RULE 87 The heir is not entirely precluded from suing the executor or administrator.
ACTIONS BY AND AGAINST THE EXECUTORS AND However, the suit may only prosper if:
ADMINISTRATORS
SEC. 1. Actions which may and which may not be brought against executor
or administrator. - No action upon a claim for the recovery of money or debt
or interest thereon shall be commenced against the executor or administrator; but
to recover real or personal property, or an interest therein, from the estate, or to
enforce a lien thereon, and actions to recover damages for an injury to person or
property, real or personal, may be commenced against him.
SEC. 2. Executor or administrator may bring or defend actions which survive.
For the recovery or protection of the property or rights of the deceased, an
executor or administrator may bring or defend, in the right of deceased,
actions for causes which survive.
To recall, money claims should be filed against the decedent's estate; they may
not be pursued against the executor or administrator.
Only the following actions may be commenced against the executor or
administrator:
1) Recovery of real or personal property or an interest therein;
2) Enforcement of a lien on real or personal property, and
3) Recovery of damages for an injury to person, property whether real or
personal.
 RULE - Actions which survive the decedent's death should be made against
the executor or administrator. Actions that do not survive must be claimed
against the estate.
 "Claims" required to be presented against a decedent's estate is generally
construed to mean debts or demands of a pecuniary nature which could have
been enforced against the deceased in his lifetime or liability contracted by
the deceased before his death.
 The court charged with the settlement of the estate is bound to protect
the estate from any disbursements based on claims not chargeable to
the estate.
 Actions to recover real or personal property, or an interest therein, survive
the decedent's death. Thus, an action for quieting of title with damages
and an action for recovery of personal property such as a motor vehicle
are not extinguished by the death of a party.
 The executor or administrator may sue upon any cause of action which
accrued to the decedent during his lifetime. Any action affecting the
property rights of a deceased which may be brought by or against him if
he were alive, may be instituted and prosecuted by or against the
administrator, unless by its very nature, it cannot survive, because death
extinguishes such right.
SEC. 3. Heir may not sue until share assigned. -When an executor or
administrator is appointed and assumes the trust, no action to recover the title
or possession of lands or for damages done to such lands shall be maintained
against him by an heir or devisee 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.
 Before distribution is made or before any residue known, the heirs and
devisees have no cause of action against the administrator for recovery of
property left by the deceased.
WHEN HEIRS MAY FILE AN ACTION IN COURT
GENERAL RULE - heirs have no legal standing to sue for recovery or
protection of property rights of the deceased.
EXCEPTIONS:
1) Pending the filing of administration proceedings
2) Administration proceedings have already been commenced, but an
administrator has not yet been appointed
3) The executor or administrator is unwilling or refuses to bring suit
4) The executor or administrator is alleged to have participated in the act
complained of and he is made a party defendant.
In one case, the heirs were allowed to file a petition for correction of clerical
errors in the description of the property in the project of partition after it was
approved by the probate court.
1) There is an order of the court assigning the property to such heir; or
2) The time allowed for the payment of a debt has expired.
Simply put, the partition and delivery of his corresponding share must
precede the suit filed by the heir.
 The RATIONALE for the foregoing rule was aptly explained by Chief
Justice Moran, to wit:
An executor or administrator who assumes the trust, takes possession
of the property left by the decedent for the purpose of paying debts. While
his debts are undetermined and unpaid, no residue may be settled for
distribution among the heirs and devisees. Consequently, before distribution
is made, or before any residue is known, the heirs or devisees have no cause
of action against the executor or administrator for recovery of the property
left by the deceased.
SEC. 4. Executor or administrator may compound with debtor. Within the
approval of the court, an executor or administrator may compound with the
debtor of the deceased for a debt due, and may give a discharge of such debt on
receiving a just dividend of the estate of the debtor.
 Section 4 empowers the executor or administrator to compromise with the
decedent's debtor.
SEC. 5. Mortgage due estate may be foreclosed. - A mortgage belonging to the
estate of a deceased person, as mortgagee or assignee of the right or a mortgage,
may be foreclosed by the executor or administrator.
 RULE - executor or adminis trator is not chargeable for the loss sustained
by the estate.
 Nevertheless, if, through his negligence, the estate sustains a loss due
to his failure to foreclose or delay until the mortgage property has
depreciated such that the full amount of the debt cannot be recovered,
the executor or administrator shall bear the loss.
 The executor or administrator must show to the satisfaction of
the court the reason for the failure to foreclose and the loss
resulting to the estate.
 Assuming that the executor or testator successfully forecloses the
mortgaged property, the distribution of the proceeds shall be
determined by the heirs among themselves. Such issue cannot be
litigated or determined in the foreclosure case, unless all the heirs are
made parties to the said proceeding.
SEC. 6. Proceedings when property concealed, embezzled, or fraudulently
conveyed. If an executor or administrator, heir, legatee, creditor or other
individual interested in the estate of the deceased, complains to the court having
jurisdiction of the estate that a person is suspected of having concealed,
embezzled, or conveyed away any of the money, goods, or chattels of the
deceased, or that such person has in his possession or has knowledge of any
deed, conveyance, bond, contract, or other writing which contains evidence of or
tends or discloses the right, title, interest, or claim of the deceased, the court may
cite such suspected person to appear before it any may examine him on oath on
the matter of such complaint; and if the person so cited refuses to appear, or to
answer on such examination or such interrogatories as are put to him, the court
may punish him for contempt, and may commit him to prison until he submits
to the order of the court. The interrogatories put any such person, and his answers
thereto, shall be in writing and shall be filed in the clerk's office.
 When the property of the decedent is concealed, embezzled, or
fraudulently conveyed, the interested party must bring it to the court's
attention, which shall then cite the person suspected to appear in court.
 If the person cited REFUSES, the court may punish him for contempt and
order his commitment to prison until he submits to the court's order.
Section 6 contemplates 2 situations:
1) When the executor or administrator, heir, legatee, creditor or other
individual interested in the estate of the deceased complains to the
court having jurisdiction of the estate that a person is suspected of
having concealed, embezzled, or conveyed away any of the money,
goods, or chattels of the deceased; or
2) When such person has in his possession or has knowledge of any
deed, conveyance, bond, contract, or other writing, which contains
evidence of or tends or discloses the right, title, interest, or claim of
the deceased.
 The section only provides a proceeding for examining persons suspected
of having concealed, embezzled, or conveyed away property of the
deceased or withholds information of documentary evidence tending to
disclose rights or claims of the deceased to such property or to disclose the
possession of his last will and testament.
 PURPOSE OF THE PROCEEDING - to elicit evidence, and the section
does not, in terms, authorize the court to enforce delivery of possession
of the things involved. To obtain the possession, recourse must therefore
generally be had to an ordinary action.
SEC. 7. Person entrusted with estate compelled to render account. The court,
on complaint of an executor or administrator, may cite a person entrusted by an
executor or administrator with any part of the estate of the deceased to
appear before it, and may require such person to render a full account, on
oath, of the money, goods, chattels, bonds, account, or other papers belonging to
such estate as came to his possession in trust for such executor or administrator,
and of his proceedings thereon; and if the person so cited refuses to appear to
render such account, the court may punish him for contempt as having
disobeyed a lawful order of the court.
SEC. 8. Embezzlement before letters issued. - If a person, before the granting of
letters testamentary or of administration on the estate of the deceased, embezzles
or alienates any of the money, goods, chattels, or effects of such deceased, such
person shall be liable to an action in favor of the executor or administrator of the
estate for DOUBLE the value of the property sold, embezzled, or alienated, to
be recovered for the benefit of such estate.
 If before grant of letters testamentary or of administration, person
embezzles or alienates money or property of the deceased, such person shall
be liable to an action in favor of the executor or administrator for double the
value of the property sold, embezzled or alienated. This is the "DOUBLE
VALUE RULE."
SEC. 9. Property fraudulently conveyed by deceased may be recovered.
When executor or administrator must bring action. - When there is a
deficiency of assets in the hands of an executor or administrator for the payment
of debts and expenses of administration, and the deceased in his lifetime had
conveyed real or personal property, or a right or interest therein, or an debt or
credit, with intent to defraud his creditors or to avoid any right, debt, or duty; or
had so conveyed such property, right, interest, debt or credit that by law the
conveyance would be void as against his creditors, and the subject of the
attempted conveyance would be liable to attachment by any of them in his lifetime,
the executor or administrator may commence and prosecute to final
judgment an action for the recovery of such property, right, interest, debt, or
credit for the benefit of the creditors; but he shall not be bound to commence
the action unless on application of the creditors of the deceased, not unless the
creditors making the application pay such part of the costs and expenses, or give
security therefor to the executor or administrator, as the court deems equitable.
An executor or administrator may commence and prosecute to final judgment an
action for the recovery of property, right, interest, debts, or credit for the
benefit of creditors when the following circumstances concur:
1) The deceased in his lifetime had conveyed real or personal property, right or
interest therein, or debt or credit
