion

Rule 81: Bond of Executor and Administrator

I. What the bonds secure

a. The performance of the matters which are the very duties and obligations of the
administrator or executor which are:
i. To administer the estate and pay the debts
ii. To perform all judicial orders
iii. To account within 1 year and at any other time when required by the court
iv. To make an inventory within 3 months
II. Purpose and nature of an executor’s or administrator’s bond
i. To safeguard the estate
ii. To answer for any infidelity that may arise during the administration of the
property of the deceased
iii. Faithful administration and fair distribution
III. Administration bonds are:
a. For the benefit of the Creditors, and heirs, and
b. To compel the administrator to perform the trust reposed in him in the discharge the
duties incumbent upon him.
IV. Extent of Liability of the surety on the bond
a. The maximum liability of the surety on the bond of an administrator is the STATED
AMOUNT OF THE BOND
V. How may such bond be executed
a. Either in the same special proceedings, or in a separate action
VI. Executor’s bond
a. General Rule: If the testator in his will directs the executor to serve without bond, OR
with only his individual bond he may be allowed by the court
b. Exception: Court has the power to ignore; if the court deems necessary and prudent in
the following cases:
i. Executor- non-resident
ii. Insolvent
iii. Executor’s finances are precarious, to afford adequate security for due
administration of the estate
iv. All other cases where the circumstances show to be proper that a bond should
be required

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c. Reason for exception: to protect heirs and legatees from wasteful administration of the
estate
VII. Bond of joint administrators and executors
a. Bond depends on sound discretion of the courts
i. Require to post separate bonds
ii. Joint bond
1. Amount of joint bond must be the equal to the totality of the bond
required
VIII. Bond of special administrator
a. Required bond conditioned upon the faithful execution of the administration
i. Make and return true inventory of
1. Goods
2. Chattel
3. Rights
4. Credits
5. And estate when come to his possession
ii. Will truly account for such as such are received by him when required by the
court
iii. Will DELIVER the same to the person’s appointed, or such other person
authorized to receive
IX. Money spend in good faith by the administrator
a. Administrator’s bond not liable. Liable ONLY for faithful administration of the estate
X. Notice to surety for forfeiture of administrator’s bond
a. No surety not entitled to notice, but he may intervene through leave of court
XI. Insufficiency of bond
a. Not adequate reason for annulment of court order
b. Does not dissolve absolutely and unconditionally an injunction
c. Remedy: order party to file sufficient bond

RULE 82: Revocation of Administration, Death, Resignation and Removal or Executors and
Administrators

I. Administration revoked if will discovered – will discovered after letters of administration has
been issued.
a. What will happen?
i. Letters of administration shall be revoked
ii. and powers granted shall be terminated
b. Effect of revocation
i. All powers of administration shall cease
ii. Administrator shall surrender his letters to the court
iii. Administrator shall render his account within such time as the court directs
iv. Proceedings for the issuance of letters testamentary or of administration under
the will shall be had
c. NOTE: the will must first be PROVED and ALLOWED

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d. The new executor or administrator thereafter appointed takes up from where the old
administrator left and is successor in trust
II. Resignation of Executor or Administrator
a. Grounds NaspAIA
i. Neglect to render his account
ii. Neglect to settle his estate according to law
iii. Neglect to perform an order or judgment of the court, a duty expressly provided
in the Rules of Court
iv. If he absconds
v. If he becomes insane
vi. If he becomes in anyway in capable or unsuitable for the discharge of the trust
b. Grounds for removal NOT exclusive – lies within the discretion of the court
c. Other grounds:
i. Lack of harmony or conflicting interest between administrator and persons
interested
ii. Active hostility to creditors
iii. False representation
iv. Physical incapacity
v. Adverse interest
vi. Delays in the winding or the settlement
d. Before resignation – administrator or executor must first file and inventory of estate,
the fruits and produce and income of properties
III. Validity of acts prior to revocation, resignation or removal – lawful acts prior to resignation
or removal shall remain valid
IV. Effect of removal
a. Deprives the administrator of the right to do anything further with respect to settlement
and administration of the estate
b. Settle accounts and turn over to successor without delay (court may compel)
c. He becomes an administrator de facto until he delivers the estate
V. Powers of new executor
a. Same as predecessor
b. To defend or prosecute actions commenced or defended by the previous administrator
c. To have executed judgments recovered for the estate by the previous administrator
d. Renewed authority to sell or mortgage real prop obtained by the previous admin
without further notice or hearing

