WRITTEN REPORT

DISCUSSION ON RULES 72-90

(Special Proceedings)
Thursday
7:30 – 9:30 PM

Submitted by:

Anor, Jennifer L.
Rule 72: Subject Matter and Applicability of General Rules

Settlement of estate of deceased person is one of the subject matters of special proceedings.
While Section 1, Rule 72 of the Rules of Court enumerated 14 cases where the rules of special
proceedings are applicable, the list is not exclusive. By the nature of special proceeding, any
petition by which a party seeks to establish a status, right, or a particular fact may be included as
special proceeding.

Rule 73: Venue and Process

Rules 73-90 of the Rules of Court discuss the settlement of estate of deceased person. Under
the Civil Code, a person shall be presumed dead if absent and unheard of for seven years in
ordinary circumstances or four years in extraordinary circumstances. It involves the entire estate
of the deceased. For married individuals, the property shall be inventoried and liquidated
accordingly.

The Regional Trial Court has jurisdiction over proceedings for the settlement of the estate of a
deceased person where the value of the estate exceeds P300,000.00 outside Metro Manila or if
it exceeds P400,000.00 in Metro Manila. The MTCC, MCTC, MTC, and MeTC, meanwhile, has
jurisdiction if the value of the estate does not exceed P300,000.00 outside Metro Manila or
P400,000 if within Metro Manila. On the other hand, venue of the proceeding depends whether
the decedent was a resident of the Philippines or not at the time of his death. If he is a resident,
venue is the place where the deceased resided at the time of death; otherwise, venue is in any
province where he has estate, real or personal. However, under the exclusionary rule, if the estate
is found in different provinces, the court first taking cognizance shall exercise jurisdiction to the
exclusion of all other courts. Residence is for the determination of venue as such it is deemed
waived if no question regarding it is raised.

The probate court exercises a limited and special jurisdiction so it cannot hear and it cannot
dispose of matters collateral to the proceeding. It is a settled rule that whenever the probate court
passes upon the determination of issue of ownership, such determination is merely provisional,
subject to a proper action commenced by the parties. However, if the parties involved in the
determination of ownership are all heirs or that the rights of third parties are not impaired, the
probate court may conclusively decide the question of ownership.
The probate court exercises the following powers and duties:
a) Issue warrants and processes necessary to compel the attendance of witnesses or to carry
into effect their orders and judgments, and all other powers granted them by law (Sec. 3, Rule
73);
b) If a person defies a probate order, it may issue a warrant for the apprehension and
imprisonment of such person until he performs such order or judgment, or is released (Sec.
3, Rule 73).
c) Orders the probate of the will of the decedent (Sec. 3, Rule 77);
d) Grants letters of administration of the party best entitled thereto or to any qualified applicant
(Sec. 5, Rule 79);
e) Supervises and control all acts of administration;
f) Hears and approves claims against the estate of the deceased (Sec. 11, Rule 86);
g) Orders payment of lawful debts (Sec. 11, Rule 88);
h) Authorizes sale, mortgage or any encumbrance of real estate (Sec. 2, Rule 89);
i) Directs the delivery of the estate to those entitled thereto (Sec. 1, Rule 90);

Rule 74: Summary Settlement of Estate

The general rule is that the estate of a deceased person should be judicially administered with
the appointment of an administrator or executor. However, Rule 74 provides for instances when
estate need not be judicially administered: extrajudicial settlement and summary settlement of
estate of small value.

Extrajudicial settlement does not require court intervention and is proper only when the decedent
left no will and no debts. It can be resorted to only at the by agreement of all heirs who are all of
age or the minors are represented by their judicial guardians or legal representatives. If there is
only one heir, he may adjudicate to himself. Such settlement must be made in a public instrument
duly filed with the register of deeds and the fact of settlement must be published in a newspaper
of general circulation once a week for 3 consecutive weeks. Since the proceeding provided in
Section 1 of Rule 74 is an ex parte proceeding, an extrajudicial settlement despite the publication
is binding on any person who has not participated or who had no notice of death of the decedent.
Summary settlement of estates with small value involves judicial adjudication in a summary
proceeding. It is allowed in both testate and intestate estates and even if there are debts.
However, it is applied only when the gross estate does not exceed P10,000.00. Petition for
summary settlement is filed by an interested person and the hearing is held not less than 1 month
nor more than 3 months from the date of the last publication of notice. The notice must be
published at least once a week for 3 consecutive weeks in a newspaper of general circulation.
The order of partition or award, if it involves real estate, is recorded in the register of deeds and
the bond is filed with the register of deeds in an amount to be fixed by the court. A summary
settlement is also not binding upon heirs or creditors who were not parties or who had no
knowledge of the death of the decedent.

