FIRST DIVISION

[G.R. No. L-28298. November 25, 1983.]

ROSITA SANTIAGO DE BAUTISTA, ET AL. , plaintiffs-appellees, vs.

VICTORIA DE GUZMAN, ET AL. , defendants-appellants.

Jose D. Villena for plaintiffs-appellees.

Antonio Gonzales for defendants-appellants.

SYLLABUS

1. REMEDIAL LAW; SPECIAL PROCEEDINGS; MONEY CLAIM AGAINST THE

ESTATE; PERIOD TO FILE WITHIN THE TIME LIMITED IN THE NOTICE; MANDATORY. —
Section 5, Rule 86 of the Rules of Court is mandatory. The requirement therein is for the
purpose of protecting the estate of the deceased. The executor or administrator is
informed of the claims against it, thus enabling him to examine such claim and to
determine whether it is a proper one which should be allowed. Therefore, upon the
dismissal of the rst complaint of herein plaintiffs-appellees in Civil Case No. 2050,
they should have presented their claims before the intestate proceedings led in the
same court and docketed as Special Proceedings No. 1303-P. Instead of doing so,
however, the plaintiffs-appellees slept on their right. They allowed said proceedings to
terminate and the properties to be distributed to the heirs pursuant to a project of
partition before instituting this separate action. Such is not sanctioned by the above
rule for it strictly requires the prompt presentation and disposition of 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 (See Py Eng Chong v. Herrera, 70 SCRA
130).
2. ID.; ID.; ID.; FAILURE TO FILE CLAIM WITHIN THE PRESCRIBED PERIOD; A
BAR TO A SUBSEQUENT CLAIM AGAINST THE ESTATE. — With the exception provided
for in the above rule, the failure of herein plaintiffs-appellees to present their claims
before the intestate proceedings of the estate of Rosendo de Guzman within the
prescribed period constituted a bar to a subsequent claim against the estate or a
similar action of the same import.
3. ID.; ID.; ID.; TAKING COGNIZANCE OF THE CASE AFTER TERMINATION OF
INTESTATE PROCEEDING; HELD AN ERROR OF THE TRIAL COURT. — It was an error on
the part of the trial court to hold that the plaintiffs-appellees had a cause of action
against the defendants-appellants who are the heirs of the deceased against whom the
liability is sought to be enforced, much less take cognizance of the complaint. As in the
rst complaint, said court could not have assumed jurisdiction over the second case
for the simple reason that it was no longer acting as a probate court which was the
proper forum to le such complaint. The termination of the intestate proceedings and
the distribution of the estate to the heirs did not alter the fact that plaintiffs-appellees'
claim was a money claim which should have been presented before the probate court.
The liability of the late Rosendo de Guzman arose from the breach of his obligations
under the contract of carriage between him and the unfortunate passenger. The
obligations are spelled out by law but the liability arose from a breach of contractual
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 obligations. The resulting claim is a money claim.
4. ID.; ID.; INSTANCE ALLOWING CREDITOR TO FILE AN ACTION AGAINST A
DISTRIBUTEE OF THE DEBTOR'S ESTATE; NOT MET IN THE CASE AT BAR. — The only
instance wherein a creditor can le an action against a distributee of the debtor's asset
is under Section 5, Rule 88 of the Rules of Court. Even under the above rule, the
contingent claims must rst have been established and allowed in the probate court
before the creditors can le an action directly against the distributees. Such is not the
situation, however, in the case at bar. The complaint herein was led after the intestate
proceedings had terminated and the estate nally distributed to the heirs. If we are to
allow the complaint to prosper and the trial court to take cognizance of the same, then
the rules providing for the claims against the estate in a testate or intestate
proceedings within a speci c period would be rendered nugatory as a subsequent
action for money claim against the distributees may be led independently of such
proceedings. This precisely is what the rule seeks to prevent so as to avoid further
delays in the settlement of the estate of the deceased and in the distribution of his
property to the heirs, legatees or devisees.
5. ID.; ID.; PROBATE PROCEEDING; KNOWLEDGE OF THE ADVERSE PARTY
PRESUMED; BEING A PROCEEDING IN REM. — Furthermore, even assuming that the
plaintiffs-appellees had no knowledge of the intestate proceedings which is not
established, the law presumes that they had such knowledge because the settlement of
estate is a proceeding in rem and therefore the failure to le their claims before such
proceedings barred them from subsequently ling the same claims outside said
proceedings.
MELENCIO-HERRERA, J.. concurring in the result:
1. REMEDIAL LAW; SPECIAL PROCEEDING; CLAIM FOR DAMAGES ARISING
FROM BREACH OF CONTRACT; WITHIN THE PURVIEW OF SECTION 5, RULE 86;
ACTION BARRED IF NOT FILED IN THE PROBATE PROCEEDING. — The civil liability
adjudged in the criminal case, and for which Rosendo de Guzman or his estate became
subsidiary liable, is plainly a money claim. On the other hand, any direct liability of
Rosendo de Guzman or his estate, for damages for the death of the passenger
Numeriano, is not a claim for damages for injury to person, which should be led under
Section 1, Rule 87 Rosendo de Guzman was not personally responsible for the death of
Numeriano. The claim of the heirs of Numeriano is one arising from the contract of
transportation (Vda. de Medina, et al. v. Cresencia, et al., 99 Phil. 506). In the case of
Gutierrez vs. Barreto Datu (115 Phil. 741), it was held that a claim for damages arising
from breach of contract is within she purview of Section 5. Rule 86. The claim of
plaintiff heirs of Numeriano should have been presented in the judicial proceedings for
the settlement of the estate of Rosendo de Guzman and, not having been so presented,
has already been barred. It was clear error on the part of the Trial Court not to have
summarily dismissed the complaint for lack of cause of action.