RULE 83: Inventory and Appraisal Provision for Support of Family

I. Inventory and Appraisal to be returned within three months

a. Purpose of inventory
i. To aid the court in revisiting the accounts and determining the liabilities of
executors or administrators
ii. To aid the court in making a final and equitable distribution of the estate
iii. To aid the court in facilitating the distribution of the estate
b. Inclusion of property in inventory

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i. Property claimed by a third person may be inventoried BUT

1. But not competent proof of ownership
2. Mere prima facie evidence and is without prejudice to rights of
interested persons to raise the question in the proper court and proper
action
II. Certain article not to be inventoried
a. Wearing apparel of the surviving spouse and minor children
b. The marriage bed and bedding
c. Other articles as will necessarily be consumed in the subsistence of the family deceased
III. Allowance of widow and family
a. ONLY
i. Widow
1. Guardianship Court no authority to enforce payment of widow’s
allowance
ii. Minor children
iii. Incapacitated children of the deceased

RULE 84: General Powers and Duties of Executors and Administrators

I. Right of administrator or executor to possess and management of properties left by the

decedent NOT ABSOLUTE
a. Can only be exercised so long as it is necessary for the payment of debts and expenses
of administration
i. No leave of court necessary
1. Exceptions
a. Not considered acts of administration
i. E.g. right of redemption of one’s property owned in
common by one or other co-owners of the estate
II. Access to Partnership Books and Property
a. The administrator or the executor is given at all times free access to, and may examine,
the books and accounts of the partnership.
b. Gen. Rule: The administrator has
i. No legal interest in the partnership assets
ii. No right to interfere
iii. Not the person to liquidate
c. Exception
i. If the partner unnecessarily delays settlement of the partnership’s affairs
ii. Administrator or executor has the duty to bring matters to the court
III. Repair of buildings
IV. Power to make repairs
a. Extent: only to such repairs as are necessary to keep the property in good condition
b. Court may direct the completion of a building begun by the decedent (necessary to
preserve the estate)
V. Payment of debts: Administration of Estate not willed
a. Right of possession and management of real and personal property

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b. Provided that it is for payment of debts and expense of administration

c. Heirs and devisees and legatees have
i. No right to interfere with admin or exec in the discharge of his duties
ii. No right, w/o his consent to the possession of any property
d. Rights of heirs remain inchoate and subject to right of creditors
e. Creditors of HEIRS cannot intervene in administration
i. They can only intervene after all debts of the decedent are paid
ii. and when the net assets are determined and divisible
f. NOTE: Right to possession of the administrator ONLY EXIST when there are
i. Debts
ii. Expenses of administration
g. Property in custodia legis
i. Property sold by heir, when the property was already in the hands of the
vendee during institution of the proceedings ----- not in custodia legis
ii. Check held by a third person --- in custodia legis
VI. Acts of Administration
a. Gen rule: the admin or exec can perform acts of administration no need for special
authority from the court; issuance of letters considered as vested with authority to
perform
i. Lease of property
ii. Exception: cannot lease for more than 6 years (act of dominion or ownership)
b. Exception: other acts such as acts of authority- authority from the court is required
VII. Acts of disposition, ownership and dominion
a. Need special authority from court PB BAILS C
i. Payment of debts
ii. Borrowing money
iii. Buying property
iv. All other acts of dominion and ownership
v. Investments of part of the estate
vi. Continuing business that the decedent was engaged in
VIII. Powers and duties of Administrator or Executor
a. Administration
i. Handle or marshal all assets of the deceased
ii. Manage estate wisely or economically and in a business-like manner
iii. Bring such action as he may deemed necessary
b. Liquidation
i. Determine assets and properties
ii. Pay debts
c. Distribution
i. Distribute estate among known heirs, devisees, legatees and all other persons
entitled there to
IX. Restriction to the powers
a. Cannot acquire by purchase at public or judicial auction- property under administration
b. Cannot barrow money without authority of the court