2) Such conveyance was
a. Made with intent to defraud his creditors
b. Made to avoid any right, debt, or duty or had so conveyed such
property, right, interest, debt, or creditors; and
c. The subject of the attempted conveyance would be liable to
attachment by any of them in his lifetime; and
3) There is deficiency of assets in the hands of an executor or administrator for
the payment of debts and expenses of administration.
 The executor or administrator is not bound to commence the action,
unless the creditors apply to the court and that they shall pay such part of
the costs and expenses, or give security therefor to the executor or
administrator, as the court deems equitable.
SEC. 10. When creditor may bring action. Lien for costs. - When there is such
a deficiency of assets, and the deceased in his lifetime had made or attempted
such a conveyance, as is stated in the last preceding section, and the executor or
administrator has not commenced the action therein provided for, any creditor of
the estate may, with the permission of the court, commence and prosecute to final
judgment, in the name of the executor or administrator, a like action for the
recovery of the subject of the conveyance or attempted conveyance for the benefit
of the creditors. But the action shall not be commenced until the creditor has
filed in a court a bond executed to the executor or administrator, in an amount
approved by the judge, conditioned to indemnify the executor or administrator
against the costs and expenses incurred by reason of such action. Such creditor
shall have a lien upon any judgment recovered by him in the action for such costs
and other expenses incurred therein as the court deems equitable. Where the
conveyance or attempted conveyance had been made by the deceased in his
lifetime in favor of the executor or administrator, the action which a creditor
may bring shall be in the name of all the creditors, and permission of the court and
filing of bond as above prescribed, are not necessary.
 The creditor may bring an action in the name of the executor or
administrator for the recovery of property fraudulently conveyed by the
deceased upon concurrence of the following:
1) There is a deficiency of assets
2) The deceased in his lifetime had made or attempted such a
conveyance with intent to defraud creditors or to avoid any right, debt,
or duty (Section 9)
3) The executor or administrator has not commenced action provided in
Section 9; and
4) The creditor has filed a bond executed to the executor or
administrator in an amount approved by the judge, conditioned to
indemnify the executor or administrator against the costs and
expenses incurred by reason of such action.
 If the creditor is successful, he shall have a lien upon any judgment
recovered by him for reasonable costs and expenses.
Notwithstanding the foregoing, when the conveyance or its attempt made by the
decedent during his lifetime is in favor of the executor or administrator, the
action commenced shall be in the name of all the creditors. Corollarily, the court's
permission and the filing of bond are dispensed with.
When the demand is in favor of the administrator and the party against whom
it is enforced is a third party, not under the court's jurisdiction, the demand
cannot be by mere motion by the administrator, but by an independent action
against the third person. For obvious reasons, the demand cannot be made
because third persons not under the jurisdiction of the court are involved.
CHAPTER IX
PAYMENT OF DEBTS OF THE ESTATE AND SALES, MORTGAGES,
AND OTHER ENCUMBRANCES OF PROPERTY OF DECEDENT
RULE 88
PAYMENT OF DEBTS OF THE ESTATE
SEC. 1. Debts paid in full if estate sufficient. If, after hearing all the money
claims against the estate, and after ascertaining the amount of such claims, it
appears that there are sufficient assets to pay the debts, the executor or
administrator pay the same within the time limited for that purpose.
SEC. 2. Part of estate from which debt paid when provision made by will. - If
the testator makes provision by his will, or designates the estate to be
appropriated for the payment of his debts, the expenses of administration, or
the family expenses, they shall be paid according to the provisions of the will;
but if the provision made by the will or the estate appropriated, is not sufficient
for that purpose, such part of the estate of the testator, real or personal, as is not
disposed of by will, if any shall be appropriated for that purpose.
SEC. 3. Personalty first chargeable for debts, then realty. The personal estate
of the deceased not disposed of by will shall be first chargeable with the
payment of debts and expenses; and if said personal estate is not sufficient for
that purpose, or its sale would redound to the detriment of the participants for
the estate, the whole of the real estate not dispose of by will, or so much
thereof as is necessary, may be sold, mortgaged, or otherwise encumbered for
that purpose by the executor or administrator, after obtaining the authority of the
court therefor. Any deficiency shall be met by contributions in accordance with
the provisions of section 6 of this rule.
SEC. 6. Court to fix contributive shares where devisees, legatees, or heirs
have been in possession. - Where devisees, legatees, or heirs have entered into
possession of portions of the estate before the debts and expenses have been
settled and paid, and have become liable to contribute for the payment of such
debts and expenses, the court having jurisdiction of the estate may, by order for
that purpose, after hearing, settle the amount of their several liabilities, and
order how much and in what manner each person shall contribute, and may issue
execution as circumstances require.
SEC. 7. Order of payment if estate insolvent. - If the assets which can be
appropriated for the payment of debts are not sufficient for that purpose, the
executor or administrator shall pay the debts against the estate, observing the
provisions of Articles 1059 and 2239 to 2251 of the Civil Code.
The following REQUISITES must concur before the executor or administrator
may pay the money claims against the estate:
1) A hearing is conducted;
2) The amounts of such claims are ascertained; and
3) There are sufficient assets to pay the debt.
 The provision in a will for the payment of a specific debt does not dispense
with the requirement that a claim should be FILED against the estate.
 In any case where the provision in the will is insufficient to cover the
entire debt, that part of the decedent's estate not disposed of by will
shall answer for such deficiency.
ORDER OF PREFERENCE for the payment of debts of the estate:
1) From the portion or property designated in the will;
2) From the personal property.
3) From the real property.
In case of a deficiency after the exhaustion of the decedent's estate, it shall be
satisfied from the contribution of devisees, legatees, or heirs who have been in
possession of portions of the estate before the debts and expenses have been
settled and paid.
If the decedent is insolvent, the preference of credits stated in Articles 1059 and
2239 to 2251 of the Civil Code must be followed.
EXCEPTIONS: INSTANCES WHEN REALTY CAN BE CHARGED FIRST
The rules provide for specific instances when realty shall be charged ahead of
the decedent's personal property:
1) When the decedent's personal property is insufficient
2) When the sale of personal property shall be detrimental to the participants
of the estate
3) When the sale of personal property may injure the business or interests of
those interested in the estate
4) When the testator has not made sufficient provision for payment of such
debts, expenses, and legacies
5) When the decedent was, in his lifetime, under contract, binding in law, to
deed real property to beneficiary
6) When the decedent during his lifetime held real property in trust for another.
Before the foregoing exceptions may apply, the following REQUISITES must be
complied with:
1) The executor or administrator makes an application with the court;
2) Written notice is given to the persons interested;
3) Hearing by the court.
WHEN WRIT OF EXECUTION MAY ISSUE
Although a writ of execution may not issue to recover a claim against the estate, a
writ of execution may issue in accordance with Section 6. In declaring such writ
as valid, the Supreme Court said:
"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 which
case the court having jurisdiction of the estate may, by order for that
purpose, after hearing, settle the amount of their several liabilities, and
order how much and in what manner each person shall contribute, and
may issue execution if circumstances require."
 Section 6 clearly authorizes execution to enforce payment of the debts of
the estate.
 A legacy is not a debt of the estate, but according to Section 6, legatees
are among those against whom execution is authorized to be issued.
 Sections 15 and 16, as well as Sections 1 to 5, and 7(a) of Rule 89 all refer
to the payment of legacies as if such are debts.
 The correct rule is amply stated in Rule 90, Section 1, which does not
include legacies as among those that should be paid before order of
distribution - only debts, funeral charges, expenses of administration,
allowance to widow and inheritance tax. Again, it is only after the
debts and expenses of administration have been paid that the
residue shall be given to heirs and those entitled by way of
inheritance or legacy.
SEC. 4. Estate to be retained to meet contingent claims. If the court is satisfied
that a contingent claim duly filed is valid, it may order the executor or
administrator to retain in his hands sufficient estate to pay such contingent
claim when the same becomes absolute, or if the estate is insolvent, sufficient to
pay a portion equal to the dividend of the other creditors.
SEC. 5. How contingent claim becoming absolute in two years allowed and
paid. Action against distributees later. If such contingent claim becomes
absolute and is presented to the court, or to the executor or administrator,
within two (2) years from the time limited for other creditors to present their
claims, it may be allowed by the court if not disputed by the executor or
administrator and, if disputed, it may be proved and allowed or disallowed by
the court as the facts may warrant. If the contingent claim is allowed, the creditor
shall receive payment to the same extent as the other creditors if the estate
retained by the executor or administrator is sufficient. But if the claim is not so
presented, after having become absolute, within said two (2) years, and allowed,
the assets retained in the hands of the executor or administrator, not exhausted in
the payment of claims, shall be dis-turbed by the order of the court to the persons
entitled to the same; but the assets so distributed may still be applied to the
payment of the claim when established, and the creditor may maintain an action
against the distributees to recover the debt, and such distributees and their
estates shall be liable for the debt in proportion to the estate they have respectively
received from the property of the deceased.
A contingent claim is one that is subject to the happening of a future uncertain
event. The REQUISITES for the estate to be required to retain estate to meet the
contingent claim are as follows:
1) The contingent claim is duly filed within the 2-year period allowed for the
