RULE 86

CLAIMS AGAINST ESTATE

Presented by Pamela Pasia

RULE 86
Section 1. Notice to creditors to be issued by court.
— Immediately after granting letters testamentary or of
administration, the court shall issue a notice requiring all
persons having money claims against the decedent to file
them in the office of the clerk of said court.
Money Claims
Claims for money, debt or interest thereon upon a liability contracted by the
decedent before his death.

Question:
When may the court issue notices to creditors to file their claims?

Answer:
Immediately after granting letters testamentary or of administration.
 Claims arising after his death cannot be presented except for:

1. Funeral expenses; and

2. Expenses of the last sickness of the decedent.

Claims for taxes (inheritance and estate) due and assessed after the
death of the decedent need not be presented in the form of a claim.
The court in the exercise of its administrative control over the
executor or administrator may direct the latter to pay such taxes.

The heirs, even after distribution, are liable for inheritance and
estate taxes.

Section 2. Time within which claims shall be filed.

— In the notice provided in the preceding section, the court shall
estate the time for the filing of claims against the estate, which
shall not be more than twelve (12) not 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 previously
limited, the court may, for cause shown and on such terms as are
equitable, allow such claim to be filed within a time not exceeding
one (1) month.
Statute of Non-Claims
The period fixed by the rule for the filing of the claims against the estate.

Reason for the rule: For the speedy settlement of the affairs of the
deceased and the early delivery of the property to the distributees,
legatees or heirs.

Where to File Claims: All money claims must be entertained by Settlement

Court regardless of amount. (Sec. 1) In other words,B.P. Blg. 129 is not
applicable.
When to file claims
General Rule: Within the time fixed in the notice which shall not be
more than 12 months nor less than 6 months after the date of the
first publication. Otherwise, they are barred forever.

Even if the testator acknowledged the debt in his will and instructed
the executor to pay the debt, the statute of non- claims must still be
complied with; otherwise the claim may also be barred.

Exception: Belated claims

Belated Claims
- Claims not filed within the original period fixed by the court.

On application of a creditor who has failed to file his claim within

the time previously limited, at any time before an order of
distribution is entered, the court may, for cause shown and on
such terms as are equitable, allow such claim to be filed within a
time not exceeding 1 month from the order allowing belated
claims.

Note:

The statute of non-claims supersedes the statute of limitations

insofar as the debts of deceased persons are concerned
because if a creditor fails to file his claim within the time fixed
by the court in the notice, then the claim is barred forever.
However, both statute of non-claims and statute of limitations
must concur in order for a creditor to collect; thus, a creditor
cannot claim, even if within the statute of non-claims, if his
claim has already prescribed under the statute of limitations.
• However, a creditor barred by the Statute of Non-claims may file
a claim as a counterclaim in any suit that the executor or
administrator may bring against such creditor (Sec 5).

Good excuse for late filing

The pendency of the action before the regular courts was cited
as a good excuse for the tardiness of the claim (Echaus v.
Blanco, G.R. No. L-30453, December 4, 1989).
Section 3. Publication of notice to creditors.

—Every executor or administrator shall, immediately after the

notice to creditors is issued, cause the same to be published
three (3) weeks successively in a newspaper of general
circulation in the province, and to be posted for the same
period in four public places in the province and in two public
places in the municipality where the decedent last resided.
 Publication of the notice for 3 successive weeks in a
newspaper of general circulation in the province and post
the same in public places in the province and in public
places in the municipality where the decedent last resided.
 Section 4. Filing of copy of printed notice.

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

10 days after publication and posting.

 Note:

A notice to creditors to file their claims is not proper if only a

special administrator has been appointed as a special
administrator is generally not empowered to pay the debts of
the deceased (Sec. 2, Rule 80) and his bond, unlike that of a
regular administrator, is not conditioned upon the payment of
such debts (Regalado, p. 74).
Section 5. Claims which must be filed under the notice. If not
filed, barred; exceptions. —

All claims for money against the decent, arising from contract,
express or implied, whether the same be due, not due, or
contingent, all claims for funeral expenses and expense for the
last sickness of the decedent, and judgment for money against
the decent, 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.
Where an executor or administrator commences an action, or
prosecutes an action already commenced by the deceased in
his lifetime, the debtor may set forth by answer the claims he
has against the decedent, instead of presenting them
independently to the court as herein provided, and mutual
claims may be set off against each other in such action; and if
final judgment is rendered in favor of the defendant, the
amount so determined shall be considered the true balance
against the estate, as though the claim had been presented
directly before the court in the administration proceedings.
Claims not yet due, or contingent, may be approved at their
present value.
Claims referred to under this section refer to claims for the
recovery of money and which are not secured by a lien
against the property of the estate (Olave v. Canlas, G.R. No. L-
12709, February 28, 1962).

