BONDS OF EXECUTORS AND ADMINISTRATOR
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
SECTIONS 6-7
LSPU College of Law
RULE 89
SALES, MORTGAGES, AND OTHER ENCUMBRANCES OF PROPERTY OF DECEDENT
SECTIONS 1-6
SECTION 1. ORDER OF SALE OF PERSONALTY
The court may order the whole or part of the personal estate to be sold if necessary:
1. To pay debts and expenses of administration;
2. To pay legacies; or
3. To cover expenses for the preservation of the estate.
SECTION 2. WHEN COURT MAY AUTHORIZE SALE, MORTGAGE, OR OTHER ENCUMBRANCE OF REALTY TO PAY DEBTS AND LEGACIES THOUGH PERSONALTY NOT EXHAUSTED
1. If personal estate is not sufficient to pay debts, expenses of
administration and legacies; or
2. If the sale of personal estate may injure the business or other interests
of those interested in the estate; and
3. If the testator has not made sufficient provision for payment of such debts, expenses and legacies;
4. If the deceased was in his lifetime under contract, binding in law to
deed real property to beneficiary (Section 8);
5. If the deceased during his lifetime held real property in trust for
another person (Section 9);
Requisites:
1. Application of executor/administrator;
2. Written notice to heirs, devisees and legatees; and
3. Hearing.
Note: Assets in the hands of executor/administrator will not be reduced to prevent a creditor from receiving his full debt or diminish his dividends.
Notice is mandatory: Without notice and hearing, the sale, mortgage or encumbrance is void.
Ratio: The reason behind this requirement is that the heirs are the presumptive owners. Since they succeed to all the rights and obligation of the deceased from the moment of the latter’s death, they are the persons directly affected by the sale or mortgage and therefore cannot be deprived of the property, except in the manner provided by law.
SECTION 3. PERSONS INTERESTED MAY PREVENT SUCH SALE, ETC., BY GIVING BOND
If the opposition to the sale is based on the fact that the oppositor claims title to the property to be sold, the court will hold in abeyance the authority to sell such property until the issue of ownership has been settled in an ordinary action, since the probate court generally has no jurisdiction to resolve issues of ownership in the administration proceedings.
Conditions of bond: To pay the debts, expenses of administration and legacies within such time as the court directs.
SECTION 4. WHEN COURT MAY AUTHORIZE SALE OF ESTATE AS BENEFICIAL TO INTERESTED PERSONS. DISPOSAL OF PROCEEDS
The court may authorize the sale of whole or part of the estate if it appears beneficial to the heirs, devisees, legatees, and other interested persons. The proceeds shall be assigned to the persons entitled to the estate in the proper proportions.
SECTION 5. When court may authorize sale, mortgage, or other encumbrance of estate to pay debts and legacies in other countries.
When the sale of personal estate, or the sale, mortgage, or other encumbrance of real estate is not necessary to pay the debts, expenses of administration, or legacies in the Philippines, but it appears from records and proceedings of a probate court in another country that the estate of the deceased in such other country is not sufficient to pay the debts, expenses of administration, and legacies there, the court here may authorize the executor or administrator to sell the personal estate or to sell, mortgage, or otherwise encumber the real estate for the payment of debts or legacies in the other country, in same manner as for the payment of debts or legacies in the Philippines.
SECTION 6. When court may authorize sale, mortgage, or other encumbrance of realty acquired on execution or foreclosure.
The court may authorize an executor or administrator to sell mortgage, or otherwise encumber real estate acquired by him on execution or foreclosure sale, under the same cicumstances and under the same regulations as prescribed in this rule for the sale, mortgage, or other encumbrance of other real estate.
Comment: Acquired by him on execution or foreclosure sale meaning : executor or administrator may sell the real propert acquired through ordinary execution sale Governed by Rule 39 and foreclosure sale governed by Rule 68.
SECTIONS 7-9
SECTION 7. Regulations for granting authority to sell, mortgage, or otherwise encumber estate.
The following are regulations for granting authority to sell, mortgage or otherwise encumbrance of properties of the decedent:
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The executor or administrator shall file a written petition setting forth the debts due from the deceased, the expenses of administration, the legacies, the value of the personal estate, the situation of the estate to be sold, mortgaged, or otherwise encumbered, and such other facts as will show that the sale, mortgage, or other encumbrance is necessary or beneficial;
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The court shall thereupon fix a time and place for hearing such petition, and cause notice stating the nature of the petition, the reasons for the same, and the time and place of hearing, to be given personally or by mail to the persons interested, and may cause such further notice to be given, by publication or otherwise, as it shall deem proper;
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If the court requires it, the executor or administrator shall give an additional bond, in such sum as the court directs, conditioned that such executor or administrator will account for the proceeds of the sale, mortgage, or other encumbrances;
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If the requirements in the preceding subdivisions of this section have been complied with, the court, by order stating such compliance, may authorize the executor or administrator to sell, mortgage, or otherwise encumber, in proper cases, such part of the estate as is deemed necessary, and in case of sale the court may authorize it to be public or private, as would be most beneficial to all parties concerned. The executor or administrator shall be furnished with a certified copy of such order;
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If the estate is to be sold at auction, the mode of giving notice of the time and place of the sale shall be governed by the provisions concerning notice of execution sale;
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There shall be recorded in the registry of deeds of the province in which the real estate thus sold, mortgaged, or otherwise encumbered is situated, a certified copy of the order of the court, together with the deed of the executor or administrator for such real estate, which shall be as valid as if the deed had been executed by the deceased in his lifetime.
SECTION 8. When a court may authorize conveyance or realty which deceased contracted to convey; Notice; Effect of deed.
Where the deceased was, his lifetime, under a valid contract to convey real property, the court having jurisdiction may authorize the executor or administrator to execute the deed in accordance with the terms of the contract or with such modifications as may have been agreed upon by the parties and approved by the court, provided an application with due notice to all persons interested, is filed with the court; and if the contract is to convey real property to the executor or administrator, the clerk of court shall execute the deed. However, this conveyance shall not be allowed if the assets of the estate will be reduced such that the creditor will not receive his full debt or dividend.
SECTION 9. When court may authorize conveyance of lands which deceased held in trust.
Upon application and with due notice to all persons interested, the court having jurisdiction may authorize the executor or administrator to deed real property held in trust by the deceased in his lifetime in favor of the beneficiary thereof, or the latter’s executor or administrator.
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