[G.R. No. 118671.
January 29, 1996]
THE ESTATE OF HILARIO M. RUIZ, EDMOND RUIZ, Executor, petitioner,
vs. THE COURT OF APPEALS (Former Special Sixth Division),
MARIA PILAR RUIZ-MONTES, MARIA CATHRYN RUIZ, CANDICE
ALBERTINE RUIZ, MARIA ANGELINE RUIZ and THE PRESIDING
JUDGE OF THE REGIONAL TRIAL COURT OF PASIG, BRANCH
156, respondents.
PUNO, J.:
This petition for review on certiorari seeks to annul and set aside the
decision dated November 10, 1994 and the resolution dated January 5, 1995 of
the Court of Appeals in CA-G.R. SP No. 33045.
The facts show that on June 27, 1987, Hilario M. Ruiz1 executed a
holographic will naming as his heirs his only son, Edmond Ruiz, his adopted
daughter, private respondent Maria Pilar Ruiz Montes, and his three
granddaughters, private respondents Maria Cathryn, Candice Albertine and
Maria Angeline, all children of Edmond Ruiz. The testator bequeathed to his heirs
substantial cash, personal and real properties and named Edmond Ruiz executor
of his estate.2
On April 12, 1988, Hilario Ruiz died. Immediately thereafter, the cash
component of his estate was distributed among Edmond Ruiz and private
respondents in accordance with the decedents will. For unbeknown
reasons, Edmond, the named executor, did not take any action for the probate of
his fathers holographic will.
On June 29, 1992, four years after the testators death, it was private
respondent Maria Pilar Ruiz Montes who filed before the Regional Trial Court,
Branch 156, Pasig, a petition for the probate and approval of Hilario Ruizs will
and for the issuance of letters testamentary to Edmond
Ruiz.3 Surprisingly, Edmond opposed the petition on the ground that the will was
executed under undue influence.
On November 2, 1992, one of the properties of the estate - the house and
lot at No. 2 Oliva Street, Valle Verde IV, Pasig which the testator bequeathed to
Maria Cathryn, Candice Albertine and Maria Angeline4 - was leased out by
Edmond Ruiz to third persons.
On January 19, 1993, the probate court ordered Edmond to deposit with
the Branch Clerk of Court the rental deposit and payments totalling P540,000.00
representing the one-year lease of the Valle Verde property. In compliance,
on January 25, 1993, Edmond turned over the amount
of P348,583.56, representing the balance of the rent after deducting P191,416.14
for repair and maintenance expenses on the estate.5
In March 1993, Edmond moved for the release of P50,000.00 to pay the
real estate taxes on the real properties of the estate. The probate court approved
the release of P7,722.006
On May 14, 1993, Edmond withdrew his opposition to the probate of the
will. Consequently, the probate court, on May 18, 1993, admitted the will to
probate and ordered the issuance of letters testamentary to Edmond conditioned
upon the filing of a bond in the amount of P50,000.00. The letters testamentary
were issued on June 23, 1993.
On July 28, 1993, petitioner Testate Estate of Hilario Ruiz as executor,
filed an Ex-Parte Motion for Release of Funds. It prayed for the release of the
rent payments deposited with the Branch Clerk of Court. Respondent Montes
opposed the motion and concurrently filed a Motion for Release of Funds to
Certain Heirs and Motion for Issuance of Certificate of Allowance of Probate Will.
Montes prayed for the release of the said rent payments to Maria Cathryn,
Candice Albertine and Maria Angeline and for the distribution of the testators
properties, specifically the Valle Verde property and the Blue Ridgeapartments,
in accordance with the provisions of the holographic will.
On August 26, 1993, the probate court denied petitioners motion for
release of funds but granted respondent Montes motion in view of petitioners lack
of opposition. It thus ordered the release of the rent payments to the decedents
three granddaughters. It further ordered the delivery of the titleds to and
possession of the properties bequeathed to the three granddaughters and
respondent Montes upon the filing of a bond of P50,000.00.