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c. Cannot speculate with funds under administration

d. If no authority cannot continue business
e. Not to profit in the increase or loss or decrease in the value of the property

RULE 85: Accountability and Compensation of Executors

I. Accountability of Executor/Administrator
a. Whole estate of the deceased which has come into his possession
i. BUT not for the estate which he has not possessed
1. EXCEPTION:
a. If through UNFAITHFULNESS to the trust or
b. through his OWN FAULT.
c. Lack of necessary court action ….He failed to recover portion or
part of the estate which has come to his knowledge
b. NOT to profit from the increase or decrease in value
i. Not profit from the increase in value although through his efforts
ii. He shall not be liable for loss PROVIDED that it is not his fault
iii. Not liable for loss due to fortuitous event IN THE ABSENCE OF NEGLIGENCE
c. NOT accountable for debts due the estate
i. Gen Rule: Debts remain uncollected – Presumption is that it was the
exec/admin’s fault
ii. Exception: burden fall on the admin/exec to prove that it was not his fault
d. Accountability from realty used by him
i. Admin/Exec who takes possession or control of the real estate of the decedent
must account for rents or profit thereof
ii. When admin/Exec occupies a house belonging to the estate – as if he has
received rent for it.
e. Accountability for Neglect or delay
i. Damages sustained may be charged and allowed against him in his account, and
shall be liable on his bond if
1. Neglects or unreasonably delay to raise money
2. Neglects to pay over the money in his hands
3. Or the value of the property is lessened or there is unnecessary cost or
interest accrues
4. Or person interested suffers loss

Eg. Crop was not harvested on time due to delay in procuring money

Debt of the estate should have been paid – interest accrues

II. Expenses
a. Money allowed as cost
i. Gen Rule: when admin/exec files an action or defends an action, in his capacity
as administrator, costs shall be paid by the estate
ii. Exception: cost shall be borne personally by the exec or admins if:
1. Acted in bad faith
2. Resisted without just cause

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b. Allowed expenses and fees

i. Necessary expenses (can be collected by way of reimbursement)
1. Care and management and settlement of the estate
a. Preservation and productivity
b. Management- liquidation, payment of debts and distribution of
residue
2. NOT necessary expense
a. Expenses on anniversary of death
b. Appearance in court of presumptive heir or witnesses to oppose
probate
c. Expense for the settlement of the estate on the question of who
are entitled to the estate
d. Expenses by the administrator to produce a bond
ii. Attorney’s fees
1. Only allowed when:
a. Services rendered for the execution of his trust in the
administration of the estate
2. Services of the attorney- NOT rendered directly for the estate but are
rendered directly to the administrator (preservation, management,
liquidation, distribution)
a. THEREFORE: admin/exec entitled to reimbursement by way of
expense of the administration
3. Procedure in collecting attorney’s fees
a. Request admin to make payment
b. If no payment-admin shall be sued in his personal capacity
c. If judgment is rendered – he pays, included as expense of
administration
d. ANOTHER OPTION: file a petition in the intestate proceedings,
asking the court, after notice has been given to direct payment
of his fees as expense of administration
4. Disallowed attorney’s fees as expense of administration
a. Services was rendered as special admin to fight removal
b. Litigation between beneficiaries, or protection of interest of a
particular person
c. Litigation for own benefit of admin
III. Compensation of Exec or Admin
a. Shall either be of
i. 4 pesos per day or
ii. Commission- depending on the value of the estate
1. 5000= 2%
2. 5,000.01 but not more than 30,000 = 3%
3. 30,000.01 but not more than 100,000 = 2 ½ %
4. 100,000.01 and above = 2 ¼ %
b. Subject to the following