creditors to present claims;
2) The court is satisfied that the claim is valid; and
3) The claim has become absolute.
 As to contingent claims which mature after the 2-year period for filing
claims, the assets retained in the hands of the executor or administrator not
exhausted in the payment of the claims, shall be distributed by order of the
court to the persons entitled to the same.
 Assets so distributed may still be applied to the payment of the claim
when established, and the creditor may maintain an action against the
distributees to recover the debt, and such distributees and their estates
shall be liable for the debt in proportion to the estate they have
respectively received from the property of the deceased..
SEC. 8. Dividends to be paid in proportion to claims. - If there are no assets
sufficient to pay the credits of any one class of creditors after paying the credits
entitled to preference over it, each creditor within such class shall be paid a
dividend in proportion to his claim. No creditor of any one class shall receive
any payment until those of the preceding class are paid.
 Section 8 contemplates a situation where there are several creditors entitled
to the same preference and the assets are insufficient to pay all of them.
 In such case, the proceeds shall be prorated among the creditors of the
same preference. This, of course, assumes that the other creditors entitled
to a higher preference have been satisfied.
SEC. 9. Estate of insolvent non-resident, how disposed of. In case
administration is taken in the Philippines of the estate of a person who was at the
time of his death an inhabitant of another country, and who died insolvent, his
estate found in the Philippines shall, as far as practicable, be so disposed of that
his creditors here and elsewhere may receive each an equal share, in proportion
to their respective credits.
SEC. 10. When and how claim proved outside the Philippines against
insolvent resident's estate paid. - If it appears to the court having jurisdiction
that claims have been duly proven in another country against the estate of an
insolvent who was at the time of his death an inhabitant of the Philippines, and
that the executor or administrator in the Philippines had knowledge of the
presentation of such claims in such country and an opportunity to contest their
allowance, the court shall receive a certified list of such claims, when
perfected in such country, and add the same to the list of claims proved
against the deceased person in the Philippines so that a just distribution of the
whole estate may be made equally among all its creditors according to their
respective claims; but the benefit of this and the preceding sections shall not be
extended to the creditors in another country if the property of such deceased
person there found is not equally apportioned to the creditors residing in the
Philippines and the other creditor, according to their respective claims.
 If the decedent is a non-resident and insolvent, his estate found in the
Philippines shall be distributed to his creditors, both here and outside the
country, in proportion to their respective shares.
SEC. 11. Order for payment of debts. Before the expiration of the time
limited for the payment of the debts, the court shall order the payment thereof,
and the distribution of the assets received by the executor or administrator for
that purpose among the creditors, as the circumstances of the estate require and in
accordance with the provisions of this rule.
SEC. 12. Orders relating to payment of debts where appeal is taken. If an
appeal has been taken from a decision of the court concerning a claim, the court
may suspend the order for the payment of the debts or may order the
distribution among the creditors whose claims are definitely allowed, leaving in
the hands of the executor or administrator sufficient assets to pay the claim
disputed and appealed. When a disputed claim is finally settled the court having
jurisdiction of the estate shall order the same to be paid out of the assets
retained to the same extent and in the same proportion with the claims of other
creditors.
When an appeal is taken from its decision concerning a claim, the court may take
either of the following courses of action:
1) Suspend the order for the payment of the debts; or
2) Order the distribution among the creditors whose claims are definitely
allowed, leaving in the hands of the executor or administrator sufficient
assets to pay the claim disputed and appealed.
 Once the dispute has been settled, the court shall order the same to be paid
out of the assets retained to the same extent and in the same proportion with
the claims of other creditors.
SEC. 13. When subsequent distribution of assets ordered. If the whole of the
debts are not paid on the first distribution, and if the whole assets are not
distributed, or other assets afterwards come to the hands of the executor or
administrator, the court may from time to time make further orders for the
distributions of assets.
The court is not precluded from making a single order of distribution of the
estate. In fact, Section 13 recognizes the court's power to make further orders for
the distribution of the estate:
1) If the whole of the debts are not paid on the first distribution;
2) If the whole assets are not distributed; or
3) If other assets afterwards come to the hands of the executor or
administrator.
SEC. 14. Creditors to be paid in accordance with terms of order. When an
order is made for the distribution of assets among the creditors, the executor or
administration shall, as soon as the time of payment arrives, pay the creditors
the amounts of their claims, or the dividend thereon, in accordance with the terms
of such order.
SEC. 15. Time for paying debts and legacies fixed, or extended after notice,
within what periods. On granting letters testamentary or administration the court
shall allow to the executor or administrator a time for disposing of the estate
and paying the debts and legacies of the deceased, which shall not, in the first
instance, exceed one (1) year; but the court may, on application of the executor or
administrator and after hearing on such notice of the time and place therefor given
to all persons interested as it shall direct, extend the time as the circumstances of
the estate require not exceeding six (6) months for a single extension nor so that
the whole period allowed to the original executor or administrator shall exceed
two (2) years.
SEC. 16. Successor of dead executor or administrator may have time
extended on notice within certain period. When an executor or administrator
dies, and a new administrator of the same estate is appointed, the court may
extend the time allowed for the payment of the debts or legacies beyond the
time allowed to the original executor or administrator, not exceeding six (6)
months at a time and not exceeding six (6) months beyond the time which the
court might have allowed to such original executor or administrator; and notice
shall be given of the time and place for hearing such application, as required in
the last preceding section.
Sections 15 and 16 may be summarized as follows:
1) The executor or administrator has an initial period of one year from the
issuance of letters testamentary or administrator to:
a) Dispose of the estate
b) To pay the debts and legacies of the deceased.
2) The executor or administrator may apply for an extension not exceeding 6
months for a single extension after hearing and notice to all persons
interested.
3) The whole period allowed to the original executor or administrator shall not
exceed 2 years.
4) The successor of the executor or administrator who dies during the
settlement of the estate may have the time extended on notice, not
exceeding 6 months at a time and not exceeding 6 months beyond the
time allowed to the original executor or administrator.
5) Thus, the total allowable period if the executor or administrator dies is 2
and a half years.
RULE 89
SALES, MORTGAGES, AND OTHER ENCUMBRANCES OF PROPERTY
OF DECEDENT
SEC. 1. Order of sale of PERSONALTY. - Upon the application of the executor
or administrator, and on written notice to the heirs and other persons interested,
the court may order the whole or a part of the PERSONAL estate to be sold,
if it appears necessary for the purpose of paying debts, expenses of administration,
or legacies, or for the preservation of the property.
 The executor or administrator is prohibited from selling PERSONAL
property of the decedent without court order even if the heirs and other
persons interested have consented thereto.
 An executor or administrator may be held answerable for selling the
decedent's property without a court order.
 The assent of the heirs is insufficient to vest in him the power to
dispose of the decedent's property.
 Moreover, the court cannot motu proprio order the sale of
PERSONAL property.
 It is ESSENTIAL that the executor or administrator applies
for such sale with the court and gives written notice to the
heirs and other persons interested. It must also be shown that
the sale is necessary for the payment of debts, expenses of
administration, or legacies, or the preservation of the property.
SEC. 2. When court may authorize sale, mortgage, or other encumbrance of
REALTY to pay debts and legacies through personalty not exhausted. When
the PERSONAL estate of the deceased is not sufficient to pay the debts,
expenses of administration, and legacies, or where the sale of such PERSONAL
estate may injure the business or other interests of those interested in the estate,
and where a testator has not otherwise made sufficient provision for the
payment of such debts, expenses, and legacies, the court, on the application of
the executor or administrator and on written notice of the heirs, devisees, and
legatees residing in the Philippines, may authorize the executor or
administrator to sell, mortgage, or otherwise encumber so much as may be
necessary of the REAL estate, in lieu of PERSONAL estate, for the purpose of
paying such debts, expenses, and legacies, if it clearly appears that such sale,
mortgage, or encumbrance would be beneficial to the persons interested; and if
a part cannot be sold, mortgaged, or otherwise encumbered without injury to those
interested in the remainder, the authority may be for the sale, mortgage, or other
encumbrance of the whole of such REAL estate, or so much thereof as is
necessary or beneficial under the circumstances.
 The court, on application, may authorize the executor or administrator to
sell mortgage, or otherwise encumber the decedent's REAL estate, instead
of his PERSONAL property, in order to pay debts, expenses, and legacies.
 The sale, mortgage, or other encumbrance is conditioned on the
application of the executor or administrator, written notice to the
heirs, devisees, and legatees residing in the country, and such would
be beneficial to the person interest.
 The executor or administrator is not constrained to sell, mortgage, or
encumber the whole property or none. Only so much as may be necessary
of the REAL estate need be sold, mortgaged, or encumbered. Nevertheless,
the whole property may be sold, mortgaged, or encumbered in the following
instances:
1) If the sale, mortgage, or encumbrance of a part will injure those
interested in the remainder; and
2) If it is necessary under the circumstances.