DECISION

GUTIERREZ, JR. , J : p

This is an appeal from the decision of the Court of First Instance of Rizal, Pasay
City branch, in Civil Case No, 3530, ordering the defendants-appellants to pay the
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 plaintiffs-appellees damages and attorney's fees and dismissing the former's
counterclaim. As no questions of facts were raised by the appellants in their brief, the
Court of Appeals certified this case to us for decision.
The facts, as stated in the resolution of the appellate court, are as follows:
On May 10, 1952, Numeriano Bautista, husband and father of the
plaintiffs-appellees, respectively, was a passenger of jeepney bearing Plate No.
TPU-4013, owned and operated by Rosendo de Guzman, deceased husband and
father of defendants-appellants, respectively, as one of the jeepneys used in his
transportation business. Eugenio Medrano y Torres was employed by said
Rosendo de Guzman as the driver of said jeepney. Said driver drove and managed
said jeepney at that time along Taft Avenue, Pasay City, in a negligent and
reckless manner and, as a result, the jeepney turned turtle and, consequently,
passenger Numeriano Bautista sustained physical injuries which caused his
death. Eugenio Medrano, the driver, was accused and convicted of homicide
through reckless imprudence by the trial court in a decision promulgated on May
27, 1952 and sentenced to a penalty of imprisonment of four (4) months and one
(1) day of arresto mayor and to indemnify the heirs of Numeriano Bautista,
plaintiffs-appellees herein, in the sum of P3,000.00. A writ of execution was
issued against said driver, Eugenio Medrano for the said sum of P3,000.00 but
the same was returned to the Court unsatisfied.

On May 12, 1952, Rosendo de Guzman died.

Because of their failure to collect the said sum of P3,000.00 from the
driver, Eugenio Medrano, plaintiffs-appellees led a complaint (Civil Case No.
2050) dated October 7, 1952, with the Court of First Instance of Rizal, Pasay City
Branch, against defendants-appellants alleging, among other things besides the
above-mentioned incidents, that they demanded from Rosendo de Guzman and
from the defendants-appellants the payment of the sums of P3,000.00 as
subsidiary liability; P10,000.00 as actual exemplary and moral damages and
P1,000.00 as attorney's fees for the suit by reason of the death of Numeriano
Bautista as related above, but Rosendo de Guzman and later the herein
defendants-appellants refused to pay the same. Plaintiffs-appellees therefore
prayed that the defendants-appellants be ordered to pay the said sums as well as
the costs of suit.

