Rule 82: Revocation of Administration, Death,

Resignation and Removal of Executors and

Administrators

Relevant Issue:
WON the administrators are already entitled
for the payment.

Section 2. Court may remove or accept

resignation
of
executor
or
administrator,
proceedings upon death, resignation or removed

Relevant Ruling:
Petitioner Quasha Law Office is entitled to
attorney's fees for legal services rendered in the
settlement of the estate of their deceased which are
chargeable to the estate of Raymond Trieviere.
However, even if it is within the discretion of
the RTC whether or not to permit 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 that the following
requirements are complied with.

Suntay III v. Cojuangco-Suntay (supra)

Relevant Ruling:
The SC stated that it is patently clear that the
CA erred in excluding Emilio III from the administration
of the decedents estate. As Federicos adopted son,
Emilio IIIs interest in the estate of Cristina is as much
apparent to this Court as the interest therein of
respondent, considering that the CA even declared
that "under the law, [Federico], being the surviving
spouse, would have the right of succession over a
portion of the exclusive property of the decedent,
aside from his share in the conjugal partnership." The
reasoning that Emilio IIIs nomination was subject to a
suspensive condition and rendered inoperative by
reason of Federicos death wholly inapplicable to the
case at bar.
Hilado v. CA (supra)

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.

Relevant Ruling:
On
complaints
against
the
general
competence of the administrator. The proper remedy
is to seek the removal of the administrator in
accordance with Section 2, Rule 82.
Quasha Ancheta Pena and Nolasco Law office v.
LCN Construction Corporation, G.R. 120575
Relevant Facts:
Raymond Triviere died on 1987. The
settlement of his intestate estate was instituted by his
widow, Amy Triviere. Atty. Syquia and Atty. Quasha,
representing the heirs of the late Raymond Triviere,
were appointed administrators of the estate. As
administrators they incurred expenses related to the
act of administration.
In 1995, Atty. Syquia and Atty. Quasha filed
before the RTC a Motion for Payment of their litigation
expenses but the RTC denied the Motion.On 2002,
Atty. Syquia and Atty. Zapata filed another Motion for
Payment.
LCN filed its opposition to the Motion made on
2002. LCN asserted that contrary to what was stated
in the second Motion for Payment, Sec. 7, Rule 85 of
the RoC was inapplicable,since the administrators
failed to establish that the estate was large, or that its
settlement was attended with great difficulty, or
required a high degree of capacity on the part of the
administrators. Finally, LCN argued that its claims are
still outstanding and chargeable against the estate of
the late Raymond Triviere.
RTC granted the 2nd motion for payment but
reduced the sums to be paid. LCN filed a Motion for
Reconsideration but it was denied by the RTC. LCN
sought recourse from the CA and it ruled in favour of
LCN.

Olivia Pascual v. CA , G.R. 120575

Relevant Facts:
Don Andres Pascual died intestate on 1973 and was
survived by his widow Dona Adela Pascual and the
children of his full-blooded and half-blooded brothers.
Adela filed a petition for letters of administration over
the estate of her husband. The court appointed her
special administratrix. To assist her with said
proceedings, she hired Atty. Jesus I. Santos, herein
private respondent, as her counsel for a fee equivalent
to fifteen 15% of the gross estate of the decedent.
The heirs of the decedent moved for the
approval of their Compromise Agreement, stipulating
that 3/4 of the estate would go to Adela and 1/4 to the
other heirs.The intestate court approved said
Agreement on 1985.
On August 18, 1987, while the settlement was
still pending, Adela died, leaving a will which named
the petitioner as the sole universal heir. The latter filed
at the RTC of Malabon a petition for the probate of said
will.
Six years after Adelas death, the lower court
rendered a decision that disposed of the estate in
accordance to the compromise agreement. The court
also awards the attorneys fees of Atty. Jesus Santos
equivalent to 15% of the share of the estate of Adela.
Atty. Santos filed a Motion for the Issuance of a
Writ of Execution insofar as the payment of his
attorneys fees was concerned. Despite opposition from
the petitioner, the motion was granted by the the
intestate court.
Feeling aggrieved, petitioner filed with the CA
a petition for annulment of the award of attorneys
fees. CA dismissed the petition