SEC. 3. Persons interested may prevent such sale, etc., by giving bond. - No
such authority to sell, mortgage, or otherwise encumber REAL or PERSONAL
estate shall be granted if any person interested in the estate gives a BOND, in
a sum to be fixed by the court, conditioned to pay the debts, expenses of
administration, and legacies within such time as the court directs; and such 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.
 Any person interested in the estate may prevent the sale, mortgage, or
encumbrance of REAL or PERSONAL property part of the estate by giving
a bond, in an amount fixed by the court.
 The bond is conditioned on the payment of debts, expenses of
administration, and legacies, as well as security of the creditors,
executor, or administrator.
SEC. 4. When court may authorize sale of estate as beneficial to interested
persons. Disposal of proceeds. When it appears that the sale of the whole or a
part of the REAL or PERSONAL estate, will be beneficial to the heirs, devisees,
legatees, and other interested persons, the court may, upon application of the
executor or administrator and on written notice to the heirs, devisees, and
legatees who are interested in the estate to be sold, authorize the executor or
administrator to sell the whole or a part of said estate, although not necessary
to pay debts, legacies, or expenses of administration; but such authority shall not
be granted if inconsistent with the provisions of a will. In case of such sale, the
proceeds shall be assigned to the persons entitled to the estate in the proper
proportions.
 The primary consideration for the court is the interest and benefit to the
heirs, devisees, legatees, and other interested persons.
 While the sale may not be necessary for the payment of debts, expenses of
administration, or legacies, the court may nevertheless authorize such sale.
 Any proceeds derived from such sale shall be assigned to the persons
entitled to the estate in the proper portions.
 Note that the only limitation on a sale otherwise beneficial to
interested persons would be its inconsistency with the provisions of a
will.
SEC. 5. When court may authorize sale, mortgage, or other encumbrance of
estate to pay debts and legacies in other countries. When the sale of
PERSONAL estate, or the sale, mortgage, or other encumbrance of REAL estate
is not necessary to pay the debts, expenses of administration, or legacies in the
Philippines, but it appears from records and proceedings of a probate court in
another country that the estate of the deceased in such other country is not
sufficient to pay the debts, expenses of administration, and legacies there, the
court here may authorize the executor or administrator to sell the
PERSONAL estate or to sell, mortgage, or otherwise encumber the REAL
estate for the payment of debts or legacies in the other country, in same
manner as for the payment of debts or legacies in the Philippines.
SEC. 6. When court may authorize sale, mortgage, or other encumbrance of
REALTY acquired on execution or foreclosure. The court may authorize an
executor or administrator to sell mortgage, or otherwise encumber REAL estate
acquired by him on execution or foreclosure sale, under the same
circumstances and under the same regulations as prescribed in this rule for the sale,
mortgage, or other encumbrance of other REAL estate.
SEC. 7. Regulation for granting authority to sell, mortgage, or otherwise
encumber estate. The court having jurisdiction of the estate of the deceased may
authorize the executor or administrator to sell PERSONAL estate, or to sell,
mortgage, or otherwise encumber REAL estate, in cases provided by these
rules and when it appears necessary or beneficial under the following
regulations.
a) The executor or administrator shall file a written petition setting forth the
debts due from the deceased, the expenses of administration, the legacies,
the value of the PERSONAL estate, the situation of the estate to be sold,
mortgaged, or otherwise encumbered, and such other facts as show that the
sale, mortgage, or other encumbrance is necessary or beneficial;
b) The court shall thereupon fix a time and place for hearing such petition,
and cause notice stating the nature of the petition, the reasons for the same,
and the time and place of hearing, to be given personally or by mail to the
persons interested, and may cause such further notice to be given, by
publication or otherwise, as it shall deem proper;
c) If the court requires it, the executor or administrator shall give an
additional bond, in such sum as the court directs, conditioned that such
executor or administrator will account for the proceeds of the sale,
mortgage, or other encumbrance;
d) If the requirements in the preceding subdivisions of this section have been
complied with, the court, by order stating such compliance, may
authorize the executor or administrator to sell, mortgage, or otherwise
encumber, in proper cases, such part of the estate as is deemed necessary,
and in case of sale the court may authorize it to be public or private, as
would be most beneficial to all parties concerned. The executor or
administrator shall be furnished with a certified copy of such order;
e) If the estate is to be sold at auction, the mode of giving notice of the time
and place of the sale shall be governed by the provisions concerning notice
of execution sale;
f) There shall be recorded in the registry of deeds of the province in which
the REAL estate thus sold, mortgage, or otherwise encumbered is situated, a
certified copy of the order of the court, together with the deed of the
executor or administrator for such REAL estate, which shall be as valid as if
the deed had been executed by the deceased in his lifetime.
SEC. 8. When court may authorize conveyance of REALTY which deceased
contracted to convey. Notice. Effect of deed. Where the deceased was in his
lifetime under contract, binding in law, to deed REAL property, or an interest
therein, the court having jurisdiction of the estate may, on application for that
purpose, authorize the executor or administrator to convey such property
according to such contract, or with such modifications as are agreed upon by
the parties and approved by the court; and if the contract is to convey REAL
property to the executor or administrator, the clerk of court shall execute the
deed. The deed executed by such executor, administrator, or clerk of court shall
be as effectual to convey the property as if executed by the deceased in his
lifetime; but no such conveyance shall be authorized until notice of the
application for that purpose has been given personally or by mail to all persons
interested, and such further notice has been given, by publication or otherwise, as
the court deems proper; nor if the assets in the hands of the executor or
administrator will thereby be reduced so as to prevent a creditor from receiving
his full debt or diminish his dividend.
 The provision presupposes that the contract entered into by the deceased
during his lifetime is valid and binding.
 There should be no controversy involving REAL property or interest
therein.
 Such sale must not reduce the value of the estate to the extent of
depriving creditors payment of their claims.
SEC. 9. When court may authorize conveyance of lands which deceased held
in trust. Where the deceased in his lifetime held REAL property in trust for
another person, the court may after notice given as required in the last preceding
section, authorize the executor or administrator to deed such property to the
person, or his executor or administrator, for whose use and benefit it was so held;
and the court may order the execution of such trust, whether created by deed or
by law.
 It is necessary that notice be given to all persons interested in the estate
PRIOR to the authorization to deed the property held in trust by the
decedent to the person entitled to the same.
 Moreover, the fact that creditors would be affected would not prevent
the conveyance since the property does not form part of the estate.
CHAPTER X
DISTRIBUTION AND PARTITION OF THE ESTATE
RULE 90
DISTRIBUTION AND PARTITION OF THE ESTATE
SEC. 1. When order for distribution of residue made. When the debts, funeral
charges, and expenses of administration, the allowance to the widow, and
inheritance tax, if any, chargeable to the estate in accordance with law, have
been paid, the court, on the application of the executor or administrator, or of a
person interested in the estate, and after hearing upon notice, shall assign the
residue of the estate to the persons entitled to the same, naming them and the
proportions, or parts, to which each is entitled, and such persons may demand
and recover their respective shares from the executor or administrator, or any
other person having the same in his possession. If there is a controversy before
the court as to who are the lawful heirs of the deceased person or as the
distributive shares to which each person is entitled under the law, the controversy
shall be heard and decided as in ordinary cases.
No distribution shall be allowed until the payment of the obligations above
mentioned has been made or provided for, unless the distributees, or any of them,
give a bond, in a sum to be fixed by the court, conditioned for the payment of
said obligations within such time as the court directs.