Defendants-appellants through counsel led a motion to dismiss

predicated on two grounds, namely, that the lower court had no jurisdiction over
the subject matter of the litigation and that the complaint stated no cause of
action. In support of said motion, they maintained that the suit was for a money
claim against the supposed debtor who was already dead and as such it should
be led in testate or intestate proceedings or, in the absence of such proceedings,
after the lapse of thirty (30) days, the creditors should initiate such proceedings,
that the heirs could not be held liable therefor since there was no allegation that
they assumed the alleged obligation.

The lower court sustained the motion to dismiss in an order dated May 11,
1953, stating, among other things, that:

"The procedure thus opened for a money claimant against a deceased

person, as in the instant case, is for said claimant to le proceedings for the
opening of the judicial administration of the estate of said deceased person and
to present his claim in said proceedings. The claimant may only proceed to sue
the heirs of the deceased directly where such heirs have entered into an extra-
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 judicial partition of such estate and have distributed the latter among themselves,
in which case, the heirs become liable to the claimant in proportion to the share
which they have received as inheritance. Plaintiffs' complaint does not state that
the defendants have received any such inheritance from their said deceased
father, Rosendo de Guzman, and hence, there is no cause of action against
aforesaid defendants."

This order became final.

Then on December 14, 1954, plaintiffs-appellees led with the same trial
court Civil Case No. 3530 (subject of this appeal) against the same defendants in
the former case, the complaint containing analogous allegations as those
embodied in the rst complaint but in this second complaint they further allege
that on June 12, 1952, Rosendo de Guzman died intestate and that intestate
proceedings were led in the same court and docketed therein as Special
Proceedings No. 1303-P, wherein on April 20, 1953, a project of partition was
presented in and approved by said Court with the ve heirs receiving their shares
valued at P2,294.05 each, and on May 14, 1953, said intestate proceedings were
closed. They also alleged that Numeriano Bautista during his lifetime was the
only one supporting them and his death caused them shock, sufferings and
anxiety and therefore defendants-appellants should pay to them, aside from the
P3,000.00, an additional amount of P15,000.00 as moral, exemplary and
compensatory damages, plus the sum of P2,000.00 as attorney's fees for the
prosecution of this case, besides the costs of suit.

Defendants-appellants again led a motion to dismiss on May 5, 1955,

alleging the same grounds as those interposed in the rst complaint but adding
the further ground of res judicata in view of the dismissal of the rst case which
became nal as no appeal or any other action was taken thereon by the
appellees.

On August 22, 1955, the lower court denied the motion to dismiss for lack
of sufficient merit.

xxx xxx xxx

Then on July 11, 1961, the parties through their respective counsel
submitted a partial stipulation of facts found on pages 63 to 67 of the amended
record on appeal which stipulation of facts, was made the basis of the decision
of the lower court which was rendered on August 26, 1961 (should be August 14,
1961), aside from the testimony of the widow of Numeriano Bautista, appellee
Rosita Bautista, who testi ed on the same incidents already recited herein and on
the sufferings and shock she and her children, all appellees in this case, suffered.
From said decision, the present appeal has been interposed . . ."

Defendants-appellants assign the following errors:

