RULE 86-1

SECOND DIVISION
[G.R. No. 147999. February 27, 2004]
SUI MAN HUI CHAN and GONZALO CO, petitioners, vs. HON. COURT OF APPEALS and OSCAR D. MEDALLA, respondents.
QUISUMBING, J.:

On November 14, 1988, Napoleon C. Medalla as lessor and Ramon Chan as lessee entered into a Lease Contract over a hotel
building. On August 5, 1989, Ramon Chan died. He was survived by his wife, petitioner Sui Man Hui Chan. Napoleon Medalla
also died and his heir, private respondent Oscar Medalla, succeeded him as owner and lessor of the leased premises.
Petitioners failed to pay the monthly rentals due on the leased premises. Medalla then sent demand letters to petitioners,
but the latter still failed to pay the unpaid rentals. Medalla then asked petitioners to settle the unpaid rentals, pay the unpaid
real estate taxes, and vacate the leased premises. Petitioners vacated the premises but without paying their unpaid rentals
and realty taxes. Aggrieved by petitioners refusal to pay the amounts owing, Private respondent Medalla instituted this
collection suit.
Petitioners contend that any claim should be filed against the estate of Ramon Chan in an estate proceeding pursuant to
Section 5, Rule 86, of the Revised Rules of Court since Ramon Chans estate is the real party-in-interest. The court declared
that Section 5, Rule 86 is inapplicable in the case. It pointed out that the unpaid rentals being claimed were those for the
period April 1993 to December 1998. These were incurred by petitioners and not by the late Ramon Chan, who died on
August 5, 1989.
ISSUE: WON the claim for the unpaid rentals must be made against the estate of Ramon Chan pursuant to Section 5, Rule
86 of the Revised Rules of Court.
HELD: NO. A lease contract is not essentially personal in character. Thus, the rights and obligations therein are transmissible
to the heirs. However, only obligations incurred before the decedents death is chargeable as a Claim Against the estate
under Rule 86.
In the case at bar, the unpaid rentals sought to be claimed were for the period April 1993 to December 1998, which is after
the death of Ramon Chan, the original lessee, on August 5, 1989.
In other words, as the unpaid rentals did not accrue during the lifetime of Ramon Chan, but well after his death, his estate
might not be held liable for them. Hence, there is no indubitable basis to apply Section 5, Rule 86, of the Revised Rules of
Court as petitioners urge respondents to do.

Rule 86 Case # 2
[G.R. No. 117495. May 29, 1997]
NELLY ACTA MARTINEZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, DOMINADOR CORRO, PASTOR
CORRO, CELESTINO CORRO, LUIS CORRO, EREBERTO CORRO, JAIME CRUZ, WENCESLAO DELVO, GREGORIO DELVO,
HERMEJIAS COLIBAO, JOSE OGANA and ALONSO ALBAO, respondents.

BELLOSILLO, J.:

FACTS: Raul Martinez was an operator of taxicab units. Private respondents worked for him as drivers. In 1992, Raul died
leaving his mother, Petitioner Nelly Acta Martinez as his sole heir. Private respondents lodged a complaint before the Labor
Arbiter for violation of PD 85 and illegal dismissal. They alleged that they have been regular drivers of Raul Martinez since
20 October 1989 earning no less than P400.00 per day driving twenty-four (24) hours every other day. For the duration of
employment, not once did they receive a 13th month pay. After the death of Raul Martinez, petitioner took over the
management and operation of the business. On or about 22 June 1992 she informed them that because of difficulty in
maintaining the business, she was selling the units together with the corresponding franchises. However, petitioner did not
proceed with her plan; instead, she assigned the units to other drivers.

Petitioner traversed the claim for 13th month pay by contending that it was personal and therefore did not survive the death
of her son. Besides, private respondents were not entitled thereto as Sec. 3, par. (e), of the Rules and Regulations
Implementing P. D. 851 is explicit that employers of those who are paid on purely boundary basis are not covered therein.
The relationship between her son and private respondents was not that of employer-employee but of lessor-lessee. The
operation of the business ceased upon the death of her son and that she did not continue the business because she did not
know how to run it.

Labor Arbiter dismissed the complaint. NLRC set aside the appealed decision. Hence, this recourse of petitioner. Petitioner
imputes grave abuse of discretion on respondent NLRC in reversing the decision of the Labor Arbiter.

Petitioner argues that respondent NLRC acted as a probate court when it assumed jurisdiction over the estate of a deceased
person, pronounced her legally entitled to succeed the deceased and ordered her to pay the money claim of private
respondents. Moreover, petitioner argues that the claims of private respondents were personal to her son and thus were
abated by his death.

ISSUE: Whether or not the claim of private respondents should be filed in the intestate proceeding of Raul Martinez

HELD: Yes. Petitioner's arguments are well-taken. The claim for 13th month pay pertains to the personal obligation of Raul
Martinez which did not survive his death. The rule is settled that unless expressly assumed, labor contracts are not
enforceable against the transferee of an enterprise. In the present case, petitioner does not only disavow that she continued
the operation of the business of her son but also disputes the existence of labor contracts between her son and private
respondents.

The reason for the rule is that labor contracts are in personam, and that claims for backwages earned from the former
employer cannot be filed against the new owners of an enterprise. Nor is the new operator of a business liable for claims
for retirement pay of employees. Thus the claim of private respondents should have been filed instead in the intestate
proceedings involving the estate of Raul Martinez in accordance with Sec. 5, Rule 86, of the Rules of Court which provides in
part - Sec. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. - All claims for money against the
decedent, arising from contract, express or implied, whether the same be due, not due, or contingent, all claims for funeral
expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent, must be filed
within the time limited in the notice; 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 x x x x

Under this rule, upon the death of the defendant, a testate or intestate proceeding shall be instituted in the proper court
wherein all his creditors must appear and file their claims which shall be paid proportionately out of the property left by the
deceased. The objective is to avoid duplicity of procedures. Hence, the ordinary actions must be taken out from the ordinary
courts. Conformably with Art. 110 of the Labor Code, money claims of laborers enjoy preference over claims of other
creditors in case of bankruptcy or liquidation of the employer's business.

Rule 86 Case # 3
Allan Joseph Sheker vs. Estate of Alicia O Sheker, Victoria Medina, administratrix.
G.R. No. 157912 December 13, 2007
AUSTRIA-MARTINEZ, J.:

FACTS: The RTC admitted to probate the holographic will of Alice Sheker and thereafter issued an order for all the creditors
to file their respective claims against the estate. In compliance therewith, petitioner filed on a contingent claim for agents
commission due him in the event of the sale of certain parcels of land belonging to the estate, and reimbursement for
expenses incurred and/or to be incurred by petitioner in the course of negotiating the sale of said realties.

The executrix of the Estate of Alice Sheker (MEDINA) moved for the dismissal of said money claim against the estate on the
grounds that (1) the requisite docket fee, as prescribed in Section 7(a), Rule 141 of the Rules of Court, had not been paid; (2)
petitioner failed to attach a certification against non-forum shopping; and (3) petitioner failed to attach a written explanation
why the money claim was not filed and served personally.

The RTC-Iligan City issued the assailed Order dismissing without prejudice the money claim based on the grounds advanced
by respondent. Petitioners MR was denied.Petitioner then filed the present petition for review on certiorari.

Petitioner maintains that the RTC erred in strictly applying to a probate proceeding the rules requiring a certification of non-
forum shopping, a written explanation for non-personal filing, and the payment of docket fees upon filing of the claim. He
insists that Section 2, Rule 72 of the ROC provides that rules in ordinary actions are applicable to special proceedings only
in a suppletory manner.

ISSUE: WON a contingent claim filed in the probate proceeding must contain a certification against non-forum shopping,
and failing to do so will dismiss the complaint

HELD: No. The certification of non-forum shopping is required only for complaints and other initiatory pleadings. A
money claim against an estate is more akin to a motion for creditors claims to be recognized and taken into consideration
in the proper disposition of the properties of the estate. In Arquiza v. Court of Appeals,[6] the Court explained thus:

x x The office of a motion is not to initiate new litigation, but to bring a material but incidental matter arising in the
progress of the case in which the motion is filed. A motion is not an independent right or remedy, but is confined to
incidental matters in the progress of a cause. It relates to some question that is collateral to the main object of the action
and is connected with and dependent upon the principal remedy.xx

A money claim is only an incidental matter in the main action for the settlement of the decedents estate; more so if the
claim is contingent since the claimant cannot even institute a separate action for a mere contingent claim. Hence, herein
petitioners contingent money claim, not being an initiatory pleading, does not require a certification against non-forum
shopping.