 In settlement of estate proceedings, the distribution of the estate properties
can only be made:
1) after all the debts, funeral charges, expenses of administration,
allowance to the widow, and estate tax have been paid; or
2) before payment of said obligations only if the distributees or any of
them gives a bond in a sum fixed by the court conditioned upon the
payment of said obligations within such time as the court directs, or
when provision is made to meet those obligation.
 After the foregoing payments are made, the residue may be distributed to
those entitled thereto.
 The practice in the distribution of the estates of deceased persons is to
assign the whole of the properties left for distribution to the heirs in a
certain definite proportion, an aliquot part pertaining to each of the
heirs.
 It is only after the payment of all debts, funeral expenses, charges of
administration, allowance to widow and inheritance tax shall have
been effected that the court should make the declaration of heirs or of
such persons as are entitled by law to the residue.
 However, what the court is enjoined from doing is the distribution
of the residue of the estate before its obligations are first paid, but
the court is not enjoined from making the declaration of heirs prior to
the satisfaction of these obligations.
EFFECT OF FINAL DECREE OF DISTRIBUTION
 A final decree of distribution of the estate of a deceased person vests the
title to the land of the estate in the distributees.
 If the decree is ERRONEOUS, it should be corrected by opportune
appeal, for once it becomes final, its binding effect is like any other
judgment in rem, unless properly set aside for lack of jurisdiction or
fraud.
 Where the court has validly issued a decree of distribution and the
same has become FINAL, the validity or invalidity of the project of
partition becomes irrelevant.
 The only instance where a party interested in a probate proceeding may
have a final liquidation set aside is when he is left out by reason of
circumstances beyond his control or through mistake or inadvertence not
imputable to negligence. Even then, the better practice to secure relief is
reopening of the same case by proper motion within the reglementary
period, instead of an independent action, the effect of which, if successful,
would be, as in the instant case, for another court or judge to throw out a
decision or order already final and executed and reshuffle properties long
ago distributed and disposed of.
LIQUIDATION
There are 2 REQUISITES before the distribution of the estate:
1) Liquidation; and
2) Declaration of heirs.
 LIQUIDATION refers to the determination of all assets of the estate and
payment of all debts and expenses.
 The declaration of heirs is undertaken to determine to whom the
residue of the estate should be distributed.
 The declaration is made in the same proceeding, a separate action
for the declaration of heirs not being the proper recourse.
 The decedent's net estate is ascertained by deducting all payable
obligations and charges from the value of the property owned by the
deceased at the time of death. Thereafter, all donations subject to collation
would be added to it. This is the partible estate. From there, the legitime of
the compulsory heirs can be established. Thereafter, the court may
determine whether a donation has prejudiced the legitimes.
PROJECT OF PARTITION
 Towards the end of the proceedings in a petition for settlement of estate, a
project of partition is usually prepared is usually prepared and
presented to the court.
 The project of partition is a proposal for distribution of the hereditary
estimates and determines the persons entitled thereto.
 The PROBATE COURT LOSES JURISDICTION of an estate under
administration only after the payment of all the debts and the remaining
estate delivered to the heirs entitled to receive the same.
 The finality of the approval of the project of partition by itself alone
does not terminate the probate proceeding.
 As long as the order of the distribution of the estate has not been
complied with, the probate proceedings cannot be deemed closed and
terminated.
 This means that a judicial partition is not final and conclusive. It
does not prevent an heir from bringing an action to obtain his share,
provided the prescriptive period has not closed.
Reyes vs. Regional Trial Court of Makati, Branch 142
G.R. No. 165744, August 11, 2008
FACTS:
Petitioner Oscar and respondent Rodrigo are two of the four children of the
spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each
owned shares of stock of Zenith Insurance Corporation (Zenith), a domestic
corporation established by their family. Pedro died in 1964, while Anastacia died
in 1993. Although Pedro's estate was judicially partitioned among his heirs
sometime in the 1970s, no similar settlement and partition appear to have been
made with Anastacia's estate, which included her shareholdings in Zenith. As of
June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo
owned 8,715,637 and 4,250 shares, respectively.
Zenith and Rodrigo filed a complaint with the Securities and Exchange
Commission (SEC) against Oscar. Rodrigo sought to obtain an accounting of
Zenith's funds which were formerly and presently in the control, custody, or
possession of Oscar. He also sought the determination of the shares of stock of his
parents. Rodrigo claimed that Oscar fraudulently appropriated their parents' shares
of stock. In the meantime, the jurisdiction over the matter was transferred to the
RTC. When Republic Act (R.A.) No. 8799 took effect, the SEC's exclusive and
original jurisdiction over cases enumerated in Section 5 of Presidential Decree
(P.D.) No. 902-A was transferred to the RTC designated as a special commercial
court. Thereupon, Oscar filed a Motion to Declare Complaint as Nuisance or
Harassment Suit, which the RTC partially granted.
Does the RTC of Makati, acting as a special commercial court, have jurisdiction
to settle the estate of the deceased?
HELD:
NO. More than the matters of injury and redress, what Rodrigo clearly aims to
accomplish through his allegations of illegal acquisition by Oscar is the
distribution of Anastacia's shareholdings without a prior settlement of her estate
an objective that, by law and established jurisprudence, cannot be done. The RTC
of Makati, acting as a special commercial court, has no jurisdiction to settle,
partition, and distribute the estate of a deceased. A relevant provision-Section 2 of
Rule 90 of the Revised Rules of Court that contemplates properties of the
decedent held by one of the heirs declares:
Questions as to advancement made or alleged to have been made by
the deceased to any heir may be heard and determined by the court having
jurisdiction of the estate proceedings, and the final order of the court
thereon shall be binding on the person raising the questions and on the heir.
Worth noting are this Court's statements in the case of Natcher vs. Court of
Appeals:
Matters which involve settlement and distribution of the estate of the
decedent fall within the exclusive province of the probate court in the
exercise of its limited jurisdiction.
It is clear that trial courts trying an ordinary action cannot resolve to
perform acts pertaining to a special proceeding because it is subject to
specific prescribed rules. [Emphasis supplied.]
That an accounting of the funds and assets of Zenith to determine the extent and
value of Anastacia's shareholdings will be undertaken by a probate court and not
by a special commercial court is completely consistent with the probate court's
limited jurisdiction. It has the power to enforce an accounting as a necessary
means to its authority to determine the properties included in the inventory of the
estate to be administered, divided up, and distributed. Beyond this, the
determination of title or ownership over the subject shares (whether belonging to
Anastacia or Oscar) may be conclusively settled by the probate court as a question
of collation or advancement. We had occasion to recognize the court's authority to
act on questions of title or ownership in a collation or advancement situation in
Coca us. Pangilinan where we ruled:
It should be clarified that whether a particular matter should be
 resolved by the Court of First Instance in the exercise of its general
jurisdiction or of its limited probate jurisdiction is in reality not a
jurisdictional question. In essence, it is a procedural question involving a
mode of practice "which may be waived."
As a general rule, the question as to title to property should not be
passed upon in the testate or intestate proceeding. That question should be
ventilated in a separate action. That general rule has qualifications or
exceptions justified by expediency and convenience.
Thus, the probate court may provisionally pass upon in an intestate or
testate proceeding the question of inclusion in, or exclusion from, the
inventory of a piece of property without prejudice to its final determination
in a separate action.
Although generally, a probate court may not decide a question of title
or ownership, yet if the interested parties are all heirs, or the question is one
of collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of third parties are not
impaired, the probate court is competent to decide the question of
ownership.
In sum, we hold that the nature of the present controversy is not one which may be
classified as an intra-corporate dispute and is beyond the jurisdiction of the special
commercial court to resolve. In short, Rodrigo's complaint also fails the nature of
the controversy test.
ADVANCE DISTRIBUTION OF THE ESTATE
Quasha Ancheta Pena and Nolasco Law Office us. LCN Construction Corp.
G.R. No. 174873, August 26, 2008
FACTS:
Raymond Triviere passed away on December 14, 1987. On January 18, 1988,
proceedings for the settlement of his intestate estate were instituted by his widow,
Amy Consuelo Triviere, before the Regional Trial Court (RTC) of Makati City,
Branch 63 of the National Capital Region (NCR), docketed as Special
Proceedings Case No. M-1678. Atty. Enrique P. Syquia (Syquia) and Atty.
William H. Quasha (Quasha) of the Quasha Law Office, representing the widow
and children of the late Raymond Triviere, respectively, were appointed
administrators of the estate of the deceased in April 1988.
Upon motion by the administrators, the RTC ordered the payment of P450,000.00
as share of the children of the deceased and P150,000.00 as share for the widow of
the deceased, Amy Consuelo Triviere.
LCN Construction Corporation, as the only remaining claimant against the
Intestate Estate of the Late Raymond Triviere, sought recourse from the Court of
Appeals through a petition for certiorari, contending that the awards violate
Section 1, Rule 90 of the Rules of Court, as there still exists its (LCN's) unpaid
claim in the sum of P6,016,570.65. The Court of Appeals revoked the shares
awarded by the RTC to the children and widow of the deceased on the basis that
Section 1, Rule 90 of the Rules of Court proscribes the distribution of the residue
of the estate until all its obligations have been paid.
Was the advance distribution of the estate of the decedent valid?
HELD:
NO. While the awards in favor of petitioner children and widow was not yet a
distribution of the residue of the estate, given that there was still a pending claim
against the estate, still, they did constitute a partial and advance distribution of the
estate. Virtually, the petitioner children and widow were already being awarded
shares in the estate, although not all of its obligations had been paid or provided
for. Section 2, Rule 109 of the Revised Rules of Court expressly recognizes
advance distribution of the estate, thus:
Section 2. Advance distribution in special proceedings.
Notwithstanding a pending controversy or appeal in proceedings to settle
the estate of a decedent, the court may, in its discretion and upon such terms
as it may deem proper and just, permit that such part of the estate as may
not be affected by the controversy or appeal be distributed among the heirs
or legatees, upon compliance with the conditions set forth in Rule 90 of
these rules.
The second paragraph of Section 1 of Rule 90 of the Revised Rules of Court
allows the distribution of the estate prior to the payment of the obligations
mentioned therein, provided that "the distributees, or any of them, gives a bond, in
a sum to be fixed by the court, conditioned for the payment of said obligations
within such time as the court directs."
In sum, although it is within the discretion of the RTC whether or not to pormit
the advance distribution of the estate, its exercise of such discretion should be
qualified by the following: [1] only part of the estate that is not affected by any
pending controversy or appeal may be the subject of advance distribution (Section
2, Rule 109); and [2] the distributees must post a bond, fixed by the court,
conditioned for the payment of outstanding obligations of the estate (second
paragraph of Section 1, Rule 90). There is no showing that the RTC, in awarding
to the petitioner children and widow their shares in the estate prior to the
settlement of all its obligations, complied with these two requirements or, at the
very least, took the same into consideration. Its Order of June 12, 2003 is
completely silent on these matters. It justified its grant of the award in a single
sentence which stated that petitioner children and widow had not yet received
their respective shares from the estate after all these years. Taking into account
that the claim of LCN against the estate of the late Raymond Triviere allegedly
amounted to P6,016,570.65, already in excess of the P4,738,558.63 reported total
value of the estate, the RTC should have been more prudent in approving the
advance distribution of the same.
Petitioners earlier invoked Dael us. Intermediate Appellate Court, where the Court
sustained an Order granting partial distribution of an estate.
However, Dael is not even on all fours with the case at bar, given that the Court
therein found that:
Where, however, the estate has sufficient assets to ensure equitable distribution of
the inheritance in accordance with law and the final judgment in the proceedings
and it does not appear there are unpaid obligations, as contemplated in Rule 90,
for which provisions should have been made or a bond required, such partial
distribution may be allowed. (Emphasis supplied.)
No similar determination on sufficiency of assets or absence of any outstanding
obligations of the estate of the late Raymond Triviere was made by the RTC in
this case. In fact, there is a pending claim by LCN against the estate, and the
amount thereof exceeds the value of the entire estate.
Furthermore, in Dael, the Court actually cautioned that partial distribution of the
decedent's estate pending final termination of the testate or intestate proceeding
should as much as possible be discouraged by the courts, and, except in extreme
cases, such form of advances of inheritance should not be countenanced. The
reason for this rule is that courts should guard with utmost zeal and jealousy the
estate of the decedent to the end that the creditors thereof be adequately protected
and all the rightful heirs be assured of their shares in the inheritance.
Hence, the Court does not find that the Court of Appeals erred in disallowing the
advance award of shares by the RTC to petitioner children and the widow of the
late Raymond Triviere.
 Although the right of an heir over the property of the decedent is inchoate as
long as the estate has not been fully settled and partitioned, the law allows a
co-owner to exercise rights of ownership over such inchoate right.
 Once an action for the settlement of an estate is filed with the court, the
properties included therein are under the control of the intestate court. And
not even the administrator may take possession of any property that is part
of the estate without the prior authority of the court.
 An heir of the deceased may sell his undivided or ideal share during the
pendency of the estate proceedings without the prior approval of the probate
court, he being the co-owner with other heirs of the estate.
 Court approval is necessary only if specific property of the estate
is sold.
REMEDY OF HEIR ENTITLED TO RESIDUE BUT NOT GIVEN HIS
SHARE
An heir entitled to the residue of the estate may demand his share through the
following courses of action:
1) A motion in the same probate or administration proceedings; or
2) A motion to reopen the settlement proceedings if it had already been closed.
 The heir should not file an independent action which would be tried by
another court or judge that might reverse a decision or order of the probate
court already final and executed and reshuffle properties long ago
distributed and disposed of.
 If the proceeding is already CLOSED and it involves persons who are
 non-parties to the partition, a motion to reopen may be filed by a non-party Order Setting petition for hearing
within 15 days or before the order closing the proceeding becomes final.
 With regard to parties to a partition agreement who have not received Notice of hearing
their share, their remedy would be to file a motion for execution within 5
years. 1. Publication of notice for 3 consecutive weeks (R76S3)
 Nevertheless, if other grounds are raised, such as forgery, the final 2. Notice by mail or personally to designated or known heirs, legatees,
judgment cannot be attacked except through a separate action. devisees, executor (R76S4)
 Like ordinary cases, the validity of a final judgment can be assailed
through a petition for relief under Rule 38, annulment of judgment Notice to known heirs, creditors, other interested persons (R79S3)
under Rule 47, and a petition for certiorari under Rule 65, assuming
that the judgment is void for want of jurisdiction. II - HEARING

