Santos vs. Manarang

A debt recognized in a testator's will does not dispense with the requirement that the claim be presented to and allowed by the committee on claims; the statute of nonclaims bars claims not presented within the statutory period, and the testator cannot override the mandatory probate procedure for settling claims against the estate.

Don Lucas de Ocampo died on November 18, 1906, leaving a last will and testament dated July 26, 1906, which devised his real and personal property to his three children. The fourth clause of the will declared that the testator had contracted certain debts and expressed his desire that they be "religiously paid" by his wife and executors. Among the debts listed were two in favor of the plaintiff, Isidro Santos: one for P5,000 due April 14, 1907, and various others amounting to P2,454. The will was duly probated, and a committee was regularly appointed to hear and determine claims against the estate. The Code of Civil Procedure established a system for the allowance of claims against decedents' estates, including the statute of nonclaims, which fixed a definite period within which creditors must present their claims to the committee.

Don Lucas de Ocampo died on November 18, 1906, possessed of real and personal property, which by his last will and testament dated July 26, 1906, he left to his three children. The fourth clause of the will declared that the testator had contracted certain debts and desired that they be "religiously paid" by his wife and executors. Among the debts listed were two in favor of the plaintiff, Isidro Santos: one due on April 14, 1907, for P5,000, and various others described as falling due at different dates amounting to P2,454. The will was duly probated, and a committee was regularly appointed to hear and determine claims against the estate. The committee submitted its report to the court on June 27, 1908.

On July 14, 1908, the plaintiff presented a petition asking the court to require the committee to reconvene and pass upon his claims, which were recognized in the will. This petition was denied. On November 21, 1910, the plaintiff instituted proceedings against the administratrix of the estate to recover the sums mentioned in the will as due him. Relief was denied in the court below, and the plaintiff appealed.

In his petition asking that the committee be reconvened, the plaintiff stated that his failure to present his claims to the committee was due to his belief that it was unnecessary to do so because the testator had expressly recognized them in his will and directed that they be paid. The time previously limited for presentation of claims was six months from July 23, 1907, allowing the plaintiff until January 23, 1908, to present his claims. The plaintiff's petition was not presented until July 14, 1909, more than a year after the period had expired. The record affirmatively showed that the committee made the publications required by law. The court's order of August 1, 1912, approving the administratrix's account after reducing final payments of some claims to agree with the amounts allowed by the committee, demonstrated that the committee's report had been approved.

The Court observed that of the debts listed in the will, not a single one was allowed by the committee in the amount named in the will. The testator either failed to list all his creditors, set down erroneous amounts, overlooked some debts, contracted new ones after the will was made, or made partial payments on some and incurred additional indebtedness as to others. Among the assets of the estate mentioned in the will was a parcel of land valued at P6,500, while in the inventory of the administratrix the "right to repurchase" this land from Isidro Santos was listed as an asset. Counsel for the administratrix alleged that he was prepared to prove that the testator erroneously claimed the fee of this land in his will and stated Santos' rights as a mere debt of P5,000, when in reality the only asset was the value of the right to repurchase, which expired in 1907 after the testator's death.

• Reconvening the Committee: The appellant argued that the court erred in denying his petition to reconvene the committee, contending that it did not appear in the committee's report that the publications required by section 687 of the Code of Civil Procedure had been duly made, that the court had not approved the committee's report at the time he presented his petition, and that the administration proceedings had not been terminated.
• Mistake of Law: The appellant claimed that his failure to present his claims to the committee was due to his belief that it was unnecessary because the testator expressly recognized them in his will and directed that they be paid, and that he did not become aware of the necessity of presenting them until after the committee had made its final report.
• Payment of Debts Recognized in the Will: The appellant insisted that the court erred in dismissing his petition asking that the administratrix be compelled to pay over to him the amounts mentioned in the will as debts due him, invoking the maxim "the will of the testator is the law of the case."

