G.R. No.

L-12302 April 13, 1959

RIO Y COMPANIA (Successor to RIO Y OLABARRIETA), plaintiff-appellant, vs. ELVIRA MASLOG, ETC., ET
AL. defendants-appellees.

FACTS: On January 15, 1939, Rio y Olabarrieta (predecessor-in-interest of appellant Rio y Compania) and
the late Anastacio Manalo, father of the defendant-appellee Elvira Maslog, entered into a "Contrato de Servicios
Personales" wherein the personal services of Anastacio Manalo were engaged by the plaintiff-appellant for the
administration and exploitation of its forest concession.

On May 30, 1941, Anastacio Manalo died intestate at Puerto Princesa, Palawan. Elvira Maslog carried on the account
of her late father and, made payments thereon up to December 31, 1941. As of December 31, 1941, the balance of the
account stood at P18,614.58 due and owing to plaintiff-appellant.

On January 29, 1954, plaintiff-appellant filed a complaint with the Court of First Instance of Palawan for the recovery of
said amount from Elvira Maslog (joined with her husband) in her capacity as her father's only heir, because through an
affidavit of extrajudicial settlement of November 19, 1953 she had adjudicated to herself all the properties of the late
Anastacio Manalo.

Before the case was set for hearing, defendants-appellees filed a motion to dismiss the complaint, on the ground that
the cause of action has already prescribed. The trial court rendered a decision, holding that the complaint was filed late
and consequently dismissed the same.

ISSUE: Whether the action was barred by laches.

RULING: YES. This action has become barred through the laches of appellant company.

It is admitted that Anastacio Manalo died intestate, and at the time of his death at Puerto Princesa, Palawan, on May
30, 1941, he had an outstanding obligation in plaintiff-appellant's favor in the total sum of P18,614.58. This claim,
being for money and arising from contract, did not survive and should have been filed promptly against the
estate of the deceased debtor(Secs. 2 and 5, Rules 87).

Plaintiff-appellant was aware of the death of Anastacio Manalo on said date, and it is not claimed that Rio y Compania
(successor to the original creditor) did not know the existence of Manalo's obligation. As a creditor, it was appellant's
duty to present its claim within a reasonable time after Anastacio Manalo's death in the estate proceedings, and if none
were had to file a petition for letters of administration, as authorized by sec. 6(b) of Rule 79. But in spite of the creditor's
knowledge of the debtor's death on May 30, 1941 and its awareness of the existence of the obligation, it did not take
steps to institute administration proceedings, or collect the debt in question until January 29, 1954, more than 12 years
from the death of the decedent.

The law 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. In the case of Tan Se
Guan vs. Ga Siu San, 47 Phil., 96, this Court held:

The purpose of the rule is to settle the affairs of the estate with dispatch, so that the residue may be delivered
top 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.

The purpose of the law in fixing a definite period within which claims against an estate of the deceased
person must be presented is to insure a speedy settlement of the estate and the early distribution of the estate
of deceased persons should not be unnecessarily delayed by the lethargy and negligence of those who have
a direct interest in the same. (In re Estate of Tangco 39 Phil., 967-968.)

In consonance with this policy, it has been held that —

Where a creditor, knowing of a debtor's death and the fact that no administrator is appointed allows three
years to elapse without asking for the appointment of an administrator or institute intestate proceedings in the
competent court he is guilty of laches and his claim prescribes. (Sikat vs. Villanueva, 57 Phil., 486; Chuakay
& Co. vs. Oh Tiong Keng's Heirs, 62 Phil., 883; Magbanua vs. Akol, 72 Phil., 567).
 To hold otherwise would be to permit a creditor having knowledge of his debtor's death to keep the latter's
estate in suspense indefinitely, by not instituting either testate or intestate proceedings in order to present his
claim, to the prejudice of the heirs and legatees. (Sikat vs. Vda. de Villanueva, supra.)

The fact that the obligation arose from a written contract, with a prescriptive period of ten years is irrelevant to the policy
of speedy liquidation of decedent's estates. Chief Justice Moran, has noted that Sec. 5, Rule 87 of the Rules of Court,
constitutes a special limitation that overrides the ordinary rules of prescription:

Under this provision, not only claims due, but also claims not due or contingent, should be filed otherwise they
are barred forever. So that even where a claim arises upon a written contract and, therefore its period of
limitation is ten years, if the debtor dies, such claim should be presented in the estate or intestate proceeding
of the deceased debtor within the time fixed by the court, otherwise it is barred. . .

Nor does the moratorium constitute a good excuse for delaying the filing of this appellant's claim, and the consequent
speedy settlement of the debtor's estate and delivery of the net residue "to persons entitled thereto without their being
afterwards called to respond in actions for claims which, under the ordinary statute of limitations have not yet prescribed.
(Moran, Commentaries on the Rules of Court, Vol. II [3rd Ed] p. 400.) We have heretofore ruled that —

The general objectives of the moratorium law, which is rehabilitation of debtors, must give way to the more
urgent necessity of setting the estate of the decedent and distributing its residue among his heirs as soon as
possible thereby minimizing if not avoiding altogether, expenses of administration. (Jison vs. Warner, Barnes
& Co. Ltd., 89 Phil., 239; 48 Off. Gaz. No. 9, p. 3873.)