If the claim is secured; apply Sec. 7 of this Rule.

Claims which should be filed under the Statute of Non-claims

1. Money claims, debts incurred by deceased during his lifetime

arising from contract:
a. Express or implied;
b. Due or not due;
c. Absolute or contingent.
2. Claims for funeral expenses;
3. For the last illness of the decedent;
4. Judgment for money against decedent.

Note: The enumeration is exclusive (Festin, p. 75)

A money claim arising from a crime of quasi-delict committed by
the decedent is not included in the concept of claims which have
to be filed under this Rule but should be the subject of an action
against the executor or administrator (Sec. 1, Rule 87) or against
the heirs.
(Belamala v. Polinar, G.R. No. L- 24098, November 18, 1967).
 Unpaid taxes are not covered by the statute of non- claims as
these are monetary obligations created by law (Vera, et al. v.
Fernandez, et al., G.R. No. L- 31364, March 30, 1979).

Absolute Claim
Such a claim as, if contested between living persons, would be
proper subject of immediate legal action and would supply a
basis of a judgment for a sum certain.

Contingent Claim
A conditional claim or claim that is subject to the happening of a
future uncertain event.

It has reference to the uncertainty of liability, and not to

uncertainty of collection
(Gaskell v. Tan Sit, G.R. No. 18405, September 23, 1922).
 Claims not yet due or contingent may be approved at their
present value.

A deficiency judgment is a contingent claim and therefore, must

be filed with the probate court where the settlement of the
deceased is pending, within the period fixed for the filing of claims.
(First National City Bank of New York v. Cheng Tan, G.R. No. L-
14234, February 28, 1962).
 Claims Extinguished by Actions which
Death Survive
Personal to eithe rof the parties and Claim is

not extinguished by death

is extinguished by death but shall be prosecuted as a money

claim against the estate of the

Examples: legal separation, deceased

annulment of marriage, declaration

Example: contractual money claim
of nullity of marriage
 Where the defendant dies while the action for a sum of money is
pending against him in the Court of Appeals, he shall be substituted
therein by his legal representative but the final judgment of the
appellate court shall not be enforceable by a writ of execution but
should be filed in the probate court as a money claim in accordance
with Sec. 5 of Rule 86 (Paredes, et al. v. Moya, G.R. No. L- 38051,
December 26, 1973). If none of the heirs is willing to be substituted
defendant, the creditor has to procure the appointment of an
executor/administrator (Sec. 16, Rule 3).
 If a final judgment had already been rendered against the
decedent prior to his death, but without levy on execution having
been effected against his property, such judgment must also be
filed as a claim against the estate in the manner provided for by
this Rule. If levy has already been made before his death,
execution shall proceed (Sec. 7 [c], Rule 39).
Section 6. Solidary obligation of decedent

— 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 debtor. In a joint obligation of the
decedent, the claim shall be confined to the portion belonging to
him
Claim should be filed against decedent as if he were the only
debtor without prejudice on the part of the estate to recover
contribution from the other debtor.

Joint obligation of decedent

- The claim must be confined to the portion belonging to the
decedent.
Section 7. Mortgage debt due from estate.

— A creditor holding a claim against the deceased secured by mortgage

or other colateral security, may abandon the security and prosecute his
claim in the manner provided in this rule, and share in the general
distribution of the assets of the estate; or he may foreclose his mortgage
or realize upon his security, by action in court, making the executor or
administrator a party defendant, and if there is a judgment for a
deficiency, after the sale of the mortgaged premises, or the property
pledged, in the foreclosure or other proceeding to realize upon the
security, (ccnt.)
he may claim his deficiency judgment in the manner provided in the
preceding section or he may rely upon his mortgage or other security
alone, and foreclosure the same at any time within the period of the statute
of limitations, and in that event he shall not be admitted as a creditor, and
shall receive no share in the distribution of the other assets of estate; but
nothing herein contained shall prohibit the executor or administrator from
redeeming the property mortgaged or pledged, by paying the debt for
which it is held as security, under the direction of the court, if the court shall
adjudge it to be for the best interest of the estate that such redemption
shall be made.
Alternative remedies: (AFR)

1. Abandon or waive the security and prosecute his claim against the estate
and share in the general distribution of the assets of the estate;
2. Foreclose his mortgage or realize upon his security by action in court
making the executor or administrator a party defendant and if there is
judgment for deficiency, he may file a claim (contingent) against the estate
within the statute of non-claims;
3. Rely solely on his mortgage and foreclose (judicially or extrajudicially) the
same at anytime within the period of the statute of limitations but he
cannot be admitted as creditor and shall not receive in the distribution of
the other assets of the estate.
Note: The mortgage creditor can avail of only one of the three remedies
and if he fails to recover under that remedy he can not avail of any of
the other two remedies (Bachrach Motor Co., Inc., v. Icarangal, G.R. No.
L-45350, May 29,1939).