The liabilities of the distribute within two years are for claims of an heir or other person unduly
deprived of participation in the estate; for claims of an heir or other persons unduly deprived of
participation in the estate payable in money; and for the debts outstanding against the estate, and
not yet paid. In order to enforce these liabilities, the person prejudiced may compel judicial
settlement of estate and if the estate was summarily settled, the heir or creditor may file a motion
to reopen the summary settlement proceeding.

In Sampilo v CA (G.R. No. L-10474, February 28, 1958), the Court ruled that the provisions of
Section 4 of Rule 74, barring distributees or heirs from objecting to an extrajudicial partition after
the expiration of two years from such extrajudicial partition, is applicable only to persons who
have participated or taken part or had notice of the extrajudicial partition, and, in addition, when
the provisions of Section 1 of Rule 74 have been strictly complied with. There is nothing therein,
or in its source which shows clearly a statute of limitations and a bar of action against third
persons.

If on the date of the expiration of the 2-year prescriptive period, the person authorized to file a
claim is a minor or mentally incapacitated person, or is in prison, or outside the Philippines, he
may present his claim within one year upon reaching the majority age, regaining his mentality,
release from prison, or returning to the Philippines, respectively.

Remedies of an excluded creditor after extrajudicial settlement of estate are as follows: proceed
against the bond, file a petition for letters of administration, file an action to annual a deed of
extrajudicial settlement, proceed against the real property, and file an ordinary civil action. For an
excluded heir, the remedies include action to compel settlement of estate, action for rescission
on the ground of lesion; accion reivindicatoria; and annulment on the ground of fraud.

Rule 75: Production of Will; Allowance of Will Necessary

Probate of the will is mandatory. It is a proceeding in rem and imprescriptible. Likewise, the
doctrine of estoppel does not apply to probate proceeding. The Civil Code and Rules of Court
provide that no will shall pass either real or personal property unless it is proved and allowed.
Exceptions of the probate of the will are when the heirs divide the estate according to the will
(McMicking v. Sy Combieng, 21 Phil. 219) and when the testator should make a partition of his
properties by an act inter vivos (Mang-Oy vs CA, G.R. No. L-27421 September 12, 1986).

Probate is a juridical act of proving the due execution of a will and its approval by the court.
Although the issue in the probate of a will is only the determination of the extrinsic validity of the
will, there are instances when the court passed upon the intrinsic validity or validity of
testamentary dispositions based on the principle of practical considerations, such as when there
is waste of time, effort, expense plus added anxiety and where the entire or all testamentary
dispositions are void (Nuguid v Nuguid, G.R. No. L-23445, June 23, 1966) and where the defect
is apparent on its face (Acain v IAC, G.R. No. 72706, October 27, 1987; Nepumuceno v CA, G.R.
No. L-62952, October 9, 1985).

A will may be probated during the testator’s lifetime or after the testator’s death. In the latter, the
heir, executor, creditor, devisee or legatee may file a petition for the allowance.

If the will is in the custody of a person, such person shall deliver the will to the court or to the
executor named in the will within 20 days after knowing the death of the testator. The executor in
turn within 20 days after knowing the death of the testator or after he knows that he is named,
present the will to the court and signify his acceptance of the trust or his refusal to accept it.

The respective duties of the custodian and executor are mandatory such that any person who
neglect the duty shall be imprisoned and fined, respectively.
Rule 76: Allowance or Disallowance of Will

The petition for allowance of will must show the following: a) The jurisdictional facts; (b) The
names, ages, and residences of the heirs, legatees, and devisees of the testator or decedent; (c)
The probable value and character of the property of the estate; (d) The name of the person for
whom letters are prayed; (e) If the will has not been delivered to the court, the name of the person
having custody of it.

Jurisdictional facts include the death of the decedent, his residence at the time of his death in the
province where the probate court is sitting, or if he is an inhabitant of a foreign country, his having
left his estate in such province." (Cuenco vs CA, G.R. No. L-24742 October 26, 1973).