Relevant Issue:
WON the awarding of attorneys fees is void
because it was made after the trial court had lost its
jurisdiction over the attorneys client by reason of
Adelas death.
Relevant Ruling:
No. The death of Adela did not ipso facto
extinguish the monetary claim of private respondent
or require him to refile his claim with the court hearing
the settlement of her testate estate. Had he filed the
claim against Adela personally, the rule would have
applied. However, he did so against the estate of Don
Andres.
The intestate courts jurisdiction subsists
because the proper party in this case is the estate of
Don Andres, which is distinct and separate from that of
Adela
who
merely
served
as
the
formers
administratrix. It is well-settled that a monetary claim
against the person administering an estate, in relation
to his or her acts of administration, in its ordinary
course, can be filed at the court where a special
proceeding for the settlement of the estate is pending.
Sec. 3 acts before revocation, resignation or
removal to be valid
Vda De Bacaling v. Laguna, G.R. L-26694
Relevant Facts:
Hector Laguna is the registered owner of a
residential land situated at La Paz, Iloilo City.Petitioner
and her late husband, Dr. Ramon Bacaling, with the
acquiescence
of
private
respondent
Laguna,
constructed a residential house on a portion of said lot
paying a monthly rental of P80.00. Unable to pay the
lease rental from July 1959 to September 1961 an
action for ejectment was filed by private respondent
against petitioner in her capacity as judicial
administratrix of the estate of her late husband, Dr.
Bacaling.
The petitioner and private respondents had a
compromise agreement but the petitioner failed to
comply with the compromise agreement.
Petitioner moved for reconsideration to quash
the writ of execution. Laguna filed an opposition to the
petitioner's
motion,
alleging
that
as
judicial
administratrix she was legally authorized to enter into
the amicable settlement which was the basis of the
decision sought to be executed and, therefore, her act
was binding upon the present judicial administrator,
Atty. Roberto Dineros, who replaced petitioner upon
her discharge as such on November 28, 1964.
Petitioners motion for reconsideration was
dismissed. It was appealed to the CA and the same
was dismissed.
The probate court approved the order of
demolition of the house in controversy.Petitioner
interposed an opposition allegingthat she was no
longer in control of the estate funds when the
stipulated obligations in the amicable, that the
residential house to be demolished is worth
P35,000.00 for which she is entitled to
reimbursement as a builder in good faithand that the
guardian ad litem of the minor children was not

notified of the motion for the issuance of an order of

demolition.
Relevant Issue:
WON the acts of the petitioner as judicial
administratrix prior to her discharge or removal are
valid and binding upon her successor.
Relevant Ruling:
Yes. Under Section 3, Rule 82 of the Rules of
Court, petitioner's lawful acts before the revocation of
her letters of administration or before her removal
shall have the same validity as if there was no such
revocation or removal. It is elementary that the effect
of revocation of letters testamentary or of
administration is to terminate the authority of the
executor or administrator, but the acts of the executor
or administrator, done in good faith prior to the
revocation of the letters, will be protected, and a
similar protection will be extended to rights acquired
under a previous grant of administration.
Rule 83: Inventory and Appraisal, Provision for
Support of Family
Section 1.Inventory and Appraisal
Returned within Three Months

to

be

Aranas vs Mercado, G.R. No. 156407

Relevant Facts:
Emigdio Mercado died intestate. He was
survived by wife Teresita, their 5 children and 2
children from first wife. Teresita was appointed as
administrator.
Thelma (daughter of the first wife) questioned
the inventory submitted by Teresita, claiming some
properties owned by Emigdio were excluded.
RTC demanded Teresita to include in the
inventory properties excluded. CA reversed the RTC
decision.
Relevant Issue:
WON RTC committed GAD in directing the
inclusion of the properties in the estate of the
decedent?
Relevant Ruling:
No.Rule 83, Section 1 requires administrator to
submit an inventory of all the properties of the
decedent. This includes properties, which could be his
properties. However, the word ALL is qualified by the
phrase which has come into his possession or
knowledge, which signifies that the properties must be
known to the administrator to belong to the decedent
or are in her possession as the administrator.
The objective of the ROC in requiring the
inventory and appraisal of the estate of the decedent
is to aid the court in revising the accounts and
determining the liabilities of the executor or the
administrator, and in making a final and equitable
distribution (partition) of the estate and otherwise to
facilitate the administration of the estate. Hence, the
RTC is vested with wide discretion on the question of
what properties should be included in the inventory.

