Spec Pro Class 2020

FACTS:

          The estate of Amadeo Matute Olave is the owner of a parcel of land in Davao. Southwest Agricultural Marketing Corp. (SAMCO) filed a case a Civil Case No. 4623 at Court of First Instance of Davao City against Carlos V. Matute and Matias Matute in their capacities as co-administrators of the estate of Amado Matute Olave for the collection of an alleged indebtedness plus attorney’s fee amounting P 24,940.13.  The defendants denied their lack of knowledge and questioned the legality of the claim of SAMCO.

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          On October 25, 1966 in Special Proceedings No. 25876, the CFI of Manila Branch IV issued an order directing the administrators to secure the probate court’s approval before entering into any transaction involving the 17 titles of the estate.

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          On October 20, 1967, the parties in Civil Case No. 4623 of the Court of First Instance of Davao, submitted to the respondent court an Amicable Settlement whereby the property of the estate covered by OCT No. 0-27 of Davao was conveyed and ceded to SAMCO as payment of its claim. The said Amicable Settlement was not submitted to and approved by the then Court of First Instance of Manila, Branch IV.

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          On November 10, 1967, the CA approved the said Amicable Settlement  and gave the same the enforceability of a court decision.

           

ISSUE:

          Whether or not the amicable settlement needs to be approved by the probate court.

 

HELD:

          Yes, the amicable settlement needs to be approved by the probate court. The purpose of presentation of claims against decedents of the estate in the probate court is to protect the estate of deceased persons. That way, the executor or administrator will be able to examine each claim and determine whether it is a proper one which should be allowed. Further, the primary object of the provisions requiring presentation is to apprise the administrator and the probate court of the existence of the claim so that a proper and timely arrangement may be made for its payment in full or by pro-rata portion in the due course of the administration, inasmuch as upon the death of a person, his entire estate is burdened with the payment of all of his debts and no creditor shall enjoy any preference or priority; all of them shag share pro-rata in the liquidation of the estate of the deceased.

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          Where estate of a deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without any prior approval of the Court.