It appearing that more than 12 years had elapsed from the death of Anastacio Manalo before a complaint was
filed to recover the indebtedness of the deceased and without the filing of any intestate proceedings in the
court, the plaintiff-appellant's action is now barred and was correctly dismissed by the court below.
G.R. No. L-7940 March 27, 1913

In the matter of the estate of TELESFORO DE DIOS. TOMAS OSMEÑA, appellant.

FACTS: Tomas Osmeña claims to have had a claim against the estate of Telesforo de Dios, but did not
present the alleged claimed within the six (6) months specified by the court for the presentation of claims to the
commissioners.

Osmeña asked for a motion to extend the time within which he would present said claim. Osmeña reasoned "that during
said time one of the heirs of said estate was making propositions to Osmeña to pay on his own account the debt which
he had against the property of said estate; that Osmeña, under the belief that the said heir would pay the said debt,
could not duly formulate his claim before the commission during said period of six months; that said heir did not pay
the debt or any part thereof to Osmeña as he had at first offered to do."

The Court denied the motion to extend as the rule stands that claims against the estate must be filed within 6 months.
Also, no details or facts were presented by Osmeña to prove such failure or opportunity. Most importantly, Osmeña
resides in Cebu; ergo, it would be impossible to not know the death of De Dios.

ISSUE: Whether or not the court erred in refusing to extend the period for the presentation of claims against
the estate of Telesforo de Dios

RULING: NO.

The court below correctly said that there must be cause shown before it would be authorized to extend the
time within which claims may be presented against the estate.

The power of the court to extend the time for certain purposes is defined in article 690 of the Code of Civil
Procedure and from a reading of said article it appears that a condition precedent to the exercise of such power is a
just cause.

The court does not find in said motion any allegation which it can call a just cause. The only allegation in
relation to the matter is that he has not had opportunity to present his claim against the estate within the six months
fixed by the court, without stating any details or facts relative to such failure of opportunity.

The applicant is a merchant of much experience, a resident of the municipality of Cebu, where he has lived
and where the deceased, Telesforo de Dios, died, who was also a person weel-known in Cebu. It is impossible that
Tomas Osmeña was not informed and did not know the death of said Telesforo de Dios, and Mr. Osmeña is a person
who has many suits in this court, both special proceedings and civil actions. The object of the administration of estates
under the Code of Civil Procedure is to give an opportunity to the creditors to present their claims and a determination
of the condition of the property left by the deceased and to prevent the presentation of claims after certain dates.

It is in the interest of the law and of the spirit of the Code of Civil Procedure that the claims be presented within
the period fixed by the law and that the time for presentation be not extended without just cause.

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 into the
hands of the persons entitled to receive it.

As stated in the case of Jose McMicking vs. Sy Conbieng, "it is the policy of every people which maintains the
principle of private ownership of property that he who owns a thing shall not be deprived of its possession or use except
for the most urgent and imperative reasons and then only so long as is necessary to make the rights which underlie
these reasons effective;" and, "it is a principle of universal acceptance which declares that one has the instant right to
occupy that which he owns, and it is only in the presence of reasons of the strongest and most urgent nature that
principle is prevented from accomplishing the purpose which underlines it."

It is distinctly against the interests of justice and indirect opposition to the policy of the law to extend unduly
the time within which estates should be administered and thereby to keep the property from the possession and use of
those who are entitled to it. Before the time in which claimants must present their claims against an estate is extended
the person asking the privilege must present sound reasons therefor. Whether or not those reasons are sufficient and
whether as a result of their presentation the time ought or ought not to be extended rests in the sound discretion of the
court.

This being so, a decision as to whether or not the time shall be extended will not be disturbed on appeal unless
it clearly appears that there has been an abuse of that discretion. It is a doctrine followed by this court as by all others
that, where a court has discretion, the exercise thereof will not be interfered with except in case of abuse.

The general doctrine is to the effect that, "in the absence of a clear abuse of discretion, to the complaining
party's prejudice, matters purely within the discretion of the trial court are not reviewable on appeal." Moreover, the
doctrine is also stated in the same volume that, "it will be presumed on appeal, in the absence of a showing to the
contrary, that the discretionary powers of the lower court have been exercised without abuse. The burden of showing
abuse is upon the party complaining."

In the case at bar the appellant failed to show that the court below abused the discretion given it by law.

In the first place, the appellant has not shown that he has a meritorious claim against the estate. There
appears nothing in the record demonstrating what the nature of the claim is, how it was contracted, or when. There is
simply a naked allegation that appellant has a claim.

In the second place, the appellant, admitting full knowledge of the time within which he should have presented
his claim and the date on which the time for presentation expired, presents no sufficient explanation for failure to present
the claim within that period. His only excuse is that during the running of the period he was maintaining negotiations
with one of the heirs for the payment of the claim. Even if that were true, it furnishes no reason why the claim was not
presented. Although the negotiations may have been pending, the claim could have been presented nevertheless and,
on payment thereof by the heir, further proceedings could have been prevented.

Under these circumstances the court committed no error in refusing to extend the time within which the claim could be
presented.