I
THE COURT BELOW ERRED IN NOT SUSTAINING THE MOTION TO DISMISS
(MOCION DE SOBRESIMIENTO) FILED BY THE DEFENDANTS-APPELLANTS ON OR
ABOUT MAY, 1955, APPEARING ON PAGE 10 ET SEQ. OF THE AMENDED RECORD ON
APPEAL.
II
THE COURT BELOW ERRED IN NOT DECLARING THAT THE CLAIM OF THE
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 PLAINTIFFS-APPELLEES IS ALREADY BARRED FOR FAILURE ON THEIR PART TO FILE
THEIR CLAIM IN THE INTESTATE PROCEEDINGS OF THE DECEASED ROSENDO DE
GUZMAN (SPECIAL PROCEEDINGS NO. 1303-P) OF THE COURT OF FIRST INSTANCE
OF RIZAL.
III
THE COURT ERRED IN NOT SUSTAINING THE DEFENSE OF RES JUDICATA
INTERPOSED BY DEFENDANTS-APPELLANTS BY VIRTUE OF THE FINAL ORDER
RENDERED OR ISSUED BY THE COURT OF FIRST INSTANCE OF RIZAL IN CIVIL CASE
NO. 2050, DATED MAY 11, 1953, COPY OF SAID ORDER IS ATTACHED AS EXHIBIT "F"
AND MADE AN INTEGRAL PART OF THE PARTIAL STIPULATION OF FACTS.
IV
THE COURT BELOW ERRED IN RENDERING A DECISION ORDERING THE HEREIN
DEFENDANTS-APPELLANTS TO JOINTLY AND SEVERALLY PAY THE PLAINTIFFS-
APPELLEES THE SUM OF THREE THOUSAND PESOS (P3,000.00), WITH INTERESTS
AND COSTS.
V
THE COURT BELOW ERRED IN DISMISSING DEFENDANTS-APPELLANTS'
COUNTER-CLAIM AND IN NOT RENDERING A DECISION IN ACCORDANCE THEREWITH.
The only question presented in the assigned errors is whether or not the trial
court erred in giving due course to the complaint on the grounds stated above. We
sympathize with the plight of the plaintiffs-appellees but they have lost their right to
recover because of negligence and a failure to observe mandatory provisions of the law
and the Rules. They overlooked the fact that they were no longer suing Rosendo de
Guzman who died shortly after the accident but his heirs.
Section 5, Rule 86 of the Rules of Court provides:
All claims for money against the decedent arising from contract, express or
implied, whether the same be due, not due, or contingent, all claims for funeral
expenses and expenses for the last sickness of the decedents, and judgment for
money against the decedent, must be led within the time limited in the notice;
otherwise they are barred forever; except that they may be set forth as
counterclaims in any action that the executor or administrator may bring against
the claimants . . . Claims not yet due, or contingent, may be approved at their
present value. cdrep

The above-quoted rule is mandatory. The requirement therein is for the purpose
of protecting the estate of the deceased. The executor or administrator is informed 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. Therefore, upon the dismissal of
the rst complaint of herein plaintiffs-appellees in Civil Case No. 2050, they should have
presented their claims before the intestate proceedings led in the same court and
docketed as Special Proceedings No. 1303-P. Instead of doing so, however, the
plaintiffs-appellees slept on their right. They allowed said proceedings to terminate and
the properties to be distributed to the heirs pursuant to a project of partition before
instituting this separate action. Such is not sanctioned by the above rule for it strictly
requires the prompt presentation and disposition of 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. (See Py Eng Chong v. Herrera, 70 SCRA 130). With the
exception provided for in the above rule, the failure of herein plaintiffs-appellees to
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 present their claims before the intestate proceedings of the estate of Rosendo de
Guzman within the prescribed period constituted a bar to a subsequent claim against
the estate or a similar action of the same import.
Therefore, it was an error on the part of the trial court to hold that the plaintiffs-
appellees had a cause of action against the defendants-appellants who are the heirs of
the deceased against whom the liability is sought to be enforced, much less take
cognizance of the complaint. As in the rst complaint, said court could not have
assumed jurisdiction over the second case for the simple reason that it was no longer
acting as a probate court which was the proper forum to le such complaint. The
termination of the intestate proceedings and the distribution of the estate to the heirs
did not alter the fact that plaintiffs-appellees' claim was a money claim which should
have been presented before the probate court. The liability of the late Rosendo de
Guzman arose from the breach of his obligations under the contract of carriage
between him and the unfortunate passenger. The obligations are spelled out by law but
the liability arose from a breach of contractual obligations. The resulting claim is a
money claim.
The only instance wherein a creditor can le an action against a distributee of the
debtor's asset is under Section 5, Rule 88 of the Rules of Court which provides:
If such contingent claim becomes absolute and is presented to the court, or
to the executor or administrator, within two (2) years from the time limited for
other creditors to present their claims, it may be allowed by the court if not
disputed by the executor or administrator, and, if disputed, it may be proved and
allowed or disallowed by the court as the facts may warrant. If the contingent
claim is allowed, the creditor shall receive payment to the same extent as the
other creditors if the estate retained by the executor or administrator is su cient.
But if the claim is not so presented, after having become absolute, within said two
(2) years, and allowed, the assets retained in the hands of the executor or
administrator, not exhausted in the payment of claims, shall be distributed by the
order of the court to the persons entitled to the same; but the assets so distributed
may still be applied to the payment of the claim when established, and the
creditor may maintain an action against the distributes to recover the debt, and
such distributes and their estates shall be liable for the debt in proportion to the
estate they have respectively received from the property of the deceased. LexLib