Rule 86 Case # 4

G.R. No. L-46095 November 23, 1977

PHILIPPINE NATIONAL BANK, petitioner,

vs. HON. ASUNCION, FABAR INCORPORATED, JOSE MA. BARREDO,
CARMEN B. BORROMEO and TOMAS L. BORROMEO, respondents.

MAKASIAR, J.:

Facts: Spouses Antonio and Asuncion Chua were the owners of a parcel of land covered by a TCT and registered in their
names. Upon the death of Antonio, the probate court appointed his son, private respondent Allan Chua as special
administrator of the intestate estate. The court also authorized Allan to obtain a loan accommodation from PNB to be
secured by a real estate mortgage over the above-mentioned parcel of land, which Allan did for P450,000.00 with interest.

For failure to pay the loan in full, the bank extrajudicially foreclosed the real estate mortgage. During the auction, PNB was
the highest bidder. However, the loan had a payable balance. To claim this deficiency, PNB instituted an action with the RTC
against Asuncion and Allan. The RTC dismissed PNBs complaint. The CA affirmed the decision. PNB appealed contending
that under prevailing jurisprudence, when the proceeds from an extrajudicial foreclosure is not enough to pay off the loan,
the mortgagee can file a civil case against the mortgagor to satisfy the deficiency.

Issue: WON PNB may still pursue by civil action the recovery of the balance of indebtedness after having foreclosed the
property securing the same

Held: No. Case law holds that this rule grants to the mortgagee three distinct, independent and mutually exclusive
remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in case the mortgagor
dies, among them:

(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and
(3) to rely on the mortgage exclusively, foreclosing the same at any time before it is barred by prescription without right to
file a claim for any deficiency.

Petitioner herein has chosen the mortgage-creditors option of extrajudicially foreclosing the mortgaged property of the
Chuas. This choice now bars any subsequent deficiency claim against the estate of the deceased, Antonio M. Chua.
Petitioner may no longer avail of the complaint for the recovery of the balance of indebtedness against said estate, after
petitioner foreclosed the property securing the mortgage in its favor. It follows that in this case no further liability remains
on the part of respondents and the late Antonio M. Chuas estate.

Rule 86 Case # 5
G.R. No. 88602 April 6, 1990
TOMASA VDA. DE JACOB, as Special Administratrix of the Estate of the Deceased ALFREDO E. JACOB, petitioner,
vs. CA, BICOL SAVINGS & LOAN ASSOCIATION, JORGE CENTENERA, AND LORENZO C. ROSALES, respondents.

GANCAYCO J.:

FACTS: Dr. Alfredo E. Jacob was the registered owner of a parcel of land. Sometime in 1972 Jorge Centenera was appointed
as administrator of Hacienda Jacob until January 1, 1978 when the SPA was revoked. Centenera secured a loan from the
Bicol Savings & Loan Association. When it fell due, he failed to pay. The mortgage was annotated on the title.

The bank foreclosed the real estate mortgage and the corresponding provisional sale of the mortgaged property to the
respondent bank was effected. On November 5, 1982 a definite deed of sale of the property was executed in favor of the
respondent bank as the sole and highest bidder.

Tomasa Vda. de Jacob who was subsequently named administratrix of the estate of Dr. Jacob contends that the
extrajudicial foreclosure proceedings and the sale of the property mortgaged under the amended real estate mortgage
after the mortgagor died are null and void. It is pointed out that Dr. Jacob died on March 9, 1979 and that the extrajudicial
foreclosure proceedings were effected after his death, that is, the public auction sale was made on May 11, 1979.
Petitioner argues that such extrajudicial foreclosure can only be prosecuted during the lifetime of Dr. Jacob for the reason
that such kind of foreclosure under Act No. 3135, as amended, is authorized only because of the special power of attorney
inserted in the mortgage deed; and that said special power of attorney cannot extend beyond the lifetime of the supposed
mortgagor.

ISSUE: WON an extrajudicial foreclosure of a mortgage may proceed even after the death of the mortgagor - YES

RULING: From the provision of Sec. 7 Rule 86 it is clearly recognized that a mortgagee has three remedies that may be
alternately availed of in case the mortgagor dies, to wit:

(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim; (2) to foreclose
the mortgage judicially and prove the deficiency as an ordinary claim; and; (3) to rely on the mortgage exclusively, or other
security and foreclose the same at anytime, before it is barred by prescription, without the right to file a claim for any
deficiency.

From the foregoing it is clear that the mortgagee does not lose its light to extrajudicially foreclose the mortgage even
after the death of the mortgagor as a third alternative under Section 7, Rule 86 of the Rules of Court.

The power to foreclose a mortgage is not an ordinary agency that contemplated exclusively the representation of the
principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's own protection. That
power survives the death of the mortgagor.

The right of the mortgagee bank to extra judicially foreclose the mortgage after the death of the mortgagor, acting through
his attorney-in-fact, did not depend on the authority in the deed of mortgage executed by the latter. That right existed
independently of said stipulation and is clearly recognized in Section 7, Rule 86 of the Rules of Court aforecited.

While it is true that the question of the validity of said mortgage and consequently the extrajudicial foreclosure thereof
was raised in a separate proceeding before the trial court the pendency of such separate civil suit can be no obstacle to the
issuance of the writ of possession which is a ministerial act of the trial court after a title on the property has been
consolidated in the mortgagee.

WHEREFORE, petitions in G.R. Nos. 88602 and 89544 are hereby DISMISSED for lack of merit, with costs against petitioner.
SO ORDERED.

Rule 86 Case # 6
G.R. No. L-51278 May 9, 1988
HEIRS OF RAMON PIZARRO, SR., vs. HON. CONSOLACION, CFI of Davao and LUIS TAN
Gancayco, J.:

Luis Tan filed petition for the issuance of letters of administration in favor of a certain Atilano. Petition alleged that he is the
only surviving son of deceased Garcia who died intestate, that deceased left a parcel of land in CM Recto, Davao City which
is in the possession of the heirs of Pizarro. Heirs of Pizarro opposed the petition. They claimed that their deceased
predecessor was the vendee of 1/2 of the subject property by virtue of an extrajudicial settlement of estate and deed of
absolute sale executed by Vicente Tan. Heirs of Pizarro prayed that letters of administration of be issued in favor of anyone
of them. Subsequently parties herein entered into a compromise whereby petitioners agreed to withdraw their opposition
to the appointment of private respondent's recommendee and for the intestate proceedings to proceed in due course.

After the judicial administrator had qualified and his inventory of the assets of the late Garcia was approved, respondent
court issued an order dated June 1, 1979 requiring the filing of creditors' claim against the said estate within the period of
six (6) months from the date of the first publication.

A joint motion to proceed with the determination of the heirs of Garcia was filed. Heirs of Pizarro opposed on the sole ground
that it is without procedural basis. Luis Tan filed a motion to exclude the Heirs of Pizarro on the ground that they do not
even claim to be the heirs of the deceased Garcia and that the extrajudicial deed of partition and deed of absolute sale is
spurious and simulated. Heirs of Pizarro filed their opposition to said motion and also filed a claim against the estate of the
deceased Garcia in the amount of P350,000 representing services allegedly rendered by their deceased father and P200,000
for payment of realty and income taxes.

Luis Tan filed a motion to dismiss the claim on the ground that it is spurious and barred for having been filed beyond the six
(6) month period set in the notice for the filing of creditors' claim. Respondent court dismissed both claims of the petitioners
on the ground that they are barred for having been filed out of time.

Issue: WON the claims were filed out of time. No.

Held: The range of the period specified in the rule is intended to give the probate court the discretion to fix the period for
the filing of claims. The probate court is permitted by the rule to set the period provided it is not less than six (6) months nor
more than twelve (12) months from the date of the first publication of the notice thereof. Such period once fixed by the
court is mandatory. The purpose of the law, in fixing a period within which claims against an estate must be presented, is to
insure a speedy settlement of the affairs of the deceased person and the early delivery of the property to the person entitled
to the same.

However, in this case the trial court set the period for the filing of the claims within six (6) months from the date of the first
publication of the notice. It was obviously short of the minimum limit of six (6) months provided for by the law. Petitioner
correctly observed that the trial court thereby shortened the period set by the law.

Since the notice issued and the period set by the trial court was not in accordance with the requirements of Section 2, Rule
86 of the Rules of Court, what should then apply is the period as provided for by the rules which is not less than six months
nor more than twelve (12) months from the date of first publication of notice. The first publication of the notice in the
Mindanao Times was on March 30, 1978. Thus the two claims of petitioners against the estate which were filed on March
5, 1979 and March 29, 1979 respectively were filed on time.

