Case Summary (G.R. No. 149926)
Facts
- On May 31, 1980 and December 13, 1980, FCCC extended two loans (₱128,000 and ₱123,156) to decedent Efraim Santibañez for the purchase of Ford tractors. Efraim and Edmund executed promissory notes and a continuing guaranty agreement in favor of FCCC.
- Efraim died in February 1981, leaving a holographic will. Probate proceedings commenced in Iloilo City (Special Proceedings No. 2706). Edmund was appointed special administrator on April 9, 1981.
- On July 22, 1981, Edmund and Florence entered a joint extrajudicial agreement partitioning three tractors between themselves—each to assume the indebtedness corresponding to the tractor taken.
- On August 20, 1981, FCCC purportedly assigned its assets and liabilities to Union Savings and Mortgage Bank by deed of assignment; UBP’s participation in that deed was not evidenced.
- UBP sent demand letters to Edmund and Florence in 1987 and, upon nonpayment, filed a complaint for sum of money on February 5, 1988, against both heirs before RTC Makati Branch 150 (later transferred to Branch 63). Edmund remained outside Philippine jurisdiction.
Procedural History
• Florence filed an answer contesting her liability, arguing the joint agreement was unapproved by the probate court and thus void, and that any claim against the decedent should have been filed in probate.
• RTC Branch 63 dismissed the complaint for lack of merit, holding:
– A money claim against a decedent must be filed in the probate court under Rule 86, Sections 1 and 5, Revised Rules of Court.
– The July 1981 joint agreement effected an extrajudicial partition during pending probate and was void for lack of court approval.
– UBP failed to prove it succeeded to FCCC’s rights under the deed of assignment.
• CA affirmed, rejecting UBP’s arguments that the joint agreement needed no probate approval, that Florence waived her right by participation, and that the holographic will did not cover the tractors.
Issues
- Whether an extrajudicial partition among heirs is valid before probate approval.
- Whether heirs’ assumption of decedent’s indebtedness under an invalid partition binds them.
- Whether UBP’s claim could proceed in ordinary civil action without filing in probate court.
- Whether respondents are solidarily liable under the continuing guaranty and promissory notes.
- Whether UBP proved its status as successor in interest to FCCC’s claims.
Applicable Law
• 1987 Philippine Constitution – ensures due process and judicial jurisdiction in estate administration.
• Rule 86, Sections 1 and 5, Revised Rules of Court – mandates filing of all money claims against decedent in probate.
• Civil Code Article 1082 – defines partition and requires court approval for extrajudicial divisions affecting estate jurisdiction.
• Civil Code Article 774 – regulates transmission of obligations from decedent to heirs, subject to estate settlement procedures.
Supreme Court Ruling and Legal Analysis
Jurisdiction of Probate Court
– Probate court has exclusive authority over administration, liquidation, and distribution of a decedent’s estate. All claims for money against a decedent must be filed in probate within the statutory period or are forever barred, per Rule 86, Sec. 5. UBP’s direct civil action circumvented this requirement.Invalidity of Extrajudicial Partition
– Under established jurisprudence, no valid partition among heirs can occur until a will is probated. The holographic will’s residuary clause (“all other properties…”) encompassed the three tractors. The July 1981 agreement, entered while probate was pending, constituted an extrajudicial partition and was void for lack of probate court approval.Heirs’ A
Case Syllabus (G.R. No. 149926)
Facts
- On May 31, 1980, First Countryside Credit Corporation (FCCC) and Efraim Santibaaez entered into a loan agreement for ₱128,000 to finance a Ford 6600 tractor; Efraim and his son Edmund signed a promissory note payable in five annual installments.
- On December 13, 1980, FCCC extended another loan of ₱123,156 for a second Ford 6600 tractor with accessories and a Howard Rotamotor, evidenced by a promissory note and a Continuing Guaranty Agreement signed by Efraim and Edmund.
- Efraim died in February 1981, leaving a holographic will; in March, probate proceedings (Special Proceedings No. 2706) commenced before the RTC Iloilo City, and on April 9, 1981, Edmund was appointed special administrator.
- On July 22, 1981, Edmund and his sister Florence executed a Joint Agreement dividing three tractors—two to Edmund, one to Florence—and each assumed the indebtedness corresponding to the tractor received.
- On August 20, 1981, FCCC assigned all its assets and liabilities to Union Savings and Mortgage Bank (not yet UBP) by Deed of Assignment.
- Demand letters were sent by petitioner Union Bank of the Philippines (UBP) to Edmund, who remained abroad and unserved; UBP narrowed its suit to Florence and filed Civil Case No. 18909 on February 5, 1988, in RTC Makati, Branch 150, for sums due.
- Florence answered on December 7, 1988, contending she was not bound by the loan documents or the unapproved Joint Agreement; the case was transferred to Branch 63 on January 29, 1990.
RTC Decision
- Dismissed the complaint for lack of merit.
- Held that money claims against a decedent must be filed in probate court under Rule 86, Section 5.
- Ruled the Joint Agreement was an unapproved partition of estate and thus void, since probate of the will was pending.
- Found petitioner failed to prove that Union Savings and Mortgage Bank’s assets and liabilities had validly transferred to UBP.
- Concluded that Florence could not be held liable under a void agreement.
Court of Appeals Ruling
- Affirmed the