Hilado vs CA (supra)
Relevant Ruling:
Section 1 of Rule 83 requires the administrator to
return to the court a true inventory and appraisal of all
the real and personal estate of the deceased within three
(3) months from appointment, while Section 8 of Rule 85
requires the administrator to render an account of his
administration within one (1) year fromreceipt of the
letters testamentary or of administration. We do not
doubt that there are reliefs available to compel an
administrator to perform either duty, but a person whose
claim against the estate is still contingent is not the party
entitled to do so. Still, even if the administrator did delay
in the performance of these duties in the context of
dissipating the assets of the estate, there are protections
enforced and available under Rule 88 to protect the
interests of those with contingent claims against the
estate.
Section 3. Allowance to Widow and Family
Heirs of Bang v. Sy, G.R. 114217
Relevant Facts:
Sy Bang died intestate in 1971 and in an out-ofcourt conference, the children of both marriages divided
upon themselves the control and management of Sy
Bangs various businesses.
Rolando filed a Complaint forpartition of the
estate against the petitioners.Rosita Ferrera-Sy also filed
a motion for payment of widows allowance. She claimed
that she was not given any widows allowance. She cited
Rule 83(3) of the RoC.
Petitioners argued that Rule 83(3) is granted only
during the settlement of the estate and such allowance
shall be taken from the common mass of property
during liquidation. Since this case is a special civil action
for partition under Rule 69, Rosita is not entitled to any
widows allowance.
The Court granted Rositas motion for payment of
widows allowance.
Petitioners argued that Rosita had already
executed a Sinumpaang Salaysay waiving any claims
against the petitioners in exchange of a parcel of land
and 1 million pesos. Respondents countered that Rosita
was no longer in full possession of her mental faculties
when she signed the waiver.
Petitioners also argued that under Rule 83(3) a
widows allowance can only be paid in an estate
proceeding. Even if the case for partition be considered
as estate proceedings, only the trial court hearing the
partition case had exclusive jurisdiction to execute the
payment of the allowance.
In the meantime, Respondents filed a joint
petition for the guardianship of Rosita Ferrer-Sy where
Rosauro Sy, who sought to be named special guardian,
filed before the guardianship court a motion to order the
deposit of the widows allowance.
The Court ruled in favor of the deposit of the
widows allowance. The petitioners all failed to comply

with the ruling. They were all found guilty of contempt of

court.
The petitioners, who are now Zenaida and Emma,
argued that they should not be made to pay the
allowance as they did not have any participation in the
management of the businesses of Sy Bang.
Also, the said allowance must come from the
estate of Sy Bang and not from Jose or any of the latters
heirs.
Relevant Issues:
1. W/N the Guardianship court has exceeded its
jurisdiction in directing the deposit of the widows
allowance?
2. W/N the respondents are also liable for the
payment of the widows allowance as heirs of Sy Bang?
Relevant Ruling:
1. YES.The court hearing the petition for
guardianship had limited jurisdiction. It had no jurisdiction
to enforce payment of the widows allowance.
The court cited in Rule 83 (3) is the court
hearing the settlement of the estate and it is this court
which has jurisdiction over the properties of the estate, to
the exclusion of all the other courts.
In a cited case, the court said that the
Guardianship Court may order the delivery of the
property of the ward to the guardian only if the property
clearly belongs to the ward or if the title has been
judicially decided.
2. NO. The widows allowance is chargeable to
the estate of Sy Bang and since petitioners are the one
holding the properties belonging to Sy Bang, they should
pay for the allowance.
In the 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 obligations.
Estate of Ruiz vs CA, G.R. 118671
Relevant Facts:
Hilario Ruiz died leaving a holographic will
naming as heirs his son Edmond Ruiz (Petitioner), his
adopted daughter, Maria Ruiz-Montes (respondent),
and his three granddaughters.
Edmond was named as the executor. However,
he did not take any action for the probate of his
fathers holographic Will. Hence, it was the respondent
who filed a petition for the probate of the Will.
However, Edmond opposed the petition on the ground
that it was executed under undue influence.

Respondent filed a Motion for Issuance of

Certificate of Allowance of Probate Will. RTC granted
the respondents motion and ordered the delivery of
the titles to and possession of the properties, upon the
filing of a bond of P50,000.00.

attained majority age, two are gainfully employed and

one is married as provided for under Sec. 3 Rule 83 of the
Rules of Court.

Petitioner appealed but the appellate court

dismissed the petition and sustained the probate
courts order.

