Law on Special Proceedings REVIEWER

GENERAL PROVISIONS

RULE 72 - SUBJECT MATTER AND APPLICABILITY OF GENERAL RULES

SETTLEMENT OF ESTATE OF DECEASED PERSONS

RULE 73 - VENUE AND PROCESSES

RULE 74 - SUMMARY SETTLEMENT OF ESTATES

RULE 75 - PRODUCTION OF WILL; ALLOWANCE OF WILL NECESSARY

RULE 76 - ALLOWANCE OF DISALLOWANCE OF WILL

RULE 77 - ALLOWANCE OF WILL PROVED OUTSIDE OF THE PHILIPPINES AND 

ADMINISTRATION OF ESTATE THEREUNDER

RULE 78 - LETTERS TESTAMENTARY AND OF ADMINISTRATION; WHE AND TO 

WHOM ISSUED

RULE 79 - OPPOSING ISSUANCES OF LETTERS TESTAMENTARY; PETITION AND CONTEST 

FOR LETTERS OF ADMINISTRATION

RULE 80 - SPECIAL ADMINISTRATOR

RULE 81 - BOND OF EXECUTORS AND ADMINISTRATORS

RULE 82 - REVOCATION OF ADMINISTRATION, DEATH, RESIGNATION, AND REMOVAL OF 

EXECUTORS OR ADMINISTRATORS

RULE 83 - INVENTORY AND APPRAISAL; PROVISION FOR SUPPORT OF FAMILY

RULE 84 - GENERAL POWERS AND DUTIES OF EXECUTORS AND ADMINISTRATORS

RULE 85 - ACCOUNTABILITY AND COMPENSATION OF EXECUTORS AND ADMINISTRATORS

RULE 86 - CLAIMS AGAINST ESTATE

RULE 87 - ACTIONS BY AND AGAINST EXECUTORS AND ADMINISTRATORS

RULE 88 - PAYMENT OF THE DEBTS OF THE ESTATE

RULE 89 - SALES, MORTGAGES AND OTHER ENCUMBRANCES OF PROPERTY OF

DECEDENT

RULE 90 - DISTRIBUTION AND PARTITION OF THE ESTATE

GENERAL PROVISIONS

RULE 72 SUBJECT MATTER AND APPLICABILITY OF GENERAL RULES 

Sec 1. Subject matter of special proceedings - 

1.Settlement of Estate of deceased persons;

2.Escheat; 

3.Guardianship and Custody of children; 

4.Trustees; 

5.Adoption; 

6.Rescission and revocation of adoption; 

7.Hospitalization of insane persons; 

8.Habeas Corpus; 

9.Change of Name 

10. Voluntary dissolution of corporations;

11. Judicial approval of voluntary recognition of minor natural children;

12. Constitution of family home;

13. Declaration of absence and death;

14. Cancellation or correction of entries in the civil

*Not an exclusive list

Sec. 2. Applicability of rules of civil actions -

In the absence of special rules, the rules provided for in ordinary actions shall be, as far as practicable, applicable to special proceedings.

SETTLEMENT OF ESTATE OF DECEASED PERSONS

RULE 73 - VENUE AND PROCESSES

Section 1. Where estate of deceased persons settled. — 

Inhabitant of the Philippines at the time of his death, whether a citizen or an alien - in the Court of First Instance in the province in which he resides at the time of his death

Inhabitant of a foreign country, the Court of First Instance of any province in which he had estate

Court first taking cognizance of settlement of estate of a decedent shall exercise jurisdiction TO THE EXCLUSION of all other courts - subject to preferential jurisdiction of court where TESTATE proceedings are filed. 

Jurisdiction assumed by a court depending on - place of residence of decedent, or
location of estate 

Shall NOT BE CONTESTED in a suit or proceeding - except in an appeal from that court, or when want of jurisdiction appears in the record  

Term “resides” refers to “actual or physical” residence, as distinguished from “legal residence” or “domicile.”  

The term “resides” means the personal, actual or physical habitation of a person, actual place of residence of place of abode. It signifies physical presence in a place and actual stay thereat. It does NOT mean legal residence or domicile. (Garcia-Fule vs. CA, 74 SCRA 189

Section 2. Where estate settled upon dissolution of marriage. —

Upon the death of either the husband or the wife, the partnership affairs must be liquidated in the testate or intestate proceedings of the deceased husband or wife. If both died, liquidation may be made in the testate or intestate proceedings of either. 

Where a complaint is brought against the surviving spouse for the recovery of an indebtedness against the conjugal property, any judgment obtained therein is void. The proper action should be in the form of a claim to be filed in the testate or intestate proceedings of the deceased person 

Section 3. Process. —

Probate court is of limited jurisdiction 

1. Probate court cannot adjudicate or determine title to properties claimed to be a part of the estate and equally claimed as belonging to outside parties. 

2. It can only determine whether or not they should be included in the inventory or list of properties to be administered by the administrator. 

3. Probate court can only pass upon questions of title provisionally for the purpose of determining whether a certain property should or should not be included in the inventory. 

4. Parties have to resort to an ordinary action for final determination of conflicting claims of title. 

Separate civil action for quieting of title - where issue or ownership of properties excluded from the inventory is finally determined

EXCEPTION: Where interested parties are all heirs and rights of third parties are not impaired, probate court can decide question of ownership. With consent of all the parties, without prejudice to third persons 

However, probate court has jurisdiction to (a) determine heirs – separate action for declaration of heirs not proper and (b) distribute estate. 

Section 4. Presumption of death. —

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 often years. If he disap- peared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened. 

Art. 391. The following shall be presumed dead for all pur- poses, including the division of the estate among the heirs: 

(1) A person on board a vessel lost during a sea voyage, or an aero plane which is missing, who has not been heard of for four years since the loss of the vessel or aero plane; 

(2) A person in the armed forces who has taken part in war, and has been missing for four years; 

(3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.

RULE 74 - SUMMARY SETTLEMENT OF ESTATES

Section 1. Extrajudicial settlement by agreement between heirs. — 

Section 2. Summary settlement of estate of small value. —

Section 3. Bond to be filed by distributees. —

Section 4. Liability of distributees and estate. —

Section 5. Period for claim of minor or incapacitated person. —

Distinction between extrajudicial settlement and summary settlement of estates of small value: 

Sec. 1. Extrajudicial settlement by agreement between the heirs 

REQUISITES OF EXTRAJUDICIAL SETTLEMENT 

1. Decedent died intestate 

2. No outstanding debts at time of settlement

3. Heirs all of legal age or minors represented by judicial guardians or legal representatives 

4. Settlement made in public instrument duly filed with Registry of Deeds

5. Publication in newspaper of general circulation in the province once a week for 3
consecutive weeks 

6. Bond equivalent to value of personal property posted with RD

RATIONALE for Sec. 1, Rule 74 – when person dies without having obligations to be paid, his heirs are not bound to submit property for judicial administration, which is always long and costly

IF HEIRS DISAGREE – ordinary action for partition. 