There are two stages in the probate of a will: first stage is the probate proper which deals with the
extrinsic validity of the will, and the second stage is the inquiry into the intrinsic validity of the
provisions in the will and the distribution of the property according to the will. In the first stage, the
will is proven and passed upon by the Court to the following: a.) testamentary capacity of the
testator; b.) compliance with the form of a will as prescribed by law; c.) absence of undue influence
in the making and execution of the will; and d.) genuineness of the will. On the other hand, the
will shall be disallowed in any of the following cases: a.) If not executed and attested as required
by law; b.) If the testator was insane, or otherwise mentally incapable to make a will, at the time
of its execution; c.) If it was executed under duress, or the influence of fear, or threats; d.) If it was
procured by undue and improper pressure and influence, on the part of the beneficiary, or of some
other person for his benefit; e.) If the signature of the testator was procured by fraud or trick, and
he did not intend that the instrument should be his will at the time of fixing his signature thereto.
(Section 9, Rule 76). The list is exclusive, and no other grounds can serve to disallow a will. The
second stage commences only after the court has finally allowed the will. Once a will is probated,
it is conclusive as to the execution and validity of the will. A certificate of allowance shall also be
attached to the will and the will and certificate filed and recorded by the Clerk. Attested copies of
the will devising real estate and of the certificate of allowance thereof, shall be recorded in the
Register of Deeds of the province in which the land lie.

The law in force at the time of the execution of a will (Art. 795, Civil Code of the Philippines).If the
will has been executed in substantial compliance with the formalities of the law, and the possibility
of bad faith and fraud is obviated, said will should be admitted to probate (Art. 809, Civil Code of
the Philippines).

Since probate is a proceeding in rem, the publication required by the Rules of court is a
jurisdictional requirement. Notice published once a week for 3 consecutive weeks is applicable
only when the petition for probate is filed by third persons. If the petition for probate was filed by
the testator himself, newspaper publication is not required. When the probate is filed by third
persons, personal notice is to be given to designated/known heirs, legatees and devises. The
personal service of notice, unlike publication, is a matter of procedural convenience. On the other
hand, if the petition is filed by the testator himself, personal notice is sent only to testator’s
compulsory heirs.

Evidence required in support of uncontested notarial will is the testimony of at least one of the
subscribing witnesses may be allowed, if such witness testifies that the will was executed as is
required by law. In case the subscribing witnesses reside outside the province, deposition is
allowed (Section 7, Rule 76) and if the subscribing witnesses are dead, insane, or none of them
resides in the Philippines, the court may admit testimony of other witnesses Section 8, Rule 76).
For holographic wills, it shall be necessary that at least one witness who knows the handwriting
and signature of the testator explicitly declare that the will and the signature are in the handwriting
of the testator.

A contestant to the will must state in writing his grounds for opposing the allowance of the will and
serve a copy thereof to the petitioner and other interested parties. If the notarial will is contested,
all subscribing witnesses and the notary public before whom the will was acknowledged must be
produced and examined. For contested holographic wills, three witnesses who know the
handwriting of testator must testify, and in the absence thereof and if the court deem it necessary,
testimony of an expert witness may be resorted to.

Generally, a holographic will if destroyed cannot be probated. Exception is if there exists a

photostatic or xerox copy thereof (Gan v. Yap, G.R. No. L-12190, August 30, 1958). On the other
hand, in case of a lost or destroyed notarial will, it must be proved that the will was in existence
at time of testator’s death or was fraudulently or accidentally destroyed in testator’s lifetime
without his knowledge and provisions of the will must be clearly and distinctly proven by at least
2 creditable witnesses.
Rule 77: Allowance of Will Proved Outside of Philippines and Administration of Estate
Thereunder

In reprobate, the local court acknowledges as binding the findings of the foreign probate court
provided its jurisdiction over the matter can be established. (In The Matter Of The Petition To
Approve The Will Of Ruperta Palaganas vs. Ernesto Palaganas, G.R. No. 169144, January 26,
2011).

Allowance of the proven will shall be filed in the same venue as provided for in Rule 73 and the
petition shall be accompanied with the authenticated copy of the will and authenticated decree of
the allowance thereof. Notices in accordance with Sections 3 and Section 4 of Rule 76 are
necessary as the will probated abroad is treated as an original will.

For a will proved abroad to be allowed in the Philippines, it must meet the requirement set in
Article 816 of the Civil Code, which states that “The will of an alien who is abroad produces effect
in the Philippines if made with the formalities prescribed by the law of the place in which he
resides, or according to the formalities observed in his country, or in conformity with those which
this Code prescribes.”

The evidence necessary for the reprobate or allowance of wills which have been probated outside
of the Philippines are as follows: (1) the due execution of the will in accordance with the foreign
laws; (2) the testator has his domicile in the foreign country and not in the Philippines; (3) the will
has been admitted to probate in such country; (4) the fact that the foreign tribunal is a probate
court, and (5) the laws of a foreign country on procedure and allowance of wills . (De Perez vs.
Tolete, G.R. No. 76714 June 2, 1994). Rationale for presenting evidence is that our courts cannot
take judicial notice of them.