Whether private respondents are entitled to any

allowance

Relevant Issue:
WON the probate court, prematurely partitioned and
distributed the estate despite the existence of
obligations of the estate.
Relevant Ruling:
The probate court erred in granting the
distribution. No distribution shall be allowed until the
payment of the obligations 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 the case at bar, the questioned order
speaks of notice to creditors, not payment of debts
and obligations. Hilario Ruiz allegedly left no debts
when he died but the taxes on his estate had not been
paid, much less ascertained. The estate tax is one of
those obligations that must be paid before distribution
of the estate. Notably, at the time the order was
issued the properties of the estate had not yet been
inventoried and appraised. Hence, there being no
inventory and appraisal, and the consequent tax
liability not having been ascertained, the bond
amounting to P50, 000 cannot be said to have proper
basis.
Santero v. CFI of Cavite, GR 61700-03
Relevant Facts:
Petitioners Princesita Santero-Morales, Federico
Santero and Winy Santero are the children of the late
Pablo Santero with Felixberta Pacursa.
Private respondents Victor, Rodrigo, Anselmina
and Miguel all surnamed Santero are 4 of the 7 children
begotten by the same Pablo Santero with Anselma Diaz.
Both sets of children are the natural children of
the late Pablo Santero since neither of their mothers was
married to their father Pablo.
Private respondents filed a Motion for Allowance
thru their guardian Anselma Diaz on the ground of
support which included educational expenses, clothing
and medical necessities. The Court granted said motion
and the private respondents were given an allowance
prayed for in their motion.
Private respondents filed another Motion for
Allowance to include Juanita, Estelita and Pedrito all
surnamed Santero as children of the late Pablo Santero
with Anselma Diaz praying that an order be granted
directing the administrator Reynaldo Evaristo, to deliver
the sum of P6,000 to each of the 7 children of Anselma
Diaz as their allowance from the estate of Pablo Santero.
Petitioners argue that the private respondents are
not entitled to any allowance since they have already

Issue:

Ruling:
YES. The controlling provision of law is not Rule
83, Sec. 3 of the New Rules of Court but Arts. 290 and
188 of the Civil Code reading as follows:
Art. 290. Support is everything that is
indispensable for sustenance, dwelling, clothing and
medical attendance, according to the social position of
the family.
Support also includes the education of the person
entitled to be supported until he completes his education
or training for some profession, trade or vocation, even
beyond the age of majority.
Art. 188. From the common mass of property
support shall be given to the surviving spouse and to the
children during the liquidation of the inventoried property
and until what belongs to them is delivered; but from this
shall be deducted that amount received for support which
exceeds the fruits or rents pertaining to them.
The fact that private respondents are of age,
gainfully employed, or married is of no moment and
should not be regarded as the determining factor of their
right to allowance under Art. 188. While the Rules of
Court limit allowances to the widow and minor or
incapacitated children of the deceased, the New Civil
Code gives the surviving spouse and his/her children
without distinction. Since the provision of the Civil Code,
a substantive law, gives the surviving spouse and to the
children the right to receive support during the liquidation
of the estate of the deceased, such right cannot be
impaired by Rule 83 Sec. 3 of the Rules of Court which is
a procedural rule. Be it noted however that with respect
to "spouse," the same must be the "legitimate spouse"
(not common-law spouses who are the mothers of the
children here).

Rule 84: General Power and Duties of Executors

and Administrators
Sec. 2 Executor or Administrator to keep building
in repair
Silverio v. CA, G.R. 178933

Relevant Facts:
Beatriz Silverio died intestate and was survived
by her spouse, Ricardo Silverio, Sr. who filed an intestate
proceeding for the settlement of her estate.

