Spec Pro 1

G.R. No. L-18936 May 23, 1967

INTESTATE ESTATE OF ENCARNACION ELCHICO Vda. de FERNANDO, deceased.

NATIVIDAD E. IGNACIO and LEONOR E. ALMAZAN, administratrices-appellants,
vs.
PAMPANGA BUS COMPANY, INC., claimant appellee.

In 1951, Pampanga Bus Company, Inc. lodged its complaint in the CFI of Manila against two (2) defendants Valentin Fernando
and Encarnacion Elchico Vda. de Fernando. The suit was to collect P105,000.00 upon a contractual obligation. 1However, in
1955, Encarnacion Elchico Vda. de Fernando died. By this time, Pambusco had already presented its evidence and submitted its
case.

In 1955, Intestate proceedings were filed.2 Notice to the estate's creditors was given for them to file their claims within six (6)
months from this date, the first publication of the notice.

On Pambusco's motion, the court in the civil case ordered Jose Nicolas, administrator, to substitute for the deceased
Encarnacion Elchico Vda. de Fernando as one of the defendants. No objection to this order was registered.

July 15, 1955. Pambusco amended its complaint in the civil case naming the administrator Jose Nicolas and original defendant
Valentin Fernando, as defendants which the court admitted.

Jose Nicolas, as such administrator, participated in the proceedings and filed an amended answer with counterclaim against
Pambusco.

December 11, 1958. After trial on the merits, the CFI of Manila rendered judgment in the civil case in favor of the plaintiff and
against the defendants, ordering to pay the sum of NINETY-THREE THOUSAND PESOS (P93,000.00) together with the costs of
these proceedings. Defendants' counterclaim is hereby dismissed.

The two defendants appealed, however, the Court of Appeals affirmed the judgment.

Both defendants appealed by certiorari to SC. Valentin Fernando's appeal4 was dismissed for having been filed out of time. The
appeal of the estate of Encarnacion Elchico Vda. de Fernando, 5 raising issues of fact, likewise dismissed.

January 25, 1961. The judgment in the civil case having reached finality, Pambusco moved in the intestate proceedings that the
heirs and/or the present joint administratrices, Natividad E. Ignacio and Leonor E. Almazan, be ordered to pay P46,500.00, the
share of the deceased in the judgment debt.

The administratrices opposed. Ground: Pambusco's claim is time-barred.

Resolving Pambusco's motion, the probate court (in Sp. Proc. 25256) issued an order allowing said amount of P46,500.00 to be
paid by the heirs and/or the joint administratrices;

The administratrices came to this Court on appeal.

ISSUES:
1. W/N Pambusco's claim properly admitted by the probate court? YES.
Section 21, Rule 3 of the Rules of Court,6 which reads:
SEC. 21.Where claim does not survive. — When the action is for recovery of money, debt or interest thereon, and the
defendant dies before final judgment in the Court of First Instance, it shall be dismissed to be prosecuted in the
manner especially provided in these rules.

The Philosophy behind the rule which provides for the dismissal of the civil case is that, upon the death of defendant, all money
claims should be filed in the testate or interstate proceedings "to avoid useless duplicity of procedure." 7

But is there justification for the civil case to go on in spite of the death of Encarnacion Elchico Vda. de Fernando "before final
judgment in the Court of First Instance?"

At the time of the death of defendant Encarnacion Elchico Vda. de Fernando, plaintiff Pambusco had already closed its evidence
and submitted its case. Her administrator substituted. By this substitution, the estate had notice of the claim. The estate was
thus represented. The administrator did not complain of the substitution. At no time did the estate of the deceased impugn the
authority of the regular courts to determine the civil case. Much less did it seek abatement of the civil suit. On the contrary, its
administrator took active steps to protect the interests of the estate. He joined issue with plaintiff. He filed an amended answer.
He counterclaimed. He went to trial. Defeated in the Court of First Instance, he appealed to the Court of Appeals. He even
elevated that civil case to SC.