 IF ONLY ONE HEIR – affidavit of self-adjudication. 

Adjudication by an heir of the decedent’s entire estate to himself by means of an affidavit is allowed only if he is the sole heir to the estate. 

FILING OF EXTRAJUDICIAL SETTLEMENT WITH REGISTER OF DEEDS REQUIRED – whether by public instrument, affidavit, stipulation in pending action for partition. 

DESPITE ITS PUBLICATION, extrajudicial settlement NOT BINDING on any person who has not participated therein or who had no notice thereof. 

Extrajudicial settlement – on whom binding
The procedure outlined in Section 1 of Rule 74 is an ex parte proceeding. The rule plainly states, however, that persons who do not participate or had no notice of an extrajudicial settlement will not be bound thereby. The publication of the settlement does not constitute constructive notice to the heirs who had no knowledge or did not take part in it because the same was notice after the fact of execution.  The publication of the settlement does not constitute constructive notice to the heirs who had no knowledge or did not take part in it because the same was notice after the fact of execution. The requirement of publication is geared for the protection of creditors and was never intended to deprive heirs of their lawful participation in the decedent’s estate.

Action to annul deed of extrajudicial settlement – Sec. 4, Rule 74 provides a two year prescriptive period (1) to persons who participated or taken part or had notice of the extrajudicial partition, and (2) when the provisions of Sec. 1 of Rule 74 have been strictly complied with – that all persons or heirs of the decedent have taken part in the extrajudicial settlement or are represented by themselves or through guardians. 

Prescriptive period for non-participants – 10 years, because an action for reconveyance based on implied or constructive trust, being an obligation created by law, prescribes in 10 years (Art. 1144, par. 2, Civil Code) 

The period starts from issuance of title over the property. Constructive trusts under Art. 1456 are established to prevent unjust enrichment. In Marquez, husband executed affidavit of self-adjudication without including the children 

The ruling in Gerona vs. De Guzman, 11 SCRA 153 (1964), cited in Pedrosa vs. CA,, that prescriptive period for non-participants is 4 years from discovery of fraud, i.e., when deed was filed with RD and new title issued, is not applicable, because the same was based on the old Code of Civil Procedure (Sec. 43, which governed prescription). The Gerona doctrine was abandoned in Amerol vs. Bagumbaran, 154 SCRA 396 (1987) and reiterated in Caro vs. CA, 180 SCRA 401 (1989) and Marquez. 

Exception to prescription of actions – when plaintiff, the legal owner, and not the defendant registered owner, is in possession of the land to be reconveyed. Said action, when based on fraud, is imprescriptible as long as the land has not passed to an innocent purchaser for value. 

Lack of registration of extrajudicial settlement does not affect its validity when there are no creditors or rights of creditors are not involved. 

RULE 75 - PRODUCTION OF WILL; ALLOWANCE OF WILL NECESSARY

Section 1. Allowance necessary. Conclusive as to execution. — 

No will shall pass either real or personal estate unless it is proved and allowed in the proper court. 

Subject to the right of appeal, such allowance of the will shall be conclusive as to its due execution.

Section 2. Custodian of will to deliver. — 

Person who has custody of a will - deliver the will to the court having jurisdiction, or to the executor named in the willn within twenty (20) days after he knows of the death of the testator

Section 3. Executor to present will and accept or refuse trust. — 

Person named as executor in a will -  shall present such will to the court having jurisdiction and shall signify to the court in writing his acceptance of the trust or his refusal to accept it.

a) within twenty (20) days after he knows of the death of the testate, or 

b) within twenty (20) days after he knows that he is named executor 

if he obtained such knowledge after the death of the testator

UNLESS the will has reached the court in any other manner

Section 4. Custodian and executor subject to fine for neglect. — 

Neglect of Section 2-3 without excused satisfactory to the court - Fine not exceeding P2000

Section 5. Person retaining will may be committed. —

Person in custody of a will after the death of the testator who neglects without reasonable cause to deliver the same, when ordered so to do, to the court having jurisdiction - committed to prison and there kept until he delivers the will.

RULE 76 - ALLOWANCE OF DISALLOWANCE OF WILL

Section 1. Who may petition for the allowance of will. — 

1) Any executor

2) devisee named in a will

3) legatee named in a will

4) any other person interested in the estate

*whether the same be in his possession or not, or is lost or destroyed.

5) testator himself 

*during his lifetime, petition the court for the allowance of his will.

Section 2. Contents of petition. —

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, legatees, and devisees of the testator or decedent;

(c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters are prayed;

(e) If the will has not been delivered to the court, the name of the person having custody of it.

*No defect in the petition shall render void the allowance of the will, 

or the issuance of letters testamentary or of administration with the will annexed.

Section 3. Court to appoint time for proving will. Notice thereof to be published. — 

court shall fix a time and place for proving the will 

cause notice of such time and place to be published three (3) weeks successively, previous to the time appointed, in a newspaper of general  circulation in the province.

*But no newspaper publication shall be made where the petition for probate has 

been filed by the testator himself.

