ArticuLaw Primo
LSPU-LAW STAR CLASS
Rule 89
Sales, Mortgages, and other Encumbrances of Property of the Decedent
Prepared by: Rushid Jay S. Sancon
Section 1. Order of Sale of Personalty
Upon written application of executor or administrator, the court may order the whole or part of a personal estate
- written notice to the heirs and other persons interested
- If it is appears that it is necessary for paying debts, expenses of administration, or legacies, or for preservation of the property
Question: Is notice to the interested party in such sale, mortgage or encumbrance of decedent’s estate mandatory? What is the effect in case of failure to give notice?
Answer: Yes. Such notice is mandatory, without which the sale, mortgage or encumbrance made is void.
Question: May the court authorize the sale, mortgage, or other encumbrance in lieu of personal estate? Under what instances?
Answer: Yes.
- When the personal estate is not sufficient to pay debts, expenses of administration and legacies.
- The sale of the subject personal estate may injure the business or other interests of those interested in the estate
Note: Where a testator has not otherwise made sufficient provision for the payment of such debts, expenses, and legatees residing in the Philippines
(Section 2, Rule 89)
Section 3. Persons interested may prevent such sale, etc., by giving a bond
-No authority to sell, mortgage, or encumbrance shall be granted of real or personal
-Interested person opposing such authority must post a bond to be fixed by the court and at such time court may direct
Section 4. when court may authorize sale of estate as beneficial to interested persons. Disposal of proceeds.
Although not necessary to pay debts, legacies, or expenses of administration, the court may authorize the sale of real or personal property estate if:
- Beneficial to the heirs, devisees, legatees, and other interested persons; and
- If it is not inconsistent with the provisions of a will.
Section 5. when the court may authorize sale, mortgage, or other encumbrance of estate to pay debts and legacies in other countries
Even if the sale, mortgage, and encumbrance of personal and real estate is not necessary to pay the debts, expenses of administration, or legacies in the Philippines, the court may authorize the executor or administrator to sell, mortgage or encumber the personal or real estate for paying the debts, expenses of administration and legacies outside the country.
Section 6. when court may authorize sale, mortgage, or other encumbrance of realty acquired on execution or foreclosure
The sale, mortgage or encumbrance of realty acquired in favor of the estate shall be governed by the same regulations prescribed under this rule
Section 7. regulations for granting authority to sell, mortgage, or otherwise encumber estate (Personal or real)
-the executor or administrator shall file a written petition setting forth, the debts due from the deceased and other expenses
-Fixing by the court of time and place to hear the petition, and causing notice, to be given personally or mail to interested persons
-Executor and administration shall likewise give additional bond, if the court requires it
-if all of the requirements of the above have been complied with, the court by order stating such compliance, may authorize the sale, mortgage, or encumber the part of the estate as it deemed necessary
-the provisions concerning notice of execution sale shall govern the notice of the time and place of the estate to be sold at auction
-Recording in the registry of deeds of the province in which the real estate of the sale, mortgage or otherwise encumbered is situated
It being settled that property under administration needs the approval of the probate court before it can be disposed of, any unauthorized dispositions does not bind the estate and is null and void
Question: With respect to heirs, is there a need for a court approval before they can exercise their right to dispose their ideal share?
Answer: No. it is settled that court approval is necessary for the validity of any disposition of the decedent’s estate. However, reference to judicial approval cannot adversely affect the substantive rights of the heirs to dispose of their ideal share in the co-ownership among the heirs. (Beltran v. Donato, 32 Phil. 66)
Section 8. when court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect.
Section 9. When may authorize conveyance of lands which deceased held in trust
- Both covers a contract entered by the deceased to convey real or property interest therein during his lifetime and those property he hold in trust
Question: Is notice for such conveyance mandatory?
Answer: Yes. The authority to convey as provided for in this section can be given only after notice of the application for that purpose has been given to all persons interested, otherwise, the order authorizing the conveyance and as well as the conveyance itself is null and void. (De Jesus v. De Jesus, 35 SCRA 548)
Question: In both cases who may file for an application for such conveyance and those held in trust?
Answer : The standing to such course of action before the probate court inures to any person who stands to be benefited or injured by the judgment or to be entitled to the avails of the suit.
Question: Who may be authorized by the court to effectuate such order of conveyance?
Answer: The executor or administrator shall e authorized by the court
If such conveyance is in favor of the executor or administrator, the Clerk of Court shall execute the deed.
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See Dillena v. Court of Appeals (G.R. No. 77660, 1988)