Petitioner moved for reconsideration alleging that he actually filed his
opposition to respondent Montes motion for release of rent payments which
opposition the court failed to consider. Petitioner likewise reiterated his previous
motion for release of funds.
On November 23, 1993, petitioner, through counsel, manifested that he
was withdrawing his motion for release of funds in view of the fact that the lease
contract over Valle Verde property had been renewed for another year.7
Despite petitioners manifestation, the probate court, on December 22,
1993, ordered the release of the funds to Edmond but only such amount as may
be necessary to cover the espenses of administration and allowanceas for
support of the testators three granddaughters subject to collation and deductible
from their share in the inheritance. The court, however, held in abeyance the
release of the titles to respondent Montes and the three granddaughters until the
lapse of six months from the date of firast publication of the notice to
creditors.8 The Court stated thus:
xxx xxx xxx
After consideration of the arguments set forth thereon by the parties, the court resolves to
allow Administrator Edmond M. Ruiz to take possession of the rental payments deposited
with the Clerk of Court, Pasig Regional Trial Court, but only such amount as may
be necessary to cover the expenses of administration and allowances for support of
Maria Cathryn Veronique, Candice Albertine and Maria Angeli, which are subject to
collation and deductible from the share in the inheritance of said heirs and insofar as they
exceed the fruits or rents pertaining to them.
As to the release of the titles bequeathed to petitioner Maria Pilar Ruiz-Montes and the
above-named heirs, the same is hereby reconsidered and held in abeyance until the lapse
of six (6) months from the date of first publication of Notice to Creditors.
WHEREFORE, Administrator Edmond M. Ruiz is hereby ordered to submit an
accounting of the expenses necessary for administration including provisions for the
support Of Maria Cathryn Veronique Ruiz, Candice Albertine Ruiz and Maria Angeli
Ruiz before the amount required can be withdrawn and cause the publication of
the notice to creditors with reasonable dispatch.9
Petitioner assailed this order before the Court of Appeals. Finding no grave abuse of
discretion on the part of respondent judge, the appellate court dismissed the petition and
sustained the probate courts order in a decision dated November 10, 199410 and a
resolution dated January 5, 1995.11
Hence, this petition.
Petitioner claims that:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
AFFIRMING AND CONFIRMING THE ORDER OF RESPONDENT REGIONAL
TRIAL COURT OF PASIG, BRANCH 156, DATED DECEMBER 22, 1993, WHICH
WHEN GIVEN DUE COURSE AND IS EFFECTED WOULD: (1) DISALLOW THE
EXECUTOR/ADMINISTRATOR OF THE ESTATE OF THE LATE HILARIO M.
RUIZ TO TAKE POSSESSION OF ALL THE REAL AND PERSONAL PROPERTIES
OF THE ESTATE; (2) GRANT SUPPORT, DURING THE PENDENCY OF THE
SETTLEMENT OF AN ESTATE, TO CERTAIN PERSONS NOT ENTITLED
THERETO; AND (3) PREMATURELY PARTITION AND DISTRIBUTE THE
ESTATE PURSUANT TO THE PROVISIONS OF THE HOLOGRAPHIC WILL EVEN
BEFORE ITS INTRINSIC VALIDITY HAS BEEN DETERMINED, AND DESPITE
THE EXISTENCE OF UNPAID DEBTS AND OBLIGATIONS OF THE ESTATE.12
The issue for resolution is whether the probate court, after admitting the
will to probate but before payment of the estates debts and obligations, has the
authority: (1) to grant an allowance from the funds of the estate for the support of
the testators grandchildren; (2) to order the release of the titles to certain heirs;
and (3) to grant possession of all properties of the estate to the executor of the
will.
On the matter of allowance, Section 3 of Rule 83 of the Revised Rules of
Court provides:
Sec. 3. Allowance to widow and family. - The widow and minor or incapacitated children
of a deceased person, during the settlement of the estate, shall receive therefrom under
the direction of the court, such allowance as are provided by law.