If the reprobated will is allowed under Rule 77, it shall have the following effect: 1.) The will shall
be treated as if originally proved and allowed in Philippine courts; 2.) Letters testamentary or
administration with a will annexed shall extend to all estates in the Philippines; 3.) After payment
of just debts and expenses of administration, the residue of the estate shall be disposed of as
provided by law in cases of estates in the Philippines belonging to persons who are inhabitants
of another state or country.
Where the person dies intestate with property in his country of domicile and in a foreign country,
the administration of the property shall be made in both countries in accordance with the
principal/domiciliary administration and ancillary administration.

Rule 78: Letters Testamentary and of Administration, When and to Whom Issued

The executor and administrator are the individuals who may administer the estate of a deceased.
To be qualified, an executor or administrator, he must be a resident of the Philippines, of legal
age and not unfit to execute the duties of the trust by any of the reasons enumerated in Section
1, Rule 78. Before the letters of testamentary or administration is issued, the executor or
administrator, who is competent, must accept the trust and give a bond to be appointed.

On the other hand, no person in competent to serve as executor or administrator who: (a) Is a
minor; (b) Is not a resident of the Philippines; and (c) Is in the opinion of the court unfit to execute
the duties of the trust by reason of drunkenness, improvidence, or want of understanding or
integrity, or by reason of conviction of an offense involving moral turpitude.

If any of the executors or administrators cannot act due to reasons provided in Section 5, Rule
78, the court may issue the letters of testamentary or administration to others who shall possess
the same qualification and perform the duties and discharge the trust.

Section 6, Rule 78 of the Rules of Court provides for the order of preference for the appointment
of regular executor. However, the order is not absolute for it depends on the attendant facts and
circumstances of each case and it has been long held that the selection of an administrator lies
in the sound discretion of the trial court. (In The Matter Of The Intestate Estate Of Cristina
Aguinaldo- Suntay; Emilio A.M. Suntay III vs. Cojuangco-Suntay, G.R. No. 183053, June 16,
2010).

Appointment of co-administrator is allowed by court but as a way of exception because of the

following reasons: (1) to have the benefits of their judgment and perhaps at all times to have
different interests represented; (2) where justice and equity demand that opposing parties or
factions be represented in the management of the estate of the deceased; (3) where the estate
is large or, from any cause, an intricate and perplexing one to settle;(4) to have all interested
persons satisfied and the representatives to work in harmony for the best interests of the estate;
and when a person entitled to the administration of an estate desires to have another competent
person associated with him in the office. (Emilio A.M. Suntay III vs. Isabel Cojuangco-Suntay.,
G.R. No. 183053, October 10, 2012)

Rule 79: Opposing Issuance Of Letters Testamentary. Petition And Contest For Letters Of
Administration

Any person interested in a will may file an opposition for the letters testamentary. An interested
person is one who would be benefited by the estate, such as an heir, or one who has a claim
against the estate, such as a creditor. The interest must be material and direct, and not merely
indirect and contingent.

The contents of petition for letters of administration is essentially the same with that of the petition
for allowance of will, except the last requirement of the latter, which is the name of the person in
custody of the will. Likewise, Section 3 requirement on notice is jurisdictional such that where no
notice is given, the proceeding is considered void and should be annulled. Any person interested
may also contest the petition. Grounds for opposition to petition for administration are
incompetency and preferential right of the heir. Such oppositor may pray that the letters issue to
himself or to any competent person or person named in the opposition. The letters of
administration shall issue if proven that requirement on notice was complied with and that the
decedent left no will and there are no other competent and willing executor.

Rule 80: Special Administrator

A special administrator is appointed only for a limited time and for a specific purpose. The special
administrator is appointed to take possession and charge of the estate of the deceased when
there is delay in granting letters testamentary of administration. This appointment lasts until the
questions causing the delay are decided and executors or administrators are appointed. Upon
the grant of letters testamentary or of administration and the appointment of regular administrator,
the special administration shall then deliver to the executor or administrator the goods, chattels,
money, and estate of the deceased in his hands.
Appointment of a special administrator is discretionary to the probate court. The appointment is
not appealable, and the only remedy against the appointment is certiorari under Rule 65.

Duties of the special administration include taking possession and charge of the of the goods,
chattels, rights, credits, and estate of the deceased and preserving them for the executors or
administrator afterwards. The special administrator may commence and maintain suits as
administrator for the purpose of preserving the estate. The executor or administrator, once
appointed may prosecute to final judgment the suits commenced by the special administrator.
However, a special administrator is not liable to pay any debts, unless ordered by the court.

Rule 81: Bond of Executors and Administrators

The bond given by an executor or administrator is for the following purpose: a.) to make and return
to the court a true and complete inventory of the estate of the deceases within three months; b.)
to administer the estate and pay and discharge all debts from the proceeds; c.) to render a true
and just account of his administration within one year, and at any other time when the court
requires; d.) to perform all orders of the court by him to be performed.