Now that the judgment has become final, the estate cannot be heard to say that said judgment — reached after a full dress trial
on the merits — will now go for naught. The estate has thus waived its right to have Pambusco's claim re-litigated in the estate
proceedings. For, though presentment of probate claims is imperative, it is generally understood that it may be waived by the
estate's representative.8 And, waiver is to be determined from the administrator's "acts and conduct." 9
 Spec Pro 2

Certainly, the administrator's failure to plead the statute of nonclaims, his active participation, and resistance to plaintiff's
claim, in the civil suit, amount to such waiver. 10

1. W/N Pambusco's claim was properly filed with the probate court even without the six-month period from notice to
creditors.

For, Section 2, Rule 86, permits acceptance of such belated claims. Says Section 2: 18
SEC. 2. Time within which claims shall be filed. — In the notice provided in the preceding section, the court shall state
the time for the filing of claims against the estate, which shall not be more than twelve (12) nor less than six (6)
months after the date of the first publication of the notice. However, at any time before an order of distribution is
entered, on application of a creditor who has failed to file his claim within the time previously limited, the court may,
for cause shown and on such terms as are equitable, allow such claim to be filed within a tune not exceeding one (1)
month.

Here, the claim was filed in the probate court on February 25, 1959, while the defendants in the civil case were still perfecting
their appeal therein. The record does not show that the administrator objected thereto upon the ground that it was filed out of
time. The pendency of that case, we are persuaded to say, is a good excuse for tardiness in the filing of the claim. 19 And, the
order of final distribution is still to be given.

Besides, the order of the lower court of March 18, 1961 allowing payment of appellee's claim "impliedly granted said appellee
an extension of time within which to file said claim." 20 The probate court's discretion has not been abused. It should not be
disturbed. 21

For the reasons given, the order of the lower court is AFFIRMED.

Rule 72 #6 Tan Sen Guan v. Go Siu San

47 Phil. 89 (1924) G.R. No. L-22451

FACTS:
1. Petitioner is administrator of the intestate estate of Tan Peng Sue and the defendant is the administrator in the
testamentary proceeding for the settlement of the estate of Antonio Tampoco. Antonio Tampoco owed Tan Peng Sue,
about the month of January, 1920, the sum of P25,802.60, which with the interest stipulated by the two deceased Tan
Peng Sue and Antonio Tampoco in their lifetime at the rate of 9 6/10 per cent per year, amounted to P30,272.89 at the
end of the year 1922
2. upon the death of Antonio Tampoco on February 5, 1920, proceeding was instituted in the CFI Manila for the
settlement of his estate
3. on December 14 of that year commissioners were appointed to hear and decide whatever claim might be presented
against the estate, and d rendered their final report on June 27, 1921, which was approved by the court below on July
14 of said year;
4. about August 30, 1922, the plaintiff, in his capacity as administrator of the estate of Tan Peng Sue, moved the court
that the committee on claims be again authorized, or a new committee appointed, to hear and decide a claim that he
had and which he was to present against the estate
5. on September 21, 1922, Geo. R. Harvey, judge, appointed new commissioners and the latter recommend payment by
the defendant administrator, which was by agreement of the parties estimated at P30,272.89 at the end of the year
1922.
6. On December 22, 1923, the court presided over by Judge Diaz rendered decision, absolving the defendant
administrator of the estate of Tampoco from the complaint, holding that the commissioners appointed on September
21, 1922, had no authority under the law to hear and decide said claim, because the court that had appointed them
had on the said date no jurisdiction to appoint them in view of the fact that more than fourteen months have elapsed
since their final report was submitted by the former committee on claims in the aforesaid testamentary proceeding
and approved by the court. To this decision the plaintiff excepted on the 29th day of the same month, and moved for
the new trial on January 9, 1924, on the ground that said decision was against the law and the facts proven at the trial.
7. On March 27, 1924, the lower court presided over by the Honorable Geo. R. Harvey, judge, after considering the motion
for new trial, rendered a new decision, setting aside that of December 22, 1923, and ordering the administrator of the
estate of Antonio Tampoco to pay the administrator of the estate of Tan Peng Sue the sum of P28,802.60, with interest
thereon at the rate of 9 6/10 per cent annum from March 28, 1920.
Pre-Issue: WON motion for new trial is proper

