matters involved, the issues raised, the specification of errors of fact or
CONVEYED BY THE DECEASED
Q: What are the requisites before a creditor may bring an action for recovery of property fraudulently conveyed by the deceased?
A:
1. There is a deficiency of assets in the hands of an executor or administrator for the payment of debts and expenses of administration;
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O M A S2. In his lifetime, the deceased had made or attempted to make a fraudulent conveyance of his property or had so conveyed such property that by law, the conveyance would be void as against his creditors;
3. The subject of the attempted conveyance would be liable to attachment in his lifetime;
4. The executor or administrator has shown no desire to file the action or failed to institute the same within a reasonable time;
5. Leave is granted by the court to the creditor to file the action;
6. A bond is filed by the creditor; and 7. The action by the creditor is in the name
of the executor or administrator (Sec. 10).
Note: The creditor shall have a lien on the judgment
recovered for costs and expenses. The last 3 requisites are unnecessary where the grantee is the executor or administrator himself, in which event, the action should be in the name of all the creditors. (Sec. 10;
Herrera, Vol. III-A, p. 175, 2005 ed.)
H. DISTRIBUTION AND PARTITION 1. LIQUIDATION
Q: What is liquidation?
A: Liquidation is the determination of all assets of the estate and payment of all debts and expenses.
Q: Discuss the process for the distribution of the residue of the estate. A:
Note: Even if the testator stated in his will that he owes a certain person and ordered that the same be paid, if the
estate is insolvent, the creditor shall not enjoy priority over other claimants. The provision in the will should only establish the claim of the creditor against the estate. He must still file his claim according to Section 9, Rule 86 and must comply with the statute of non-claims.
Q: When is the order for distribution of residue made?
A:
GR: Order of distribution shall be made after payments of all debts, funeral expenses, expenses for administration, allowance of widow and inheritance tax. (Sec. 1, Rule 90) XPN: If the distributees or any of them gives a bond conditioned for the payment of said obligation, the order of distribution may be made even before the payment of all debts, etc. (par. 2, Sec. 1, Rule 90)
Note: The probate court loses jurisdiction over the
settlement proceedings only upon payment of all debts and expenses of the obligor and delivery of the entire estate to all the heirs. (Guilas v. Judge of
CFI of Pampanga, G.R. No. L- 26695, Jan. 31, 1972)
Q: When should declaration of heirship be made? A: It is only after, and not before, the payment of all debts, funeral expenses, charges of administration, allowances to the widow, and inheritance tax shall have been effected that the court should make the declaration of heirs or of such person as are entitled by law to the residue.
It should however be made clear that what the court is enjoined from doing so is the distribution of the residue of the estate before its obligations are first paid, but the court is not enjoined from making the declaration of heirs prior to the satisfaction of these obligations.
Q: What should the executor or administrator do if all the claims are paid or settled?
A: The executor or administrator shall prepare the project of partition reflecting the residue of the estate and how it is to be distributed. However, this is not mandatory. (Herrera, Vol. III-A, p. 213, 2005 ed.)
2. PROJECT OF PARTITION
Q: What is project of partition?
A: It is a document prepared by the executor or administrator setting forth the manner in which the estate of the deceased is to be distributed among the heirs. (Solivio v. CA, G.R. No. 83308, Feb. 12, 1990)
It is merely a proposal for the distribution of the hereditary estate which the court may accept or reject. (Herrera, Remedial Law III-A, p 213)
Q: May an heir of the deceased sell his undivided share during the pendency of the estate proceedings without the prior approval of the probate court?
A: Yes. An heir has the right to sell his undivided or ideal share of the estate, he being the co-owner with other heirs of the estate. Court approval is necessary only if specific property of the estate is sold. (Heirs of Pedro Escanlar v. CA, G.R. No. 119777, Oct. 23, 1997)
Q: Does the finality of the approval of the project of partition by itself alone terminate the probate proceeding?
A: No. As long as the order of the distribution of the estate has not been complied with, the probate proceedings cannot be deemed closed and terminated. (Estate of Ruiz v. CA, G.R. No. 118671, Jan. 29, 1996)
3. REMEDY OF AN HEIR ENTITLED TO RESIDUE BUT NOT GIVEN HIS SHARE
Q: What is the remedy of an heir who is entitled to the residue but was not given his share?