Section 4. Heirs, devisees, legatees, and executors to be notified by mail or personally

1. Notice of time and place of hearing should be addressed to 

designated or known heirs, legatees and devisees 

person named as executor (if he is not petitioner)

person named as co-executor not petitioning 

2. residing in the Philippines 

3. at their places of residence, if known 

4. Personal service – at least 10 days before hearing 

5. Mailed service – at least 20 days before hearing 

6. IF TESTATOR asks for allowance of his own will – notice shall be sent only to his
COMPULSORY HEIRS.

Notice to Designated Heirs, Legatees and Devisees Jurisdictional – when they are known AND their places of residence are known 

Section 5. Proof at hearing. What sufficient in absence of contest. —

EVIDENCE INTRODUCED AT PROBATE OF WILL 

1. Publication 

2. Notice of hearing served on known heirs, legatees, devisees, etc. if places of residence known 

3. Testimony of subscribing witnesses 

a. Uncontested -- one witness sufficient 

b. Contested -- all subscribing witnesses and
notary (wills executed under Civil Code) other witnesses (under certain conditions) 

4. Holographic will 

a. Uncontested – at least one witness who knows handwriting and signature of testator;
expert testimony (in the absence of competent witness) 

b. Contested – at least 3 witnesses who know handwriting of testator; expert testimony
(in the absence of competent witness) 

5. Holographic will – testator himself as petitioner 

a. Contested – contestant has burden of disproving genuineness and due execution 

b. Uncontested – testator must affirm that will and signature are in his own handwriting

Section 6. Proof of lost or destroyed will. Certificate thereupon. — 

No will shall be proved as a lost or destroyed will unless 

a) the execution and validity of the same be established

b) and the will is proved to have been in existence at the time of the death of the 

testator, 

c) or is shown to have been fraudulently or accidentally destroyed in the lifetime 

of the testator without his knowledge, 

d) nor unless its provisions are clearly and distinctly proved by at least two (2) 

credible witnesses. 

When a lost will is proved

a) the provisions thereof must be distinctly stated and certified by the judge, 

under the seal of the court, 

b) and the certificate must be filed and recorded as other wills are filed and 

recorded.

Section 7. Proof when witnesses do not reside in province. — 

If none of the subscribing witnesses resides in the province -  court may, on motion, direct it to be taken, and may authorize a photographic copy of the will to be made and to be presented to the witness on his examination

Section 8. Proof when witnesses dead or insane or do not reside in the Philippines.

*Court may admit the testimony of other witnesses to prove the sanity of the testator, and the due execution of the will; and as evidence of the execution of the will, it may admit proof of the handwriting of the testator and of the subscribing witnesses, or of any of them.

Section 9. Grounds for disallowing will. — 

The will shall be disallowed in any of the following cases:

(a) If not executed and attested as required by law;

(b) If the testator was insane, or otherwise mentally incapable to make a will, at the time of its execution;

(c) If it was executed under duress, or the influence of fear, or threats;

(d) If it was procured by undue and improper pressure and influence, on the part of the beneficiary, or of some other person for his benefit;

(e) If the signature of the testator was procured by fraud or trick, and he did not intend that the instrument should be his will at the time of fixing his signature thereto.

Section 10. Contestant to file grounds of contest. —

a) must state in writing his grounds for opposing its allowance, 

b) serve a copy thereof on the petitioner and other parties interested in the estate.

Section 11. Subscribing witnesses produced or accounted for where will contested. — 

Contested Notarial Will - all the subscribing witnesses, and the notary:

a) if present in the Philippines and not insane, must be produced and examined

the death, absence, or insanity of any of them must be satisfactorily shown to the 

court. 

b) If all or some of such witnesses are present in the Philippines but outside the 

province where the will has been filed, their deposition must be taken. 

c) If any or all of them testify against the due execution of the will, or do not 

remember having attested to it, or are otherwise of doubtful credibility, the will 

may nevertheless, be allowed if the court is satisfied from the testimony of other 

witnesses and from all the evidence presented that the will was executed and 

attested in the manner required by law.

Contested Holographic will -  the same shall be allowed if:

a) at least three (3) witnesses who know the handwriting of the testator explicitly 

declare that the will and the signature are in the handwriting of the testator; 

b) in the absence of any competent witnesses, and if the court deem it necessary, 

expert testimony may be resorted to.

Section 12. Proof where testator petitions for allowance of holographic will. — 

No contest -  the fact that he affirms that the holographic will and the signature are in his own handwriting, shall be sufficient evidence of the genuineness and due execution thereof. 

Contested - the burden of disproving the genuineness and due execution thereof shall be on the contestant. The testator to rebut the evidence for the contestant.

Section 13. Certificate of allowance attached to prove will. To be recorded in the Office of Register of Deeds. — 

If the court is satisfied, upon proof taken and filed, that 

a) the will was duly executed, and that 

b) the testator at the time of its execution was of sound and disposing mind, 

c) and not acting under duress, menace, and undue influence, or fraud

A certificate of its allowance, signed by the judge, and attested by the seal of the court shall be attached to the will and the will and certificate filed and recorded by the clerk. 

Attested copies of the will devising real estate and of certificate of allowance thereof, shall be recorded in the register of deeds of the province in which the lands lie.

RULE 77 - ALLOWANCE OF WILL PROVED OUTSIDE OF THE PHILIPPINES AND

       ADMINISTRATION OF ESTATE THEREUNDER

Section 1. Will proved outside Philippines may be allowed here. —

EVIDENCE NECESSARY FOR REPROBATE OF WILL or will probated outside the Philippines: 

1. due execution of will in accordance with foreign laws 

2. testator has domicile in foreign country and not Philippines 

3. will has been admitted to probate in such country 

4. fact that foreign court is a probate court 

5. law of the foreign country on procedure and allowance of wills
(Vda. de Perez vs. Tolete, supra)

Reprobate of will
While foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them; however, petitioner, as ancillary administrator of Audrey’s estate, was duty-bound to introduce in evidence the pertinent law of the State of Maryland.

Section 2. Notice of hearing for allowance. — 

Court shall fix a time and place for the hearing, and cause notice thereof to be given as in case of an original will presented for allowance.

Section 3. When will allowed, and effect thereof. —

same effect as if originally proves and allowed in such court.

Section 4. Estate, how administered. — 

after the payment of just debts and expenses of administration, shall be disposed of according to such will, so far as such will may operate upon it; and the residue, if any shall be disposed of as is provided by law in cases of estates in the Philippines belonging to persons who are inhabitants of another state or country.

PUBLICATION AND NOTICE REQUIRED
Compliance with Secs. 3 and 4 of Rule 76, re publication and notice by mail or personally to known heirs, legatees and devisees of testator resident in the Philippines and to executor, if he is not the petitioner, required also in wills for reprobat

RULE 78 - LETTERS TESTAMENTARY AND OF ADMINISTRATION; WHE AND TO WHOM ISSUED

Section 1. Who are incompetent to serve as executors or administrators. — 

No person in competent to serve as executor or administrator who:

(a) Is a minor;

(b) Is not a resident of the Philippines; and

(c) Is in the opinion of the court unfit to execute the duties of the trust by reason of 

drunkenness, improvidence, or want of understanding or integrity, or by reason of 

conviction of an offense involving moral turpitude.