Petitioner alleges that this provision only gives the widow and the minor or
incapacitated children of the deceased the right to receive allowances for support
during the settlement of estate proceedings. He contends that the testators three
granddaughters do not qualify for an allowance because they are not
incapacitated and are no longer minors but of legal age, married and gainfully
employed. In addition, the provision expressly states children of the deceased
which excludes the latters grandchildren.
It is settled that allowances for support under Section 3 of Rule 83 should
not be limited to the minor or incapacitated children of the deceased. Article
13
188 of the Civil Code of the Philippines, the substantive law in force at the time
of the testators death, provides that during the liquidation of the conjugal
partnership, the deceaseds legitimate spouse and children, regardless of their
age, civil status or gainful employment, are entitled to provisional support from
the funds of the estate.14 The law is rooted on the fact that the right and duty to
support, especially the right to education, subsist even beyond the age of
majority.15
Be that as it may, grandchildren are not entitled to provisional support
from the funds of the decedents estate. The law clearly limits the allowance to
widow and children and does not extend it to the deceaseds grandchildren,
regardless of their minority or incapacity.16 It was error, therefore, for the
appellate court to sustain the probate courts order granting an allowance to the
grandchildren of the testator pending settlement of his estate.
 Respondent courts also erred when they ordered the release of the titles
of the bequeathed properties to private respondents six months after the date of
first publication of notice to creditors. An order releasing titles to properties of the
estate amounts to an advance distribution of the estate which is allowed only
under the following conditions:
Sec. 2. Advance distribution in special proceedings. - Nothwithstanding 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.17
And Rule 90 provides that:
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 to
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. 18
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 obligations.19
In the case at bar, the probate court ordered the release of the titles to the
Valle Verde property and the Blue Ridge apartments to the private respondents
after the lapse of six months from the date of first publication of the notice to
creditors. 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 hitherto been paid, much less ascertained. The
estate tax is one of those obligations that must be paid before distribution of the
estate. If not yet paid, the rule requires that the distributees post a bond or make
such provisions as to meet the said tax obligation in proportion to their respective
shares in the inheritance.20 Notably, at the time the order was issued the
properties of the estate had not yet been inventoried and appraised.
It was also too early in the day for the probate court to order the release of
the titles six months after admitting the will to probate. The probate of a will is
conclusive as to its due execution and extrinsic validity21 and settles only the
question of whether the testator, being of sound mind, freely executed it in
accordance with the formalities prescribed by law.22 Questions as to the intrinsic
validity and efficacy of the provisions of the will, the legality of any devise or
legacy may be raised even after the will has been authenticated.23
The intrinsic validity of Hilarios holographic will was controverted by
petitioner before the probate court in his Reply to Montes Opposition to his
motion for release of funds24 and his motion for reconsideration of the August 26,
1993 order of the said court.25 Therein, petitioner assailed the distributive shares
of the devisees and legatees inasmuch as his fathers will included the estate of
his mother and allegedly impaired his legitime as an intestate heir of his mother.
The Rules provide that if there is a controversy as to who are the lawful heirs of
the decedent and their distributive shares in his estate, the probate court shall
proceed to hear and decide the same as in ordinary cases.26
Still and all, petitioner cannot correctly claim that the assailed order
deprived him of his right to take possession of all the real and personal properties
of the estate. The right of an executor or administrator to the possession and
management of the real and personal properties of the deceased is not absolute
and can only be exercised so long as it is necessary for the payment of the debts
and expenses of administration,27 Section 3 of Rule 84 of the Revised Rules of
Court explicitly provides:
Sec. 3. Executor or administrator to retain whole estate to pay debts, and to administer
estate not willed. - An executor or administrator shall have the right to the possession and
management of the real as well as the personal estate of the deceased so long as it is
necessary for the payment of the debts and expenses for administration.28
When petitioner moved for further release of the funds deposited with the clerk of
court, he had been previously granted by the probate court certain amounts for
repair and maintenance expenses on the properties of the estate, and payment
of the real estate taxes thereon. But petitioner moved again for the release of
additional funds for the same reasons he previously cited. It was correct for the
probate court to require him to submit an accounting of thenecessary expenses
for administration before releasing any further money in his favor.
