SALES, MORTGAGES, AND

OTHER ENCUMBRANCES OF
PROPERTY OF THE
DECEDENT
(RULE 89)
RUSHID JAY S. SANCON

SECTION 1. ORDER OF SALE OF

PERSONALTY

upon written application of

executor or administrator, the
court may order the whole or
part of a personal estate
written

notice to the heirs and other persons

interested
If it is appears that it is necessary for paying
debts, expenses of administration, or legacies, or
for preservation of the property

Q: Is notice to the interested party in such

sale, mortgage or encumbrance of
decedents estate mandatory? What is the
effect in case of failure to give notice?

Answer: Yes. Such notice is

mandatory, without which the sale,
mortgage or encumbrance made is
void.

Q: May the court authorize the sale, mortgage, or

other encumbrance in lieu of personal estate?
Under what instances?

Answer: Yes.
When

the personal estate is not sufficient to pay

debts, expenses of administration and legacies.

The

sale of the subject personal estate may injure the

business or other interests of those interested in the
estate

Where

a testator has not otherwise made sufficient

provision for the payment of such debts, expenses,
and legatees residing in the Philippines

(Section 2, Rule 89)

SECTION 3. PERSONS
INTERESTED MAY PREVENT SUCH
SALE, ETC., BY GIVING A BOND

No authority to sell, mortgage, or encumbrance

shall be granted of real or personal

interested person opposing such authority must

post a bond to be fixed by the court and at such
time court may direct

SECTION 4. WHEN COURT MAY AUTHORIZE

SALE OF ESTATE AS BENEFICIAL TO
INTERESTED PERSONS. DISPOSAL OF
PROCEEDS.
Although not necessary to pay debts,
legacies, or expenses of administration,
the court may authorize the sale of real or
personal property estate if:
Beneficial to the heirs, devisees,
legatees, and other interested persons;
and
If it is not inconsistent with the
provisions of a will.

SECTION 5. WHEN THE COURT MAY AUTHORIZE

SALE, MORTGAGE, OR OTHER ENCUMBRANCE
OF ESTATE TO PAY DEBTS AND LEGACIES IN
OTHER COUNTRIES

Even if the sale, mortgage, and encumbrance of

personal and real estate is not necessary to pay
the debts, expenses of administration, or legacies
in the Philippines, the court may authorize the
executor or administrator to sell, mortgage or
encumber the personal or real estate for paying
the debts, expenses of administration and
legacies outside the country.

SECTION 6. WHEN COURT MAY AUTHORIZE SALE,

MORTGAGE, OR OTHER ENCUMBRANCE OF REALTY
ACQUIRED ON EXECUTION OR FORECLOSURE
the sale, mortgage or

encumbrance of realty acquired in

favor of the estate shall be
governed by the same regulations
prescribed under this rule

SECTION 7. REGULATIONS FOR GRANTING

AUTHORITY TO SELL, MORTGAGE, OR OTHERWISE
ENCUMBER ESTATE (PERSONAL OR REAL)

the executor or administrator shall file a written

petition setting forth, the debts due from the
deceased and other expenses

Fixing by the court of time and place to hear the

petition, and causing notice, to be given personally
or mail to interested persons

Executor and administration shall likewise give

additional bond, if the court requires it

if all of the requirements of the above have been

complied with, the court by order stating such
compliance, may authorize the sale, mortgage, or
encumber the part of the estate as it deemed
necessary

the provisions concerning notice of execution sale

shall govern the notice of the time and place of the
estate to be sold at auction

Recording in the registry of deeds of the province in

which the real estate of the sale, mortgage or
otherwise encumbered is situated

It being settled that property under

administration needs the approval of the
probate court before it can be disposed of, any
unauthorized dispositions does not bind the
estate and is null and void

Q: With respect to heirs, is there a need for a

court approval before they can exercise their right
to dispose their ideal share?