Likewise, a special administrator must also give a bond conditioned that: a.) he will make and
return a true inventory of the goods, chattels, rights, credits, and estate of the deceased which
come to his possession or knowledge; b.) he will truly account for such as are received by him
when required by the court; and c.) will deliver the same to the person appointed executor or
administrator, or to such other person as may be authorized to receive them.

The bond serves as a continuing liability as long as the probate court retains jurisdiction of the
estate. The purpose of the administration bond is for the benefit of the creditors and the heirs. It
is not part of the necessary expenses chargeable against the estate.

The court may still require a bond even if the testator directs that the executor serve without bond.
In case there are two or more executors or administrators, the court may take a separate bond
from each.
Rule 82: Revocation of Administration, Death, Resignation, and Removal of Executors or
Administrators

There are two main categories when the letters of administration is revoked: one is by the
discovery of will after issuance of letters of administration and the other is by the resignation of
the executor or death, resignation or removal of the administrator. Upon the revocation of the
letters of administration, the administrator is obliged to surrender the letters to the court and render
his account within such time as directed by the court. A new proceeding for the issuance of letters
testamentary shall then be commenced in accordance with the Rules.

Under Rule 82, the following are the grounds for the removal of administrator: neglect to perform
an order or judgment of the court or a duty expressly provided by the rules; absconding; insanity
or incapability or unsuitability to discharge the trust; neglect to render accounts; and neglect to
settle estate according to the Rules. The administrator may also resign based on these reasons.

If there are two or more executors or administrators, the remaining executor or administrator may
administer the trust alone, unless the court grants letters to someone to act with him. If there is
no remaining executor or administrator, the court may appoint any suitable person. The newly
appointed person shall assume the powers to collect and settle the estate the former executor or
administrator did not administer. He may prosecute or defend actions that the former executor or
administrator commenced and have execution on judgment recovered in the name of such former
executor or administrator. If the court granted the former executor or administrator an authority
for the sale or mortgage of real estate, it may be renewed in favor of such executor or
administrator without further notice of hearing. These are consistent with the rule that any lawful
act of the executor or administrator before the revocation are valid.

Rule 83: Inventory and Appraisal. Provision for Support of Family

Three months after his appointment, the executor or administrator shall return to the court a true
inventory and appraisal of the estate of the deceased. Under the direction of the court, the
inventory should not include the wearing apparel of the surviving spouse and minor children, the
marriage bed and bedding, and other articles necessary for the substinence of the family of the
deceased. Under the direction of the court, the widow and minor or incapacitated children of a
deceased person shall receive such allowance as provided by law during the settlement of the
estate.

Rule 84: General Powers and Duties of Executors and Administrators

An executor or administrator has the following general powers and duties: access to partnership
books and property; maintain in tenantable repair the houses and other structures and fences
belonging to the estate and deliver these to the heirs or devises, when directed by the court; and
possess and manage the estate so long as necessary to pay the debts and expenses of
administration.

On the other hand, the executor or administrator cannot acquire by purchase the property under
administration; borrow money without authority of the court; speculate with fund under
administration; lease the property for more than one year; continue the business of the deceased
unless authorized by the court; and profit by the increase or decrease in the value of the property
under administration.

Rule 85: Accountability and Compensation of Executors and Administrators

Generally, an executor or administrator is charged with the whole of the estate of the deceased
at the value of the appraisement contained in the inventory, including the interest, profit, and
income of such estate and the proceeds of the estate sold by the executor or administrator, at the
price it was sold. An exception is for those which has not come into his possession.

In the following instances, the executor or administrator is held accountable. As provided in

section 4 of Rule 85, if an executor or administrator uses or occupies any part of the real estate
himself, he shall account for it as agreed upon by him and the parties interested or as determined
by court. Under Section 5 of Rule 85 he is held accountable if he neglects unreasonably delays
to raise money or pay over the money has in his hands. As a consequence of such neglect or
delay, the value of the estate is reduced or cost or interested are accrued, the interested person
suffer loss, or the estate is deemed waste. The damaged incurred shall be charged against the
executor or administrator and he shall be liable on his bond.
An executor or administrator is allowed for the necessary expenses for the care, management,
and settlement of the estate, and for his services. The compensation is four pesos per day for the
time actually and necessarily employed or a commission upon the value of so much of the estate
and is disposed of by him. However, if the estate is large and the settlement was attended with
great difficulty and has required high degree of capacity on the part of the executor or
administrator, a greater sum may be allowed. This compensation shall be followed when the
deceased did not make some provision for the compensation or when he renounces all claim to
the compensation provided in the will.