It was relevantly noted by the probate court that petitioner had deposited
with it only a portion of the one-year rental income from the Valle Verde property.
Petitioner did not deposit its succeeding rents after renewal of the
lease.29 Neither did he render an accounting of such funds.
Petitioner must be reminded that his right of ownership over the properties
of his father is merely inchoate as long as the estate has not been fully settled
and partitioned.30 As executor, he is a mere trustee of his fathers estate. The
funds of the estate in his hands are trust funds and he is held to the duties and
responsibilities of a trustee of the highest order.31 He cannot unilaterally assign to
himself and possess all his parents properties and the fruits thereof without first
submitting an inventory and appraisal of all real and personal properties of the
deceased, rendering a true account of his administration, the expenses of
administration, the amount of the obligations and estate tax, all of which are
subject to a determination by the court as to their veracity, propriety and
justness.32
IN VIEW WHEREOF, the decision and resolution of the Court of Appeals
in CA-G.R. SP No. 33045 affirming the order dated December 22, 1993 of the
Regional Trial Court, Branch 156, Pasig in SP Proc. No. 10259 are affirmed with
the modification that those portions of the order granting an allowance to the
testators grandchildren and ordering the release of the titles to the private
respondents upon notice to creditors are annulled and set aside.
Respondent judge is ordered to proceed with dispatch in the proceedings
below.
SO ORDERED.
G.R. No. 149926 February 23, 2005
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
EDMUND SANTIBAEZ and FLORENCE SANTIBAEZ
ARIOLA, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules
of Court which seeks the reversal of the Decision1 of the Court of Appeals dated
May 30, 2001 in CA-G.R. CV No. 48831 affirming the dismissal2 of the
petitioners complaint in Civil Case No. 18909 by the Regional Trial Court (RTC)
of Makati City, Branch 63.
The antecedent facts are as follows:
On May 31, 1980, the First Countryside Credit Corporation (FCCC) and Efraim
M. Santibaez entered into a loan agreement3 in the amount of 128,000.00. The
amount was intended for the payment of the purchase price of one (1) unit Ford
6600 Agricultural All-Purpose Diesel Tractor. In view thereof, Efraim and his son,
Edmund, executed a promissory note in favor of the FCCC, the principal sum
payable in five equal annual amortizations of 43,745.96 due on May 31, 1981
and every May 31st thereafter up to May 31, 1985.
On December 13, 1980, the FCCC and Efraim entered into another loan
agreement,4 this time in the amount of 123,156.00. It was intended to pay the
balance of the purchase price of another unit of Ford 6600 Agricultural All-
Purpose Diesel Tractor, with accessories, and one (1) unit Howard Rotamotor
Model AR 60K. Again, Efraim and his son, Edmund, executed a promissory note
for the said amount in favor of the FCCC. Aside from such promissory note, they
also signed a Continuing Guaranty Agreement5 for the loan dated December 13,
1980.
Sometime in February 1981, Efraim died, leaving a holographic
will.6 Subsequently in March 1981, testate proceedings commenced before the
RTC of Iloilo City, Branch 7, docketed as Special Proceedings No. 2706. On April
9, 1981, Edmund, as one of the heirs, was appointed as the special administrator
of the estate of the decedent.7 During the pendency of the testate proceedings,
the surviving heirs, Edmund and his sister Florence Santibaez Ariola, executed
a Joint Agreement8 dated July 22, 1981, wherein they agreed to divide between
themselves and take possession of the three (3) tractors; that is, two (2) tractors
for Edmund and one (1) tractor for Florence. Each of them was to assume the
indebtedness of their late father to FCCC, corresponding to the tractor
respectively taken by them.
On August 20, 1981, a Deed of Assignment with Assumption of Liabilities9 was
executed by and between FCCC and Union Savings and Mortgage Bank,
wherein the FCCC as the assignor, among others, assigned all its assets and
liabilities to Union Savings and Mortgage Bank.