HELD: Yes.
 the discretionary power granted the judges by section 145 of the Code of Civil Procedure to revise or amend their
judgments, before the same become final, may be exercised upon a motion based on section 145, subsection 3, jointly
with, or separately from the power to grant new trial, although the exercise of the power to grant new trial necessarily
requires the revocation of the former judgment; that under section 145, a judge may correct errors in his decisions,
and in revoking his original decision by amending it upon the motion a reopening of the case

Issue: WON action for new trial had already prescribed

HELD: Yes.
 Spec Pro 3

1. The failure of Tan Chu Lay, heir of Tan Peng Sue, to present his claim was an omission committed by an heir who had
knowledge of the existence of the credit of his deceased father. The fact that Tan Chu Lay might have been induced by
fraudulent machinations and unlawful influence of the defendant administrator cannot affect the legal consequences
of said act. And even if it be admitted that the widow of Tan Peng Sue was in China while the committee on claims was
acting in the proceeding for the settlement of Antonio Tampoco's estate, still the result would be the same. The law
does not make any reservation or exception whatever, and this court cannot make either.
a. The pertinent part of section 695 of the Code of Civil Procedure provides: A person having a claim against a
deceased person proper to be allowed by the committee, who does not, after publication of the required
notice, exhibit his claim to the committee as provided in this chapter, shall be barred from recovering such
demand or from pleading the same in offset to any action, except as hereinafter provided.
2. Under section 690, a creditor who has failed to present his claim within the period fixed by the committee on claims
may apply to the court, within six months after the period previously fixed, for the renewal of the commission for the
purpose of examining his claim. Also a creditor may make such application even after six months from the expiration
of the period formerly fixed and before the final settlement of the estate, if the committee shall have failed to give the
notice required by section 687.
a. the application of the plaintiff was presented fourteen months after the expiration of the period fixed for the
filing of claims. And while it was presented before the final settlement of the estate of Antonio Tampoco, yet, it
having been proved that the committee had published in the newspaper La Nacion the notice required by law,
there was no possible ground for granting said application. Even considering this application under section
113 of the Code of Civil Procedure, we believe that the lapse of fourteen months is an unsurmountable barrier
opposing the granting of said application.

WON the notice to the creditors was done in the proper manner
HELD: Yes.

1. Before a credit may be held barred by our procedural statutes relative to liquidation of inheritance, it must appear,
among other things, that the committee have designated convenient hours and places for the holding of their meetings
for the examination and admission of claims, and that they have published this fact in the manner provided by the law.
Unless this is done, the right of a creditor cannot prescribe, and he who claims the benefit of prescription has the
burden of proof.
2. the committee on claims in the aforesaid proceeding had published for three consecutive weeks a notice to claimants,
stating that they might present their claims within the period of six months, the committee to hold meetings at the
office of Attorney M.G. Goyena, room No. 1, 34, Escolta, on the last Wednesday of each month at 3:30 p. m. for the
purpose of hearing and deciding claims, notwithstanding the appointment issued by the court, in which the places are
designated where the notice should be posted, and the newspaper in which it should be published for three weeks,
giving the creditors the period of six months to present their claims.
For the foregoing the judgment appealed from is reversed, and it is hereby declared that the plaintiff appellee has lost his right
to enforce his claim in this proceeding, without pronouncement as to costs. So ordered.