Rule 86 Case # 7
G.R. No. L-46095 November 23, 1977
PNB vs. HON. ASUNCION, FABAR INCORPORATED, JOSE MA. BARREDO, CARMEN B. BORROMEO and TOMAS L.
BORROMEO
MAKASIAR, J.:

PNB granted Fabar Incorporated various credit accommodations and advances. Said credit accommodations had an
outstanding balance of P8,449,169.98 as of May 13, 1977. The credit accommodations are secured by the joint and several
signatures of private respondents herein and Manuel H. Barredo. For failure to pay their obligations notwithstanding
repeated demands a collection suit was filed against all private respondents and Manuel H. Barredo.

Before the case could be decided, Manuel H. Barredo died. Counsel for private respondents informed the respondent Court
of said death. Respondent Court dismissed the suit for money claim in view of the said death citing the provisions of Section
6, Rule 86 of the Revised Rules of Court, which provides:

Where the obligation of the decedent is solidary with another debtor, the claim shall be filed against the decedent
as if he were the only debtor, without prejudice to the right of the estate to recover contribution from the other
debtor ... the claim of plaintiff may be filed with the estate proceedings of the decedent.

PNB asked for reconsideration of the order dismissing the case as against all the defendants, contending that the dismissal
should only be as against the deceased defendant Manuel H. Barredo.

Issue: Was the dismissal proper?

Held: The dismissal is not proper. A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals that nothing
therein prevents a creditor from proceeding against the surviving solidary debtors. Said provision merely sets up the
procedure in enforcing collection in case a creditor chooses to pursue his claim against the estate of the deceased solidary
debtor.

The rule has been set forth that a creditor (in a solidary obligation) has the option whether to file or not to file a claim
against the estate of the solidary debtor. In construing Section 6, Rule 87 of the old Rules of Court, which is the precursor
of Section 6, Rule 86 of the Revised Rules of Court, this Court said, in the case of Manila Surety & Fidelity Co., Inc. vs.
Villarama, et al. that:

It is evident from the foregoing that Section 6 of Rule 87 (of the Old Rules of Court) provides the procedure should
the creditor desire to go against the deceased debtor, but there is certainly nothing in the said provision making
compliance with such procedure a condition precedent before an ordinary action against the surviving debtors,
should the creditor choose to demand payment from the latter, could be entertained to the extent that failure to
observe the same would deprive the court jurisdiction to 'take cognizance of the action against the surviving
debtors. Upon the other hand, the Civil Code expressly allow the creditor to proceed against any one of the solidary
debtors or some or all of them simultaneously.

It is crystal clear that Article 1216 of the New Civil Code is the applicable provision in this matter. Said provision gives the
creditor the right to "proceed against anyone of the solidary debtors or some or all of them simultaneously. "

The choice is undoubtedly left to the solidary creditor to determine against whom he will enforce collection. In case of the
death of one of the solidary debtors, he (the creditor) may, if he so chooses, proceed against the surviving solidary debtors
without necessity of filing a claim in the estate of the deceased debtors. It is not mandatory for him to have the case
dismissed as against the surviving debtors and file its claim against the estate of the deceased solidary debtor, as was made
apparent in the aforequoted decision. For to require the creditor to proceed against the estate, making it a condition
precedent for any collection action against the surviving debtors to prosper, would deprive him of his substantive rights
provided by Article 1216 of the New Civil Code.

Rule 86 Case # 8
G.R. No. 121597 June 29, 2001
PNB vs. CA, ALLAN M. CHUA as Special Administrator of the Intestate Estate of the late ANTONIO M. CHUA and Mrs.
ASUNCION M. CHUA

QUISUMBING, J.:
Spouses Chua were the owners of a parcel of land covered by TCT No. P-142. Upon Antonios death, the probate court
appointed his son, Allan Chua, special administrator of Antonios intestate estate. The court also authorized Allan to obtain
a loan accommodation of P550,000 from petitioner PNB to be secured by a REM over the above-mentioned parcel of land.

Allan obtained a loan of P450,000 from PNB secured by REM on the aforesaid parcel of land. For failure to pay the loan in
full, the bank extrajudicially foreclosed the REM. After the auction sale, the loan had a payable balance of P372,825.63. To
claim this deficiency, PNB instituted an action against both wife and son in his capacity as special administrator. RTC
dismissed PNBs complaint which CA affirmed.

Issue: Can PNB pursue by civil action the recovery of the balance of indebtedness after having foreclosed the property
securing the same? NO.

Held: The rule in extrajudicial foreclosure sale or ordinary debts does not apply to a foreclosure of mortgage arising out of
a settlement of estate.

Sec. 7 of Rule 86 is applicable to the controversy at hand which grants to the mortgagee three distinct, independent and
mutually exclusive remedies that can be alternatively pursued by the mortgage creditor for the satisfaction of his credit in
case the mortgagor dies, among them:

(1) to waive the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary claim;
(2) to foreclose the mortgage judicially and prove any deficiency as an ordinary claim; and
(3) to rely on the mortgage exclusively, foreclosing the same at any time before it is barred by prescription without
right to file a claim for any deficiency.
The plain result of adopting the last mode of foreclosure is that the creditor waives his right to recover any deficiency from
the estate.

PNB has chosen the mortgage-creditors option of extra judicially foreclosing the mortgaged property of the Chuas. This
choice now bars any subsequent deficiency claim against the estate of the deceased, Antonio M. Chua. PNB may no longer
avail of the complaint for the recovery of the balance of indebtedness against said estate, after it foreclosed the property
securing the mortgage in its favor. It follows that in this case no further liability remains on the part of respondents and the
late Antonio M. Chuas estate. WHEREFORE, the instant petition is hereby DENIED.

Rule 86 Case # 9
G.R. No. 118655 April 12, 2000
HEIRS OF ELIAS LORILLA vs.CA, COMMERCIAL CREDIT CORPORATION et al
QUISUMBING, J.:

Respondent Commercial Credit Corporation (now known as PENCAPITAL) filed a complaint with the RTC Makati for a sum of
money against Sanyu Machineries Agencies, Inc., Sanyu Chemical Corporation, and several other defendants, among whom
was Elias Lorilla, (now deceased) who had acted as sureties for the two corporate debtors. The complaint was docketed as
Civil Case No. 5262. PENCAPITAL obtained a writ of attachment on the real property of defendant Elias L. Lorilla covered by
TCT No. 298986, the levy was duly annotated on the certificate of title concerned.

During the pendency of Civil Case No. 5262, Elias L. Lorilla executed a dacion en pago over the property attached in favor of
the JRMDC. Hence, TCT No. 298986 was cancelled and replaced by TCT No. 114067 in the name of JRMDC. The levy in favor
of PENCAPITAL was carried over to the new certificate of title.

JRMDC filed suit against PENCAPITAL for the cancellation of the latter's levy on the property in question with the RTC Pasig
but was denied by the RTC. RTC Makati rendered judgment in Civil Case No. 5262 in favor of PENCAPITAL. RTC Makati issued
a writ of execution and PENCAPITAL thereafter proceeded against the property covered by TCT No. 298986 in the name of
defendant Lorilla.

ISSUE: WON the denial of the action for annulment of judgment, in view of the death of defendant Elias Lorilla, was proper.
YES
HELD: As contemplated in Section 21 of Rule 3, the action has to be dismissed without prejudice to the plaintiff thereafter
presenting his claim as a money claim in the settlement of the estate of the deceased defendant. The claim becomes a
mere incident in the testamentary or intestate proceedings of the deceased where the whole matter may be fully
terminated jointly with the settlement and distribution of the estate.

In the present case, however, the records do not show if any notice of death was filed by Atty. Alfredo Concepcion, counsel
of record of Elias Lorilla in Civil Case No. 5262 before the Makati Court. Thus, neither the Makati Court nor PENTACAPITAL
were made aware of the death of Elias Lorilla. The trial court could not be expected to know or take judicial notice of the
death of Lorilla, absent such notice. Neither could the petitioners have been made aware of the trial courts judgment adverse
to their father, for all notices and orders of the court were sent to Lorillas counsel of record, who did not bother to inform
the parties concerned of Elias Lorillas death. Apparently, Lorillas counsel failed in his duty to promptly inform the court of
the death of his client, as the Rules require.

As far as the Makati Court was concerned, until the Writ of Execution was issued and the levy thereof on August 5, 1993,
Lorilla continued to be represented by counsel of record, Atty. Concepcion; and that upon service of a copy of the decision
on said counsel at the latters address, Lorilla was deemed to have been validly served notice of the judgment. The failure of
Atty. Concepcion to serve notice on the court and the adverse parties regarding his clients death binds herein petitioners as
much as the client himself could be so bound. Jurisprudence teems with pronouncements that a client is bound by the
conduct, negligence and mistakes of his counsel.