10
Demand letters for the settlement of his account were sent by petitioner Union
Bank of the Philippines (UBP) to Edmund, but the latter failed to heed the same
and refused to pay. Thus, on February 5, 1988, the petitioner filed a
Complaint11 for sum of money against the heirs of Efraim Santibaez, Edmund
and Florence, before the RTC of Makati City, Branch 150, docketed as Civil Case
No. 18909. Summonses were issued against both, but the one intended for
Edmund was not served since he was in the United States and there was no
information on his address or the date of his return to the
Philippines.12 Accordingly, the complaint was narrowed down to respondent
Florence S. Ariola.
On December 7, 1988, respondent Florence S. Ariola filed her Answer13 and
alleged that the loan documents did not bind her since she was not a party
thereto. Considering that the joint agreement signed by her and her brother
Edmund was not approved by the probate court, it was null and void; hence, she
was not liable to the petitioner under the joint agreement.
On January 29, 1990, the case was unloaded and re-raffled to the RTC of Makati
City, Branch 63.14 Consequently, trial on the merits ensued and a decision was
subsequently rendered by the court dismissing the complaint for lack of merit.
The decretal portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered DISMISSING the complaint for lack
of merit.15
The trial court found that the claim of the petitioner should have been filed with
the probate court before which the testate estate of the late Efraim Santibaez
was pending, as the sum of money being claimed was an obligation incurred by
the said decedent. The trial court also found that the Joint Agreement apparently
executed by his heirs, Edmund and Florence, on July 22, 1981, was, in effect, a
partition of the estate of the decedent. However, the said agreement was void,
considering that it had not been approved by the probate court, and that there
can be no valid partition until after the will has been probated. The trial court
further declared that petitioner failed to prove that it was the now defunct Union
Savings and Mortgage Bank to which the FCCC had assigned its assets and
liabilities. The court also agreed to the contention of respondent Florence S.
Ariola that the list of assets and liabilities of the FCCC assigned to Union Savings
and Mortgage Bank did not clearly refer to the decedents account. Ruling that
the joint agreement executed by the heirs was null and void, the trial court held
that the petitioners cause of action against respondent Florence S. Ariola must
necessarily fail.
The petitioner appealed from the RTC decision and elevated its case to the Court
of Appeals (CA), assigning the following as errors of the trial court:
1. THE COURT A QUO ERRED IN FINDING THAT THE JOINT
AGREEMENT (EXHIBIT A) SHOULD BE APPROVED BY THE
PROBATE COURT.
2. THE COURT A QUO ERRED IN FINDING THAT THERE CAN BE
NO VALID PARTITION AMONG THE HEIRS UNTIL AFTER THE
WILL HAS BEEN PROBATED.
3. THE COURT A QUO ERRED IN NOT FINDING THAT THE
DEFENDANT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.16
The petitioner asserted before the CA that the obligation of the deceased had
passed to his legitimate children and heirs, in this case, Edmund and Florence;
the unconditional signing of the joint agreement marked as Exhibit "A" estopped
respondent Florence S. Ariola, and that she cannot deny her liability under the
said document; as the agreement had been signed by both heirs in their personal
capacity, it was no longer necessary to present the same before the probate
court for approval; the property partitioned in the agreement was not one of those
enumerated in the holographic will made by the deceased; and the active
participation of the heirs, particularly respondent Florence S. Ariola, in the
present ordinary civil action was tantamount to a waiver to re-litigate the claim in
the estate proceedings.
On the other hand, respondent Florence S. Ariola maintained that the money
claim of the petitioner should have been presented before the probate court.17
The appellate court found that the appeal was not meritorious and held that the
petitioner should have filed its claim with the probate court as provided under
Sections 1 and 5, Rule 86 of the Rules of Court. It further held that the partition
made in the agreement was null and void, since no valid partition may be had
until after the will has been probated. According to the CA, page 2, paragraph (e)
of the holographic will covered the subject properties (tractors) in generic terms
when the deceased referred to them as "all other properties." Moreover, the
active participation of respondent Florence S. Ariola in the case did not amount
to a waiver. Thus, the CA affirmed the RTC decision, viz.:
WHEREFORE, premises considered, the appealed Decision of the Regional Trial
Court of Makati City, Branch 63, is hereby AFFIRMED in toto. SO ORDERED.18
In the present recourse, the petitioner ascribes the following errors to the CA:
I.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE
JOINT AGREEMENT SHOULD BE APPROVED BY THE PROBATE COURT.