The rule reserves a right to the executor or administrator of an estate to

redeem a mortgaged or pledged property of a decedent which the
mortgage or pledgee has opted to foreclose, instead of filing a money claim
with the probate court, under said Section 7 of Rule 86. While the
redemption is subject to the approval of the probate court, the exercise of
the right is discretionary upon the said executor or administrator and may
not be ordered by the probate court upon its own motion (Manalansan v.
Castaneda, G.R. No. L-43607, June 27, 1978)
Section 8. Claim of executor or administrator against an estate.

— If the executor or administrator has a claim against the estate he

represents, he shall give notice thereof, in writing, to the court, and the
court shall appoint a special administrator, who shall, in the adjustment
of such claim, have the same power and be subject to the same liability
as the general administrator or executor in the settlement of other
claims. The court may order the executor or administrator to pay to the
special administrator necessary funds to defend such claim.
This is one of the instances where a special administrator is
appointed. The special administrator will have authority to act
only with respect to the claim of the regular administrator or the
executor (Regalado, p. 83).
Section 9. How to file a claim. Contents thereof. Notice to executor or
administrator.

— A claim may be filed by delivering the same with the necessary vouchers
to the clerk of court and by serving a copy thereof on the executor or
administrator. If the claim be founded on a bond, bill, note, or any other
instrument, the original need not be filed, but a copy thereof with all
indorsements shall be attached to the claim and filed therewith. On
demand, however, of the executor or administrator, or by order of the
court or judge, the original shall be exhibited, unless it be list or destroyed,
in which case the claimant must accompany his claim with affidavit or
affidavits containing a copy or particular description of the instrument and
stating its loss or destruction.
 When the claim is due, it must be supported by affidavit stating the
amount justly due, that no payments have been made thereon which are
not credited, and that there are no offsets to the same, to the knowledge of
the affiant. If the claim is not due, or is contingent, when filed, it must also
be supported by affidavits stating the particulars thereof. When the
affidavit is made by a person other than the claimant, he must set forth
therein the reason why it is not made by the claimant. The claim once filed
shall be attached to the record of the case in which the letters
testamentary or of administration were issued, although the court, in its
discretion, and as a matter of convenience, may order all the claims to be
collected in a separate folder.
How to file a claim:

1. Deliver the claim with the necessary vouchers to the clerk of

court;
2. Serve a copy thereof on the executor or administrator;
3. If the claim is due, it must be supported by an affidavit stating
the amount due and the fact that there has been no offsets;
4. If the claim is not due or contingent, it must be accompanied by
an affidavit stating the particulars thereof.
Section 10. Answer of executor or administrator. Offsets

— Within fifteen (15) days after service of a copy of the claim on the
executor or administrator, he shall file his answer admitting or denying the
claim specifically, and setting forth the admission or denial. If he has no
knowledge sufficient to enable him to admit or deny specifically, he shall
state such want of knowledge. The executor or administrator in his answer
shall allege in offset any claim which the decedent before death had
against the claimant, and his failure to do so shall bar the claim forever. A
copy of the answer shall be served by the executor or administrator on the
claimant. The court in its discretion may extend the time for filing such
answer.
• Executor shall file his answer to the claim within 15 days after
service of a copy of the claim.

• The executor or administrator may interpose any counterclaim

in offset of a claim against the estate. Said counterclaim is
regarded as a compulsory counterclaim as the failure to file the
same shall bar the claim forever.
Section 11. Disposition of admitted claim.

— Any claim admitted entirely by the executor or administrator shall

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

• The heir, legatee or devisee may oppose the claim admitted by the
executor or administrator.
Section 12. Trial of contested claim.

— Upon the filing of an answer to a claim, or upon the expiration

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

• The court may refer the claim to a commissioner.

Section 13. Judgment appealable.

— The judgment of the court approving or disapproving a claim,

shall be filed with the record of the administration proceedings
with notice to both parties, and is appealable as in ordinary
cases. A judgment against the executor or administrator shall be
that he pay, in due course of administration, the amount
ascertained to be due, and it shall not create any lien upon the
property of the estate, or give to the judgment creditor any
priority of payment.
Judgment against the executor and administrator shall not
create any lien upon the property of the estate or does not
constitute a specific lien which may be registered on such
property.

Judgment of a probate court approving or disapproving a claim

is appealable.

Note: The mode of appeal is record on appeal and must be

filed within 30 days from notice of judgment
Section 14. Costs.

— When the executor or administrator, in his answer, admits and

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