Moreover in this case, the SC found that the property which petitioners claim as their lawful inheritance, was no longer part
of the estate of Elias Lorilla at the time of his death. For Elias Lorilla had earlier executed a dacion en pago over this property
in favor of JRMDC. Thesubject property was validly transferred to JRMDC already. Hence petitioners could not claim that
they were deprived of their lawful inheritance without due process of law.

Sec. 21 of Rule 3 of the Revised Rules of Court sets out the procedure that should be followed after the death of the
defendant in a case. If he died "before final judgment in the Court of First Instance," the action should be dismissed without
prejudice to the plaintiff presenting his claim in the settlement of the estate of the deceased in accordance with and as
required by Section 5 of Rule 86 of the Revised Rules of Court. Here, however, the property in question had already been
taken out of the estate of Elias Lorilla, even before judgment in Civil Case No. 5262 was rendered, and it was transferred to
JRMDC by virtue of the dacion en pago executed by Elias Lorilla. For this reason, Section 5 of Rule 86 loses its pertinence to
the case at bar.

Likewise, Section 7 of Rule 39 of the Revised Rules of Court will not apply to the present case. For it speaks of a situation
where a party dies after the entry of the judgment or order of the court. It does not cover a situation where the court was
reportedly informed of the death of a party only after final judgment. WHEREFORE, the assailed decision of the CA is hereby
AFFIRMED.

Rule 86 Case # 11
G.R. No. L-35925 November 10, 1932
RICARDO SIKAT, Judicial Admin of the I/E Mariano P. Villanueva vs.
QUITERIA VIUDA DE VILLANUEVA, Judicial Adm. of the I/E Pedro Villanueva, defendant-appellee.
VILLA-REAL, J.:

FACTS: Ricardo Sikat is the judicial administrator of the intestate estate of Mariano P. Villanueva. Quiteria Vda. de Villanueva
is the judicial administratrix of the intestate estate of Pedro Villanueva. Sikat filed a complaint against Vda de Villanueva
praying that the decision of the committee on claims and appraisal in the intestate proceedings of the aforesaid Pedro
Villanueva with regard to the credit of the late Mariano P. Villanueva be confirmed by the court. Vda. de Villanueva denied
each and every allegation, and set up a special defense of prescription. Evidence was adduced acknowledging indebtedness,
the document dated September 22, 1909, executed by the late Pedro Villanueva in favor of his father, the late Mariano P.
Villanueva.

Issue: WON the claim of Mariano P. Villanueva's estate against Pedro Villanueva estate has already prescribed.

HELD: YES
This court has so held in Santos vs. Manarang, in treating of the period of prescription established in section 689 of the Code
of Civil Procedure, as follows:
It cannot be questioned that this section supersedes the ordinary limitation of actions provided for in chapter 3 of
the Code. It is strictly confined, in its application, to claims against the estates of deceased persons, and has been
almost universally adopted as part of the probate law of the United States. It is commonly termed the statute of
non-claims, and its purpose is to settle the affairs of the estate with dispatch, so that the residue may be delivered
to the persons entitled thereto without their being afterwards called upon to respond in actions for claims, which,
under the ordinary statute of limitations, have not yet prescribed.
Now then, with reference to the extraordinary prescription established for claims against deceased persons, has the claim
of Mariano P. Villanueva's estate against Pedro Villanueva's estate prescribed?

In re Estate of De Dios (24 Phil., 573), cited in the aforementioned case of Santos vs. Manarang, this court laid down the
following doctrine:
The purpose of the law, in fixing a period within which claims against an estate must be presented, is to insure a
speedy settlement of the affairs of the deceased person and the early delivery of the property, to the persons
entitled to receive it.

The speedy settlement of the estate of deceased persons for the benefit of creditors and those entitled to the residue by
way of inheritance or legacy after the debts and expenses of administration have been paid, is the ruling spirit of our
probate law.

SC had seen that under section 689 of the Code, the maximum period for the presentation of claims against the estate of a
deceased person is 18 months from the time fixed by the committee on claims and appraisal in its notice, and this period
may be extended one month if a creditor applies for it within six months after the first term, according to section 690.

The SC held that whenever a creditor's claim presented in the intestate proceedings of the estate of his debtor is not allowed
because the court has no jurisdiction, and such creditor permits more than three years to elapse before instituting the same
proceedings in the competent court, the claim is barred by laches, applying the provisions of section 49 of the Code of Civil
Procedure, by analogy.

Rule 86 Case # 12
IN RE ADMINISTRATION OF THE ESTATE OF PASCUAL VILLANUEVA. MAURICIA G. DE VILLANUEVA vs. PHILIPPINE
NATIONAL BANK
GR No. L-18403 September 30, 1961

PAREDES, J:

FACTS: The widow Mauricia Villanueva petitioned the CFI of Agusan for letters of administration for the administration of
her deceased husband, Pascual Vilanueva. On the hearing, it was agreed to place the estate under administration, but not
under the widow but to a certain Atty. Teodulo R. Ricaforte. After taking oath, he entered upon the performance of his
duties.

On November 9, 1950 the Clerk of the Agusan CFI, issued the following Notice to Creditors to all persons having claims for
money against the decedent requiring them to file their claims with the clerk of court within six but not beyond twelve
months after date of the first publication of this notice.

The above notice contained the usual order for publication thereof (once a week for three consecutive weeks) which was
effected, thru the Morning Times of City, a newspaper of general circulation, on Nov. 16, 23 and 30, 1950, which expired on
November 16, 1951.

On July 20, 1953, PNB filed in the administration proceedings, Creditor's Claim for the total amount of P1,347.45 due as of
June 5, 1953 which was due and demandable since Dec. 20, 1940. The administrator, on November 5, 1954, opposed the
alleging that he had no knowledge or information sufficient to form a belief as to the truth of the allegations therein. He also
argued that the same indebtedness has already been paid, that the caused action for the recovery of the aforesaid amount
of P1,847.45 is barred by the statute of limitations, for more than ten (10) Years have elapsed since the cause of action
accrued up to present time; That the said claim is barred forever on the ground that notice to creditors having been published
in the MORNING TIMES of Cebu City, a newspaper of general circulation in on November 16, 23 and 30, 1950
The appellant PNB, more than four (4) Years after the opposition of the claim presented by the administrator, filed a Petition
for an Extension alleging, among others, that Sec. 2, Rule 87 of the Rules, allows the filing of claims even if the period stated
in the notice to creditors elapsed, upon cause shown and on such terms as equitable; that its failure to present the claiming
with the period stated in the notice, was its lack of knowledge of administration proceeding. The CFI ruled against PNB and
denied its subsequent reconsideration. The said order was appealed to the CA which certified it saying that the issue if purely
of law.

ISSUE: Whether or not PNB is barred to claim the amount of P1, 347.45 - YES

HELD: Publication of notice to creditors is a constructive notice to the world. Hence, creditor cannot be permitted to file
his claim beyond the period fixed in the notice on the ground that he had no knowledge of the administration proceedings

The period fixed in the notice lapsed on November 16, 1951 and the claim was filed on July 20, 1953 or about 1 year and 8
months late. This notwithstanding, appellant contends that it did not know of such administration proceedings, not even its
employees in the Branch Office in Butuan City, Agusan. It is to be noted that the petition for Letters of Administration and
the Notice to Creditors were duly published in the Manila Daily Bulletin and in the Morning Times, respectively, which was
a full compliance with the requirements of the Rules. It is quite true that the Courts can extend the period within which to
present claims against the estate, even after the period limited has elapsed; but such extension should be granted under
special circumstances. The lower did not find any justifiable reason to give the extension and for one thing, there was no
period to extend, the same had elapsed.

Rule 86 Case # 13
EVANGELISTA VS. LA PROVEEDORA
GR No. L-32824 March 31, 1971
38 SCRA 379

MAKALINTAL, J:
Facts:
Manuel Abad Santos died and subsequently, a writ of execution was issued and his property was levied by
the sheriff. Meanwhile, intestate proceeding for the settlement of his estate was filed and petitioner was appointed
administratrix. Even prior to her appointment, having been notified of the scheduled auction sale of the property subject
of the levy, she informed the sheriff of the death of Abad Santos and demanded that he desist from the sale. She filed
a motion with the court but it was denied and the property was sold to the highest bidder, La Proveedora.

Issue: W/N the judgment must be presented as a claim against the estate if the debtor dies before the
levy of execution?