II.
THE COURT OF APPEALS ERRED IN FINDING THAT THERE CAN BE NO
VALID PARTITION AMONG THE HEIRS OF THE LATE EFRAIM SANTIBAEZ
UNTIL AFTER THE WILL HAS BEEN PROBATED.
III.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE
RESPONDENT HAD WAIVED HER RIGHT TO HAVE THE CLAIM RE-
LITIGATED IN THE ESTATE PROCEEDING.
IV.
RESPONDENTS CAN, IN FACT, BE HELD JOINTLY AND SEVERALLY LIABLE
WITH THE PRINCIPAL DEBTOR THE LATE EFRAIM SANTIBAEZ ON THE
STRENGTH OF THE CONTINUING GUARANTY AGREEMENT EXECUTED IN
FAVOR OF PETITIONER-APPELLANT UNION BANK.
V.
THE PROMISSORY NOTES DATED MAY 31, 1980 IN THE SUM OF
128,000.00 AND DECEMBER 13, 1980 IN THE AMOUNT OF 123,000.00
CATEGORICALLY ESTABLISHED THE FACT THAT THE RESPONDENTS
BOUND THEMSELVES JOINTLY AND SEVERALLY LIABLE WITH THE LATE
DEBTOR EFRAIM SANTIBAEZ IN FAVOR OF PETITIONER UNION BANK.19
The petitioner claims that the obligations of the deceased were transmitted to the
heirs as provided in Article 774 of the Civil Code; there was thus no need for the
probate court to approve the joint agreement where the heirs partitioned the
tractors owned by the deceased and assumed the obligations related thereto.
Since respondent Florence S. Ariola signed the joint agreement without any
condition, she is now estopped from asserting any position contrary thereto. The
petitioner also points out that the holographic will of the deceased did not include
nor mention any of the tractors subject of the complaint, and, as such was
beyond the ambit of the said will. The active participation and resistance of
respondent Florence S. Ariola in the ordinary civil action against the petitioners
claim amounts to a waiver of the right to have the claim presented in the probate
proceedings, and to allow any one of the heirs who executed the joint agreement
to escape liability to pay the value of the tractors under consideration would be
equivalent to allowing the said heirs to enrich themselves to the damage and
prejudice of the petitioner.
The petitioner, likewise, avers that the decisions of both the trial and appellate
courts failed to consider the fact that respondent Florence S. Ariola and her
brother Edmund executed loan documents, all establishing the vinculum jurisor
the legal bond between the late Efraim Santibaez and his heirs to be in the
nature of a solidary obligation. Furthermore, the Promissory Notes dated May 31,
1980 and December 13, 1980 executed by the late Efraim Santibaez, together
with his heirs, Edmund and respondent Florence, made the obligation solidary as
far as the said heirs are concerned. The petitioner also proffers that, considering
the express provisions of the continuing guaranty agreement and the promissory
notes executed by the named respondents, the latter must be held liable jointly
and severally liable thereon. Thus, there was no need for the petitioner to file its
money claim before the probate court. Finally, the petitioner stresses that both
surviving heirs are being sued in their respective personal capacities, not as heirs
of the deceased.
In her comment to the petition, respondent Florence S. Ariola maintains that the
petitioner is trying to recover a sum of money from the deceased Efraim
Santibaez; thus the claim should have been filed with the probate court. She
points out that at the time of the execution of the joint agreement there was
already an existing probate proceedings of which the petitioner knew about.