AGUAS v. LLEMOS
GR No. L-18107
August 30, 1962
[re: Rule 86 ~ nature of claims]

FACTS:
 Francisco Salinas and the spouses Felix Guardino and Maria Aguas jointly filed before the CFI of Catbalogan, Samar an
action for damages against Hermogenes Llemos
 Plaintiffs averred that:
1. Llemos had served them by registered mail with a copy of a petition for a writ of possession, with notice that
the same would be submitted to the said CFI
2. In view of the copy and notice served, plaintiffs went all the way from Manila to Samar accompanied by their
lawyers, only to discover that no such petition had been filed
3. Llemos maliciously failed to appear in court, rendering plaintiff's expenses and trouble all in vain, causing
them mental anguish and undue embarrassment
 Llemos died before he could answer the complaint
 Upon leave of court, plaintiffs amended their complaint to include Llemos' heirs
 The heirs filed a motion to dismiss, which was granted on the following grounds:
1. The legal representative, not the heirs, should have been made the party defendant
2. The action being for recovery of money, testate/intestate proceedings should be initiated and the claim filed
therein
 Motion for reconsideration = denied
 Hence this appeal

ISSUE:Was the action filed by plaintiff-appellants one that is abated by the death of the defendant?

RULING: NO.
 Plaintiffs argue that when a comparison is made between those provisions of the Rules of Court concerning claims that
are barred if not filed in the estate settlement proceedings (Rule 86 [then Rule 87], Sec. 5) and those defining actions
that survive and may be prosecuted against the executor or administrator (Rule 87 [then Rule 88], Sec. 1), actions for
damages caused by tortious conduct of a defendant (as in the case at bar) survive the death of the latter – plaintiffs are
correct
 Spec Pro 4

 Rule 86, Sec. 5 provides that the actions that are abated by death are:
1. Claims for funeral expenses and those for the last sickness of the decedent
2. Judgments for money
3. All claims for money against the decedent, arising from contract express or implied
 ... none of which include that of the plaintiffs, for it is not enough that the claim against the deceased party be for
money, but it must arise from "contract express or implied", i.e. all purely personal obligations other than those which
have their source in delict or tort
 Rule 87, Sec. 1, enumerates actions that survive against a decedent's executors or administrators:
1. Actions to recover real and personal property from the estate
2. Actions to enforce a lien thereon
3. Actions to recover damages for an injury to person or property
 ... the present suit being under the third kind of action enumerated above, it having been held that "injury to property"
is not limited to injuries to specific property, but extends to other wrongs by which personal estate is injured or
diminished
 To maliciously cause a party to incur unnecessary expenses, as charged in this case, is certainly injurious to that
party's property
 However, the parties have arrived at an amicable settlement of their differences, and that they have agreed to dismiss
the appeal, rendering the case moot
 APPEAL DISMISSED, w/o special pronouncement as to costs

PNB VS CA
GR NO. 121597 JUNE 29, 2001

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 PNB’s 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: May PNB still pursue by civil action the recovery of the balance of indebtedness after having foreclosed the property
securing the same?

Held: No. Under Section 7, Rule 89, once the deed of real estate mortgage is recorded in the proper Registry of Deeds, together
with the corresponding court order authorizing the administrator to mortgage the property, said deed shall be valid as if it has
been executed by the deceased himself.

In the present case, it is undisputed that the conditions under the aforecited rule have been complied with. It follows that Sec. 7
of Rule 86, appropriately applies to the controversy at hand. 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.

Petitioner cited Prudential Bank v. Martinez as precedent for holding that in extrajudicial foreclosure of mortgage, when the
proceeds of the sale are insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the mortgagor.
However, it must be pointed out the cited cases involve ordinary debts secured by a mortgage. The case at bar, we must stress,
involves a foreclosure of mortgage arising out of a settlement of estate, wherein the administrator mortgaged a property
belonging to the estate of the decedent, pursuant to an authority given by the probate court. As the Court of Appeals correctly
stated, the Rules of Court on Special Proceedings comes into play decisively. (PNB vs. CA et al, G.R. No. 121597, June 29, 2001)