REMEDY OF A PRETERITED HEIR Proof of notice of hearing

R76S5
 The intestate proceedings, although closed and terminated, can still be R79S5
opened within the prescriptive period upon petition by the preterited heir.
 The prescriptive period within which the preterited heir may initiate Evidence for Petitioner
the proceeding is 10 years, it being an action upon an obligation
created by law. 1. Death of decedent
 Where the judgment has become FINAL, the remedy of a party-heir would 2. Residence at time of death
be to file an independent suit against the parties and all other heirs for the
recovery of her share in the estate. Testimony/ies of subscribing Decedent left no will or there is no
witness/es (R76S5) competent and willing executor
INSTANCES WHEN THE COURT MAY ISSUE A WRIT OF EXECUTION (R79S5)
Proof when testator is petitioner Petitioner is qualified for appointment
GENERAL RULE - a probate court cannot issue a writ of execution (R76S12) (R78S1,6)
EXCEPTIONS -
1) To satisfy the contributive shares of the devisees/legatees heirs when the Evidence for Oppositor
latter had entered prior possession over the estate. (R88S6)
2) To enforce payment of the expenses of partition. (R90S3) File grounds for contest
3) To satisfy the costs when a person is cited for examination in probate (R76S10)
proceedings. (R142S13)
III - COURT ORDER
SEC. 2. Questions as to advancement to be determined. Questions as to
advancement made, or alleged to have been made, by the deceased to any heir Order or decision allowing will or admitting it to probate
may be heard and determined by the court having jurisdiction of the estate
proceedings; and the final order of the court thereon shall be binding on the Certificate of allowance attached to prove will (R76S13)
person raising the questions and on the heir.
Order for issuance of letters testamentary (R78 S4)
 Questions as to advancement made or alleged to have been made by the
deceased to any heir may be heard and determined by the court having Order for issuance of letters administration (R79S5)
jurisdiction of the estate proceedings; and the final order of the court
thereon shall be binding on the person raising the questions and on the heir. Issuance of letters by clerk of court
 While it may be true that the Rules used the word "may," it is nevertheless
clear that the same provision contemplates a probate court when it speaks Oath of executor or administrator
of the "court having jurisdiction of the estate proceedings."
 Thus, a court acting in its general jurisdiction, is devoid of authority Filing of executor or administrator’s bond (R81S1)
to render and adjudication and resolve the issue of advancement of
real property. Filing of inventory within 3 months (R81S1a)
 An action for reconveyance and annulment of title with damages is
not the proper suit to thresh out the issue. Accounting within 1 year (R81S1c)(R85S8)

SEC. 3. By whom expenses of partition paid. If at the time of distribution the
executor or administrator has retained sufficient effects in his hands which may
lawfully be applied for the expenses of partition of the properties distributed,
such expenses of partition may be paid by such executor or administrator
when it appears equitable to the court and not inconsistent with the intention
of the testator; otherwise, they shall be paid by the parties in proportion to their
respective shares or interest in the premises, and the apportionment shall be
settled and allowed by the court, and, if any person interested in the partition does
not pay his proportion or share, the court may issue an execution in the name
of the executor or administrator against the party not paying the sum assessed.
Actions by or against executor or administrator (R87)
IV - CLAIMS AGAINST ESTATE
Notice of filing of claims - time for filing not more than 12 months or less
than 6 months from first publication (R86S1,2)
Publication of notice for 3 consecutive weeks and posting (R86S3,4)
Filing of claim and answer thereto (R86S9,10)

