Litonjua vs. Montilla, Jr.

A judgment creditor of an heir cannot collect his claim out of the property pertaining by inheritance to said heir before the debts of the testate or intestate succession have been paid and the net assets that are divisible among the heirs are known. A person who is not a creditor of the deceased has no right to intervene in the proceedings brought in connection with the estate or in the settlement of the succession.

Pedro L. Litonjua obtained a judgment against Claudio Montilla in Civil Case No. 868 of the Court of First Instance of Negros Occidental. Claudio Montilla was one of the heirs of the late Agustin Montilla, Sr., whose estate was the subject of Special Proceeding No. 32 in the same court. The legal backdrop involves the Civil Code provisions on succession, which require that the debts of the deceased be paid before the heirs can inherit, and the rules on intervention in estate proceedings, which limit participation to creditors of the deceased.

Pedro L. Litonjua obtained a judgment against Claudio Montilla in Civil Case No. 868 of the Court of First Instance of Negros Occidental for the payment of P4,000 with legal interest, plus costs amounting to P39.00. A writ of execution was issued in due time, but no property of Claudio Montilla could be found which could be levied upon.

On June 12, 1950, Litonjua filed a motion in Special Proceeding No. 32, the intestate estate proceedings of the late Agustin Montilla, Sr., praying that the interest, property, and participation of Claudio Montilla, one of the heirs of Agustin Montilla, Sr., in the latter's intestate estate be sold and that out of the proceeds the judgment debt of Claudio Montilla in favor of Litonjua be paid. This motion was opposed by Claudio Montilla and by Agustin Montilla, Jr., the administrator of the intestate estate.

On August 7, 1950, the Court of First Instance of Negros Occidental issued an order denying the motion. Litonjua appealed from this order. The Supreme Court found that Litonjua was not a creditor of the deceased Agustin Montilla, Sr., and that he sought to collect his claim out of the inheritance of Claudio Montilla, an heir, before the net assets of the intestate estate had been determined.

• Right to Collect from Heir's Share: Litonjua, as movant-appellant, sought to have Claudio Montilla's interest, property, and participation in the intestate estate sold to satisfy the judgment debt, arguing that as a creditor of the heir, he was entitled to collect out of the property which pertains by inheritance to said heir.

• No Right to Intervene: Claudio Montilla, as oppositor-appellee, and Agustin Montilla, Jr., as administrator-appellee, opposed the motion, consistent with the principle that a person who is not a creditor of the deceased has no right to intervene in estate proceedings or in the settlement of the succession.

• Creditor's Right Against Estate Property: Whether a judgment creditor of an heir may levy execution on the heir's share in an intestate estate before the estate's debts have been paid and the net distributable assets have been determined.
• Standing to Intervene in Estate Proceedings: Whether a person who is not a creditor of the deceased has the right to intervene in the proceedings brought in connection with the estate or in the settlement of the succession.

• Creditor's Right Against Estate Property: No. A creditor of an heir is entitled to collect his claim out of the property which pertains by inheritance to said heir only after the debts of the testate or intestate succession have been paid and when the net assets that are divisible among the heirs are known, because the debts of the deceased must first be paid before his heirs can inherit.
• Standing to Intervene in Estate Proceedings: No. A person who is not a creditor of the deceased, testate or intestate, has no right to intervene either in the proceedings brought in connection with the estate or in the settlement of the succession.