Section 2. Executor of executor not to administer estate. —

Section 3. Married women may serve. —

Section 4. Letters testamentary issued when will allowed. — 

When a will has been proved and allowed, the court shall issue letters testamentary thereon to the person named as executor therein, if he is 

a) competent, 

b) accepts the trust, 

c) and gives bond as required by these rules.

Section 5. Where some coexecutors disqualified others may act. — 

When all of the executors named in a will can not act because of:

a) incompetency, 

b) refusal to accept the trust, 

c) or failure to give bond, 

on the part of one or more of them

letters testamentary may issue to such of them as are competent, accept and give bond, and they may perform the duties and discharge the trust required by the will.

Section 6. When and to whom letters of administration granted. — 

If no executor is named in the will, or 

the executor or executors are incompetent, 

refuse the trust, or 

fail to give bond, 

or a person dies intestate, 

Administration shall be granted:

(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of the court, or to such person as such surviving husband or wife, or next of kin, requests to have appointed, if competent and willing to serve;

(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty (30) days after the death of the person to apply for administration or to request that administration be granted to some other person, it may be granted to one or more of the principal creditors, if may be granted to one or more of the principal creditors, if competent and willing to serve;

(c) If there is no such creditor competent and willing to serve, it may be granted to such other person as the court may select.

RULE 79 - OPPOSING ISSUANCES OF LETTERS TESTAMENTARY; PETITION AND CONTEST FOR LETTERS OF ADMINISTRATION

Section 1. Opposition to issuance of letters testamentary. Simultaneous petition for administration. — 

Any person interested in a will may state in writing the grounds why letters testamentary should not issue to the persons named therein as executors, or any of them

A petition may, at the time, be filed for letters of administration with the will annexed.

Meaning of “interested person” – one who would be benefited by the estate (heir), or one who has a claim against the estate (creditor). Interest must be MATERIAL and DIRECT, not merely indirect or contingent.

An “interested person” has been defined as one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a creditor. The interest must be material and direct, and not merely indirect or contingent 

Section 2. Contents of petition for letters of administration. — 

A petition for letters of administration must be filed by an interested person and must show, so far as known to the petitioner:

(a) The jurisdictional facts;

(b) The names, ages, and residences of the heirs, and the names and residences of the creditors, of the decedent;

(c) The probable value and character of the property of the estate;

(d) The name of the person for whom letters of administration are prayed.

But no defect in the petition shall render void the issuance of letters of administration.

Section 3. Court to set time for hearing. Notice thereof. — 

Court shall fix a time and place for hearing the petition, and shall cause notice thereof to be given to the known heirs and creditors of the decedent, and to any other persons believed to have an interest in the estate, in the manner provided in sections 3 and 4 of Rule 76.

Section 4. Opposition to petition for administration. — 

Any interested person may, by filing a written opposition, contest the petition on the ground of the incompetency of the person for whom letters are prayed therein, or on the ground of the contestant's own right to the administration, and may pray that letters issue to himself, or to any competent person or person named in the opposition.

Section 5. Hearing and order for letters to issue. — 

It must first be shown that notice has been given as hereinabove required, 

court shall hear the proofs of the parties in support of their respective allegations, 

and if satisfied that the decedent left no will, or that there is no competent and willing executor, it shall order the issuance of letters of administration to the party best entitled thereto.

Section 6. When letters of administration granted to any applicant. — 

Letters of administration may be granted to any qualified applicant

RULE 80 - SPECIAL ADMINISTRATOR

Section 1. Appointment of special administrator. —

1. When there is delay in granting letters testamentary or of administration by any cause - including appeal from allowance or disallowance of will 

2. court may appoint special administrator to take possession and charge of the estate of the deceased 

3. until a) questions causing delay decided or b) executors or administrators appointed 

The appointment of a special administrator is justified only when there is delay in granting letters, testamentary (in case the decedent leaves behind a will) or administrative (in the event that the decedent leaves behind no will, as in the Petition at bar) occasioned by any cause. 

The principal object of the appointment of a temporary administrator is to preserve the estate until it can pass into the hands of a person fully authorized to administer it for the benefit of creditors and heirs.

Section 2. Powers and duties of special adminsitrator. — 

Such special administrator shall 

a) take possession and charge of the goods, chattels, rights, credits, and estate 

of the deceased and 

b) preserve the same for the executors or administrator afterwards appointed, 

c) and for that purpose may commence and maintain suits as administrator. 

d) He may sell only such perishable and other property as the court orders sold. 

e) shall not be liable to pay any debts of the deceased unless so ordered by the 

court.

Section 3. When powers of special administrator cease. Transfer of effects. Pending suits. — 

CEASE - When letters testamentary or of administration are granted on the estate of the deceased

DUTY -  deliver to the executor or administrator the goods, chattels, money, and estate of the deceased in his hands. 

The executor or administrator may prosecute to final judgment suits commenced by such special administrator.

RULE 81 - BOND OF EXECUTORS AND ADMINISTRATORS

Section 1. Bond to be given issuance of letters. Amount. Conditions. — 

Conditions of Bond:

(a) To make and return to the court, within three (3) months, a true and complete inventory of all goods, chattels, rights, credits, and estate of the deceased which shall come to his possession or knowledge or to the possession of any other person for him;

(b) To administer according to these rules, and, if an executor, according to the will of the testator, all goods, chattels, rights, credits, and estate which shall at any time come to his possession or to the possession of any other person for him, and from the proceeds to pay and discharge all debts, legacies, and charges on the same, or such dividends thereon as shall be decreed by the court;

(c) To render a true and just account of his administration to the court within one (1) years, and at any other time when required by the court;

(d) To perform all orders of the court by him to be performed.

Section 2. Bond of executor where directed in will. When further bond required. — 

If the testator in his will directs that the executors serve

without bond, or 

with only his individual bond, 

he may be allowed by the court to give bond in such sum and with such surety as the court approves conditioned only to pay the debts of the testator; 

but the court may require of the executor a further bond in case of a change in his circumstance, or for other sufficient case, with the conditions named in the last preceding section.

Section 3. Bonds of joint executors and administrators. — 

When two or more persons are appointed executors or administrators the court may take a separate bond from each, or a joint bond from all.

Section 4. Bond of special administrator. — 

A special administrator before entering upon the duties of his trust shall give a bond, in such sum as the court directs, conditioned that he will make and return a true inventory of the goods, chattels, rights, credits, and estate of the deceased which come to his possession or knowledge, and that he will truly account for such as are received by him when required by the court, and will deliver the same to the person appointed executor or administrator, or to such other person as may be authorized to receive them.