SEC. 4. Recording the order of partition of estate. Certified copies of final Trial of contested claim (R86S12)
orders and judgments of the court relating to the real estate or the partition thereof
shall be recorded in the registry of deeds of the province where the property is Judgment approving or disapproving claim (R86S13)
situated.
V - PAYMENT OF DEBTS OF ESTATE
SETTLEMENT OF ESTATE STAGES
Debts paid in full if estate sufficient (R88S1)
I - PETITION
Order of payment if estate insolvent (R88S7)
TESTATE INTESTATE
Filing of petition for allowance of will Filing of petition for issuance of letter Order for payment of debts (R88S11)
- by executor, devisee, legatee, other of administration - person (R79S2)
interested person (R76S1,2) Time for payment not to exceed 1 year, extendible for 1 more year (R88S15)
Sales, mortgage and other encumbrances of property of decedent for paying
debts, etc. (R89)

VI - DISTRIBUTION AND PARTITION OF ESTATE

Rule 90

Approval of final accounting and project of partition

Actual distribution or delivery to heirs of their respective shares

VII - CLOSING

Order declaring proceedings closed and terminated

CHAPTER XI
ESCHEAT

RULE 91
 ESCHEATS
SEC. 1. When and by whom petition filed. When a person dies intestate,
seized of REAL property in the Philippines, leaving no heir or person by law
entitled to the same, the Solicitor General or his representative in behalf of the
Republic of the Philippines, may file a petition in the Court of First Instance of
the province where the deceased last resided or in which he had estate, if he
resided out of the Philippines, setting forth the facts, and praying that the estate of
the deceased be declared escheated.
NATURE OF PROCEEDINGS
 ESCHEAT is a proceeding whereby the state, by virtue of its sovereignty,
steps in and claims the real or personal property of a person who dies
intestate leaving no heir.
 In the absence of a lawful owner, a property is claimed by the estate
to forestall an open "invitation to self-service by the first comers."
 Escheat proceedings rest on the PRINCIPLE of ultimate ownership
by the state of all property within its jurisdiction.
REQUISITES FOR FILING OF PETITION
1) That a person died intestate
2) That he left no heirs or persons entitled by law to the same; and
3) That the deceased left properties.
THREE KINDS OF ESCHEAT
A petition for escheat may be filed under 3 circumstances.
1) Section 1 Rule 91 - a petition may be filed when a person dies intestate,
with real properties within the Philippines, leaving no heir entitled to the
same.
2) Section 5 Rule 91 - a petition for reversion of property alienated in
violation of the Constitution or statute.
3) Act No. 3936 - unclaimed balances in banks is also subject of escheat
proceedings.
WHERE FILED
 Regional Trial Court of the province where the deceased last resided or in
which he had estate, if he was a non-resident.
WHO MAY FILE PETITION
 Escheat proceeding must be initiated by the Solicitor General.
 All interested parties, such as the actual occupant and the adjacent lot
owners shall be personally notified of the proceedings and given the
opportunity to present their valid claims, otherwise the property will be
reverted to the State.
 "Interested party" is any person alleging to have a direct right or interest
in the property sought to be escheated.
WHO MAY OPPOSE PETITION
 Any person alleged to have a direct right or interest in the property sought
to be escheated, likewise an interested and necessary party, may properly
oppose the petition for escheat or file a claim thereto with the court within
the period provided for in Section 4 of the Rule.
 A respondent may file a motion to dismiss for failure to state a cause of
action, where the petition for escheat does not state facts which entitle
petitioner to the remedy prayed for. The respondent may also cite other
grounds for dismissal under the Rules of Court.
ESCHEAT PROCEEDINGS CANNOT BE CONVERTED INTO
SETTLEMENT OF ESTATE
 The proceedings were instituted as escheat proceedings and not for the
settlement of the estate of deceased persons.
 The court acquired jurisdiction to hear the petition for escheat by virtue of
the publication of the petition for escheat.
 The jurisdiction acquired cannot be converted into one for the
distribution of the properties of the decedent.
 For the distribution of the estate of the decedent to be instituted, the
proper petition must be presented and the proceedings should comply
with the requirements of the Rule.
 Hence, the escheat court does not have the power to order, or to
proceed with, the distribution of the estate of a decedent in escheat
proceedings, and adjudicate the properties to the oppositors.
SEC. 2. Order for hearing. If the petition is sufficient in form and substance,
the court, by an order reciting the purpose of the petition, shall fix a date and
place for the hearing thereof, which date shall be not more than six (6) months
after the entry of the order, and shall direct that a copy of the order be
published before the hearing at least once a week for six (6) successive weeks in
some newspaper of general circulation published in the province, as the court shall
be deem best.
NOTICE AND PUBLICATION
 The court must fix a date and place for the hearing of the petition.
 The date of hearing should not be more than 6 months after entry
of the order.
 Also, the order must be published at least once a week for 6 consecutive
weeks in newspaper of general circulation in the province.
 This is a deviation from the other special proceedings, which require
publication for three consecutive weeks.
 Publication of the notice of hearing is a jurisdictional requisite,
non-compliance with which affects the validity of the proceedings.
SEC. 3. Hearing and judgment. Upon satisfactory proof in open court on the
date fixed in the order that such order has been published as directed and that the
person died intestate, seized of real or personal property in the Philippines,
leaving no heir or person entitled to the same, and no sufficient cause being shown
to the contrary, the court shall adjudge that the estate of the estate of the
deceased in the Philippines, after the payment of just debts and charges, shall
escheat; and shall, pursuant to law, assign the PERSONAL estate to the
municipality or city where he last resided in the Philippines, and the REAL estate
to the municipalities or cities, respectively, in which the same is situated. If the
deceased never resided in the Philippines, the whole estate may be assigned to
the respective municipalities or cities where the same is located. Such estate shall
be for the benefit of public schools, and public charitable institutions and centers
in said municipalities or cities.
The court, at the instance of an interested party, or on its own motion, may order
the establishment of a permanent trust, so that the only income from the
property shall be used.
JUDGMENT IN ESCHEAT PROCEEDINGS
 A judgment in escheat proceedings when rendered by a court of competent
jurisdiction is conclusive against all persons with actual or constructive
notice, but not against those who are not parties or privies thereto.
 However, before the court may render judgment in an escheat
proceeding, it must first be satisfactorily proved in open court that:
a) order has been published as directed; and
b) the person died intestate with real or personal property in the
Philippines, leaving no heir or person entitled to the same.
 The court shall order the payment of just debts and charges, and thereafter
adjust the estate escheated in favor of the state.
The properties shall be distributed as follows:
Decedent was a resident of the Philippines
Personal property Municipality or city where he last resided
in the Philippines
Real property Municipalities or cities in which the
property is situated
Decedent never resided in the Respective municipalities or cities where
Philippines the properties are located
WHEN PROCEEDINGS WILL NOT PROSPER
In Municipal Council of San Pedro Laguna vs. Colegio de San Jose, the
petitions sought to escheat a certain Hacienda de San Pedro Tunasan. In their
petition, the Municipality based their claims to escheat the property on the fact
that certain properties including the Hacienda, were confiscated by the Crown of
Spain, which later passed on title to the property to the Government of the
Philippines. The Court ruled that the petition for escheat of Hacienda de San
Pedro Tunasan cannot prosper. It explained that the Municipality cannot claim
that the same be escheated to it, because it is no longer the case of real property
owned by a deceased person who has not left any heirs or person who may legally
claim it.
It has also been held that Rule 91 does not cover properties taken from enemy
nationals as a result of World War II and required to be transferred to the
Republic of the Philippines by the United States in accordance with its own
enactment commonly known as the Philippine Property Act of 1946. Such
properties, including the land in dispute, belong to the Philippine government not
by virtue of the escheat proceedings but on the strength of the transfer authorized
and required by the said Act.
WAIVER OF RIGHT TO ESCHEAT
 The right to escheat may be waived, either expressly or impliedly.
 Hence, when the right to escheat claimed by the municipality has
existed long prior to the registration proceedings instituted by the
Roman Catholic Archbishop of Manila, and, as the same has not been
asserted in said proceedings, it is deemed to have been completely
waived.
DECLARATION THAT A PERSON IS PRESUMPTIVELY DEAD IN
ESCHEAT PROCEEDINGS
Vicente Tan vs. City of Davao
G.R. No. L-44347, September 29, 1988
FACTS:
On September 12,1962, the City of Davao filed a petition in the Court of First
Instance of Davao, Branch I to declare Dominga Garcia's land escheated in its
favor. It alleged that Dominga Garcia and her children are presumed to be dead
and since Dominga Garcia left no heir or person by law entitled to inherit her
estate, the same should be escheated pursuant to Rule 92 (now Rule 91) of the
Rules of Court.
Ramon Pizarro opposed the escheat petition on the ground that courts are not
authorized to declare that a person is presumed to be dead and that Dominga
Garcia's being in Red China is not a sufficient ground to deprive her of her
property by escheat proceedings.
May the court declare an absentee presumptively dead in connection with an
action for settlement of the intestate estate of the absentee?
HELD:
YES. The Court of Appeals did not err in affirming the trial court's ruling that
Dominga Garcia and her heirs may be presumed dead in the escheat proceedings
as they are, in effect, proceedings to settle her estate. Indeed, while a petition
instituted for the sole purpose of securing a judicial declaration that a person is
presumptively dead cannot be entertained if that were the only question or matter
involved in the case, the courts are not barred from declaring an absentee
presumptively dead as an incident of, or in connection with, an action or
proceeding for the settlement of the intestate estate of such absentee.
Direct evidence proving that Dominga Garcia, her husband. and her children are
in fact dead, is not necessary. It may be presumed under Article 390 of the Civil
Code which provides:
ART. 390. After an absence of seven years, it being unknown whether or not the
absentee still lives, he shall be presumed dead for all purposes, except for those of
succession.
The absentee shall not be presumed dead for the purpose of opening his
succession till after an absence of ten years.
The evidence of the City of Davao preponderantly shows that in 1923 Dominga
Garcia and her family left the Philippines bound for China. Since then until the
instant petition was filed on September 12, 1962, a period covering about 39 years,
nothing had been heard about them.
SEC. 4. When and by whom claim to estate filed. If a devisee, legatee, heir,
widow, widower, or other person entitled to such estate appears and files a claim
thereto with the court within five (5) years from the date of such judgment, such
person shall have possession of and title to the same, or if sold, the
municipality or city shall be accountable to him for the proceeds after
deducting reasonable charges for the care of the estate; but a claim not made
within the said time shall be forever barred.
PERIOD FOR FILING CLAIM TO ESTATE
 Since escheat is one of the incidents of sovereignty, the state may, and
usually does, prescribe the conditions and limits the time within which a
claim to such property may be made.
 The procedure by which the escheated property may be recovered is
generally prescribed by statute, and a time limit is imposed within which
such action must be brought.
 A devisee, legatee, widow, widower, or other person entitled to the estate
must file a claim with the court within 5 years from the date of such
judgment in the escheat proceedings.
 The 5-year period is not a device capriciously conjured by the state to
defraud any claimant; on the contrary, it is decidedly prescribed to
encourage would-be claimants to be punctilious in asserting their
claims, otherwise they may lose them forever in a final judgment.
 Thereafter, such claimant shall have possession and title thereto.
 If the property has already been SOLD, the municipality or city shall
accountable to him for proceeds, after deducting reasonable charges of care
of estate.
 Hence, where claimants contested the escheat judgment in the guise
of the petition for annulment filed before the Court of Appeals after
the lapse of almost 8 years, the belated assertion of right militates
against recovery.
 Where a person comes into an escheat proceeding as a claimant, the
burden is on such intervenor to establish his title to the property and his
right to intervene.
LACK OF JURISDICTION OF ESCHEAT COURT
 In the absence of jurisdiction to order an escheat due to non-compliance
with jurisdictional requirements under the Rules of Court, the court has no
jurisdiction to grant the remedy enabling the devisee, legatee, heir, widow,
widower or other person entitled to the estate to appear within a specific
period from the date of the decree of escheat and file a claim to the estate.
SEC. 5. Other actions for escheat. Until otherwise provided by law, actions
reversion or escheat of properties alienated in violation of the Constitution or of
any statute shall be governed by this rule, except that the action shall be
instituted in the province where the land lies in whole or in part.
ESCHEAT AND REVERSION DISTINGUISHED
 Escheat and reversion proceedings have the same effects, but different
procedures are followed.
CONSTITUTIONAL BASIS
Section 5 of Rule 91 is primarily based on Section 7, Article XII of the
Constitution, which provides:
"Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain."
 Thus, escheat proceedings may be instituted as a consequence of a
violation of Article XIII of the Constitution, which prohibits transfers of
private agricultural land to aliens, whereas an action for reversion is
expressly authorized under the Public Land Act.
IDLE AGRICULTURAL LAND MAY BE SUBJECT TO REVERSION
PROCEEDINGS
 Under R.A. No. 8435, otherwise known as the "Agriculture and Fisheries
Modernization Act of 1997" (approved on December 22, 1997), idle
agricultural land may be subject to reversion proceedings.
 Section 11 of said law provides:
"Section 11. Penalty for Agricultural Inactivity and Premature
Conversion. Any person or juridical entity who knowingly or deliberately
causes any irrigated agricultural lands seven (7) hectares or larger, whether
contiguous or not, within the protected areas for agricultural development,
as specified under Section 6 in relation to Section 9 of this Act, to lie idle
and unproductive for a period exceeding one (1) year, unless due to force
majeure, shall be subject to an idle land tax of Three Thousand Pesos
(P3,000.00) per hectare per year. In addition, the violator, shall be required
to put back such lands to productive agricultural use. Should the continued
agricultural inactivity, unless due to force majeure, exceed a period of two
(2) years, the land shall be subject to escheat proceedings."
ESCHEAT OF UNCLAIMED BALANCES
 Unclaimed balances include credits or deposits of money, bullion, security
or other evidence of indebtedness of any kind, and interest thereon with
banks in favor of any person unheard from for a period of 10 years of
more, together with the interest and proceeds thereof.
 Such unclaimed balances shall be deposited with the government.
 Escheat is not a proceeding to penalize depositors for failing to
deposit to or withdraw from their accounts. It is a proceeding
whereby the state compels the surrender to it of unclaimed deposit
balances when there is substantial ground for a belief that they have
been abandoned, forgotten, or without an owner.
questions involved therein. Private respondent bank being a real party in
interest, it may and can file a motion to dismiss on the ground of improper
venue.
MULTIPLE ACTIONS ALLOWED
 The phrase "or actions" in Section 3 of Act No. 3936 is very significant. It
manifests awareness on the part of the legislators that a single action to
cover all banks wherever located in the Philippines would not be legally
feasible in view of the venue prescribed for such action under the same
section, i.e., the province where the bank is located.

