Union Bank v.

Santibanez
452 SCRA 228 |
Abu
FACTS:On May 31, 1980, the First Countryside Credit Corporation(FCCC) and
Efraim Santibaez entered into a loan agreement in theamount of P128,000.00. The
amount was intended for the paymentof one ( 1) uni t For d 6600 Agr i cul t ur al
Tr act or . I n vi ew t her eof , Efraim and his son, Edmund, executed a promissory
note in favor
of t h e F C C C , t h e p r i n c i p a l s u m p a y a b l e i n f i v e e q u a l a n n
u a l amortizations. On Dec. 1980, FCCC and Efraim entered into anotherloan
agreement for the payment of another unit of Ford 6600 andone unit of a
Rotamotor. Again, Efraim and Edmund executed apromissory note and a
Continuing Guaranty Agreement for the laterl oan. I n 1981, Ef r ai m
di ed, l eavi ng a hol ogr aphi c wi l l . Test at eproceedings commenced before the
RTC of Iloilo City. Edmund wasappointed as the special administrator of the
estate. During thependency of the testate proceedings, the survi ving hei rs,
Edmundand his sister Florence, executed a Joint Agreement, wherein
theyagreed to di vide between themsel ves and take possession of thethree
(3) tractors: (2) tractors for Edmund and (1) for Florence.Each of them was to
assume the indebtedness of their late fatherto FCCC, corresponding to
the tractor respecti vel y taken
by them.I n t h e me a n t i me , a De e d o f As s i g n me n t wi t h As s u mp t i o
n o f Liabilities was executed by and between FCCC and Union
Bank,wherein the FCCC assi gned al l its assets and liabil iti es to
UnionBank.Demand letters were sent by Union Bank to Edmund, butthe latter
refused to pay. Thus, on February 5, 1988, Union Bankf i l ed a Compl ai nt
f or sum of money agai nst t he hei r s of Ef r ai mSantibaez, Edmund and
Florence, before the RTC of Makati City.Summonses were i ssued against
both, but the one intended forEdmund was not ser ved si nce he was i n
t he Uni t ed St at es andthere was no information on his address or the date of his
return tothe Philippines. Florence filed her Answer and alleged that the
loandocument s di d not bi nd her si nce she was not a par t y
t her et o. Considering that the joint agreement signed by her and her brotherEdmund
was not approved by the probate court, it was nul l andvoi d; hence,
she was not l i abl e t o Uni on Bank under t he j oi nt agreement.Union Bank
asserts that the obli gation of the deceased hadpassed to his legitimate hei rs
(Edmund and Florence) as providedin Article 774 of the Civil Code; and
that the unconditional si gningof the joint agreement estopped Florence, and
that she cannotdeny her liability under the said
document.I n her comment t o t he pet i t i on, Fl or ence mai nt ai ns t hat Union
Bank is trying to recover a sum of money from the deceasedEfraim Santibaez; thus
the claim should have been filed with theprobate court. She points out that at
the time of the execution
of t h e j o i n t a g r e e me n t t h e r e wa s a l r e a d y a n e x i s t i n g p r o b a t e p r
o c e e d i n g s . Sh e a s s e r t s t h a t e v e n i f t h e a g r e e me n t wa s voluntarily
executed by her and her brother Edmund, it should
stillh a v e b e e n s u b j e c t e d t o t h e a p p r o v a l o f t h e c o u r t
a s i t ma y prejudice the estate, the heirs or third parties.ISSUE:W/ N t he cl ai m
of Uni on Bank shoul d have been f i l ed wi t h t heprobate court before
which the testate estate of the late EfraimSantibaez was pending. W/N the
agreement between Edmund andFlorence (which was in effect, a partition of hte
estate) was voidconsidering that it had not been approved by the probate
court.

W/N there can be a valid partition among the heirs before the will isprobated

.HELD:We l l -
s e t t l e d i s t h e r u l e t h a t a p r o b a t e c o u r t h a s t h e j ur i sdi ct i on t o de
t er mi ne al l t he pr oper t i es of t he deceased, t odetermine whether they
should or should not be included in theinventory or list of properties to be
administered. The said court
ispr i mar i l y concer ned wi t h t he admi ni st r at i on, l i qui dat i on anddistributio
n of the estate.I n our j ur i sdi ct i on, t he r ul e i s t hat t her e can be no
val i dpartition among the heirs until after the will has been probated. Inthe present
case, Efraim left a holographic will which contained theprovision which reads as follows:

(e) Al l other properti es, real or personal, which I own
andm a y b e d i s c o v e r e d l a t e r a f t e r m y d e m i s e , s h a l l b e distri
buted in the proporti on indicated in the i mmediatelypreceding paragraph in
favor of Edmund and Florence, mychildren. T h e a b o v e - q u o t e d i s a n a l l -
e n c o mp a s s i n g p r o v i s i o n embracing all the properties left by the decedent
which might haveescaped his mind at that time he was making his wi ll, and
otherpr oper t i es he may acqui r e t her eaf t er . I ncl uded t her ei n ar e t hethr
ee (3) subject tractors. This being so, any partition involving thesai d t r act or s
among t he hei r s i s not val i d. The j oi nt agr eement executed by Edmund
and Florence, partitioning the tractors
amongt h e ms e l v e s , i s i n v a l i d , s p e c i a l l y s o s i n c e a t t h e t i me o f i t
s execution, there was already a pending proceeding for the probateof their late fathers
holographic will covering the said
tractors. T h e Co u r t n o t e s t h a t t h e l o a n wa s c o n t r a c t e d b y t h e dec
edent . The bank, pur por t edl y a cr edi t or of t he l at e Ef r ai mSantibaez,
should have thus filed its money claim with the probatecourt in accordance with Section
5, Rule 86 of the Revised Rules of Court. The filing of a money claim against the
decedents estate inthe probate court is mandatory. This requirement is for the
purposeof protecting the estate of the deceased by informing the
executoror admi ni st r at or of t he cl ai ms agai nst i t , t hus enabl i ng hi m
t oexamine each clai m and to determine whether it is a proper onewhich should
be allowed. The plain and obvious design of the rule isthe speedy settlement of the
affairs of the deceased and the earl ydelivery of the property to the distributees,
legatees, or heirs.Perusing the records of the case, nothing therein could holdFlorence
accountable for any liabi lity incurred by her late father. The documentary
evidence presented, particularly the promissorynotes and the continuing guaranty
agreement, were executed andsigned onl y by the late Efraim Santibaez and his
son Edmund. Asthe petitioner failed to file its money claim with the probate court,at
most, it may only go after Edmund as co-maker of the decedentunder the said
promissory notes and continuing guaranty