RULE 82 - REVOCATION OF ADMINISTRATION, DEATH, RESIGNATION, AND REMOVAL OF EXECUTORS OR ADMINISTRATORS

Section 1. Administration revoked if will discovered. Proceedings thereupon. — 

1. If after letters of administration have been granted as if decedent died intestate, his will is PROVED AND ALLOWED by the court, 

2. letters of administration shall be REVOKED and all powers thereunder cease. 

3. Administrator shall forthwith 

a. Surrender letters to the court and 

b. Render his account within such time as the court directs 

4. proceedings for issuance of letters testamentary or of administration will follow.

Section 2. Court may be remove or accept resignation of executor or administrator. Proceeding upon death, resignation, or removal. — 

Concerning 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. While the provision is silent as to who may seek with the court the removal of the administrator, a creditor, even a contingent one, would have the personality to seek such relief. After all, the interest of the creditor in the estate relates to the preservation of sufficient assets to answer for the debt, and the general competence or good faith of the administrator is necessary to fulfill such purpose.

Section 3. Acts before revocation, resignation, or removal to be valid. — 

Effect of revocation, resignation or removal of executor or administrator on his previous acts – lawful acts shall have same validity as if no revocation, resignation or removal. 

Rule on Precedence of Probate of Will 

Sec. 1, Rule 82 was followed in Uriarte vs. CFI of Negros Occidental: 

1. If in the course of intestate proceedings, it is found out that decedent left a last will, 

2. probate proceedings should REPLACE intestate proceedings 

3. even if at that stage an administrator had already been appointed. 

4. Administrator is required to – 

a. render final account 

b. turn over estate in his possession to executor subsequently appointed 

5. Without prejudice that proceeding shall continue as intestacy should alleged will
be rejected or disapproved. 

Probate of the will is mandatory (Sec. 1, Rule 75) and therefore takes precedence over intestate proceedings

Section 4. Powers of new executor or administrator. Renewal of license to sell real estate. — 

The person to whom letters testamentary or of administration are granted after the revocation of former letters, or the death, resignation, or removal of a former executor or administrator, shall have the like powers to collect and settle the estate not administered that the former executor or administrator had, and may prosecute or defend actions commenced by or against the former executor or administrator, and have execution on judgments recovered in the name of such former executor or administrator. 

An authority granted by the court to the former executor or administrator for the sale or mortgage of real estate may be renewed in favor of such person without further notice or hearing.

RULE 83 - INVENTORY AND APPRAISAL; PROVISION FOR SUPPORT OF FAMILY

Section 1. Inventory and appraisal to be returned within three months. — 

Within three (3) months after his appointment every executor or administrator shall return to the court a true inventory and appraisal of all real and personal estate of the deceased which has come into his possession or knowledge.

Section 2. Certain article not to be inventoried. — 

The wearing apparel of the surviving husband or wife and minor children, 

the marriage bed and bedding, 

and such provisions and other articles as will necessarily be consumed in the substinence of the family of the deceased, under the direction of the court

Section 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.

RULE 84 - GENERAL POWERS AND DUTIES OF EXECUTORS AND ADMINISTRATORS

Section 1. Executor or administrator to have access to partnership books and property. How right enforced. — 

The executor or administrator of the estate of a deceased partner shall at all times have 

a) access to, 

b) and may examine and t

c) take copies of, books and papers relating to the partnership business, 

d) and make examine and make invoices of the property belonging to such 

partnership; 

and the surviving partner or partners, on request, shall exhibit to him all 

such books, papers, and property in their hands or control.

Section 2. Executor or administrator to keep buildings in repair. — 

maintain in tenanble repair the houses and other structures and fences belonging to the estate, and 

deliver the same in such repair to the heirs or devisees when directed so to do by the court.

Section 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed. — 

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 the expenses of administration.

Purpose of administration – liquidation of the estate and distribution of the residue among the heirs, legatees and devisees. 

Liquidation – (a) determination of all the assets of the estate and (b) payment of all debts and expenses

Powers and duties of executor and administrator 

1. administration
2. liquidation
3. distribution

RULE 85 - ACCOUNTABILITY AND COMPENSATION OF EXECUTORS AND ADMINISTRATORS

Section 1. Executor or administrator chargeable with all estate and income. — 

Except as otherwise expressly provided in the following sections, every executor or administrator is chargeable in his account 

- with the whole of the estate of the deceased which has come into his 

possession, 

- at the value of the appraisement contained in the inventory; 

- with all the interest, profit, and income of such estate; 

- and with the proceeds of so much of the estate as is sold by him, 

at the price at which it was sold.

Section 2. Not to profit by increase or lose by decrease in value. — 

Account for the excess when he sells any part of the estate for more than the appraisement, 

if any is sold for the less than the appraisement, he is not responsible for the loss, if the sale has justly made. 

If he settles any claim against the estate for less than its nominal value, he is entitled to charge in his account only the amount he actually paid on the settlement.

Section 3. When not accountable for debts due estate. — 

No executor or administrator shall be accountable for debts due the deceased which remain uncollected without his fault.

Section 4. Accountable for income from realty used by him. — 

If the executor or administrator uses or occupies any part of the real estate himself, he shall account for it as may be agreed upon between him and the parties interested, or adjusted by the court with their assent; 

if the parties do not agree upon the sum to be allowed, the same may be ascertained by the court, whose determination in this respect shall be final.

Section 5. Accountable if he neglects or delays to raise or pay money. — 

When an executor or administrator 

a) neglects or unreasonably delays to raise money, 

by collecting the debts or selling the real or personal estate of the deceased, or

b) neglects to pay over the money he has in his hands, and the value of the 

estate is thereby lessened or unnecessary cost or interest accrues, or

c) the persons interested suffer loss, 

the same shall be deemed waste and the damage sustained may be charged and allowed against him in his account, and he shall be liable therefor on his bond.

Section 6. When allowed money paid as cost. — 

The amount paid by an executor or administrator for costs awarded against him shall be allowed in his administration account

unless it appears that the action or proceeding in which the costs are taxed was prosecuted or resisted without just cause, and not in good faith.