Ruling: Judgment for money against the decedent must be presented as a claim against the estate where the judgment
debtor dies before levy on execution of his properties.

The property levied upon in case the judgment debtor dies after the entry of judgment, as in this case, may be sold for the
satisfaction of the judgment in case death occurs after execution is actually levied. On the other hand, Section 5 of Rule
86 provides that a judgment for money against the decedent must be filed with the court in the proceeding for the
settlement of the estate. In other words, the cut-off date is the date of actual levy of execution. If the judgment debtor dies
after such levy, the property levied upon may be sold; if before, the money judgment must be presented as a claim against
the estate, although of course the same need no longer be proved, the judgment itself being conclusive. But the
judgment creditor will share the estate with other creditors, subject only to such preferences as are provided by law.
Since in this case the death of the deceased preceded the levy of execution on his properties, the judgment against his should
be presented as a claim against his estate, and the sale at auction carried out by the sheriff is null and void.

Rule 86 Case # 14
STRONGHOLD INSURANCE COMPANY VS REPUBLIC-ASAHI GLASS CORPORATION
GR No. 147561 June 22, 2006

PANGANIBAN, CJ:
Facts: Republic Asahi Glass contracts with JDS for the construction of roadways and drainage systems in RAG's
compound. JDS does so and files the required compliance bond with Stronghold Insurance acting as surety. The contract is
5.3M the bond is 795k. JDS falls fully behind schedule, prompting RAG to rescind the contract and demand the compliance
bond. The owner (Santos) of JDS dies and JDS disappears. SHI refuses to pay the bond claiming that the death of JDS owner
extinguishes the obligation.

Issue: Whether or not the death of Santos extinguished his liability under the surety bond?

Ruling: Meaning of Money claims against a deceased debtor

Money claims are claims for money, debt or interest thereon upon a liability contracted by the decedent before his death.
Claims contracted after his death cannot , therefore, be presented with exception of funeral expenses and expenses
incurred on the last sickness of the decedent.

Section 5 of Rule 86 of the Rules of Court expressly allows the prosecution of money claims arising from a contract against
the estate of a deceased debtor. Those claims are not actually extinguished. What is extinguished is only the obligees action
or suit filed before the court, which is not then acting as a probate court.

In the present case, whatever monetary liabilities or obligations Santos had under his contracts with respondent were not
intransmissible by their nature, by stipulation, or by provision of law. Hence, his death did not result in the extinguishment
of those obligations or liabilities, which merely passed on to his estate. Death is not a defense that he or his estate can set
up to wipe out the obligations under the performance bond. Consequently, petitioner as surety cannot use his death to
escape its monetary obligation under its performance bond.

Rule 86 Case # 15
GABRIEL VS BILON
GR No. 146989 February 7, 2007

AZCUNA, J:

Facts: Nelson Bilon, Angel Brazil and Ernesto Pagaygay were jeepney drivers of jeepneys owned by Melencio Gabriel. They
are paying P400/day for their boundary. Later, the drivers were required to pay an additional P50.00 to cover police
protection, car wash, deposit fee, and garage fees. The three drivers refused to pay the additional P50.00. On April 30,
1995, when the drivers reported to work, they were not given any jeepney to drive. Eventually, they were dismissed. The
three drivers sued Gabriel for illegal dismissal. The Labor Arbiter ruled in favor of the drivers and ordered Gabriel to pay
the drivers their backwages and their separation pay amounting to about a total of P1.03M. On April 18, 1997, the LA
promulgated its decision and on the same day sent a copy thereof to Gabriel but Flordeliza (wife of Gabriel) refused to
receive the copy. Apparently, Gabriel died on April 4, 1997.

Issue: Whether or not the money claims of the respondent should be filed against the estate of petitioner?

Held: Respondents monetary claim shall be governed by Section 20 (then Section 21), Rule 3 In relation to Section 5, Rule
86 of the Rules of Court. Thus, said money claims must be filed against the estate of petitioner Melencio Gabriel.

SEC. 20. Action on contractual money claims. When the action is for recovery of money arising from contract, express or
implied, and the defendant dies before entry of final judgment in the court in which the action was pending at the time of
such death, it shall not be dismissed but shall instead be allowed to continue until entry of final judgment. A favorable
judgment obtained by the plaintiff therein shall be enforced in the manner provided in these Rules for prosecuting claims
against the estate of a deceased person. (21a)

In relation to this, Section 5, Rule 86 of the Rules of Court states:

SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. All claims for money against the
decedent arising from contract, express or implied, whether the same be due, not due, or contingent, ... 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.

Thus, in accordance with the above Rules, the money claims of respondents must be filed against the estate of
petitioner Melencio Gabriel.

Rule 85 Case # 17
G.R. No. 102007 September 2, 1994
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs. ROGELIO BAYOTAS y CORDOVA, accused-appellant.

ROMERO, J.:

FACTS: Rogelio Bayotas y Cordova was convicted of Rape. Pending appeal of his conviction, Bayotas died. Consequently, the
Supreme Court in its Resolution of May 20, 1992 dismissed the criminal aspect of the appeal. However, the Solicitor General
expressed his view that the death of accused-appellant did not extinguish his civil liability as a result of his commission of
the offense charged. Counsel for the accused-appellant, on the other hand, opposed the view of the Solicitor General arguing
that the death of the accused while judgment of conviction is pending appeal extinguishes both his criminal and civil
penalties.

ISSUE: Does death of the accused pending appeal of his conviction extinguish his civil liability?

RULING: 1. Death of the accused pending appeal of his conviction extinguishes his criminal liability as well as the civil
liability based solely thereon. As opined by Justice Regalado, in this regard, "the death of the accused prior to final judgment
terminates his criminal liability and only the civil liability directly arising from and based solely on the offense committed, i.e.,
civil liability ex delicto in senso strictiore."

2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if the same may also be predicated
on a source of obligation other than delict. Article 1157 of the Civil Code enumerates these other sources of obligation from
which the civil liability may arise as a result of the same act or omission: a) Law b) Contracts c) Quasi-contracts d) . ..e)
Quasi-delicts

3. Where the civil liability survives, as explained in Number 2 above, an action for recovery therefor may be pursued but only
by way of filing a separate civil action and subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended.
This separate civil action may be enforced either against the executor/administrator or the estate of the accused,
depending on the source of obligation upon which the same is based as explained above:
Estate of the Accused if based on Contract;
Executor/ Administrator if based on law, quasi-contract, quasi-delict.

4. Finally, the private offended party need not fear a forfeiture of his right to file this separate civil action by prescription, in
cases where during the prosecution of the criminal action and prior to its extinction, the private-offended party instituted
together therewith the civil action. In such case, the statute of limitations on the civil liability is deemed interrupted during
the pendency of the criminal case, conformably with provisions of Article 1155 of the Civil Code, that should thereby avoid
any apprehension on a possible privation of right by prescription.

Applying this set of rules to the case at bench, we hold that the death of appellant Bayotas extinguished his criminal liability
and the civil liability based solely on the act complained of, i.e., rape. Consequently, the appeal is hereby dismissed without
qualification. WHEREFORE, the appeal of the late Rogelio Bayotas is DISMISSED with costs de oficio. SO ORDERED.

Rule 86 Case # 18
G.R. No. 200302 April 20, 2016
PEOPLE OF THE PHILIPPINES, Appellee,
vs. GERRY LIPATA y ORTIZA, Appellant.

CARPIO, J.:
Facts: The RTC found the appellant guilty beyond reasonable doubt of the crime of Murder and he is hereby sentenced to
suffer the penalty of imprisonment of reclusion perpetua from twenty (20) years and one (1) day to forty (40) years. The
accused is hereby adjudged to pay the heirs of Rolando Cueno the civil indemnity, actual damages, moral damages,
exemplary damages. The CA affirmed the CA decision.

The PAO filed a notice of appeal on behalf of appellant on 10 June 2011. The CA ordered the immediate elevation of the
records to this Court in its 30 June 2011 Resolution. However, the accused died on 13 February 2011.

Ruling: We concluded that "upon death of the accused pending appeal of his conviction, the criminal action is
extinguished inasmuch as there is no longer a defendant to stand as the accused; the civil action instituted therein for
recovery of civil liability ex delicto is ipso facto extinguished, grounded as it is on the criminal."

However "if the private offended party, upon extinction of the civil liability ex delicto desires to recover damages from
the same act or omission complained of, he must subject to Section 1, Rule 111 ([of the then applicable] 1985 Rules on
Criminal Procedure as amended) file a separate civil action, this time predicated not on the felony previously charged but
on other sources of obligation. The source of obligation upon which the separate civil action is premised determines
against whom the same shall be enforced."