During the pendency of the case, Ricardo Silverio,

Jr. (petitioner) filed a petition to remove Ricardo Silverio,
Sr. as the administrator of the subject estate.
The RTC granted the petition, removed Ricardo
Silverio, Sr. as administrator of the estate and appointed
Ricardo Silverio, Jr. as the new administrator.
Ricardo Silverio Jr. filed an Urgent Motion for an
Order Prohibiting Any Person to Occupy / Stay / Use Real
Estate Properties Involved in the Intestate Estate of the
Late Beatriz Silverio, Without Authority from this
Honorable Court.
The RTC directed Nelia Silverio-Dee (respondent)
to vacate the property at No. 3, Instia, Forbes Park,
Makati.
Nelia
Silverio-Dee
filed
a
Motion
for
Reconsideration of the Omnibus Order contending that
Ricardo Silverio, Sr. had given him authority to occupy
the property.
The RTC denied the MR. The alleged authority
given by Ricardo Silverio Sr. for Nelia Silverio-Dee to
occupy the property was null and void since the
possession of estate property can only be given to a
purported heir by virtue of an order from the court (Sec.
2, Rule 84, Revised Rules of Court);
In fact, the Executor or Administrator shall have
the right to the possession and management of the real
as well as the personal estate of the deceased only when
it is necessary for the payment of the debts and
expenses of administration (Sec. 3, Rule 84, Revised
Rules of Court).
In the same Order, the RTC also recalled its
previous order granting Ricardo Silverio Jr. with letters of
administration over the intestate estate of Beatriz Silverio
and reinstated Ricardo Silverio, Sr. as the administrator.
The RTC also allowed the sale of various
properties of the intestate estate of the late Beatriz
Silverio to partially settle estate taxes, penalties,
interests and other charges due thereon. Among the
properties authorized to be sold was the one located at
No. 3, Intsia, Forbes Park, Makati City.
Nelia Dee filed a Notice of Appeal from the
Assailed Order but was denied on the ground that it was
not perfected within the reglementary period. But, the CA
granted the prayer for the issuance of a TRO.
Issue:
Whether Nelia Silverio-Dee had the right to use
and occupy the property in question.
Ruling:
NO. In Rule 84, Sec. 2 of the Rules of Court, the
administrator may only deliver properties of the estate to
the heirs upon order of the Court. Similarly, under Rule
90, Sec. 1 of the Rules of Court, the properties of the
estate shall only be distributed after the payment of the
debts, funeral charges, and other expenses against the
estate, except when authorized by the Court.
Verily, 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.
In the instant case, the purported authority of
Nelia Silverio-Dee, which she allegedly secured from
Ricardo Silverio, Sr., was never approved by the probate
court. She, therefore, never had any real interest in the
property in question.
Sec. 3 Executor or Administrator to Retain Whole
Estate to Pay Debts and to Administer Estate not
willed
Silverio v. CA (supra)
Estate of Ruiz v. CA (supra)
Relevant Ruling:
No distribution shall be allowed until the payment of the
obligations 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. The
estate tax is one of those obligations that must be paid
before distribution of the estate.
Rule 85:General Power and Duties of Executors and
Administrators
Sec. 8 When Executor or Administrator to Render
Account
Hilado v. CA (supra)
Relevant Ruling:
Section 1 of Rule 83 requires the administrator to
return to the court a true inventory and appraisal of all
the real and personal estate of the deceased within three
(3) months from appointment, while Section 8 of Rule 85
requires the administrator to render an account of his
administration within one (1) year fromreceipt of the
letters testamentary or of administration.
Rule 86:
Boston Equity Resources Inc. v. CA, GR 173946
Relevant Facts:
Boston Equity Resources, Inc (petitioner) filed a
complaint for sum of money against spouses Manuel and
Lolita Toledo. However a motion for substitution was filed
by the petitioner praying that Manuel be substituted by
his children as party-defendant when Lolita (private
respondent) informed the court that Manuel is already
dead even before the filing of the complaint.
The motion was granted by the trial court.
Respondent filed a motion to dismiss the complaint on
the ground that:
The complaint failed to implead an indispensable
party or a real party in interest
The trial court did not acquire jurisdiction over the
person of Manuel pursuant to Section 5, Rule 86 of the
Revised Rules of Court