A:
1. MOTION TO SET ASIDE THE DISTRIBUTION- If an heir appears after the court approved the project of partition, the heir must file a Motion to set aside the distribution with the court so that the court will not proceed with the distribution of the residue. The probate court shall determine whether such heir has a right to participate in the distribution of the residue. If it is proven that the heir has a right, the court may order the revision of the project of partition for its adjustment.
2. MOTION FOR THE RE- OPENING OF THE
SETTLEMENT PROCEEDINGS-If the
distribution has already been made, a motion for closure has already been granted, the heir must file a Motion for the re-opening of the settlement proceedings within the 30 day
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O M A Sreglementary period, provided the order of closure has not yet become final and executory.
3. ACCION REINVIDICATORIA- If the order of closure has already become final and executory, (Vda. de Lopez v. Lopez, G.R. No. L-28602, Sept. 29, 1970)
Q: When is title to property vested to the heirs? A: It is vested from finality of order of distribution. Q: Is the order that determines distributive share appealable?
A: Yes. Otherwise, it becomes final.
4. INSTANCES WHEN PROBATE COURT MAY ISSUE WRIT OF EXECUTION
Q: What are the instances when the probate court may issue writ of execution?
A:
GR: A probate court cannot issue a writ of execution. In the case of Aldamiz vs. Judge of
CFI of Mindoro, 85 Phil. 228, a writ of execution is not the proper procedure allowed by the Rules of Court for the payment of debts and expenses of administration. The proper procedure is for the court to order the sale of personal estate or the sale or mortgage of real property of the deceased and all debts and expenses of the administration should be paid out of the proceeds of such sale or mortgage. The order for the sale or mortgage should be issued upon motion of the administrator and with the written notice to all the heirs, legatees and devisees residing in the Philippines. And when the sale or mortgage is to be made, the regulations contained in Rule 89, Sec. 7 should be complied with.
XPNS:
1. To satisfy the distributive shares of the devisees, legatees and heirs in possession of the decedent’s assets;
2. To enforce payment of the expenses of partition; and
3. To satisfy the costs when a person is cited for examination in probate proceedings.
I. TRUSTEES
1. DISTINGUISHED FROM EXECUTOR/ADMINISTRATOR
EXECUTOR/ ADMINISTRATOR TRUSTEE
Accounts are NOT under oath and except for initial and final submission of accounts, they shall be filed only at such times as may be required by the court
Accounts must be UNDER OATH and filed ANNUALLY
Court that has jurisdiction may be MTC or RTC Court which has jurisdiction is the RTC if appointed to carry into effect provisions of a will; if trustee dies, resigns or is removed in a contractual trust, RTC has jurisdiction in the appointment of new trustee
May sell, encumber or mortgage property if it is necessary for the purpose of paying debts, expenses of administration or legacies or for the preservation of property or if sale will be beneficial to heirs, legatees or devisees
(Upon application to the court with written notice to the heirs)
May sell or encumber property of the estate held in trust if necessary or expedient or upon order of the court
Order of sale has NO TIME LIMIT Order of sale has NO TIME LIMIT
Approved by the court to settle estate of the decedent Appointed to carry into effect the provisions of a will or written instrument (contractual trust)
NOT EXEMPTED from filing a bond even if such exemption is provided in the will (ratio: bond is only conditioned upon payment of debts)
May be EXEMPTED from filing a bond if provided in the will or if beneficiaries requested such exemption
Services of executors or administrator is terminated UPON PAYMENT OF DEBTS of the estate and DISTRIBUTION of property to the heirs
Trusteeship is terminated upon TURNING OVER THE PROPERTY to beneficiary after expiration of the trust (period may be provided for in the will or trust contract) MUST PAY the debts of the estate NO OBLIGATION TO PAY the debts of the beneficiaries or
Q: What is a trust?
A: A legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property. Q: Who is a trustee?
A: A trustee is one who is appointed to carry out the provision of the will or any written instrument executed by the trustor.
