CASE DIGEST

0. Case title
Law 174 – Special Proceedings

Court En Banc

Citation

Date November 28, 1962

Petitioner Manuel H. Barredo, et al.

Respondent The Court of Appeals

Ponente Reyes, J.B.L., J.

Relevant topic Contingent Claims

Prepared by Emma Guanco

CASE SUMMARY:

FACTS:

 The present appeal was filed by the heirs of the late Fausto Barredo involving a tardy claim to collect the fair
value of a promissory note.
 The promissory note was secured by a mortgage executed on December 31,1940 in favor of Fausto Barredo
over the leasehold rights of McDonough on the greater portion of a parcel of registered land in Pangasinan
owned by Constantino Factor and over 4 houses constructed by McDonough on the leased land.
 The lease contract between Factor and McDonough provided for a term of 10 years but on December 1940,
the parties extended the term up to August 31, 1961. These were all inscribed at the back of the certificate of
title of the land.
 Upon Fausto Barredo’s death, his heirs extrajudicially adjudicated unto themselves the secured credit of the
deceased and had the same annotated on the aforesaid certificate of title.
 One day, in August 1944, Manuel H. barredo was ordered to appear before an officer of the Japanese
Imperial Army at the Army and Navy Club and was commanded to bring all the documents pertaining to the
mortgage executed by the late McDonough whose private properties have been appropriated by the invaders
because of his enemy citizenship.
 Manuel H. Barredo was paid P20,000 in Japanese war notes and made to sign a certification requesting the
Register of Deeds to cancel the mortgage in consideration of the P20,000 he received. The cancellation was
inscribed at the back of the title.
 Intestate proceedings for the estate of McDonough were instituted. The heirs of Fausto Barredo filed their
belated claims against the estate of McDonough. Their claim was opposed by the administrator. The lower
court allowed the claim after hearing but this was reversed by the CA.

ISSUE – HELD – RATIO:

ISSUE #1 HELD

W/N the trial court erred in allowing the late claim YES

RATIO:

- In view of the burning and destruction of the buildings which were subject of the mortgage, the petitioners
manifested their wish to abandon their security and prosecute the claim against the estate as for a simple
money debt. When the Barredo heirs filed their claim, no order of distribution had been entered in the
proceedings.
- Section 2, Rule 87 of the RoC reads:
o SEC. 2. Time within which claims shall be filed. – In the notice provided in Section 1, the court shall
state the time for the filing of claims against the estate, which shall not be more than 12 nor less than
6 months after the date of the first publication of the notice. However, at any time before an order of
distribution is entered, on application of a creditor who has failed to file his claim within the time
previously limited, the court may, for cause shown and on such terms as are equitable, allow such
claim to be filed within a time not exceeding one month.
- The probate court fixed the period at 6 months from 23 August 1945. The claim was filed 22 October 1947.
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CASE DIGEST
0. Case title
Law 174 – Special Proceedings

- However, tardy claims may be allowed at the discretion of the court upon showing of cause.
- The respondent administrator relied on the obiter dictum in the case of the Estate of Howard J. Edmands
where it was argued that the 1-month period for filing late claims mentioned should be counted from the
expiration of the regular 6-month period. The Court said that the true ruling on the issue was clarified in Paulin
v Aquino where it said that the 1-month period shall be reckoned from the order authorizing the filing of the
claims.
- The probate court’s discretion in allowing a claim after the regular period for filing claims but before entry of an
order of distribution presupposes not only a claim of apparent merit but also that cause existed to justify
tardiness in filing the claim.
o Petitioners allege as excuse for their tardiness the recent recovery of the papers of the late Fausto
Barredo from the possession of his lawyer who is now deceased.
- The order of the trial court allowing the late claim is without justification, because under the invoked
provisions, the court has no authority to admit a belated claim for no cause or for an insufficient cause.

RULING:

WHEREFORE, the appealed decision is affirmed, with costs against the petitioners.