Even under the above rule, the contingent claims must rst have been
established and allowed in the probate court before the creditors can le an action
directly against the distributees. Such is not the situation, however, in the case at bar.
The complaint herein was led after the intestate proceedings had terminated and the
estate nally distributed to the heirs. If we are to allow the complaint to prosper and
the trial court to take cognizance of the same, then the rules providing for the claims
against the estate in a testate or intestate proceedings within a speci c period would
be rendered nugatory as a subsequent action for money claim against the distributees
may be filed independently of such proceedings. This precisely is what the rule seeks to
prevent so as to avoid further delays in the settlement of the estate of the deceased
and in the distribution of his property to the heirs, legatees or devisees.
Furthermore, even assuming that the plaintiffs-appellees had no knowledge of
the intestate proceedings which is not established, the law presumes that they had
such knowledge because the settlement of estate is a proceeding in ream and
therefore the failure to le their claims before such proceedings barred them from
subsequently filing the same claims outside said proceedings.
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 WHEREFORE, the decision of the Court of First Instance appealed from is hereby
reversed and set aside and another one entered dismissing the complaint and the
counterclaim. No costs.
SO ORDERED.
Plana and Relova, JJ., concur.
Teehankee (Chairman), J., concur in the result.

Separate Opinions
MELENCIO-HERRERA, J., concurring:

I concur in the result.

In this case, the deceased Numeriano Bautista was a passenger in a public utility
jeepney owned by the deceased Rosendo de Guzman and whose driver was Eugenio
Medrano. It was a vehicular accident involving the jeep which caused the death of
Numeriano.
The driver was prosecuted for criminal negligence resulting in death, and he was
sentenced, inter alia, to pay a civil liability of P3,000.00 to the heirs of Numeriano. Since
the driver could not pay that civil liability adjudged in the criminal case, Rosendo, or his
estate, became subsidiary liable for the amount.
In the case at bar, after the estate of Rosendo de Guzman had been judicially
settled and closed, plaintiff heirs of Numeriano had sued defendant heirs of Rosendo
de Guzman in a separate action, before the then Court of First Instance in Pasay City (a)
for settlement of the subsidiary liability of P3,000.00, (b) as well as for damages
resulting from the death of Numeriano. The Trial Court gave judgment to the plaintiffs
for the P3,000.00. but did not grant the claim for damages for the death of Numeriano
pursuant to the provisions of Section 5, Rule 86. The heirs of the deceased passenger
accepted the judgment of the trial Court, but the heirs of Rosendo de Guzman appealed
to the Intermediate Appellate Court which subsequently endorsed the case to us as
only a question of law was involved. prLL

The civil liability adjudged in the criminal case, and for which Rosendo de Guzman
or his estate became subsidiary liable, is plainly a money claim. On the other hand, any
direct liability of Rosendo de Guzman or his estate, for damages for the death of the
passenger Numeriano, is not a claim for damages for injury to person, which should be
led under Section 1, Rule 87. Rosendo de Guzman was not personally responsible for
the death of Numeriano. The claim of the heirs of Numeriano is one arising from the
contract of transportation (Vda. de Medina, et al. v. Cresencia, et al., 99 Phil. 506). In the
case of Gutierrez vs. Barreto Datu (115 Phil. 741), it was held that a claim for damages
arising from breach of contract is within the purview of Section 5, Rule 86.
The claim of plaintiff heirs of Numeriano should have been presented in the
judicial proceedings for the settlement of the estate of Rosendo de Guzman and, not
having been so presented, has already been barred. It was clear error on the part of the
Trial Court not to have summarily dismissed the complaint for lack of cause of action.

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