2. CONDITIONS OF THE BOND
Q: What are the conditions of the bond? A:
1. That the trustee will make and return to the court, at such time as it may order, a true inventory of all the estate belonging to him as trustee, which at the time of the making of such inventory shall have come to his possession or knowledge;
Note: When the trustee is appointed as a
successor to a prior trustee, the court may dispense with the making and return of an inventory if one has already been filed.
2. That he will manage and dispose of all such estate, and faithfully discharge his trust in relation thereto, according to law 3. and the will of the testator or the provisions of the instrument or order under which he is appointed;
4. That he will render upon oath at least once a year until his trust is fulfilled a true account of the property in his hands and of the management and disposition thereof, and such other accounts as the court may order; and
5. That at the expiration of his trust he will settle his accounts in court and pay over and deliver all the estate remaining in his hands, or due from him on such settlement, to the persons entitled thereto (Sec. 6, Rule 98).
Q: Is the trustee required to file a bond? A:
GR: Yes. Neglect of trustees to file a bond will be interpreted by the court as resignation or decline to accept the trust.
XPN: If requested by the testator or by all persons beneficially interested in the trust, the trustee may be exempted from filing a bond. But the court may cancel such exemption anytime. (Sec. 5, Rule 98)
3. REQUISITES FOR THE REMOVAL AND RESIGNATION OF A TRUSTEE
Q: What are the requisites for the removal or resignation of a trustee?
A:
1. Petition filed by parties beneficially interested;
2. Notice to trustee; and 3. Hearing (Sec. 8, Rule 98).
4. GROUNDS FOR REMOVAL AND RESIGNATION OF A TRUSTEE
Q: What are the grounds for removal or resignation of a trustee?
A:
1. Removal appears essential in the interest of petitioners;
2. Insanity;
3. Incapability of discharging the trust; or 4. Unsuitability (Sec. 8, Rule 98).
Note: A trustee may resign his trust if it appears to the
court proper to allow such resignation (Sec. 8, Rule 98). 5. EXTENT OF AUTHORITY OF TRUSTEE
Q: What is the extent of authority of a trustee? A: Rule 98, applies only to express trust, one which is created by a will or a written instrument. Q: When is there a testamentary trust?
A: If a testator has omitted in will to appoint a trustee in the Philippines, and if such appointment is necessary to carry into effect the provisions of the will. After notice to all persons interested, the proper RTC may appoint a trustee who shall have the same rights, powers, and duties, and in whom the estate shall vest, as if he had been appointed by the testator.
Q: When is there a contractual trust?
A: When a trustee under a written instrument declines, resigns, dies, or is removed before the objects of the trust are accomplished, and no adequate provision is made in such instrument for supplying the vacancy after due notice to all persons interested, the proper RTC may appoint a new trustee to act alone or jointly with the others, as the case may be.
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O M A SQ: Can the possession of the trustee of the property ripen into ownership?
A:
GR: An action to compel a trustee to convey property registered in his name in trust for the benefit of the cestui qui trust does not prescribe. The trustee’s possession is not adverse and therefore cannot ripen into title by prescription.
XPN: Prescription may arise where there is adverse possession of the property. To constitute adverse possession, the following must be present:
1. That the trustee has performed unequivocal acts amounting to an ouster of the cestui qui trust;
2. That such positive acts of repudiation had been made known to the cestui qui trust; and
3. That the evidence thereon should be clear and conclusive. (Ceniza vs. CA, 181 SCRA 552)
J. ESCHEAT
Q: What is escheat?
A: It is a French or Norman term meaning chance or accident. It is the reversion of property to the State in consequence of want of any individual competent to inherit.
1. WHEN TO FILE
Q: What are the three instances of escheat? A:
1. When a person dies intestate leaving no heir but leaving property in the Philippines (Sec. 1, Rule 91);
2. Reversion proceedings where sale of property is made in violation of the Constitutional provision; and
3. Dormant accounts for 10 years (Unclaimed Balance Act of Banking Laws). 2. REQUISITES FOR FILING OF PETITION
Q: What are the requisites for filing a petition? A:
1. A person died intestate;
2. He left no heirs or persons by law entitled to the same; and
3. The deceased left properties in the Philippines. (Sec. 1, Rule 91)
Q: Can the court convert escheat proceedings into settlement of the estate?