The court must also dismiss the case against Lolita

Toledo in accordance with Section 6 Rule 86 of the Rules
of Court.
The trial court denied the motion to dismiss. CA
reversed the decision
Relevant Issue:
Whether or not the estate of Manuel Toledo is an
indispensable party
Relevant Ruling:
NO. An indispensable party is one who has such
an interest in the controversy or subject matter of a case
that a final adjudication cannot be made in his or her
absence, without injuring or affecting that interest.
It is clear that the estate of Manuel is not an
indispensable party to the collection case, for the simple
reason that the obligation of Manuel and his wife,
respondent herein, is solidary.
In other words, the collection case can proceed
and the demands of petitioner can be satisfied by
respondent only, even without impleading the estate of
Manuel.
The Court of Appeals erred in its interpretation
when it held that the claim of petitioner should have been
filed against the estate of Manuel in accordance with
Sections 5 and 6 of Rule 86 of the Rules of Court.
The Court held that where two persons are bound
in solidum for the same debt and one of them dies, the
whole indebtedness can be proved against the estate of
the latter, the decedents liability being absolute and
primary.
It is evident from the foregoing that Section 6 of
Rule 87 provides the procedure should the creditor desire
to go against the deceased debtor, but there is certainly
nothing in the said provision making compliance with
such procedure a condition precedent before an ordinary
action against the surviving solidary debtors, should the
creditor choose to demand payment from the latter,
could be entertained to the extent that failure to observe
the same would deprive the court jurisdiction to take
cognizance of the action against the surviving debtors.
A cursory perusal of Section 6, Rule 86 of the
Revised Rules of Court reveals that nothing therein
prevents a creditor from proceeding against the surviving
solidary debtors. Said provision merely sets up the
procedure in enforcing collection in case a creditor
chooses to pursue his claim against the estate of the
deceased solidary debtor. The rule has been set forth that
a creditor (in a solidary obligation) has the option
whether to file or not to file a claim against the estate of
the solidary debtor.
Metrobank v. Absolute Management Corporation,
G.R. 170498
Relevant Facts:
Sherwood Holdings Corporation, Inc. (SHCI) filed a
complaint for sum of money against Absolute
Management Corporation (AMC). SHCI alleged that it

made payments through checks to AMC for the purchase

of pieces of plywood and plyboards. These checks were
given to Chua as the general manager of AMC.
Chua died before SHCI filed their complaint and a
special proceeding for the settlement of his estate was
commenced before the RTC Pasay City.
SHCI made demands on AMC, after Chuas death,
for allegedly undelivered items. AMC on the other hand
alleged that it had no knowledge of Chuas transaction
with SHCI. It also asked the court to hold Metrobank liable
for the subject checks in case it is adjudged liable to
SHCI.
Metrobank admitted that it deposited the checks
to Ayala Lumber and Hardware owned and managed by
Chua but with consent of AMC.
Subsequently, Metrobank filed a motion for leave
to admit fourth party complaint against Chuas estate. It
alleged that Chuas estate should reimburse Metrobank in
case it would be held liable in the third-party complaint
filed against it by AMC.
RTC denied Metrobanks motion. The court stated
that Metrobanks allegation in the fourth-party complaint
is a kind of quasi-contract which falls within the concept
of implied contracts that must be included in the claims
required to be filed with the judicial settlement of the
deceaseds estate under Sec. 5, Rule 86 of the Rules of
Court. Thus, it should be filed in special proceedings and
not before the RTC as a fourth-party complaint.
CA affirmed the RTSs decision.
Relevant Issue:
1. Whether quasi-contracts are included in claims
that should be filed pursuant to Rule 86, Sec. 5 of the
Rules of court.
2. Whether Metrobanks claim against the estate
of Jose Chua is based on a quasi-contract
Relevant Ruling:
1. Yes. Based on jurisprudence, the court
explained that the term implied contracts, as used in
remedial law, originated from the common law where
obligations derived from quasi-contracts and from law are
both considered as implied contracts. Thus, the term
quasi-contract is included in the concept implied
contracts as used in the Rules of Court. Accordingly,
liabilities of the deceased arising from quasi-contracts
should be filed as claims in the settlement of his estate,
as provided in Section 5, Rule 86 of the Rules of Court.
2. Yes. According to the CA, Metrobanks fourthparty complaint falls under the quasi-contracts
enunciated in Article 2154 of the Civil Code which
embodies the concept solutio indebiti which arises
when something is delivered through mistake to a person
who has no right to demand it. It obligates the latter to
return what has been received through mistake. In the
fourth-party complaint of Metrobank, it claims that Chuas
estate should reimburse it if it becomes liable on the
checks that it deposited to Ayala Lumber and Hardwares
account upon Chuas instructions. This fulfills the
requisites of solution indebiti.