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i. Estate is large and settlement is with great difficulty – great sum may be allowed
ii. Deceased by will make some other provision for the compensation of the
administrator
c. Admin may be denied compensation if
i. Prolonged settlement due to efforts to defraud heirs
ii. Due to his neglect administration has become expensive
IV. When to render account
a. WHEN? Within one year from time of receiving of letters of testamentary UNLESS the
court directs extension of time
i. Extension not more than 2 ½ years
b. Examination under oath
i. Gen Rule: Account must be proved WON there is objection
ii. If there is objection – evidence must be presented to prove objection
iii. When account has been proven- becomes final
c. When notice is needed
i. Notice of time and place of allowing and examining the same shall be given to
interested persons – mandatory
1. Person, registered mail, posting, publication
ii. Notice concerning petition to authorize executor or administrator to sell,
mortgage or otherwise encumber real estate
iii. Hearing for the application for the order of distribution
d. Surety bond as Party to accounting
i. Upon settlement of the account of the administrator, his sureties may, UPON
APPLICATION, be admitted as party to such accounting
1. Sureties not entitled to notice
2. But may be allowed to intervene by leave in due tim

Rule 86: Claim against the estate

I. Notice to creditors
1. WHEN is notice given?
Immediately after the appointment of an executor or administrator

2. TO WHOM?
All those having claims falling under the statute of non-claims

3. TO DO WHAT?
Present the claims within the period fixed

4. PERIOD FIXED?
No LESS than 6 months or no MORE than 12 months

AFTER the date of first publication of notice

EXCEPTION: If the court sees equitable; not more than 1 month

e.g. mistake in inventory- lower value of property

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5. only money claims may be presented in court in the testate or intestate proceedings

II. MONEY CLAIMS [CoFuLaJu]

1. arising from contracts

1. expressed
2. implied
1. due
2. not due
3. contingent
2. Funeral expenses
3. expenses from last illness
4. Judgment from money BUT claims from claims or torts not include
5. must be filed within the time limit in the notice – otherwise barred forever
Exceptions:

a. Counterclaims filed by the exec/admin against claimant

b.Exec/Admin prosecutes an action already commenced by the (+) in his lifetime

III. Publication of notice

1. REQUISITES
1. 3 weeks successively in a newspaper of general circulation in the province
2. to be posted for the same period in 4 public places (province) 2 public place
(municipality)
3. in municipality where the decedent last resided
4. immediately after notice to creditors is issued

IV. Filing of Copy of Printed Notice

1. When? After 10 days after notice has been published and posted
2. How? File in court printed copy PLUS affidavit setting forth the first and last date of
publication AND name of newspaper

V. Statute of Non-Claims
1. Definition: collective name given to the provisions of Sec 5, Rule 86 fixing a definite period
for the filling of claim against the estate of a decedent
2. Requisites:
1. Claims against the estate be published by the creditors
2. Money claims be filed with the clerk of court within the time prescribed by the rules
3. Claims of an executor or administrator against the estate be filed with the special
administrator
4. w/in 2 years after settlement and distribution of the estate, an heir unduly deprived of
participation in the estate may compel the resettlement of the estate
3. State of non-claims vs statute of Fraud
1. SNC: SUPERSEDES SF
2. However money claims arising from contract Whether due, not due or contingent on