• Bar of the Statute of Nonclaims: The administratrix maintained that the plaintiff's claim was barred because it was not presented to the committee within the time previously limited, and the application for extension came too late.
• Fictitious Nature of the Claim: Counsel for the administratrix alleged that he was prepared to prove that the testator erroneously claimed the fee of a parcel of land in his will and stated Santos' rights as a mere debt of P5,000, when in reality the only asset was the value of the right to repurchase, which belonged to Santos subject to the right of redemption.

• Reconvening the Committee: Whether the court erred in refusing to reconvene the committee on claims to consider the plaintiff's belated claims.
• Direct Action Against Administratrix: Whether the court erred in dismissing the plaintiff's petition to compel the administratrix to pay the amounts mentioned in the will as debts due him.
• Effect of Recognition in the Will: Whether a debt expressly recognized in a testator's will and directed to be paid may be recovered without being presented to the committee on claims.

• Reconvening the Committee: No. The plaintiff's claims were proper to be considered by the committee, and his petition for reconvening was presented after the bar of the statute of nonclaims had become conclusive. The committee did give the notice required by law, and the plaintiff's mistake of law did not excuse his failure to present his claims within the statutory period.
• Direct Action Against Administratrix: No. The plaintiff's petition was nothing more than a complaint instituting an action against the administratrix for the recovery of a sum of money, which is prohibited by section 699 of the Code of Civil Procedure when a committee has been appointed. The claim being a simple debt, the action was improperly instituted against the administratrix.
• Effect of Recognition in the Will: No. The testator's recognition of a debt in his will does not dispense with the mandatory probate procedure for settling claims against the estate. The claims against the estate were enforceable only when the prescribed legal procedure was followed, and the direction in the will to pay all just debts does not mean that they shall be paid without probate.

• Reconvening the Committee: The Court first determined whether the plaintiff's claims were such as a committee appointed to hear claims against an estate is authorized to pass upon. Under section 686, the committee is empowered to try and decide claims which survive against executors and administrators, except claims for the possession of or title to real estate. The plaintiff's claims were described in the will as debts, with nothing indicating they were contingent claims, claims for real property, damages, or specific personal property. Thus, they were claims proper to be considered by the committee. Section 689 provides that the court shall allow time for creditors to present their claims, not exceeding twelve months in the first instance, and the whole time shall not exceed eighteen months. Section 690 provides that on application of a creditor who has failed to present his claim, if made within six months after the time previously limited, the court may renew the commission and allow further time not exceeding one month. The time previously limited was six months from July 23, 1907, allowing the plaintiff until January 23, 1908, to present his claims. The court could extend this time and recall the committee at any time within the six months after January 23, 1908, or until July 23, 1908. The plaintiff's petition was not presented until July 14, 1909, and the bar of the statute of nonclaims was as conclusive under these circumstances as the bar of the ordinary statute of limitations would be. The plaintiff's plea was that he was laboring under a mistake of law, which could easily have been corrected had he sought to inform himself. The Court applied the maxim "ignorantia legis neminem excusat" and concluded that the trial court made no error in refusing to reconvene the committee.

• Direct Action Against Administratrix: The Court conceded the maxim "dictat testor et erit lex" but noted that the law imposes certain restrictions upon the testator, not only as to the disposition of his estate but also as to the manner in which he may make such disposition. The Code of Civil Procedure established a system for the allowance of claims against the estates of decedents. The Court identified at least two restrictions imposed by law upon the power of the testator to dispose of his property: (1) his estate is liable for all legal obligations incurred by him, and (2) he cannot dispose of or encumber the legal portion due his heirs by force of law. The former takes precedence over the latter. If a debt expressly recognized in the will must be paid without verification, there is nothing to prevent a partial or total alienation of the legal portion by means of a bequest under the guise of a debt, since all debts must be paid before the amount of the legal portion can be determined. The rights of heirs by force of law pass immediately upon the death of the testator, and the state intervenes and guarantees their rights. The Court concluded that the claims against the estate were enforceable only when the prescribed legal procedure was followed. The petition filed on November 21, 1910, was nothing more than a complaint instituting an action against the administratrix for the recovery of a sum of money. Under section 699, when a committee is appointed, no action or suit shall be commenced or prosecuted against the executor or administrator upon a claim against the estate to recover a debt due from the estate. The sum of money prayed for must be due the plaintiff either as a debt or a legacy. If it is a debt, the action was erroneously instituted against the administratrix. The plaintiff's claim was described by the testator as a debt, and it must be presumed that he used this expression in its ordinary and common acceptation. The testator, in so many words, left the total net assets of his estate to his children per capita, with no indication that he desired to leave anything by way of legacy to any other person. His claim against the estate having been a simple debt, the present action was improperly instituted against the administratrix.