A distinctive character of Metrobanks fourthparty complaint is its contingent nature the claim
depends on the possibility that Metrobank would be
adjudged liable to AMC, a future event that may or may
not happen. This characteristic unmistakably marks the
complaint as a contingent one that must be included in
the claims falling under the terms of Section 5, Rule 86 of
the Rules of Court:
Sec. 5. Claims which must be filed under the notice. If not
filed, barred; exceptions. All claims for money against
the decedent, arising from contract, express or implied,
whether the same be due, not due, or contingent, all
claims for funeral expenses and expenses for the last
sickness of the decedent, and judgment for money
against the decedent,must be filed within the time limited
in the notice.
Gabriel v. Bilon, G.R. 146989
Relevant Facts:
Nelson Bilon, Angel Brazil and Ernesto
Pagaygay (respondents) were jeepney drivers of
jeepneys owned by Melencio Gabriel (petitioner
substituted by wife).
On November 15, 1995, respondents filed their
complaints for illegal dismissal, illegal deductions, and
separation pay against petitioner with the LA.
On March 17, 1997, the LA decided to declare
the illegality of dismissal and ordered the petitioners
to pay respondents backwages and separation pay.
Incidentally, on April 4, 1997, petitioner
passed away. On June 5, 1997, petitioner appealed the
labor arbiters decision to the NLRC, First Division.
Subsequently the NLRC dismissed the case for
lack of employer-employee relationship. Aggrieved by
the decision of the NLRC, respondents elevated the
case to the CA.The CA reversed the decisions of the
NLRC
Relevant Issue:
WON the claim of the respondents survives.
Relevant Ruling:
With regard to respondents monetary claim,
the same shall be governed by Section 20 Rule 3 of
the Rules of Court which in accordance with the said
rule, the money claims of respondents must be filed
against
the
estate
of
petitioner
Melencio
Gabriel.Petition denied, decision of CA affirmed.
Heirs of Magsalang v. ManilaBanking
Corporation, G.R. 171206
Relevant Facts:
Spouses Flaviano and Salud Maglasang obtain
several loans from Manila banking Corp. secured by a
real estate mortgage.Flaviano died intestate, hence,
Salud and their children filed a petition for letters of
administration.
Manila banking Corp. notified its claim on the
estate of Flaviano as creditor. During the pendency of
the probate proceedings, the Son and atty-in-fact of
Flaviano was able to obtain loans from the same bank.
The probate court terminated the proceedings.
The heirs then had an extrajudicial partition. The

probate court however recognized the rights of the

bank. Hence, the bank proceeded to extra-judicial
foreclosure since they were left unpaid. But it did not
satisfy the whole amount of the money loaned.
The RTC ruled that the heirs should pay the
deficiency and the CA affirmed.
Relevant Issue:
WON the CA erred in affirming the RTCs award
of the deficiency amount in favor of the bank.
Relevant Ruling:
The secured creditor has three remedies that
he may alternatively adopt for the satisfaction of his
indebtedness:
(a) Waive the mortgage and claim the entire debt
from the estate of the mortgagor as an ordinary claim;
(b) Foreclose the mortgage judicially and prove the
deficiency as an ordinary claim; and
(c) Rely on the mortgage exclusively, or other security
and foreclose the same before it is barred by
prescription, without the right to file a claim for any
deficiency.
These remedies are distinct, independent and
mutually exclusive from each other.A remedy is
deemed chosen upon the filing of the suit for
collection or upon the filing of the complaint in an
action for foreclosure of mortgage.
The plain result of adopting the last mode of
foreclosure is that the creditor waives his right to
recover any deficiency from the estate.
PNB v. CA, G.R. 121597
Relevant Facts:
The spouses Asuncion and Antonio Chua
owned some parcels of land. When Antonio died, their
son Allan was appointed as the administrator. He was
authorized by the probate court to obtain a loan from
PNB and to be secured by a real estate mortgage on
the land owned by his parents.
Allan was unable to pay the loan. Hence, PNB
foreclosed the mortgage (extrajudicial). However, the
full amount of the loan was still not satisfied. To satisfy
the loan, PNB filed an action against Allan and Mrs.
Asoncion Chua.
The RTC dismissed PNBs complaint. The CA
also dismissed PNBs appeal.
Relevant Issue:
WON the CA is correct in dismissing the
appeal.
Relevant Ruling:
Yes. Rule 86 Sec. 7 grants to the mortgagee
three distinct, independent and mutually exclusive
remedies that can be alternatively pursued by the
mortgage creditor for the satisfaction of his credit in
case the mortgagor dies, among them:
(1) to waive the mortgage and claim the entire debt
from the estate of the mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially and prove any
deficiency as an ordinary claim; and
(3) to rely on the mortgage exclusively, foreclosing the
same at any time before it is barred by prescription
without right to file a claim for any deficiency.

The plain result of adopting the last mode of

foreclosure is that the creditor waives his right to
recover any deficiency from the estate.