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the time provided for in the statute of NC or the same shall be barred forever
4. Death of debtor does not suspend statute of Limitations
5. Belated claim
1. May be entertained by the probate court PROVIDED that no order of distribution has
been issued by the court
1. Requisites
1. Application of late creditor
2. Within one month from notice
3. With permission of the court
4. For good cause
6. Money claims arising from contracts
1. Construed to mean debts or demand of pecuniary nature which could have been
enforced against the deceased in his lifetime
2. RULES governing an action of money claims arising from contract
1. Defendant still alive upon accrual of action – file action under the statute of
limitations
2. Defendant is already dead before the action can be filed – file it in the form of
money claim (statute of non-claim shall govern)
3. Substitution by heirs- allowed without procurement of legal representatives
VI. Solidary obligation of the decedent
1. Claim shall be filed against the decedent as if he were the only debtor
2. BUT without prejudice to the right of the decedent to recover from the other debtor
3. Not applicable: no proceedings for the administration of estate has been filed despite lapse
of 2 years from decedent’s death
4. Not an Exclusive remedy: alternative; collection against the surviving solidary debtor
VII. Options of the creditor in a Mortgage due from estate
1. File as money claim against the estate, and abandon security
1. EFFECT: if he collects nothing, he can no longer file an action to foreclose
2. Foreclose through an action and make administrator the defendant
1. If proceeds are short; may secure a deficiency judgment and enforce as a claim
against the estate
3. Rely on security mortgage alone- action for foreclosure
1. Creditor may allow period to file money claim to lapse
2. May rely on the prescriptive period of filing an action to foreclose
3. If mortgaged property is given to an heir; creditor may make the heir a defendant
4. Creditor can only choose one of the three options- he abandons the others when a choice is
made
5. BUT WITHOUT PREJUDICE on the part of Admin to redeem the property
VIII. Claim of Exec/admin against estate
1. Procedure
1. Notice to the court in writing
2. Appointment of Special admin
1. SA same liability as GA
IX. How to file a claim
1. Submit claim to the clerk of court CC exec/admin, attach:
1. Copy of voucher, bill, bond, note or other docs supporting claim
2. If lost: affidavit stating basis of claim w/ copy or circumstances leading to its
destruction

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3. Original doc shall be exhibited or produced upon demand of exec or admin or court
1. If claims are due-
1. Affidavit stating amount due, no payment has been made, no offset to the
best of the personal knowledge of the claimant
2. Not due or contigent
1. Affidavit stating the particular facts
2. Claim shall be attached to the records of the case where the letters of testamentary was
issued, if voluminous-separate folder
X. Answer of Exec/Admin
1. When to file an answer? Within 15 days after service of the copy of the claim
2. Exec/admin may
1. Admit claim, stating basis
2. Deny, specific, sufficient support
3. Neither admit or deny the same, stating lack of knowledge thereof as to sufficiently
form a belief as to the truth or falsity of the same
4. Interpose a claim of offset, stating basis
3. EFFECT OF not filing an answer: barred forever
4. A copy of the answer must be furnished to the claimant
XI. Disposition of Admitted claim
1. Claim may be:
1. Admitted by court and approved without hearing (ex parte)
2. Set claims for hearing, notify interested persons
1. 15 days for heirs, devisees and legatees to file opposition
3. Nature of judgment allowing a claim
1. Direct admin/exec to pay in due course administration
2. Not create a lien or preference in payment in favor of such claimant
3. All claims approved shall share pro rata in liquidation of estate if not sufficient
XII. Filing of a claim is a requisite for adjudication and payment
1. No claim, allowance of alleged claim- null and void; not res judicata
2. Even if the will directs the payment it is still incumbent upon the creditor to file a money
claim
XIII. Judgment is appealable
XIV. Cost

RULE 87: Actions by and against executors and Administrators

I. Action against executor or administrator

a. During the lifetime of the deceased action against him accrues
i. REMEDY: money claims (statute of NC)
1. Requisites
a. Relates to money claims (contract, express, implied)
b. Before action could be filed Decedent dies
ii. REMEDY: file an action making the exec/admin the defendant
1. Requisites
a. Relates to actions-
i. To recover real or personal prop, or an interest therein;
or

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ii. To enforce a lien on real or personal property of the