We proceeded to distinguish the defendants among the different causes of action. If the act or omission complained of
arises from quasidelict or, by provision of law, results in an injury to person or real or personal property, the separate civil
action must be filed against the executor or administrator of the estate pursuant to Section 1, Rule 87 of the Rules of
Court. On the other hand, if the act or omission complained of arises from contract, the separate civil action must be filed
against the estate of the accused pursuant to Section 5, Rule 86 of the Rules of Court.

However, there was no separate civil case instituted prior to the criminal case. Neither was there any reservation for filing
a separate civil case for the cause of action arising from quasi-delict. Under the present Rules, the heirs of Cueno should
file a separate civil case in order to obtain financial retribution for their loss. The lack of a separate civil case for the cause
of action arising from quasidelict leads us to the conclusion that, a decade after Cuenos death, his heirs cannot recover
even a centavo from the amounts awarded by the CA.

WHEREFORE, we SET ASIDE the Decision promulgated on 31 May 2011 by the Court of Appeals in CA-G.R. CR-H.C. No.
04461. The criminal and civil liabilities ex delicto of appellant Gerry Lipata y Ortiza are declared EXTINGUISHED by his
death prior to final judgment.

Rule 85 Case # 19
G.R. No. 164108 May 8, 2009
ALFREDO HILADO, LOPEZ SUGAR CORPORATION, FIRST FARMERS HOLDING CORPORATION, Petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THE HONORABLE AMOR A. REYES, Presiding Judge, Regional Trial Court of Manila,
Branch 21 and ADMINISTRATRIX JULITA CAMPOS BENEDICTO, Respondents.

TINGA, J.:

FACTS: Benedicto died intestate and was survived by his wife, administratrix Benedicto, and his only daughter. At the time
of his death, there were two pending civil cases against Benedicto involving the petitioners. In the List of Liabilities attached
to the inventory, private respondent included as among the liabilities, the above-mentioned two pending claims then being
litigated before the Bacolod City courts.

Reliefs sought: 1. That they be furnished with copies of all processes and orders pertaining to the intestate proceedings and
also the manifestation/motion; 2. Set a deadline for the submission by private respondent of the required inventory of the
decedents estate, and 3. Alleging lapses on the part of private respondent in her administration of the estate, and assailing
the inventory that had been submitted thus far as unverified, incomplete and inaccurate.

On 2 January 2002, the Manila RTC issued an order denying the manifestation/motion, on the ground that petitioners are
not interested parties within the contemplation of the Rules of Court to intervene in the intestate proceedings.
ISSUE: Is the denial by the RTC proper.

RULING: Yes, motion should be denied. We can readily conclude that notwithstanding Section 2 of Rule 72, intervention as
set forth under Rule 19 does not extend to creditors of a decedent whose credit is based on a contingent claim. The definition
of "intervention" under Rule 19 simply does not accommodate contingent claims.

Had the claims of petitioners against Benedicto been based on contract, whether express or implied, then they should have
filed their claim, even if contingent, under the aegis of the notice to creditors to be issued by the court immediately after
granting letters of administration and published by the administrator immediately after the issuance of such
notice. However, it appears that the claims against Benedicto were based on tort, as they arose from his actions in
connection with Philsucom, Nasutra and Traders Royal Bank. Civil actions for tort or quasi-delict do not fall within the class
of claims to be filed under the notice to creditors required under Rule 86. These actions, being as they are civil, survive
the death of the decedent and may be commenced against the administrator pursuant to Section 1, Rule 87. Indeed, the
records indicate that the intestate estate of Benedicto, as represented by its administrator, was successfully impleaded in
Civil Case No. 11178, whereas the other civil case was already pending review before this Court at the time of Benedictos
death.

Nonetheless, in the instances that the Rules on Special Proceedings do require notice to any or all "interested parties" the
petitioners as "interested parties" will be entitled to such notice.

The instances when notice has to be given to interested parties are provided in: ( Festin)
(1) Sec. 10, Rule 85 in reference to the time and place of examining and allowing the account of the executor or
administrator;
(2) Sec. 7(b) of Rule 89 concerning the petition to authorize the executor or administrator to sell personal estate, or to
sell, mortgage or otherwise encumber real estates; and;
(3) Sec. 1, Rule 90 regarding the hearing for the application for an order for distribution of the estate residue. After all,
even the administratrix has acknowledged in her submitted inventory, the existence of the pending cases filed by the
petitioners.

Section 1 of Rule 83 requires the administrator to return to the court a true inventory and appraisal of all the
real and personal estate of the deceased within three (3) months from appointment, while Section 8 of Rule 85 requires
the administrator to render an account of his administration within one (1) year from receipt of the letters testamentary
or of administration. We do not doubt that there are reliefs available to compel an administrator to perform either
duty, but a person whose claim against the estate is still contingent is not the party entitled to do so.

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, we do not doubt that 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. WHEREFORE, the petition is DENIED.

Rule 85 Case # 20
G.R. No. L-18994 June 29, 1963
MELECIO R. DOMINGO, as Commissioner of Internal Revenue, petitioner,
vs. HON. LORENZO C. GARLITOS, in his capacity as Judge of the Court of First Instance of Leyte, and SIMEONA K. PRICE,
as Administratrix of the Intestate Estate of the late Walter Scott Price, respondents.

LABRADOR, J.:

FACTS: In a Civil Case, this Court declared as final and executory the order for the payment by the estate of the estate and
inheritance taxes, charges and penalties, amounting to P40,058.55, issued by the CFI of Leyte in, SP No. 14 entitled "In the
matter of the Intestate Estate of the Late Walter Scott Price." In order to enforce the claims against the estate the fiscal
presented a petition dated June 21, 1961, to the court below for the execution of the judgment.
The petition was, however, denied by the court which held that the execution is not justifiable as the Government is
indebted to the estate under administration in the amount of P262,200.

ISSUE: WON the Petition for Execution is proper.

Ruling: No. The petition to set aside the above orders of the court below and for the execution of the claim of the
Government against the estate must be denied for lack of merit. The ordinary procedure by which to settle claims of
indebtedness against the estate of a deceased person, as an inheritance tax, is for the claimant to present a claim before
the probate court so that said court may order the administrator to pay the amount thereof.
When judgment in a civil case has become final and executory, execution is not proper remedy to enforce payment;
claimant should PRESENT CLAIM before probate court.

Another ground for denying the petition of the provincial fiscal is the fact that the court having jurisdiction of the estate
had found that the claim of the estate against the Government has been recognized and an amount of P262,200 has
already been appropriated for the purpose by a corresponding law (Rep. Act No. 2700). Under the above circumstances,
both the claim of the Government for inheritance taxes and the claim of the intestate for services rendered have already
become overdue and demandable is well as fully liquidated. Compensation, therefore, takes place by operation of law, in
accordance with the provisions of Articles 1279 and 1290 of the Civil Code, and both debts are extinguished to the
concurrent amount.
It is clear, therefore, that the petitioner has no clear right to execute the judgment for taxes against the estate of the
deceased Walter Scott Price. Furthermore, the petition for certiorari and mandamus is not the proper remedy for the
petitioner. Appeal is the remedy. The petition is, therefore, dismissed, without costs.

Rule 86 Case 21
G.R. No. L-30453 December 4, 1989

ANGELINA PUENTEVELLA ECHAUS, in her own behalf and as Administratrix of the Estate of Luis Puentevella, assisted by
her husband, RENE ECHAUS, petitioner,
vs.
HON. RAMON BLANCO, as Judge of CFI Iloilo, and PHILIPPINE COMMERCIAL & INDUSTRIAL BANK, as Administrator of
the Testate Estate of the late Charles Newton Hodges, AVELINA A. MAGNO, as Administratrix of the Testate Estate of
the late Linnie Jane Hodges, respondents.

FACTS: The petitioner herein, Angelina Puentevella Echaus, in her own behalf and as Administratrix of the intestate estate
of her deceased father Luis Puentevella, assisted by her husband, Rene Echaus filed a complaint on May 30, 1962 against
Charles Newton Hodges (C.N. Hodges) praying for an accounting of the business covering the Ba-Ta Subdivision, the recovery
of her share in the profits and remaining assets of their business and the payment of expenses and moral and exemplary
damages. However, C.N. Hodges died which resulted to the filing of a petition for the settlement of his estate.

The trial court ruled in favor of the petitioner and ordered the private respondent to pay the amount indicated in the
decision. On January 21, 1967, the same trial court issued an order granting plaintiff's motion for the issuance of a writ of
execution against PCIB. However, the writ was not enforced as plaintiff opted to file a motion dated February 20, 1967 in SP
No. 1672 (estate proceedings of deceased C. N. Hodges) for the payment of the judgment.