• Effect of Recognition in the Will: The Court held that no respectable authority can be found which holds that the will of the testator may override positive provisions of law and imperative requirements of public policy. The Court applied the presumption that the testator is acquainted with the rules of law and intended to comply with them. If two constructions of a will are possible, one consistent with the law and the other inconsistent, the presumption that the testator intended to comply with the law compels the construction consistent with the law. The Court observed that the testator knows that the execution of his will in no way affects his control over his property, and debts may accrue and be paid in whole or in part between the time the will is made and the death of the testator. To allow a debt mentioned in the will in the amount expressed therein on the ground that such was the desire of the testator, when in fact the debt had been wholly or partly paid, would be unjust to the residuary heirs. The Court noted that of the debts listed in the will, not a single one was allowed by the committee in the amount named in the will, demonstrating that the testator either failed to list all his creditors, set down erroneous amounts, or made partial payments. The direction in the will for the executor to pay all just debts does not mean that he shall pay them without probate. The statute provides the very means for ascertaining whether the claims against the estate are just debts. From any point of view, there must be a hearing sometime before some tribunal to determine the correctness of the debts recognized in the wills of deceased persons. This hearing, in the first instance, cannot be had before the court because the law does not authorize it. Such creditors must present their claims to the committee, otherwise their claims will be forever barred.

• Statute of Nonclaims — Section 689 of the Code of Civil Procedure supersedes the ordinary limitation of actions for claims against the estate of deceased persons. Its purpose is to settle the affairs of the estate with dispatch, so that the residue may be delivered to the persons entitled thereto without their being afterwards called upon to respond in actions for claims. The bar of the statute of nonclaims is as conclusive as the bar of the ordinary statute of limitations. The Court applied this doctrine to bar the plaintiff's claim because it was not presented to the committee within the time previously limited, and the application for extension came more than a year after the period had expired.

• Saving Clause of the Statute of Nonclaims — Section 690 of the Code of Civil Procedure provides that on application of a creditor who has failed to present his claim, if made within six months after the time previously limited, the court may, for cause shown, renew the commission and allow further time not exceeding one month. The Court applied this provision to determine that the court could extend the time and recall the committee at any time within the six months after January 23, 1908, or until July 23, 1908, and that the plaintiff's petition presented on July 14, 1909, was too late.

• "The Will of the Testator is the Law of the Case" — The Court conceded the maxim "dictat testor et erit lex" but held that the law imposes certain restrictions upon the testator, not only as to the disposition of his estate but also as to the manner in which he may make such disposition. The will of the testator may not override positive provisions of law and imperative requirements of public policy. The Court applied this doctrine to hold that the testator's recognition of a debt in his will does not dispense with the mandatory probate procedure for claims against the estate.

• Presumption of Testator's Knowledge of Law — It will ordinarily be presumed in construing a will that the testator is acquainted with the rules of law and that he intended to comply with them accordingly. If two constructions of a will are possible, one consistent with the law and the other inconsistent, the presumption that the testator intended to comply with the law compels the construction consistent with the law. The Court applied this presumption to reject any construction of the will tending to show an intention of the testator that the ordinary legal method of probating claims should be dispensed with.

• Ignorantia Legis Neminem Excusat — Ignorance of the law excuses no one. The Court applied this maxim to reject the plaintiff's plea that he was laboring under a mistake of law, which could easily have been corrected had he sought to inform himself, and that his lack of information as to the law governing the allowance of claims against estates could have been remedied by proper diligence.