Answer: No. it is settled that court approval is

necessary for the validity of any disposition of
the decedents estate. However, reference to
judicial approval cannot adversely affect the
substantive rights of the heirs to dispose of their
ideal share in the co-ownership among the heirs.
(Beltran v. Donato, 32 Phil. 66)

SECTION 8. WHEN COURT MAY AUTHORIZE

CONVEYANCE OF REALTY WHICH DECEASED
CONTRACTED TO CONVEY. NOTICE. EFFECT.
SECTION 9. WHEN MAY AUTHORIZE CONVEYANCE OF
LANDS WHICH DECEASED HELD IN TRUST
- Both covers a contract entered by the deceased to convey real
or property interest therein during his lifetime and those
property he hold in trust
Q: Is notice for such conveyance mandatory?
Answer: yes. The authority to convey as provided for in this
section can be given only after notice of the application for that
purpose has been given to all persons interested, otherwise, the
order authorizing the conveyance and as well as the conveyance
itself is null and void. (De Jesus v. De Jesus, 35 SCRA 548)

Q: in both cases who may file for an application for

such conveyance and those held in trust?
Answer : The standing to such course of action
before the probate court inures to any person who
stands to be benefited or injured by the judgment or to
be entitled to the avails of the suit.

Q: Who may be authorized by the court to effectuate

such order of conveyance?
Answer: The executor or administrator shall e
authorized by the court

Is such conveyance is in favor of the executor or

administrator, the Clerk of Court shall execute the
deed.

DILLENA V. COURT OF APPEALS (G.R. NO.

77660, 1988)
Facts:
Spouses Dolores Sebastian and Rufino Carreon died in
1974, leaving an adoptive daughter Aurora Carreon
In the same year, Fausta Carreon Herrera instituted
special proceedings in the then CFI of Quezon City for
the settlement of the estate of the deceased. Fausta
was appointed as special administrator by the court
In 1975, Aurora Carreon executed an extra-judicial
settlement of the estate of the deceased spouses,
adjudicating to herself all the real property of the
said spouses. Later she was appointed as
administrator of the estate.

Meanwhile, Aurora sold properties of the estate,

without prior approval from the court, consisting of
three fishponds located in Hagonoy, Bulacan to Eladio
Dillena, herein petitioner.
The petitioner, on the other hand, sold the said
properties to Luisa Rodriguez and Starlight Industries
Co., Inc.
The court having learned such sale transaction and the
transfer of the same, required the vendees to appear,
and explain why the deed should not be cancelled due to
the absence of the courts approval to such transactions.
Eladio and Luisa failed to appear.
The court on September 1984 declared the sale of
administrator to Eladio and Luisa null and void for having
been made without courts authority and approval.

Eladio filed a petition to annul its order, arguing

it has no power to annul the sale.
The probate court denied his petition and
ordered the petitioners to return the physical
possession of the fishpond. They filed a motion
for reconsideration was denied. Such decision
was affirmed by the Court of Appeals.
On appeal to the Supreme Court, the petitioner
contended that the probate court has no power
to annul the sale entered by him and the
administratrix.

Issue:
Whether or not the contention of the petitioner
in correct

Held:
The evidence shows that when the questioned properties were sold
without court approval by private respondent to petitioner, the same
were under administration. The subject properties therefore are
under the jurisdiction of the probate court which according to our
settled jurisprudence has the authority to approve any disposition
regarding properties under administration.
An administratrix of an estate already subject of a special
proceeding pending before the probate court cannot enjoy blanket
authority to dispose of real properties as she pleases. More emphatic
is the declaration We made in Estate of Olave vs. Reyes (123 SCRA
767) wherein We stated that when the estate of the deceased person
is already the subject of a testate or intestate proceeding, the
administrator cannot enter into any transaction involving it without
prior approval of the probate court.
To uphold petitioner's contention that the probate court cannot annul
the unauthorized sale, would render meaningless the power pertaining
to the said court. Sales of properties under administration which do
not comply with the requisites under sections 4 and 7 of Rule 89 are
null and void (Bonaga vs. Soler, 2 SCRA 755).