Union Bank vs Santibanez Facts: Efraim Santibanez and his son Edmund entered into 2 loan agreements with

First Countryside Credit Corporation (FCCC). February 1981, Efraim died, leaving a holographic will. Edmund, as one of the heirs, was appointed as the special administrator of the estate of the decedent. During the pendency of the testate proceedings, the surviving heirs, Edmund and his sister Florence Santibaez Ariola, executed a Joint Agreement 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. On August 20, 1981, a Deed of Assignment with Assumption of Liabilities was executed by and between FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, assigned all its assets and liabilities to Union Savings and Mortgage Bank. USMB then made demand letters to Edmund and Florence for their debts with FCCC. Edmund was nowhere to be found (he went to the US) so all demands went to Florence. USMB stated that since she and Edmund executed a joint agreement for the partition of the estate, she is liable for the debts. Florence said 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. The TC denies the claim of USMB for lack of merit. Issue: Can USMB file a claim against Florence and the estate since the estate was already partitioned between Edmund and her? Held: NO! 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. The said court is primarily concerned with the administration, liquidation and distribution of the estate. In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has been probated: USMB 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. The Court notes that the loan was contracted by the decedent. USMB, 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. 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. 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. Claim denied.