decease (mortgage)
iii. Action to recover damages for injury to a person or
property, real or personal
b. Decedent dies before the commencement of the action
b. Action was brought against the decedent during his lifetime
i. REMEDY: substitution of admin/exec
1. Requisites
a. Relates to actions-
i. To recover real or personal prop, or an interest therein;
or
ii. To enforce a lien on real or personal property of the
decease (mortgage)
iii. Action to recover damages for injury to a person or
property, real or personal
b. Pendency of the action defendant diesn
2. Action must not be dismissed
3. Summons is necessary on the admin/exec
4. EXCEPTION: actions which are purely personal
II. Heirs may not sue until share is assigned
a. Gen Rule: Heirs have no cause of action against the executor for the recovery of prop
before the distribution and before residue is known
b. Exception: no special proceeding; no admin
i. Heirs may commence an ordinary action
c. Exception to the exception
i. Donation inter vivos – delivery of prop (Lopez v Olbes)
III. Exec/Admin may compound with debtor
a. Compounding with debtor of the deceased and act of giving discharge are acts of
dominion which REQUIRE authority of the court
IV. Foreclosure on Mortgage (decedent is the creditor)
a. If mortgage is foreclosed, the proceeds form part of the estate, and must be distributed
in the settlement of the estate proceedings and not in the foreclosure suit
V. Proceedings on concealed, embezzled or fraudulently conveyed property
a. All persons who come into possession of the property belonging to the decedent are
liable and accountable for the same to the lawful administrator
i. Persons entrusted by admin/exec become AGENT of admin/exec
ii. Through a complaint by admin/exec court may cite person and require to
render full account
iii. If person refuses the court may punish for contempt
VI. Embezzlement before letters issued
a. Person is liable to an action in favor of admin/exec of the estate double the value of
property sold, embezzled or alienated
b. Reason: recover benefits of such estate
c. DOUBLE VALUE: ONLY applies to misappropriation- for personal advantage

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VII. Recovery of Property fraudulently conveyed by deceased

a. Exec/admin may commence an action and prosecute the same to its finality
i. Requisites
1. If there is deficiency of assets for payment of debts and expenses of
administration
2. Conveyances made by decedent with intent to defraud creditors
3. Application of creditors
4. Creditors pay costs and expenses
5. Creditors give security as deemed equitable by the order
VIII. When creditors may bring an action. Lien for costs.
a. Requisites
i. Admin/exec does not have any interest to file the action for a considerable
length of time, failed to commence the action;
ii. Permission or leave of court has been granted
iii. A bond has been filed by the creditor
iv. The action must be in the name of admin/exec
1. But, when the grantee of fraudulent conveyance is the exec/admin,
above req’ts shall be no longer necessary. Action shall be in the name of
the creditors.

Rule 88: Payment of the debts of the Estate

I. Debts to be paid in full if the estate is sufficient

a. Procedure
i. Hearing of all money claims against the estate
ii. Ascertaining amounts of claims
1. Sale of personal estate or mortgage of all real estate of the deceased
a. With written notice to all heirs
iii. If there is sufficient assets – payment of debts
iv. Distribution of the remaining portion of the estate
II. Debts paid out of part of the estate when so provided by the will
a. Gen Rule: provision in will designates the part of the estate to be appropriated for
payment of debts, administration expenses or family expense – SHALL BE PAID
ACCORDING TO THE PROVISIONS
b. Exception: if part of the estate is not sufficient for that purpose
III. Personalty first is chargeable with the payment of debts and expenses (personalty not
disposed by will
a. If not sufficient or sale would redound to the detriment of the participant of the estate.
Whole of the real estate not disposed by will or so much thereof as is necessary may be
sold, mortgaged or encumbered
IV. Part of estate retained for contingent claim
a. Valid contingent claim determined by the court
i. Exec/admin shall retain through order of the court sufficient estate to pay claim
ii. If estate is insolvent, sufficient to pay a portion equal to the dividends of other
creditors

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V. Absolute contingent claim, how paid