If there are two or more executors or administrators, the court shall apportion their compensation
according to the services they actually rendered respectively. If the executor or administrator is
an attorney, he shall not charge against the estate any professional fees for legal services
rendered by him.

Under Section 8 of Rule 85, the executor or administrator is obliged to render an account of his
administration within one year from the time of receiving letters testamentary or administration.
The court however allows extensions of time for presenting claims against, or paying the debts
of, the estate, or for disposing of the estate. He shall also render such further accounts as required
by court until the estate is wholly settled. Under Section 9, the executor or administrator may be
examined under oath respecting every matter relating to any account rendered by him or the
correctness of his account, except when no objection is made to the allowance of the account
and its correctness is satisfactorily established by competent proof.

Rule 86: Claims Against Estate

Immediately after granting letters testamentary or administration, the court shall issue a notice
requiring all persons having money claims against the decedent to file them.

Claims, under Rule 86, refers to debts or demands of pecuniary nature based on liability incurred
by the deceased during his lifetime and which could have been enforced against him in his lifetime
and could have been reduced to simple money judgments, which may money claims arising from
contract, claims for taxes, claims against surety bond, and claims arising from quasi-contract and
contingent claims. If the obligation is solidary with another, the claim shall be filed against the
decedent as if he were the only debtor, but if the claim is in a joint obligation, it shall be limited to
the portion belonging to the decedent. Presentation of claim is necessary to protect the estate of
the deceased and to allow the executor or administrator to determine whether the claim is proper
or not.

The following are money claims which can be charged against the estate:
1. All claims for money against the decedent, arising from contract, express or implied, whether
the same be due, not due, or contingent;
2. All claims for funeral expenses;
3. All claims for expenses for the last sickness of the decedent; and
4. Judgment for money against the decedent. (Section 5, Rule 86)
The enumeration above is exclusive.

Claims against estate should be filed within the period fixed in the notice, which shall not be more
than 12 months nor less than 6 months after the date of the first publication as provided in Section
3 of Rule 86, otherwise it will be barred. One exception of the status of non-claims is for belated
claims. The rule provides that at any time before an order of distribution is entered, on application
of a creditor who has failed to file his claim within the previously limited, the court may, for cause
shown and on such terms as are equitable, allow such claim to be filed within a time not exceeding
one (1) month. The purpose of the fixing of the period of claims is to ensure a speedy settlement
of the affairs of the deceased person and early delivery of the property to the person entitled to it.

A creditor holding a claim secured by a mortgage or other collateral security has the following
options:
 abandon the security and prosecute his claim in the manner provided in this rule, and
share in the general distribution of the assets of the estate
 foreclose his mortgage or realize upon his security, by action in court, making the executor
or administrator a party defendant, and if there is a judgment for a deficiency, after the
sale of the mortgaged premises, or the property pledged, in the foreclosure or other
proceeding to realize upon the security, he may claim his deficiency judgment in the
manner provided in section 4
 rely upon his mortgage or other security alone, and foreclosure the same at any time within
the period of the statute of limitations
However, the executor or administrator is not prohibited from redeeming the property mortgaged
or pledged, by paying the debt for which it is held as security, under the direction of the court, if
the court shall adjudge it to be for the best interest of the estate that such redemption shall be
made.

If the executor or administrator himself has a claim against the estate, he shall notify the court
and the court shall appoint a special administrator. The court may order the executor or
administrator to pay to the special administrator necessary funds to defend such claim.

Section 9 of Rule 86 outlines the rules on how to file a claim and its contents by delivering it with
the necessary vouchers to the clerk of court and serving a copy to the executor or administrator.
Once filed, the claim is attached to the record of the case or order that all claims be collected in
a separate folder. As provided in Section 10, the executor or administrator shall file his answer
within 15 days after service of a copy of the claim. For claims entirely admitted by the executor or
administrator, it shall be submitted by the clerk to the court who may approve the same without
hearing. However, in its own discretion, the court, before approving the claim, may notify and hear
the heirs, legatees, or devises. In such cases, the executor or administrator may file an answer
to the claim. Any judgment on the approval or disapproval of the claim is appealable as in ordinary
cases.

Rue 87: Actions By and Against Executors and Administrators

The following are the only actions which can be brought against the executor or administrator:
 Recover real or personal property, or an interested from the estate
 Enforce a lien on the estate
 Recover damaged for an injury to person or property, real or personal

An heir cannot bring an action to recover the title or possession of land or for damages until there
is an order of the court assigning such lands to such heir or devisee or until the time allowed for
paying debts has expired. However, jurisprudence provides that heirs may act in place of the
administrator if the executor or administrator is unwilling or refuses to bring suit, when the
administrator is alleged to have participated in the act complained of and he is made a party
defendant, and when there is no appointed administrator.
On the part of the executor or administrator, he may bring or defend, in the right of deceased may
bring, actions for causes which survive for the recovery or protection of the property or rights of
the deceased. With the approval of the court, the executor or administrator may compound with
the debtor of the deceased for a debt due. He may also foreclose a mortgage belonging to the
estate of the deceased.

