Union Bank of the Phil. vs. Santibanez [G.R. No. 149926, February 23, 2005]

 - CASE DIGEST -

Union Bank of the Phil. vs. Santibanez

G.R. No. 149926,  February 23, 2005

452 SCRA 228

 

SUBJECT: LAW ON WILLS AND SUCCESSION

Topic: Probate of Wills

FACTS: Efraim Santibanez obtained a loan First Countryside Credit Corporation (FCCC; Unionbank is its successor) in two instances. This is for the payment of [2] tractors that he purchased. He executed loan agreements and promissory notes (PNs). Edmund, his son, was co-maker in the PNs. Efraim eventually died without having these obligation being fully paid. He left a holographic will which was then probated before the court. Subsequently, Edmund and his sister Florence (heirs of Efraim) executed a Joint Agreement whereby they distributed to themselves certain properties, including the tractors that were financed by the subject loans. The Agreement also provides that the heirs agree to assume the indebtedness pertaining to the properties allotted to them.

 

Unionbank then sent demand letters to Edmund and Florence for the payment of the balance of the obligations but these remained unpaid.

 

In defense, Florence argued that:

• Unionbank should have filed its claim before the probate court in accordance with the provisions of the Rules of Court; and
• The Joint Agreement executed by her and her brother were null and void since there can be no distribution of the estate of the deceased until the will was probated first, and that at the time of the execution of the agreement, the proceedings for the probate of her father’s will is still pending.

ISSUE: May a creditor of a deceased for a money claim collect directly from the heir on the ground that obligations of the deceased transmit to said heirs from the moment of death of the decedent?

 

 RULING: NO. The filing of a money claim against the decedent’s estate in the probate court is mandatory.

 

The Court notes that the loan was contracted by the decedent. The petitioner, purportedly a creditor of the late Efraim Santibañez, should have thus filed its money claim with the probate court in accordance with Section 5, Rule 86 of the Revised Rules of Court.

 

At the outset, well-settled is the rule that a probate court has the jurisdiction to determine all the properties of the deceased, to determine whether they should or should not be included in the inventory or list of properties to be administered. The said court is primarily concerned with the administration, liquidation and distribution of the estate.

 

Moreover, the joint agreement is invalid. The partition is nullity absent the mandatory probate of the will. It provides that the heirs as parties thereto “have agreed to divide between themselves and take possession and use the above-described chattel and each of them to assume the indebtedness corresponding to the chattel taken as herein after stated which is in favor of First Countryside Credit Corp.” The assumption of liability was conditioned upon the happening of an event, that is, that each heir shall take possession and use of their respective share under the agreement. It was made dependent on the validity of the partition, and that they were to assume the indebtedness corresponding to the chattel that they were each to receive. The partition being invalid, the heirs in effect did not receive any such tractor. It follows then that the assumption of liability cannot be given any force and effect.

 

click to view full text of the case