Section 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. — 

Allowed:

the necessary expenses the care, management, and settlement of the estate, and for his services, 

four pesos per day for the time actually and necessarily employed, 

or a commission upon the value of so much of the estate as comes into his possession and is finally disposed of by him in the payment of debts, expenses, legacies, 

or distributive shares, 

or by delivery to heirs or devisees, of two per centum of the first five thousand pesos of such value, one per centum of so much of such value as exceeds five thousand pesos and does not exceed thirty thousand pesos, one-half per centum of so much of such value as exceed one hundred thousand pesos.

Special Case

greater sum may be allowed

If there are two or more executors or administrators

apportioned among them by the court according to the services actually rendered by them respectively.

When the executors or administrator is an attorney

he shall not charge against the estate any professional fees for legal services rendered by him.

When the deceased by will makes some other provision for the compensation of his executor

that provision shall be a full satisfaction for his services unless by a written instrument filed in the court he renounces all claim to the compensation provided by the will.

Section 8. When executor or administrator to render account. —

Rule: He shall render an account of his administration within ONE (1) YEAR from the time of receiving letters testamentary or administration. 

Exception: When the court otherwise directs or requires. 

Section 9. Examinations on oath with respect to account — 

Rule: The court may examine the executor or administrator upon oath with respect to every matter relating to any account rendered by him, and shall so examine him as to the correctness of his account before the same is allowed

Exception: when no objection is made to the allowance of the account and its correctness is satisfactorily established by competent proof

The heirs, legatees, distributees, and creditors of the estate shall have the same privilege as the executor or administrator of being examined on oath on any matter relating to an administration account.

Section 10. Account to be settled on notice. — 

Before the account of an executor or administrator is allowed:

notice shall be given to persons interested of the time and place of examining and allowing the same

Such notice may be given 

a) personally to such persons interested

b) by advertisement in a newspaper or newspapers

c) or both, as the court directs.

Section 11. Surety on bond may be party to accounting. — 

Upon the settlement of the account of an executor or administrator, a person liable as surety in respect to such account may, upon application, be admitted as party to such accounting.

RULE 86 - CLAIMS AGAINST ESTATE

Section 1. Notice to creditors to be issued by court. — 

Claims

the right to payment 

to debts or demands of a pecuniary
character which cold have been enforced against the deceased in his lifetime and could have been reduced to simple money judgments

Section 2. Time within which claims shall be filed. — 

Claims against the estate should be filed with the court, which should NOT be MORE than 12 months NOR LESS than 6 months AFTER the date of the FIRST PUBLICATION of the notice to file the same. 

Effect if Claim Not Filed Within the Period 

Rule: Claims not filed within the prescribed period are barred.

Exception: A creditor must file his claim at any time BEFORE an order of distribution is entered subject to the following conditions:

a. There must be an application therefore; 

b. A cause must be shown why the permission should be granted; and

c. The extension of time required to the filing of the claim shall NOT EXCEED one (1) month.

The one-month period is counted from the order allowing the filing of the claim.

Where a Claim Arises from a Contract 

Rule: Claims arising from a contract prescribes  in TEN (10) YEARS. 

Exception: Section 2, Rule 86. Therefore, the claim should be presented within the period prescribed in said section, otherwise it is barred even if the prescriptive period of ten years has not expired. In effect, it supersedes the prescriptive period of ten years. (Rio y Compania vs. Maslog, 105 Phil. 452, 1959) 

Section 3. Publication of notice to creditors. — 

Every executor or administrator shall, immediately after the notice to creditors is issued, cause the same to be published three (3) weeks successively in a newspaper of general circulation in the province, and to be posted for the same period in four public places in the province and in two public places in the municipality where the decedent last resided.

Section 4. Filing of copy of printed notice. — Within ten (10) days after the notice has been published and posted in accordance with the preceding section, the executor or administrator shall file or cause to be filed in the court a printed copy of the notice accompanied with an affidavit setting forth the dates of the first and last publication thereof and the name of the newspaper in which the same is printed.

Section 5. Claims which must be filed under the notice. If not filed, barred; exceptions. —

Claims Against the Estate 

a) Funeral expenses;

b)Expenses for the last sickness of the decedent;
c) Judgments for money; and
d) All claims for money against the decedent arising from contract, express or 

implied, including purely personal obligations other than those which have their 

source in delict or tort. 

Under the Statute of Non-claims, 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 to creditors, which must not be more than twelve(12) nor less than six(6) months after the date of the first publication of said 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 

Tardy Claims 

The court can extend the period within which to present claims against the estate even after the period limited has lapsed, but such extension could only be granted under special circumstances. The period prescribed in the notice to creditors was not exclusive; that money claims against the estate may be allowed at any time before an order of distribution is entered, at the discretion of the court, for cause and upon such terms as are equitable. This extension of the period shall not exceed one month form the issuance of the order authorizing such extension. 

Contingent claim 

A contingent claim is one which, by its nature is necessarily dependent upon an uncertain event for its existence or validity. It may or may not develop into a valid enforceable claim and its validity and enforceability depending upon an uncertain event. A contingent claim does not follow the temporary orders of dismissal of an action upon which it is based: it awaits the final outcome thereof and only the final result can cause its termination. The rules provide that a contingent claim is to be presented in the administration proceedings in the same manner as any ordinary claim and that when the contingency arises which converts the contingent claim into a valid claim the court should then be informed that the claim had already matured. 

Remedy When Defendant Dies Before Action for Money Against Him 

If the defendant dies before any action for a sum of money can be filed against him, the plaintiff may prosecute his claim before the probate court in the state proceedings, and with respect to DAMAGES for INJURY to person or for TORT or QUASI-DELICT, he may institute the necessary action against the executor or administrator of the deceased. 

Section 6. Solidary obligation of decedent. — 

Where the obligation of the decedent is solidary with another debtor, the creditor should file the claim against the estate for the whole amount, without prejudice to the right of the estate to recover contribution from the surviving debtor, otherwise the estate is relieved of liability. 

There is nothing, however, in Sec. 6 that precludes the creditor from filing an action against the surviving debtor, without filing such claim against the estate. 

Section 7. Mortgage debt due from estate. — 

The following are three (3) distinct, independent and mutually exclusive remedies that a mortgagee can alternatively pursue for the satisfaction of his credit in case the mortgagor dies: 

a. To waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;

b. To foreclose the mortgage judicially and prove any deficiency as an ordinary claim; 

c. To rely on the mortgage exclusively, foreclosing the same at any time before it is barred by prescription without right to claim or any deficiency. 