Petitioner then filed the instant petition for mandamus dated April 21, 1969 seeking: a) to set aside respondent judge's
order of February 26, 1969; and b) to order PCIB to pay the judgment credit in Civil Case No. 6628. It is the contention of
petitioner that the judgment in Civil Case No. 6628 is now final and executory and the execution thereof becomes a matter
of right under Rule 39, Section 1 of the Rules of Court. The duty to order the execution of a final and executory judgment
is ministerial and the failure of respondent judge to issue such order is a proper case for mandamus.

ISSUE: WON Petition for Mandamus should be granted.

RULING: No. Mandamus not available immediate payment of claim by the administrator is NOT A MATTER OF RIGHT.
The court stressed that the time for paying debts (and legacies) is to be fixed by the probate court having jurisdiction over
the estate of the deceased (Sec. 15, Rule 18). In the absence of any showing that respondent judge who is taking cognizance
of the estate proceedings had already allowed the administrator to dispose of the estate and to pay the debts and legacies
of the deceased, a writ of mandamus will not issue to compel him to order payment of petitioner's claim.
Rule 86 Case # 22
G.R. No. L-33006 December 8, 1982
NICANOR NACAR, petitioner,
vs. CLAUDIO A. NISTAL as Municipal Judge of Esperanza, Agusan del Sur, PROVINCIAL SHERIFF of Agusan del Sur,
ILDEFONSO JAPITANA and ANTONIO DOLORICON, respondents.

GUTIERREZ, JR., J.:

FACTS: Nicanor Nacar filed this petition for certiorari, prohibition, and mandamus with preliminary injunction to annul an
order of the respondent judge of the municipal court of Esperanza, Agusan del Sur directing the attachment of seven (7)
carabaos, to effect the return of four (4) carabaos seized under the questioned order, and to stop the respondent judge
from further proceeding in Civil Case No. 65.

Respondent Ildefonso Japitana filed the complaint in Civil Case No. 65 and entitled it "Claim Against the Estate of the Late
Isabelo Nacar With Preliminary Attachment:" On the basis of this complaint, including an allegation "that defendant are
about to remove and dispose the above-named property (seven carabaos) with intent to defraud plaintiff herein", and
considering that Mr. Japitana had given security according to the Rules of Court, Judge Nistal issued the order commanding
the provincial sheriff to attach the seven (7) heads of cattle in the possession of petitioner Nicanor Nacar. Actually only
four (4) carabaos were attached because three (3) carabaos had earlier been slaughtered during the rites preceding the
burial of the late Isabelo Nacar.

Nicanor Nacar filed a motion to dismiss, to dissolve writ of preliminary attachment, and to order the return of the
carabaos. Private respondent Japitana filed an opposition to this motion while intervenor Antonio Doloricon filed a
complaint in intervention asserting that he was the owner of the attached carabaos and that the certificates of ownership
of large cattle were in his name.
The respondent Judge denied the motion to dismiss prompting Mr. Nacar to come to the Supreme Court.

ISSUE: WON the Petition is meritorious.

RULING: Yes. Ordinary action for collection is not allowed for money claims against the estate.
It is also patent from the complaint that respondent Japitana filed the case against petitioner Nacar to recover seven (7)
heads of carabaos allegedly belonging to Isabelo Nacar which Japitana wanted to recover from the possession of the
petitioner to answer for the outstanding debt of the late Isabelo Nacar.

This matter, however, is only ancillary to the main action. The ancillary matter does not cure a fatal defect in the complaint
for the main action is for the recovery of an outstanding debt of the late lsabelo Nacar due respondent Japitana, a cause of
action about which petitioner Nacar has nothing to do. In fact the fatal defect in the complaint was noticed by the
respondent court when it advised respondent Japitana to amend his complaint to conform with his evidence and from the
court's admission that it was inclined to dismiss the case were it not for the complaint in intervention of respondent
Doloricon. Respondent Doloricon filed his complaint for intervention on the ground that the four carabaos, subject of the
writ of attachment, were actually his carabaos. Thus, the respondent court in its Order denying the petitioner's motion to
dismiss, to dissolve writ of preliminary attachment and in order the return of the carabaos .

WHEREFORE, the petition is hereby granted. The preliminary mandatory injunction issued on January 13, 1971 is made
permanent and the cash bond filed by the petitioner in connection therewith is ordered returned to him. SO ORDERED.

Rule 86 Case 23
G.R. No. 159130 August 22, 2008
ATTY. GEORGE S. BRIONES, petitioner,
vs. LILIA J. HENSON-CRUZ, RUBY J. HENSON, and ANTONIO J. HENSON respondents.

FACTS: Respondent Ruby J. Henson filed on February 23, 1999 a petition for the allowance of the will of her late mother,
Luz J. Henson. However, Lilia Henson-Cruz, one of the deceased's daughters and also a respondent in this petition,
opposed Ruby's petition. She alleged that Ruby understated the value of their late mother's estate and acted with
"unconscionable bad faith" in the management thereof. Lilia prayed that her mother's holographic will be disallowed and
that she be appointed as the Intestate Administratrix.

The trial court then designated petitioner Atty. George S. Briones as Special Administrator of the estate. Atty. Briones
accepted the appointment, took his oath of office, and started the administration of the estate. The issue of this case focused
on the Special Administrator's Final Report submitted by the petitioner for the approval of the court. He prayed that he be
paid a commission of P97,850,191.26 representing eight percent (8%) of the value of the estate under his administration.
The respondents opposed the approval of the final report and prayed that they be granted an opportunity to examine the
documents, vouchers, and receipts mentioned in the statement of income and disbursements. They likewise asked the trial
court to deny the Atty. Briones' claim for commission and that he be ordered to refund the sum of P134,126.33 to the estate.

Nonetheless, the trial court ruled suspending the approval of the report of the special administrator except the payment of
his commission, which is hereby fixed at 1.8% of the value of the estate. On April 29, 2002, respondents filed with the Court
of Appeals (CA) a Petition for Certiorari, Prohibition, and Mandamus which was raffled to the CA's Ninth Division and
docketed as CA-G.R. SP No. 70349. The petition assailed the Order dated March 12, 2002 which appointed accounting firm
Alba, Romeo & Co. as auditors and the Order dated April 3, 2002 which reiterated the appointment.

On July 26, 2002, the respondents filed a Petition for Mandamus with the appellate court, docketed as CA-G.R. SP No.
71844. They claimed that the trial court unlawfully refused to comply with its ministerial duty to approve their seasonably-
perfected appeal. They refuted the trial court's finding of forum shopping by declaring that the issues in their appeal and in
their petition for certiorari (CA-G.R. SP No. 70349) are not identical, although both stemmed from the same Order of April
3, 2002. The court ruled in favour of the respondents and granted the petition for mandamus. Hence, the present petition.

ISSUE: In relation to estate proceedings, the issue of this case is whether the appeal made by the respondents concerning
the Special Administrators commission is valid or not.

RULING: Yes. The judgment of the court approving or disapproving a claim is Appealable as in ordinary actions (Sec.13)

From an estate proceeding perspective, the Special Administrator's commission is no less a claim against the estate than
a claim that third parties may make. Section 8, Rule 86 of the Rules recognizes this when it provides for "Claim of Executor
or Administrator Against an Estate." Under Section 13 of the same Rule, the action of the court on a claim against the
estate "is appealable as in ordinary cases." Hence, by the express terms of the Rules, the ruling on the extent of the Special
Administrator's commission - effectively, a claim by the special administrator against the estate - is the lower court's last
word on the matter and one that is appealable.

Rule 86 Case 24
G.R. No. 170498 January 9, 2013
METROPOLITAN BANK & TRUST COMPANY, Petitioner,
vs.
ABSOLUTE MANAGEMENT CORPORATION, Respondent.

FACTS: On October 5, 2000, Sherwood Holdings Corporation, Inc. (SHCI) filed a complaint for sum of money against Absolute
Management Corporation (AMC). The complaint was docketed as Civil Case No. Q-00-42105 and was assigned to the RTC of
Quezon City, Branch 80.6

SHCI alleged in its complaint that it made advance payments to AMC for the purchase of 27,000 pieces of plywood and
16,500 plyboards in the sum of P12,277,500.00, covered by Metrobank Check Nos. 1407668502, 140768507, 140768530,
140768531, 140768532, 140768533 and 140768534. These checks were all crossed, and were all made payable to AMC.
They were given to Chua, AMCs General Manager, in 1998.7 Chua died in 1999, 8 and a special proceeding for the settlement
of his estate was commenced before the RTC of Pasay City.