However, to avoid a claim in the probate court which might delay payment of the
obligation, the petitioner opted to require them to execute the said
agreement.1a\^/phi1.net
According to the respondent, the trial court and the CA did not err in declaring
that the agreement was null and void. She asserts that even if the agreement
was voluntarily executed by her and her brother Edmund, it should still have
been subjected to the approval of the court as it may prejudice the estate, the
heirs or third parties. Furthermore, she had not waived any rights, as she even
stated in her answer in the court a quo that the claim should be filed with the
probate court. Thus, the petitioner could not invoke or claim that she is in
estoppel.
Respondent Florence S. Ariola further asserts that she had not signed any
continuing guaranty agreement, nor was there any document presented as
evidence to show that she had caused herself to be bound by the obligation of
her late father.
The petition is bereft of merit.
The Court is posed to resolve the following issues: a) whether or not the partition
in the Agreement executed by the heirs is valid; b) whether or not the heirs
assumption of the indebtedness of the deceased is valid; and c) whether the
petitioner can hold the heirs liable on the obligation of the deceased.1awphi1.nt
At the outset, well-settled is the rule that a probate court has the jurisdiction to
determine all the properties of the deceased, to determine whether they should
or should not be included in the inventory or list of properties to be
administered.20 The said court is primarily concerned with the administration,
liquidation and distribution of the estate.21
In our jurisdiction, the rule is that there can be no valid partition among the heirs
until after the will has been probated:
In testate succession, there can be no valid partition among the heirs until after
the will has been probated. The law enjoins the probate of a will and the public
requires it, because unless a will is probated and notice thereof given to the
whole world, the right of a person to dispose of his property by will may be
rendered nugatory. The authentication of a will decides no other question than
such as touch upon the capacity of the testator and the compliance with those
requirements or solemnities which the law prescribes for the validity of a will.22
This, of course, presupposes that the properties to be partitioned are the same
properties embraced in the will.23 In the present case, the deceased, Efraim
Santibaez, left a holographic will24 which contained, inter alia, the provision
which reads as follows:
(e) All other properties, real or personal, which I own and may be discovered
later after my demise, shall be distributed in the proportion indicated in the
immediately preceding paragraph in favor of Edmund and Florence, my children.
We agree with the appellate court that the above-quoted is an all-encompassing
provision embracing all the properties left by the decedent which might have
escaped his mind at that time he was making his will, and other properties he
may acquire thereafter. Included therein are the three (3) subject tractors. This
being so, any partition involving the said tractors among the heirs is not valid.
The joint agreement25 executed by Edmund and Florence, partitioning the
tractors among themselves, is invalid, specially so since at the time of its
execution, there was already a pending proceeding for the probate of their late
fathers holographic will covering the said tractors.
It must be stressed that the probate proceeding had already acquired jurisdiction
over all the properties of the deceased, including the three (3) tractors. To
dispose of them in any way without the probate courts approval is tantamount to
divesting it with jurisdiction which the Court cannot allow.26 Every act intended to
put an end to indivision among co-heirs and legatees or devisees is deemed to
be a partition, although it should purport to be a sale, an exchange, a
compromise, or any other transaction.27 Thus, in executing any joint agreement
which appears to be in the nature of an extra-judicial partition, as in the case at
bar, court approval is imperative, and the heirs cannot just divest the court of its
jurisdiction over that part of the estate. Moreover, it is within the jurisdiction of the
probate court to determine the identity of the heirs of the decedent.28 In the
instant case, there is no showing that the signatories in the joint agreement were
the only heirs of the decedent. When it was executed, the probate of the will was
still pending before the court and the latter had yet to determine who the heirs of
the decedent were. Thus, for Edmund and respondent Florence S. Ariola to
adjudicate unto themselves the three (3) tractors was a premature act, and
prejudicial to the other possible heirs and creditors who may have a valid claim
against the estate of the deceased.
The question that now comes to fore is whether the heirs assumption of the
indebtedness of the decedent is binding. We rule in the negative. Perusing the
joint agreement, it provides that the heirs as parties thereto "have agreed to
divide between themselves and take possession and use the above-described
chattel and each of them to assume the indebtedness corresponding to the
chattel taken as herein after stated which is in favor of First Countryside Credit
Corp."29 The assumption of liability was conditioned upon the happening of an
event, that is, that each heir shall take possession and use of their respective
share under the agreement. It was made dependent on the validity of the
partition, and that they were to assume the indebtedness corresponding to the
chattel that they were each to receive. The partition being invalid as earlier
discussed, the heirs in effect did not receive any such tractor. It follows then that
the assumption of liability cannot be given any force and effect.