The third alternative includes extrajudicial foreclosure sale and its exercise precludes the recovery of the balance of indebtedness against the estate and frees the estate from further liability. (PNB vs. CA, 360 SCRA 370, 2001) 

Section 8. Claim of executor or administrator against an estate. — 

Procedure:

he shall give notice thereof, in writing, to the court

and the court shall appoint a special administrator, who shall, in the adjustment of such claim, have the same power and be subject to the same liability as the general administrator or executor in the settlement of other claims. 

The court may order the executor or administrator to pay to the special administrator necessary funds to defend such claim.

Section 9. How to file a claim. Contents thereof. Notice to executor or administrator. — 

Filing of Claim: Deliver with the necessary vouchers to the clerk of court and Serve a copy thereof on the executor or administrator. 

Claim founded on a bond, bill, note, or any other instrument: the original need not be filed, but a copy thereof with all indorsements shall be attached to the claim and filed therewith. 

Rule: On demand of the executor or administrator, or by order of the court or judge - 

the original shall be exhibited, 

Exception: Unless it be list or destroyed, in which case the claimant must accompany his 

claim with affidavit or affidavits containing a copy or particular description of the 

instrument and stating its loss or destruction. 

When the claim is due: supported by affidavit stating the amount justly due, that no payments have been made thereon which are not credited, and that there are no offsets to the same, to the knowledge of the affiant. 

If the claim is not due, or is contingent: it must also be supported by affidavits stating the particulars thereof.

Section 10. Answer of executor or administrator. Offsets —

Within fifteen (15) days after service of a copy of the claim on the executor or administrator

The executor or administrator in his answer shall allege in offset any claim which the decedent before death had against the claimant, and his failure to do so shall bar the claim forever.

Section 11. Disposition of admitted claim. — 

Any claim admitted entirely by the executor or administrator shall immediately be submitted by the clerk to the court who may approve the same without hearing; but the court, in its discretion, before approving the claim, may order that known heirs, legatees, or devisees be notified and heard. If upon hearing, an heir, legatees, or devisee opposes the claim, the court may, in its discretion, allow him fifteen (15) days to file an answer to the claim in the manner prescribed in the preceding section.

Section 12. Trial of contested claim. — 

Upon the filing of an answer to a claim, or upon the expiration of the time for such filing, the clerk of court shall set the claim for trial with notice to both parties. The court may refer the claim to a commissioner.

Section 13. Judgment appealable. — 

Judgment against executor and administrator shall not create any lien upon the property of the estate or does not constitute a specific lien which may be registered on such property. 

Judgment of a probate court approving or disapproving a claim is appealable. 

The mode of appeal is record on appeal and must be filed within 30 DAYS from notice of judgment. 

Section 14. Costs. — 

When the executor or administrator, in his answer, admits and offers to pay part of a claim, and the claimant refuses to accept the amount offered in satisfaction of his claim, if he fails to obtain a more favorable judgment, he cannot recover costs, but must pay to the executor or administrator costs from the time of the offer. Where an action commenced against the deceased for money has been discontinued and the claim embraced therein presented as in this rule provided, the prevailing party shall be allowed the costs of his action up to the time of its discontinuance.

RULE 87 - ACTIONS BY AND AGAINST EXECUTORS AND ADMINISTRATORS

Section 1. Actions which may and which may not be brought against executor or administrator. — 

The only actions that may instituted against the executor or administrator independently of the testate or intestate proceedings are: 

a. To recover real or personal property from the estate;
b. To enforce a lien on the real or personal property; 

c. To recover damages for an injury to person or property, real or personal; and
d. To recover damages for breach of contract entered into by the decedent, but committed by the administrator, which is personal to him.

Section 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.

Section 3. Heir may not sue until shall assigned — 

Rule: After the executor or administrator has been appointed, an heir of the decedent has no right to file an action to recover title or possession of the land or for damages done to such lands belonging to the estate of the decedent. 

Exceptions: 

a. Where the executor or administrator fails or
refuses to file such action; or

b. Where there is an order of the court
assigning the land to the heir.
A prior settlement of the estate is not essential before the heirs can commence any action originally pertaining to the deceased, where there is no showing that a judicial administrator had been appointed in proceedings to settle the estate of the deceased. 

Section 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 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.

Section 6. Proceedings when property concealed, embezzled, or fraudulently conveyed. — 

PURPOSE: To elicit information or to secure evidence from those persons suspected as having possessed or having knowledge of properties belonging to deceased, or of having concealed, embezzled or conveyed away any properties of the deceased. 

GENERAL RULE: The probate court has no authority to decide whether or not the properties belong to the estate or to the person being examined since probate courts are courts of limited jurisdiction. 

EXCEPTIONS: 

1. Provisional determination of ownership for inclusion in the inventory; or

2. Submission to the court’s jurisdiction

Section 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.

Section 8. Embezzlement before letters issued — 

The responsible 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 the estate. 

Section 9. Property fraudulently conveyed by deceased may be recovered. When executor or administrator must bring action. — 

This provision applies when there is a deficiency of assets in the hands of the executor or administrator for the payment of the debts and expenses for administration 

administration for it is under this circumstance that there may be conveyances made by the deceased with intent to defraud the creditor. 

REQUISITES BEFORE ACTION MA Y BE FILED 

1. deficiency in assets
2. the conveyance made is void (when  there are badges of fraud)
3. subject of conveyance is liable for attachment in lifetime of decedent. 

Section 10. When creditor may bring action. Lien for costs. — 

When a grantee in a fraudulent conveyance is OTHER THAN THE EXECUTOR OR ADMINISTRA TOR, a creditor may commence and prosecute the action if the following requisites are present: 

1. That the executor or administrator has shown to have no desire to file the action or failed to institute the same within the reasonable time; 

2. Leave is granted by court to creditor to file the action;

3. Bond is filed by creditor as prescribed in this provision; and 

4. Action by creditor is in the name of the executor or administrator.

These requisites need not be complied with if the grantee of the fraudulent conveyance is the executor or administrator himself, in which event the action should be in the name of all creditors. 

RULE 88 - PAYMENT OF THE DEBTS OF THE ESTATE

Section 1. Debts paid in full if estate sufficient. — 

If estate is insolvent, as in liabilities are more than the assets, Sec.7 in relation to Art. 1059 and 2239 to 2251 of the Civil Code must apply. Use rule on preference of creditors If it is sufficient to satisfy claims of a class. 

Section 2. Part of estate from which debt paid when provision made by will. — 

When the will provides for payment of debts, Section 2 must be followed. Although testator acknowledged a specific debt on his will, the creditor must still file his claim in the testate or intestate proceedings, otherwise his claim will be barred. 