SHCI made demands on AMC, after Chuas death, for allegedly undelivered items worth P8,331,700.00. According to AMC,
these transactions could not be found in its records. Upon investigation, AMC discovered that in 1998, Chua received from
SHCI 18 Metrobank checks worth P31,807,500.00. These were all payable to AMC and were crossed or "for payees account
only."10 In its answer with counterclaims and third-party complaint,11 AMC averred that it had no knowledge of Chuas
transactions with SHCI and it did not receive any money from the latter.

In the meantime, Metrobank filed a motion to dismiss14 against AMC on the ground that the latter engaged in prohibited
forum shopping. According to Metrobank, AMCs claim against it is the same claim that it raised against Chuas estate in
Special Proceedings No. 99-0023 before the RTC of Pasay City, Branch 112. The RTC subsequently denied this motion.
Subsequently, Metrobank filed a motion for leave to admit fourth-party complaint24 against Chuas estate. It alleged that
Chuas estate should reimburse Metrobank in case it would be held liable in the third-party complaint filed against it by AMC.

In an order25 dated May 7, 2004, the RTC denied Metrobanks motion. The RTC categorized Metrobanks allegation in the
fourth-party complaint as a "cobro de lo indebido"27 a kind of quasi-contract that mandates recovery of what has been
improperly paid. Quasi-contracts fall within the concept of implied contracts that must be included in the claims required to
be filed with the judicial settlement of the deceaseds estate under Section 5, Rule 86 of the Rules of Court.

As such claim, it should have been filed in Special Proceedings No. 99-0023, not before the RTC as a fourth-party complaint.
The RTC, acting in the exercise of its general jurisdiction, does not have the authority to adjudicate the fourth-party
complaint. As a trial court hearing an ordinary action, it cannot resolve matters pertaining to special proceedings because
the latter is subject to specific rules. The Court of Appeals affirmed the decision of the RTC. Hence, the present petition.

ISSUE: Whether or not quasi-contracts included in claims should be filed pursuant to Rule 86, Section 5 of the Rules of Court.

RULING: Yes. Quasi-contracts are included in claims that should be filed under Rule 86, Section 5 of the Rules of Court

Both the RTC and the CA described Metrobanks claim against Chuas estate as one based on quasi-contract. A quasi-contract
involves a juridical relation that the law creates on the basis of certain voluntary, unilateral and lawful acts of a person, to
avoid unjust enrichment.42 The Civil Code provides an enumeration of quasi-contracts,43 but the list is not exhaustive and
merely provides examples.

Metrobanks fourth-party complaint, as a contingent claim, falls within the claims that should be filed under Section 5, Rule
86 of the Rules of Court. A distinctive character of Metrobanks fourth-party complaint is its contingent nature the claim
depends on the possibility that Metrobank would be adjudged liable to AMC, a future event that may or may not happen.
This characteristic unmistakably marks the complaint as a contingent one that must be included in the claims falling under
the terms of Section 5, Rule 86 of the Rules of Court: Sec. 5. Claims which must be filed under the notice. If not filed, barred;
exceptions. All claims for money against the decedent, arising from contract, express or implied, whether the same be due,
not due, or contingent, all claims for funeral expenses and expenses for the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in the notice.

Specific provisions of Section 5, Rule 86 of the Rules of Court prevail over general provisions of Section 11, Rule 6 of the
Rules of Court. The settlement of the estate of deceased persons ( where claims against the deceased should be filed) is
primarily governed by the rules on special proceedings, while the rules provided for ordinary claims, including Sec. 11,
Rule 6 of the ROC merely apply suppletory.

Rule 86 Case # 25
G.R. No. 171206 September 23, 2013
HEIRS OF THE LATE SPOUSES FLA VIANO MAGLASANG et.al Petitioners,
vs.
MANILA BANKING CORPORATION, now substituted by FIRST SOVEREIGN ASSET MANAGEMENT SPV-AMC, INC.
FSAMI, Respondent.

PERLAS-BERNABE, J.:

FACTS: On June 16, 1975, Sps.Maglasang obtained a credit line from respondent5 in the amount of P350,000.00 which was
secured by a real estate mortgage6 executed over seven of their properties. They availed of their credit line by securing
loans in the amounts of P209,790.50 and P139,805.83 on October 24, 1975and March 15, 1976, respectively,9 both of
which becoming due and demandable within a period of one year. Further, the parties agreed that the said loans would
earn interest at 12% per annum (p.a.) and an additional 4% penalty would be charged upon default.10
Flaviano Maglasang died intestate on February 14,1977, the probate court issued an Order14 granting the petition, thereby
appointing Edgar as the administrator15 of Flavianos estate.

In an Order19 dated December 14, 1978 (December 14, 1978 Order),the probate court terminated the proceedings with
the surviving heirs executing an extra-judicial partition of the properties of Flavianos estate. The loan obligations owed by
the estate to respondent, however, remained unsatisfied due to respondents certification that Flavianos account was
undergoing a restructuring. Nonetheless, the probate court expressly recognized the rights of respondent under the
mortgage and promissory notes executed by the Sps. Maglasang, specifically, its "right to foreclose the same within the
statutory period."20

ISSUE: whether or not the CA erred in affirming the RTCs award of the deficiency amount in favor of respondent.

RULING: In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative and not cumulative.
Notably, an election of one remedy operates as a waiver of the other. For this purpose, a remedy is deemed chosen upon
the filing of the suit for collection or upon the filing of the complaint in an action for foreclosure of the mortgage. As to
Extra Judicial Foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff of the province where the sale is to be made, in accordance with Act. No.
3135, as amended by Act No. 4118

In this case, respondent sought to extra-judicially foreclose the mortgage of the properties previously belonging to Sps.
Maglasang (and now, their estates) and, therefore, availed of the third option. Lest it be misunderstood, it did not
exercise the first option of directly filing a claim against the estate, as petitioners assert, since it merely notified 52 the
probate court of the outstanding amount of its claim against the estate of Flaviano and that it was currently
restructuring the account.53 Thus, having unequivocally opted to exercise the third option of extra-judicial foreclosure
under Section 7, Rule 86, respondent is now precluded from filing a suit to recover any deficiency amount as earlier
discussed.

WHEREFORE, the petition is PARTLY GRANTED. The complaint for the recovery of the deficiency amount after extra-judicial
foreclosure filed by respondent Manila Banking Corporation is hereby DISMISSED. The extra-judicial foreclosure of the
mortgaged properties, however, stands.

SO ORDERED.

Rule 86 Case # 26
G.R. No. 188944 July 9, 2014
SPOUSES RODOLFO BEROT AND LILIA BEROT, Petitioners,
vs. FELIPE C. SIAPNO, Respondent.

SERENO, CJ:

FACTS: On May 23, 2002, Berot obtained a loan from Felipe C. Siapno in the sum of P250,000.00, As security, Macaria,
appellant and Lilia mortgaged to appellee a portion, consisting of 147 square meters (or "contested property"), of that
parcel of land with an area of 718 square meters, in the names of Macaria and her husband Pedro Berot (or "Pedro"),
deceased. On June 23, 2003, Macaria died.

Because of the mortgagors default,appellee filed an action against them for foreclosure of mortgage and damages. The
CA allowed the deficiency as claim against the estate.

ISSUE: WON the deficiency can still be recovered.

RULING: Yes. Second alternative remedy of mortgagor is To foreclose the mortgage judicially and prove any deficiency
as an ordinary action. The foreclosure suit should be against the executor or administrator as party defendant. In the
event that a creditor fails to fully recover his claim, he may obtain deficiency judgment and file it as a claim against the
estate in the manner provided by this Rule
The CA properly upheld respondent's course of action as an availment of the second remedy provided under Section 7,
Rule 86 of the 1997 Revised Rules of Court.32 Under the said provision for claims against an estate, a mortgagee has the
legal option to institute a foreclosure suit and to recover upon the security, which is the mortgaged property.

During her lifetime, Macaria was the registered owner of the mortgaged property, subject of the assailed foreclosure.
Considering that she had validly mortgaged the property to secure a loan obligation, and given our ruling in this case that
the obligation is joint, her intestate estate is liable to a third of the loan contracted during her lifetime. Thus, the
foreclosure of the property may proceed, but would be answerable only to the extent of the liability of Macaria to
respondent.

WHEREFORE, the CA Decision in CA-G.R. CV No. 87995 sustaining the RTC Decision in Civil Case No. 2004-0246-D is hereby
AFFIRMED with the MODIFICATION that the obligation of petitioners and the estate of Macaria Berot is declared as joint in
nature.

SO ORDERED.