A: No, once the court acquires jurisdiction to hear the petition for escheat by virtue of the publication of the petition for escheat, this jurisdiction cannot be converted into one for the distribution of the properties of the decedent.
Note: For the distribution of the estate to be
instituted, the proper petitions must be presented and the proceedings should comply with the requirements of the Rules of Court. (Municipality of Magallon v.
Bezore, G.R. No. L-14157, Oct. 26, 1960)
3. REMEDY OF RESPONDENT AGAINST PETITION; PERIOD FOR FILING A CLAIM
Q: What is the remedy of the respondent against the petition for escheat?
A: When the petition does not state the facts which entitle the petitioner to the remedy prayed for, or even admitting them hypothetically, the respondent may file a MOTION TO DISMISS, in such case the Motion to dismiss plays the role of a demurrer to evidence (Herrera, Remedial Law III-A, p 227-228)
K. GUARDIANSHIP
Q: What is guardianship?
A: It is a trust relation in which one person acts for another whom the law regards as incapable of managing his own affairs.
Note: Guardianship of minors is now governed by the
Rule on Guardianship of Minors (AM No. 03-02-05-SC) which took effect on May 1, 2003. While guardianship of incompetents who are not minors is still governed by the provisions of the Rules of Court on Guardianship. (Rule 92- 97)
Q: What is ancillary guardianship?
A: It refers to the guardianship in a state other than that in which guardianship is originally granted.
1. GENERAL POWERS AND DUTIES OF GUARDIANS
Q: To what extent does guardianship extend? A: Conflicts regarding ownership or title to the property in the hands of the guardian in his capacity as such should be litigated in a separate proceeding, the court in guardianship proceeding is concerned solely with the ward’s care and custody and proper administration of his properties (Villoria
v. Administrator of Veteran Affairs, L-9620, June 1957)
Q: What are the general powers and duties of guardians?
A:
1. To have the care and custody of the person of the ward, and/or the management of his estate;
2. Pay the debts of the ward;
3. To settle accounts, collect debts, and appear in actions for the ward;
4. Manage the estate of the ward frugally, and apply the proceeds to the maintenance of the ward;
5. Render verified inventory within 3 months after his appointment and annually thereafter, and upon application of interested persons;
6. Render to court for its approval an accounting of the property for 1 year from his appointment and as often thereafter as may be required, and upon application of interested persons 7. Consent to a partition of real or personal
property owned by ward jointly or in common with others. (Secs. 1-8, Rule 96; Sec. 17, A.M. No. 03-02-05-SC)
Q: What is the order of liability of the ward’s property?
A:
1. Personal estate and income of real estate 2. Real estate
Q: What are the requisites to authorize the guardian to join in the partition proceedings after hearing?
A:
1. Hearing
2. Notice to relatives of the ward; and 3. Careful investigation as to the necessity
and propriety of the proposed action (Section 5)
2. CONDITIONS OF THE BOND OF THE GUARDIAN
Q: What are the conditions of the bond of the guardian?
A:
1. To make and return to the court, within 3 months, a true and complete inventory of all the estate of his ward which shall come to his possession or knowledge or
to the possession or knowledge of any other person for him;
2. To faithfully execute the duties of his trust, manage and dispose of the estate according to the rules for the best interests of the ward, and to provide for the proper care, custody, and education of the ward;
3. To render a true and just account of all the estate of the ward in his hands, and of all proceeds or interest derived there from, and of the management and disposition of the same, at the time designated by the rules and such other times as the court directs; and at the expiration of his trust, settle his accounts with the court and deliver and pay over all the estate, effects, and moneys remaining in his hands, or due from him on such settlement, to the person lawfully entitled thereto; and
4. To perform all orders required by the court (Sec. 1, Rule 94; Sec.14, A.M. No. 03-02-05-SC).
Q: What is the purpose of the bond?
A: It is for the protection of the property of the minor or incompetent to the end that he may be assured of an honest administration of his funds (Herrera, Vol. III-A, p. 282, 2005 ed.)
Note: The bond of the guardian is a continuing one
against the obligors and their estates until all of its conditions are fulfilled. The mere fact that defendant was removed as guardian did not relieve her or her