Section 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 tat 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.

Section 4. Estate to be retained to meet contingent claims. — 

If the court is satisfied that contingent claim duly filed is valid, it may order the executor or administrator to retain in his hands sufficient estate to pay a portion equal to the dividend of the creditors. 

REQUISITES 

1. contingent claim is duly filed; 

2. court is satisfied that the claim is valid; and 

3. The claim has become absolute.

Is execution a proper remedy to satisfy an approved claim?
NO, because: 

1. Payment approving a claim does not create a lien upon a property of the estate.
2. Special procedure is for the court to order the sale to satisfy the claim. 

Section 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 years from the time limited for other creditors to present their claims. The residual funds within the estate, although already in the possession of the universal heirs, are funds of the estate. The Court has jurisdiction over them and it could compel the heirs to deliver to the administrator of the estate the necessary portion of such funds for the payment of any claims against the estate. 

If the contingent claim matures after the expiration of the two years, the creditors may sue the distributees, who are liable in proportion to the shares in the estate respectively received by them.

It has been ruled that the only instance wherein a creditor can file an action against a distributee of the debtor’s assets is under Sec. 5, Rule 88 of the Rules of Court. The contingent claims must first have been established and allowed in the probate court before the creditors can file an action directly against the distributees

Section 6. Court to fix contributive shares where devisees, legalitees, or heirs have been possession. —

1. Where devisees, legatees or heirs have entered into possession or the estate before debts and expenses settled and paid, and 

2. have become liable to contribute for payment of such debts and expenses, 

3. Court may, after hearing, order settlement of their several liabilities and order how much and in what manner each person shall contribute and may issue execution as
circumstances require. 

Section 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.

Section 8. Dividends to be paid in proportion to claims. — 

If there are no assets sufficient to pay the credits of any once 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 9. Estate of insolvent non-resident, how disposed of. — 

In the administration taken in the Philippines of the estate of the INSOL VENT his estate in the Philippines shall be disposed of that his creditors in and outside in the Philippines in proportion to their respective credits. 

Section 10. When and how claim proved outside the Philippines against insolvent resident's estate paid. — 

Claims proven outside the Philippines where the executor had knowledge and opportunity to contest its allowance therein may be added to the list of claims in the Philippines against the estate of an INSOL VENT RESIDENT and the estate will be distributed equally among those creditors. 

However the benefit of Sections 9 and 10 cannot be extended to the creditors of foreign country where the property of the deceased therein is not equally apportioned to creditors residing in the Philippines and other creditors 

Section 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.

Section 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 distributions 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.

Section 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.

Section 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.

Section 15. Time for paying debts and legacies fixed, or extended after notice, within what periods. —

Section 16. Successor of dead executor or administrator may have time extended on notice within certain period. —

TIME FOR PAYING DEBTS (Secs. 15 & 16) 

1. Executor/administrator allowed to pay debts (and legacies) for a period not more than 1 year. 

2. Extendible (on application of executor/ administrator and after notice and hearing) – not exceeding 6 months for a single extension. 

3. Whole period allowed to original executor/administrator shall not exceed 2 years. 

4. Successor of dead executor/administrator may have time extended on notice not exceeding 6 months at a time and not exceeding 6 months beyond the time allowed
to original executor/administrator.

RULE 89 - SALES, MORTGAGES AND OTHER ENCUMBRANCES OF PROPERTY OF DECEDENT

Section 1. Order of sale of personalty. —

when necessary for paying debts, expenses of administration, or legacies or for preservation of property 

The court may order the whole or part of the personal estate to be sold if necessary: 

1. to pay debts and expense of administration; 

2. to pay legacies; or 

3. to cover expenses for the preservation of the estate. 

Section 2. When court may authorize sale, mortgage, or other encumbrance of realty to pay debts and legacies through personalty not exhausted. — 

when necessary and beneficial to persons interested (heirs, devisees and legatees) 

1. If personal estate is NOT sufficient to pay debts, expenses of administration and legacies; 

2. If sale of personal estate may injure the business or interests of those interested in the estate; 

3. If testator has NOT made sufficient provision for payment of such debts, expenses and legacies; 

4. If deceased was in his lifetime under contract, binding in law to deed real property to beneficiary; (Section 8) 

5. If the deceased during his lifetime held real property in trust for another person. (Sec 9)

Section 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

BOND: for the security of the creditors, as well as of the executor or administrator, and may be prosecuted for the benefit of either.

Section 4. When court may authorize sale of estate as beneficial to interested persons. Disposal of proceeds. —

- when beneficial (to heirs, devisees and legatees, and other interested persons) but not necessary to pay debts, legacies, or expenses of administration 

Section 5. When court may authorize sale, mortgage, or other encumbrance of estate to pay debts and legacies in other countries. — 

When it appears from records and proceedings of a probate court of another country that the estate of the deceased in foreign country is not sufficient to pay debts and expenses. 

Application for authority to sell, mortgage or encumber property of the estate may be denied by the court if: 

1. the disposition is not for any of the reasons specified by the rules; OR
2. under Section 3 Rule 89, any person interested in the estate gives a bond conditioned to pay the debts, expenses of administration and legacies. 

Section 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 cicumstances and under the same regulations as prescribed in this rule for the sale, mortgage, or other encumbrance of other real estate.

Section 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.

Section 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;

- 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 affectual 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.

Section 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.

RULE 90 - DISTRIBUTION AND PARTITION OF THE ESTATE

RULE: ORDER OF DISTRIBUTION shall be made AFTER payments of all debts, funeral expenses, expenses for administration, allowance of widow and inheritance tax is effected. 

In these proceedings, the court shall: 

1. collate; 

2. determine heirs; and 

3. determine the share of each heir. 

Section 1. When order for distribution of reside 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:

assign the residue of the estate to the persons entitled to the same

Controversy as to who are the lawful heirs of the deceased person or as the distributive shares to which each person is entitled: controversy shall be heard and decided as in ordinary cases.

Rule: No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for

Exception: 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.

Section 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 may be heard and determined by the court having jurisdiction of the estate proceedings;

Final order -  binding on the person raising the questions and on the heir.

Section 3. By whom expenses of partition paid. — 

Shall be paid by the parties in proportion to their respective shares or interest in the premises

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.

Section 4. Recording the order of partition of estate. — 

What shall be recorded in the registry of deeds:

Certified copies of final orders and judgments of the court relating to the real estate or the partition