a. If contingent claim becomes absolute, is presented in court within two years from the
time limited for other creditors to file their claim
i. It may be allowed if not disputed by admin/exec
1. If disputed, may be proved – court may allow or disallow
ii. If allowed shall receive payment to the same extent as other creditors
VI. Court to fix contributive shares
a. When applicable? Devisees, legatees, or heirs have entered into possession of the
estate BEFORE the debts and expenses have been settled and paid
VII. Heir or Distributee liable for outstanding claims against the estate
a. Heirs and distribute are not required to respond with their own property for the debts
of their deceased ancestors
b. Exception: After partition, they are liable individually for the payment of all lawful
outstanding claims against the estate in PROPORTIONATE to the property they have
received from the estate.
VIII. Order of payment if estate is insolvent – NCC shall apply
a. Preference of credits art 2239 to 2251
b. Art 2239 – co-ownership - included
c. Art 2240- trust (debtor is the trustee)- excluded
d. Art 2241- Preference of Lien (movable property)
i. Duties, taxes, fees due to the state
ii. Claims arising from misappropriations, breach of trust, malfeasance by public
officials committed in the performance of their duty, on the movables, money
or securities obtained by them
iii. Claims for the unpaid prices of movables (must be in the possession of the
debtor) up to the value of the same
1. If resold, lien may be enforced on the price
iv. Credits with a pledge/mortgage (pledge in the hands of the creditor)
v. Credits for repairs, makings, safekeepings, preservation of personal property
vi. Claims for laborer’s wages, on goods manufactured on the work done
1. Art 110 LC – laborer’s wages number one in priority
vii. For expenses of salvage
viii. Credits between landlord and tenant
ix. Credits for transportation – upon the goods carried
x. Credits lodging and supplies
xi. Seeds and expenses for cultivation and harvest advanced to the debtor, upon
fruits harvested
xii. Credits for rent for one year – personal prop; immovable or fruits but not
money or instruments of credit
xiii. Claims in favor of depositary has wrongfully sold the thing deposited
e. Art 2242; preferred claims with reference to immovable
i. Taxes due on land or building
ii. Unpaid price or real or immovable sold

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iii. Claims of laborers, architects, engineers and contractors engaged in

construction or repair of buildings canals or other works, upon said building
canal or other works
iv. Mortgage credit recorded in ROD
v. Reimbursement of expense of preservation- authorized by law
vi. Credits annotated in the ROD by virtue of judicial order, attachment or
execution upon property affectec
vii. Claims of donors or real prop (pecuniary charges)
viii. Credits of insurers, upon property insured, for the insurance period of two years
f. Art 2244: w/ reference to other prop
i. Funeral expenses- debtor, children – must be approved by the court
ii. Credits for services rendered (household helpers)
1. One year proceeding the commencement of the proceedings of
insolvency
iii. Expenses- last illness of debtor
iv. Compensation of laborers – labor accidents resulting from nature of
employment
v. Support of family of the debtor
vi. Support during insolvency proceedings for 3 months
vii. Fines and civil indemnification arising from criminal offense
viii. Legal expense – administration of estate
ix. Taxes due any nation
x. Taxes in province
xi. Taxes- municipality
xii. Damages for injuries caused by quasi-delicts
xiii. Gifts to public and public institutions of charity
xiv. Credits without special privilege
g. Art 2247 and Art 2249: 2 or more credits with the same specific movable or immovable;
they shall be satisfied pro rata
IX. Dividends to paid in proportion to claims
a. When applicable?
i. If no sufficient assets
ii. No creditor of any one class shall receive any payment until those of the
preceding classes are paid
X. Disposal of estate of insolvent nonresident
a. His estate shall be disposed of that his creditors here and elsewhere may receive each
and equal share, in proportion to their respective credits
XI. When and How claims provided outside the Philippines against insolvent resident’s estate
paid
a. When applicable?
i. Claims duly proved in another country
ii. At the time of death inhabited the Philippines
iii. Exec/admin had knowledge of the presentation of such claims with an
opportunity to contest their allowance

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b. What shall the courts do?

i. Court shall receive a certified listing of such claims
ii. Add the same to the list of claims
c. When not applicable?
i. If the property of such deceased person there found is not equally apportioned
to the creditors residing in the Philippines, and other creditors according to their
respective claims
XII. Order of payment of debts
a. When? Before the expiration of the time limited for the payment of the debts
b. Ordered by the court
XIII. Payment of debts during appeal
a. Court may suspend the order for payment of debts OR
b. May order the distribution among the distribution among the creditors whose claim are
definitely allowed
i. Sufficient assets must be left for the claims appealed
XIV. When subsequent distribution of assets ordered
a. The court may from time to time make further orders for distribution of the assets
XV. Creditors paid in accordance with the terms
a. Exec/admin – pay creditors in accordance with the terms or orders
XVI. Time for payment of debts and legatees
a. Admin/exec shall be allowed by the court for disposing the estate, paying debts and
legacees of the deceased
i. Not exceed one year
1. Extension 6 months--- not more than 2 years total.
XVII. Extension of notice
a. When applicable
i. Executor/admin dies
ii. New admin/exec is appointed
b. Requirement
i. Not more than 6months
ii. Notice must be given (time and place of hearing)