• "It cannot be questioned that this section supersedes the ordinary limitation of actions provided for in chapter 3 of the Code. It is strictly confined, in its application, to claims against the estate of deceased persons, and has been almost universally adopted as part of the probate law of the United States. It is commonly termed the statute of nonclaims, and its purpose is to settle the affairs of the estate with dispatch, so that residue may be delivered to the persons entitled thereto without their being afterwards called upon to respond in actions for claims, which, under the ordinary statute of limitations, have not yet prescribed." — This passage defines the statute of nonclaims and its purpose, which is central to the Court's holding that the plaintiff's belated claim was barred.

• "It may be safely asserted that no respectable authority can be found which holds that the will of the testator may override positive provisions of law and imperative requirements of public policy." — This statement articulates the Court's conclusion that the testator's recognition of a debt in his will cannot dispense with the mandatory probate procedure for claims against the estate.

• "The direction in the will for the executor to pay all just debts does not mean that he shall pay them without probate. There is nothing in the will to indicate that the testator intended that his estate should be administered in any other than the regular way under the statute, which requires 'all demands against the estates of the deceased persons,' 'all such demands as may be exhibited,' etc. The statute provides the very means for ascertaining whether the claims against the estate or just debts." — This passage states the Court's holding that a direction in a will to pay debts does not exempt those debts from the claims procedure established by the Code of Civil Procedure.

• "From any point of view the inevitable result is that there must be a hearing sometime before some tribunal to determine the correctness of the debts recognized in the wills of deceased persons. This hearing, in the first instance, can not be had before the court because the law does not authorize it. Such debtors must present their claims to the committee, otherwise their claims will be forever barred." — This passage summarizes the Court's conclusion that creditors whose claims are recognized in a will must still present them to the committee on claims or be forever barred.

• Estate of De Dios, 24 Phil. Rep., 573 — Cited for the proposition that the object of the law in fixing a definite period within which claims must be presented is to insure the speedy settling of the affairs of a deceased person and the early delivery of the property of the estate to the persons entitled to receive it, and that the extension of time under section 690 rests in the discretion of the court.
• Estate of Reyes, 17 Phil. Rep., 188 — Cited for the proposition that claims are not barred as to property not included in the inventory, and that fraud would have the same effect of preventing the bar of the statute of nonclaims.
• Waughop vs. Bartlett, 165 Ill., 124 — Cited for the proposition that claims are not barred as to property not included in the inventory.
• Kaufman vs. Redwine, 97 Ark., 546 — Cited for the proposition that the direction in a will for the executor to pay all just debts does not mean that he shall pay them without probate, and that the statute provides the means for ascertaining whether claims against the estate are just debts.
• Collamore vs. Wilder, 19 Kan., 67 — Cited in support of the proposition that the direction in a will to pay debts does not dispense with the statutory claims procedure.
• O'Neil vs. Freeman, 45 N. J. L., 208 — Cited in support of the proposition that the direction in a will to pay debts does not dispense with the statutory claims procedure.