 Act No. 3936, as amended, outlines the proper procedure to be followed by

banks and other similar institutions in filing a sworn statement with the
Treasurer concerning dormant accounts.
 Section 2 thereof sets a detailed system for notifying depositors of
unclaimed balances.
 This notification is meant to inform them that their deposit could
be escheated if left unclaimed.
 Accordingly, before filing a sworn statement, banks and other
similar institutions are under obligation to communicate with owners
of dormant accounts.
 The PURPOSE of this initial notice is for a bank to determine
whether an inactive account has indeed been unclaimed, abandoned,
forgotten, or left without an owner.
 If the depositor simply does not wish to touch the funds in the
meantime, but still asserts ownership and dominion over the
dormant account, then the bank is no longer obligated to
include the account in its sworn statement. It is not the intent of
the law to force depositors into unnecessary litigation and
defense of their rights, as the state is only interested in
escheating balances that have been abandoned and left without
an owner.
 In case the bank complies with the provisions of the law and the unclaimed
balances are eventually escheated to the Republic, the bank "shall not
thereafter be liable to any person for the same and any action which may
be brought by any person against in any bank xxx for unclaimed balances
so deposited x x x shall be defended by the Solicitor General without cost
to such bank."
 Otherwise, should it fail to comply with the legally outlined
procedure to the prejudice of the depositor, the bank may not raise the
defense provided under Section 5 of Act No. 3936, as amended.

PARTIES

 An action to recover unclaimed balances shall be commenced by the

Solicitor General in an action for escheat in the name of the People of the
Philippines in the RTC of the province where the bank is located, in which
shall be joined as parties the bank and such creditors or depositors.

 The REASON FOR JOINING THE BANK AS A PARTY was explained

in Republic of the Philippines vs. Court of First Instance of Manila:

"A real party in interest has been defined as the party who would be
benefitted or injured by the judgment of the suit or the party entitled to avail
of the suit. There can be no doubt that private respondent bank falls under
this definition for the eschent of the dormant deposits in favor of the
government would necessarily deprive said bank of the use of such deposits.
It is in this sense that it stands to be injured by the judgment of the suit;
and it is for this reason that Section 3 of Act No. 3936 specifically provides
that the bank shall be joined as a party in the action for escheat, thus:

Section 3. Whenever the Attorney General shall be informed of such

unclaimed balances, he shall commence an action or actions in the name of
the People of the Philippines in the Court of First Instance of the province
where the bank is located, in which shall be joined as parties the bank and
such creditors or depositors. All or any member of such creditors or
depositors or banks, may be included in one action.

Indeed, if the bank were not a real party in interest, the legislature
would not have provided for its joining as a party in the escheat
proceedings.

Besides, under Section 2, Rule 3 of the Rules of Court, private

respondent bank is a real party in interest as its presence in the action
is necessary for a complete determination and settlement of the