• Creditor's Right Against Estate Property: The Court applied the doctrine from Ortiga Brothers and Co. vs. Enage and Yap Tico, 18 Phil. 345, which held that a creditor of the heirs of a deceased person is entitled to collect his claim out of the property which pertains by inheritance to said heirs only after the debts of the testate or intestate succession have been paid and when the net assets that are divisible among the heirs are known. This is because the debts of the deceased must first be paid before his heirs can inherit, pursuant to Articles 659 et seq., 1026, 1027, and 1032 of the Civil Code, and Sections 734 et seq. of the Code of Civil Procedure. An execution cannot legally be levied upon the property of an intestate succession to pay the debts of the widow and heirs of the deceased until the credits held against the latter at the time of his death shall have been paid, and only the remaining property that pertains to the said debtor heirs can be attached, under Article 1034 of the Civil Code.
• Standing to Intervene in Estate Proceedings: The Court quoted the pertinent passages from Ortiga Brothers and Co. vs. Enage and Yap Tico, which stated that a person who, having a claim against a deceased person which should be considered by the committee, does not exhibit his claim as provided by law shall be barred from recovering such demand, and that with still less reason can one who is not a creditor of the deceased intervene in the proceedings relative to the latter's intestate estate and to the settlement of his succession, because such creditor has no right or interest that calls for the protection of the law and the courts, except in any remainder which may be found due the heir. These pronouncements were found perfectly applicable to the case at bar, because the appellant was not a creditor of the deceased Agustin Montilla, Sr., and he sought to collect his claim out of the inheritance of Claudio Montilla, an heir, before the net assets of the intestate estate had been determined.

• Creditor of Heir vs. Creditor of Estate — A creditor of an heir may collect from the heir's share in a decedent's estate only after all debts of the estate have been paid and the net distributable assets are known. The Court applied this doctrine to deny Litonjua's motion, since he sought to reach Claudio Montilla's inheritance before the estate's debts were settled.
• Standing to Intervene in Estate Proceedings — Only creditors of the deceased have the right to intervene in estate proceedings or in the settlement of the succession; a creditor of an heir has no such right. The Court applied this principle to bar Litonjua's motion, as he was not a creditor of the deceased Agustin Montilla, Sr.

• "A person who, having claim against a deceased person which should be considered by the committee does not, after publication of the required notice, exhibit his claim to the committee as provided by law, shall be barred from recovering such demand or from pleading the same as an offset to any action, under the provisions of section 695 of the Code of Civil Procedure, excepting the case referred to in section 701 of the same; with still less reason can one who is not a creditor of the said deceased intervene in the proceedings relative to the latter's intestate estate and to the settlement of his succession (article 1034 of the Civil Code), because such creditor has no right or interest that call for the protection of the law and the courts, except in any remainder which may be found due the heir." — This passage, quoted from Ortiga Brothers and Co. vs. Enage and Yap Tico, establishes the rule that non-creditors of the deceased lack standing to intervene in estate proceedings.
• "An execution cannot legally be levied upon the property of an intestate succession to pay the debts of the widow and heirs of the deceased, until the credits held against the latter at the time of his death shall have been paid can the remaining property that pertains to the said debtors heirs can be attached (Art. 1034, aforecited, Civil Code.)" — This passage states the controlling rule that estate property cannot be levied upon to satisfy the debts of heirs until the estate's own debts are paid.

• Ortiga Brothers and Co. vs. Enage and Yap Tico, 18 Phil. 345 — Controlling precedent, followed by the Court. This case established the doctrines that a creditor of an heir can only collect from the heir's inheritance after the estate's debts are paid, and that a non-creditor of the deceased has no right to intervene in estate proceedings.

• Article 1034, Civil Code — Cited as the basis for the rule that an execution cannot legally be levied upon the property of an intestate succession to pay the debts of the heirs until the credits held against the deceased at the time of his death have been paid; only the remaining property pertaining to the debtor heirs can be attached.
• Articles 659 et seq., 1026, 1027, and 1032, Civil Code — Cited for the proposition that the debts of the deceased must be paid before his heirs can inherit.
• Sections 734 et seq., Code of Civil Procedure — Cited in connection with the order of payment of debts in estate proceedings.
• Sections 695 and 701, Code of Civil Procedure — Referenced in the quoted passage from Ortiga Brothers and Co. vs. Enage and Yap Tico regarding the bar against claims not exhibited to the committee and the exceptions thereto.

Pablo, Bengzon, Padilla, Tuason, Montemayor, Reyes, Jugo, and Bautista Angelo, JJ., concurred.