• Section 686, Code of Civil Procedure — Empowers the committee to try and decide claims which survive against executors and administrators, even though they be demandable at a future day, except claims for the possession of or title to real estate. The Court applied this provision to determine that the plaintiff's claims, being described in the will as debts, were claims proper to be considered by the committee.
• Section 687, Code of Civil Procedure — Requires the committee to make publications as required by law. The Court found that the record affirmatively showed that the committee did make the publications required by law.
• Section 689, Code of Civil Procedure — Provides that the court shall allow such time as the circumstances of the case require for creditors to present their claims to the committee, but not in the first instance more than twelve months or less than six months, and the whole time shall not exceed eighteen months. The Court applied this provision to determine the period within which the plaintiff was required to present his claims.
• Section 690, Code of Civil Procedure — Provides that on application of a creditor who has failed to present his claim, if made within six months after the time previously limited, the court may renew the commission and allow further time not exceeding one month. The Court applied this provision to determine that the plaintiff's application for extension came too late.
• Section 699, Code of Civil Procedure — Provides that when a committee is appointed, no action or suit shall be commenced or prosecuted against the executor or administrator upon a claim against the estate to recover a debt due from the estate. The Court applied this provision to hold that the plaintiff's action against the administratrix was improperly instituted.
• Section 700, Code of Civil Procedure — Provides that all actions commenced against the deceased person for the recovery of money, debt, or damages, pending at the time the committee is appointed, shall be discontinued, and the claims embraced within such actions presented to the committee. The Court cited this provision in determining the scope of claims proper to be considered by the committee.
• Section 703, Code of Civil Procedure — Provides that actions to recover title or possession of real property, actions to recover damages for injury to person or property, and actions to recover the possession of specified articles of personal property shall survive, but all other actions commenced against the deceased before his death shall be discontinued and the claims therein involved presented before the committee. The Court cited this provision in determining the scope of claims proper to be considered by the committee.
• Section 706, Code of Civil Procedure — Provides that an executor may, with the approval of the court, compound with a debtor of the deceased for a debt due the estate, but is nowhere permitted or directed to deal with a creditor of the estate. The Court cited this provision to illustrate that the administrator is the advocate of the estate before the committee, and to allow the administrator to examine and approve a claim against the estate would put him in the dual role of a claimant and a judge.
• Section 708, Code of Civil Procedure — Provides that a claim secured by a mortgage or other collateral security may be abandoned and the claim prosecuted before the committee, or the mortgage may be foreclosed or the security relied upon. The Court cited this provision in determining the scope of claims proper to be considered by the committee.
• Article 657, Civil Code — Provides that the rights of heirs by force of law pass immediately upon the death of the testator. The Court cited this provision to support its conclusion that the state intervenes and guarantees the rights of heirs by force of law, and that the testator cannot substitute a different procedure for determining the legal portion.
• Article 792, Civil Code — Provides that impossible conditions and those contrary to law and good morals shall be considered as not imposed. The Court cited this provision in support of its conclusion that the will of the testator may not override positive provisions of law.
• Article 818, Civil Code — Cited for the proposition that the state guarantees the rights of heirs by force of law to the extent mentioned in this article. The Court cited this provision to support its conclusion that the state cannot afford to allow the performance of its obligations to be directed by the will of an individual.
• Article 866, Civil Code — Cited for the proposition that a debt may be left as a legacy, either to the debtor or to a third person, but this case can only arise when the debt is an asset of the estate. The Court applied this provision to reject the argument that the plaintiff's claim partook of the nature of a legacy.
• Article 878, Civil Code — Cited in connection with the proposition that a debt may be left as a legacy. The Court applied this provision in rejecting the argument that the plaintiff's claim was a legacy.
• Article 1089, Civil Code — Provides that a debt arises from an obligation recognized by law. The Court cited this provision to distinguish a debt from a legacy.
• Article 1156, Civil Code — Provides that debts are demandable and must be paid in legal tender. The Court cited this provision to distinguish a debt from a legacy.

Torres, Carson, and Araullo, JJ., concurred.

• Moreland, J., dissenting — The dissent argued that the decision produced a serious miscarriage of justice, causing the appellant to lose more than P7,000, a debt specifically recognized by the testator in his will and ordered to be paid "religiously." The dissent contended that the record was lacking in legal evidence to establish the publication required by law under the order of July 23, 1907, and that the notice should have been published in pursuance of the order of January 8, 1908, which vacated and annulled the earlier order. The dissent further argued that the claim was not one that must be submitted to a committee, being recognized as a legal and valid debt by the will, and that the motion to require the executor to pay the claim should have been heard by the court. The dissent distinguished between a "claim" and a "debt," arguing that a debt recognized in a will was raised to the dignity of a debt over which no committee has jurisdiction. The dissent also argued that the proceeding was not an action against an executor to recover a debt but a motion to compel the executor to comply with the directions in a will, and that the recognition of the debt in the will changed the burden of proof from the creditor to the estate. The dissent concluded that the judgment should be reversed and the probate court ordered to hear the petitioner's motion on the merits.