Rule 89: Sale, Mortgages and other encumbrances of property of the decedent

I. Order of sale of personalty

a. When may the court order the sale of personalty
i. Paying debts, expenses of administration, or legacies; or for the preservation of
the property
ii. Court order is necessary
iii. Power of attorney issued by heirs is void, no legal effect
II. When a court may authorize conveyance though personalty not exhausted
a. Personal estate of the decease is not sufficient to pay debts, expenses and legacies
b. Sale of such personal estate may injure the business or interests of those interested in
the estate

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c. When the testator has not made sufficient provisions for the payment of his debts,
expenses and legacies
d. When it appears that the sale of the whole or part of the real estate will be beneficial to
the heirs, devisees, legatees or other interested persons
e. When the deceased was in his lifetime under contract, binding in law, to deed real
property or an interest therein
f. When the deceased in his lifetime held property in trust for another person
g. Requirement before authority
i. Application filed by the administrator
ii. Proof of service to interested persons
III. Interested persons may prevent conveyance
a. Through bond
i. Sum fixed by court
ii. Conditioned upon the payment of debts, expenses of admin and legacies
iii. PURPOSE: security of creditors
IV. When may a court authorize sale of Estate
a. Beneficial to the heirs, devisees, legatees and other interested persons
b. Notice to interested persons
i. Without notice, it would invalidate the authority granted by the court – null and
void
V. When court may authorize conveyance to pay debts abroad
a. When sale is not necessary to pay debts, expenses of administration or legacies
b. Estate of the deceased in the other country is not sufficient
c. REASON: ancillary administration
i. After payment of local creditors, ancillary administration shall be transferred to
the domiciliary administration
VI. When court may authorize conveyance on realty acquired on execution or foreclosure
a. Sec 2 rule 89
VII. Regulation on authority to sell, mortgage, encumber
a. Written petition filed by the admin/exec – jurisdictional
i. Debts due, expenses of admin, legacies
ii. Situation of the estate to be sold
iii. Other facts
b. Court shall fix time and place for hearing
c. Notice stating time and place – personally/mail/publication
d. Additional bond if the court requires
e. Authority to sell – admin/exec
f. If to be sold in auction – notice
g. Recorded in the registry of deeds
VIII. Conveyance of Realty deceased contracted to convey during his lifetime
a. Filing of application by the admin/exec
b. If conveyance is made in favor of the admin/exec, deed will be executed by the clerk of
court
c. Notice to interested parties

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d. ONLY APPLICABLE if the contract was not controverted

i. If controverted- another action
IX. Conveyance of lands held in trust by the deceased
a. Notice
b. Court may authorize executor/admin to deed such property to the person, or
exec/admin, for whose use and benefit it was held

Rule 90: Distribution and Partition of the Estate

I. Order of distribution of residue

a. Debts funeral expenses, expense for admin and allowance to window and inheritance
tax have been paid
i. Exception: if a sufficient bond is filed
b. Application of the executor/ interested persons shall assign residue of the estate to
persons entitled
c. If there is controversy: ordinary case
II. Questioned advance distribution
a. Determined by the court having jurisdiction of the estate proceedings
b. Final order of the court shall be binding
III. Expense of partition
a. May be paid by exec/admin if there is retained sufficient effects
IV. Order of partition recorded
a. Registry of deeds of the province where the prop is situated
V. Advance distribution may be made even before the debts of the estate are paid when the
heirs need money
a. BUT A BOND IS REQUIRED
b. If property is distributed creditors can still demand recovery

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