On complaint of an executor or administrator, the court may cite a person suspected of

concealing, embezzling or fraudulently conveying to appear before it and examine him on oath
and cite him in contempt if the person refused to appear. For individuals entrusted by an executor
or administrator with any part of the estate, he may be required to appear before the court and
render a full account of the estate as they came to his possession, under pain of contempt. In
case a person embezzles or alienates any of the property of the deceased prior to the issuance
of letters testamentary or administration, he shall be liable to the executor or administrator for
double the value of the property.

Section 9 of Rule 87 applies when there is a deficiency of assets in the hands of the executor or
administrator for the payment of the debts and expenses for administration and the deceased
conveyed the property with intent to defraud his creditors. In this case, the executor or
administrator may commence and prosecute an action for the recovery of such property for the
benefit of the creditors. However, he cannot commence the action unless on application of the
creditors of the deceased and when the creditors pay such part of the costs and expenses or give
security therefor as the court deems equitable.

In order for a creditor to bring an action, the following requisites must be met:

1) There is deficiency of assets in the hands of an executor or administrator for the payment of
debts and expenses of administration;
2) The deceased in his lifetime had made or attempted to make a fraudulent conveyance of his
property or had so conveyed such property that by law the conveyance would be void as against
his creditors;
3) The subject of the attempted conveyance would be liable to attachment in his lifetime;
4) The executor or administrator has shown desire the action or failed to institute the same within
a reasonable time;
5) Leave is granted by the court to the creditor to file the action;
6) Creditor files a bond; and
7) The action by the creditor is in the name of the executor or administrator. (Section 10, Rule 87)

However, if the executor or administrator was himself the transferee of the fraudulent conveyance,
the leave of court, bond and action in his name is not required; the action should be brought in
the name of all the creditors.

Rule 88: Payment of the Debts of the Estate

Payment of debts of the estate is the last stage of the settlement of the estate. At the time of the
granting of letters testamentary or of administration, the court must fix the period within which the
executor or administrator should finish the settlement of the estate. The period should not exceed
one year in the first instance, or more than two years where special circumstances so require, or
more than two years and a half when the executor or administrator dies and a new one is
appointed.

It is a settled rule that payment of debts is allowed if there are sufficient assets after ascertaining
the amount of claims. In order to satisfy the debts, there must be an order of sale or mortgage
made upon the motion of the executor or administrator with written notice to all heirs, legatees
and devisees; execution is not a proper remedy. Execution may issue only where the devisees,
legatees or heirs have entered into possession of their respective portions in the estate prior to
settlement and payment of the debts and expenses of administration and it is later ascertained
that there are such debts and expenses to be paid

In the payment of debts, the order of preference is as follows: 1.) from the portion of property
designated in the will; 2.) personal property; and lastly 3.) real property. The real estate not
disposed by will may be sold, mortgaged or encumbered only after obtaining the authority of the
court and under either circumstances: personal estate is not sufficient for the payment of debts
or its sale would redound to the detriment of the participants for the estate. Any deficiency shall
be met by contributions in accordance with the provisions of section 6 of this rule.

Section 4 of Rule 82 provides that when a contingent claim is filed and the court is satisfied of its
validity, it may order the executor or administrator to retain sufficient estate to pay such contingent
claim or if the estate is insolvent, sufficient to pay a portion equal to the dividend of the other
creditors after the claim has become absolute. A contingent claim is one which depends for its
demandability upon the happening of a future uncertain event, similar to an obligation subject to
suspensive condition in civil law. The court may approve claims, which are not yet due, at their
present value but since the court cannot authorize yet its payment, a portion of the estate may be
reserved for the payment.

If the contingent claim becomes absolute and is presented to the court as an absolute claim within
two years from the time allowed for the presentation, it will be paid in the same manner as the
other absolute claims. Therefore, the executor or administrator may only retain the property
reserved within said two-year period. Thereafter, it will be included among the assets for
distribution for the heirs. This is the reason that if the claim is not presented within the period,
such that it is presented after the period allowed by the court, the creditor may instead file an
action against each distributee so that each may contribute an aliquot portion of the payment of
the contingent claim. Jurisprudence dictates that for a creditor to successfully file an action against
a distribute of the debtor’s asset, the contingent claims must first be established and allowed in
the probate court. As stated in Section 6 of the same Rule, the court may then fix the contributive
shares where the devisees, legatees, or heirs have been in possession of the portion of the estate.