The Court notes that the loan was contracted by the decedent.l^vvphi1.net The
petitioner, purportedly a creditor of the late Efraim Santibaez, should have thus
filed its money claim with the probate court in accordance with Section 5, Rule 86
of the Revised Rules of Court, which provides:
Section 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 for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice;
otherwise they are barred forever, except that they may be set forth as
counterclaims in any action that the executor or administrator may bring against
the claimants. Where an executor or administrator commences an action, or
prosecutes an action already commenced by the deceased in his lifetime, the
debtor may set forth by answer the claims he has against the decedent, instead
of presenting them independently to the court as herein provided, and mutual
claims may be set off against each other in such action; and if final judgment is
rendered in favor of the defendant, the amount so determined shall be
considered the true balance against the estate, as though the claim had been
presented directly before the court in the administration proceedings. Claims not
yet due, or contingent, may be approved at their present value.
The filing of a money claim against the decedents estate in the probate court is
mandatory.30 As we held in the vintage case of Py Eng Chong v. Herrera:31
This requirement is for the purpose of protecting the estate of the deceased by
informing the executor or administrator of the claims against it, thus enabling him
to examine each claim and to determine whether it is a proper one which should
be allowed. The plain and obvious design of the rule is the speedy settlement of
the affairs of the deceased and the early delivery of the property to the
distributees, legatees, or heirs. `The law strictly requires the prompt presentation
and disposition of the claims against the decedent's estate in order to settle the
affairs of the estate as soon as possible, pay off its debts and distribute the
residue.32
Perusing the records of the case, nothing therein could hold private respondent
Florence S. Ariola accountable for any liability incurred by her late father. The
documentary evidence presented, particularly the promissory notes and the
continuing guaranty agreement, were executed and signed only by the late
Efraim Santibaez and his son Edmund. As the petitioner failed to file its money
claim with the probate court, at most, it may only go after Edmund as co-maker of
the decedent under the said promissory notes and continuing guaranty, of
course, subject to any defenses Edmund may have as against the petitioner. As
the court had not acquired jurisdiction over the person of Edmund, we find it
unnecessary to delve into the matter further.
We agree with the finding of the trial court that the petitioner had not sufficiently
shown that it is the successor-in-interest of the Union Savings and Mortgage
Bank to which the FCCC assigned its assets and liabilities.33 The petitioner in its
complaint alleged that "by virtue of the Deed of Assignment dated August 20,
1981 executed by and between First Countryside Credit Corporation and Union
Bank of the Philippines"34 However, the documentary evidence35 clearly reflects
that the parties in the deed of assignment with assumption of liabilities were the
FCCC, and the Union Savings and Mortgage Bank, with the conformity of
Bancom Philippine Holdings, Inc. Nowhere can the petitioners participation
therein as a party be found. Furthermore, no documentary or testimonial
evidence was presented during trial to show that Union Savings and Mortgage
Bank is now, in fact, petitioner Union Bank of the Philippines. As the trial court
declared in its decision:
[T]he court also finds merit to the contention of defendant that plaintiff failed to
prove or did not present evidence to prove that Union Savings and Mortgage
Bank is now the Union Bank of the Philippines. Judicial notice does not apply
here. "The power to take judicial notice is to [be] exercised by the courts with
caution; care must be taken that the requisite notoriety exists; and every
reasonable doubt upon the subject should be promptly resolved in the negative."
(Republic vs. Court of Appeals, 107 SCRA 504).36
This being the case, the petitioners personality to file the complaint is wanting.
Consequently, it failed to establish its cause of action. Thus, the trial court did not
err in dismissing the complaint, and the CA in affirming the same.
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
assailed Court of Appeals Decision is AFFIRMED. No costs.
SO ORDERED.