7/28/2019 Union Bank vs Santibanez (Facts,Held, Issue)

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Union Bank vs Santibanez

Facts: Efraim Santibanez and his son Edmund entered into 2 loan agreements with First Countryside

Credit Corporation (FCCC). February 1981, Efraim died, leaving a holographic will. Edmund, as one of the

heirs, was appointed as the special administrator of the estate of the decedent. During the pendency of

the testate proceedings, the surviving heirs, Edmund and his sister Florence Santibaez Ariola, executeda Joint Agreement dated July 22, 1981, wherein they agreed to divide between themselves and take

possession of the three (3) tractors; that is, two (2) tractors for Edmund and one (1) tractor for Florence.

Each of them was to assume the indebtedness of their late father to FCCC.

On August 20, 1981, a Deed of Assignment with Assumption of Liabilities was executed by and between

FCCC and Union Savings and Mortgage Bank, wherein the FCCC as the assignor, assigned all its assets

and liabilities to Union Savings and Mortgage Bank. USMB then made demand letters to Edmund and

Florence for their debts with FCCC.

Edmund was nowhere to be found (he went to the US) so all demands went to Florence. USMB stated

that since she and Edmund executed a joint agreement for the partition of the estate, she is liable for

the debts. Florence said alleged that the loan documents did not bind her since she was not a party

thereto. Considering that the joint agreement signed by her and her brother Edmund was not approved

by the probate court, it was null and void; hence, she was not liable to the petitioner under the joint

agreement. The TC denies the claim of USMB for lack of merit.

Issue: Can USMB file a claim against Florence and the estate since the estate was already partitioned

between Edmund and her?

Held: NO! 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 theinventory or list of properties to be administered. The said court is primarily concerned with the

administration, liquidation and distribution of the estate.

In our jurisdiction, the rule is that there can be no valid partition among the heirs until after the will has

been probated:

USMB should have filed its claim with the probate court as provided under Sections 1 and 5, Rule 86 of

the Rules of Court. It further held that the partition made in the agreement was null and void, since no

valid partition may be had until after the will has been probated.

The Court notes that the loan was contracted by the decedent. USMB, purportedly a creditor of the lateEfraim Santibaez, should have thus filed its money claim with the probate court in accordance with

Section 5, Rule 86 of the Revised Rules of Court.

This requirement is for the purpose of protecting the estate of the deceased by informing the executor

or administrator of the claims against it, thus enabling him to examine each claim and to determine

whether it is a proper one which should be allowed. The plain and obvious design of the rule is the

7/28/2019 Union Bank vs Santibanez (Facts,Held, Issue)

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speedy settlement of the affairs of the deceased and the early delivery of the property to the

distributees, legatees, or heirs. `

The law strictly requires the prompt presentation and disposition of the claims against the decedent's

estate in order to settle the affairs of the estate as soon as possible, pay off its debts and distribute the

residue.

Perusing the records of the case, nothing therein could hold private respondent Florence S. Ariola

accountable for any liability incurred by her late father. The documentary evidence presented,

particularly the promissory notes and the continuing guaranty agreement, were executed and signed

only by the late Efraim Santibaez and his son Edmund. As the petitioner failed to file its money claim

with the probate court, at most, it may only go after Edmund as co-maker of the decedent under the

said promissory notes and continuing guaranty, of course, subject to any defenses Edmund may have as

against the petitioner.

Claim denied.