If estate is insolvent, such that assets are not sufficient for payment of debts, Section7 in relation
to Articles 1059 and 2239 to 2251 of the Civil Code on Concurrence and Preference of Credits
must apply. If the deceased was at the time of his death an inhabitant of another country and
insolvent and the administration of his estate is taken in the Philippines, his estate found in the
Philippines will be disposed of so that his creditors in the country and elsewhere will receive an
equal share in proportion to their respective credits. If a claim is proven in another country against
the estate of an insolvent who was an inhabitant of the Philippines at the time of his death and
the executor or administrator had knowledge of such claim, when perfected in such country, the
court shall receive a copy of such claims and add them to the list of claims proved against the
deceased person in the Philippines. Under the principle of reciprocity, the benefits of section 9
and10 cannot be extended to creditors in another country if the property found in such country is
not equally apportion to the creditors residing in the Philippines.
Rule 89: Sales, Mortgages, and Other Encumbrances of Property of Decedent

The court may allow only the sale, not the encumbrance, of personal property of the decedent if
it appears necessary for the purpose of paying debts, expenses of administration, or legacies, or
for the preservation of the property.

For real property, the court may allow it to be sold, mortgaged, or otherwise encumbered if the
personal estate is not sufficient to pay the debts or where the sale of such personal estate may
injure the business or other interests of those interested in the estate and the testator has not
made a provision for the payment of such debts. It should be noted that the sale or encumbrance
should be beneficial to the persons interested in the estate. In fact, the court may authorize only
the sale of the estate, not encumbrance, although not necessary for the payment of debts, as
long as it is beneficial to the heirs, except other if such sale is inconsistent with a provision of the
will.

For a decedent whose property in other countries is not sufficient to pay the debts there, the court
may authorize the executor or administrator to sell the personal estate or to sell, mortgage, or
otherwise encumber the real estate in the other country in the same manner as for the payment
of debts in the Philippines.

In order for the administrator or executor to sell or encumber the immovable property, there must
be an authority granted by the court, otherwise such sale is null and void. In addition, such
application for authority to sell of encumber must be with notice to the interested parties, otherwise
the sale is void. The court may grant the authority in cases provided by the rules and when it
appears necessary or beneficial under the regulations enumerated in Section 7 of Rule 89.
However, the court shall not grant the authority if any interested party gives a bond conditioned
to pay the debts and legacies. The same bond shall be for the security of the creditors, as well as
of the executor or administrator, and may be prosecuted for the benefit of either.

Section 8 of Rule 89 provides that the probate court may likewise authorize conveyance of realty
which the deceased during his lifetime to convey to the executor or administrator. Under Section
9, the court may also authorize the conveyance of lands held in trust. The authority granted in the
former instance presupposed that there is no controversy as to the contract contemplated and
the estate will not be reduced, depriving the creditor of full payment of his claim or dividend. For
section 9, the authority can be granted if there is no controversy and unlike the requirement for
grant under Section 8, the authority is still granted even if the creditors are affected ass the
properties contemplated under this section is not included in the estate of the deceased who
merely held the same in trust. Notice of such application must be given to all interested parties,
otherwise both the order of the court and the conveyance made pursuant thereto are completely
void.

Rule 90: Distribution and Partition of the Estate

After all debts and expenses are paid, the court shall order the distribution of the residue. Before
the court can issue an order of distribution, the debts, funeral charges, expenses of administration
allowance to the widow and children and inheritance tax must first have been paid.

Partial distribution of the decedent pending final termination of the testate or intestate proceeding
is discouraged, but where the estate has sufficient assets to ensure an equitable distribution of
the inheritance such partial distribution may be allowed.

Proceedings for the settlement of estate is deemed ready for final closure when (1) there should
have been issued already an order of distribution or assignment of the estate of the decedent
among or to those entitled thereto by will or by law, but (2) such order shall not be issued until it
is shown that the "debts, funeral expenses and expenses of administration, allowances, taxes,
etc., chargeable to the estate" have been paid, which is but logical and proper, (3) besides, such
an order is usually upon proper and specific application for the purpose of the interested party or
parties, and not of the court

What brings a close to the intestate proceeding and putting an end to the administration and
relieving the administration from his duties is the order of distribution directing the delivery of the
residue of the estate to the persons entitled. In intestate proceedings the probate court does not
lose jurisdiction of the estate until after the payment of all the debts and the remaining estate
delivered to the heirs.

The settlement of a decedent's estate is a proceeding in rem thus the final decree of distribution
is binding against the whole world. All persons having interest, whether they were notified or not,
are equally bound.