Special administrator

Sales, mortgages, and other encumbrances of property of the decedent(Rule 89)RUSHID JAY S. SANCONSection 1. order of sale of personalty upon written application of executor or administrator, the court may order the whole or part of a personal estatewritten notice to the heirs and other persons interestedIf it is appears that it is necessary for paying debts, expenses of administration, or legacies, or for preservation of the property Q: Is notice to the interested party in such sale, mortgage or encumbrance of decedents estate mandatory? What is the effect in case of failure to give notice?

Answer: Yes. Such notice is mandatory, without which the sale, mortgage or encumbrance made is void.Q: May the court authorize the sale, mortgage, or other encumbrance in lieu of personal estate? Under what instances?

Answer: Yes. When the personal estate is not sufficient to pay debts, expenses of administration and legacies.

The sale of the subject personal estate may injure the business or other interests of those interested in the estate

Where a testator has not otherwise made sufficient provision for the payment of such debts, expenses, and legatees residing in the Philippines (Section 2, Rule 89)Section 3. persons interested may prevent such sale, etc., by giving a bond No authority to sell, mortgage, or encumbrance shall be granted of real or personal

interested person opposing such authority must post a bond to be fixed by the court and at such time court may directSection 4. when court may authorize sale of estate as beneficial to interested persons. Disposal of proceeds. Although not necessary to pay debts, legacies, or expenses of administration, the court may authorize the sale of real or personal property estate if:Beneficial to the heirs, devisees, legatees, and other interested persons; andIf it is not inconsistent with the provisions of a will.Section 5. when the court may authorize sale, mortgage, or other encumbrance of estate to pay debts and legacies in other countries Even if the sale, mortgage, and encumbrance of personal and real estate is not necessary to pay the debts, expenses of administration, or legacies in the Philippines, the court may authorize the executor or administrator to sell, mortgage or encumber the personal or real estate for paying the debts, expenses of administration and legacies outside the country.Section 6. when court may authorize sale, mortgage, or other encumbrance of realty acquired on execution or foreclosure the sale, mortgage or encumbrance of realty acquired in favor of the estate shall be governed by the same regulations prescribed under this rule

Section 7. regulations for granting authority to sell, mortgage, or otherwise encumber estate (Personal or real) the executor or administrator shall file a written petition setting forth, the debts due from the deceased and other expenses

Fixing by the court of time and place to hear the petition, and causing notice, to be given personally or mail to interested persons

Executor and administration shall likewise give additional bond, if the court requires it

if all of the requirements of the above have been complied with, the court by order stating such compliance, may authorize the sale, mortgage, or encumber the part of the estate as it deemed necessary

the provisions concerning notice of execution sale shall govern the notice of the time and place of the estate to be sold at auction

Recording in the registry of deeds of the province in which the real estate of the sale, mortgage or otherwise encumbered is situated

It being settled that property under administration needs the approval of the probate court before it can be disposed of, any unauthorized dispositions does not bind the estate and is null and void

Q: With respect to heirs, is there a need for a court approval before they can exercise their right to dispose their ideal share?

Answer: No. it is settled that court approval is necessary for the validity of any disposition of the decedents estate. However, reference to judicial approval cannot adversely affect the substantive rights of the heirs to dispose of their ideal share in the co-ownership among the heirs. (Beltran v. Donato, 32 Phil. 66)Section 8. when court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect.

Section 9. When may authorize conveyance of lands which deceased held in trust

- Both covers a contract entered by the deceased to convey real or property interest therein during his lifetime and those property he hold in trust

Q: Is notice for such conveyance mandatory?

Answer: yes. The authority to convey as provided for in this section can be given only after notice of the application for that purpose has been given to all persons interested, otherwise, the order authorizing the conveyance and as well as the conveyance itself is null and void. (De Jesus v. De Jesus, 35 SCRA 548) Q: in both cases who may file for an application for such conveyance and those held in trust?Answer : The standing to such course of action before the probate court inures to any person who stands to be benefited or injured by the judgment or to be entitled to the avails of the suit.

Q: Who may be authorized by the court to effectuate such order of conveyance?Answer: The executor or administrator shall e authorized by the courtIs such conveyance is in favor of the executor or administrator, the Clerk of Court shall execute the deed.

Dillena v. Court of Appeals (G.R. No. 77660, 1988)Facts: Spouses Dolores Sebastian and Rufino Carreon died in 1974, leaving an adoptive daughter Aurora Carreon In the same year, Fausta Carreon Herrera instituted special proceedings in the then CFI of Quezon City for the settlement of the estate of the deceased. Fausta was appointed as special administrator by the court In 1975, Aurora Carreon executed an extra-judicial settlement of the estate of the deceased spouses, adjudicating to herself all the real property of the said spouses. Later she was appointed as administrator of the estate. Meanwhile, Aurora sold properties of the estate, without prior approval from the court, consisting of three fishponds located in Hagonoy, Bulacan to Eladio Dillena, herein petitioner.The petitioner, on the other hand, sold the said properties to Luisa Rodriguez and Starlight Industries Co., Inc. The court having learned such sale transaction and the transfer of the same, required the vendees to appear, and explain why the deed should not be cancelled due to the absence of the courts approval to such transactions. Eladio and Luisa failed to appear. The court on September 1984 declared the sale of administrator to Eladio and Luisa null and void for having been made without courts authority and approval.

Eladio filed a petition to annul its order, arguing it has no power to annul the sale. The probate court denied his petition and ordered the petitioners to return the physical possession of the fishpond. They filed a motion for reconsideration was denied. Such decision was affirmed by the Court of Appeals.On appeal to the Supreme Court, the petitioner contended that the probate court has no power to annul the sale entered by him and the administratrix.

Issue: Whether or not the contention of the petitioner in correctHeld: The evidence shows that when the questioned properties were sold without court approval by private respondent to petitioner, the same were under administration. The subject properties therefore are under the jurisdiction of the probate court which according to our settled jurisprudence has the authority to approve any disposition regarding properties under administration.An administratrix of an estate already subject of a special proceeding pending before the probate court cannot enjoy blanket authority to dispose of real properties as she pleases. More emphatic is the declaration We made in Estate of Olave vs. Reyes (123 SCRA 767) wherein We stated that when the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the probate court.To uphold petitioner's contention that the probate court cannot annul the unauthorized sale, would render meaningless the power pertaining to the said court. Sales of properties under administration which do not comply with the requisites under sections 4 and 7 of Rule 89 are null and void (Bonaga vs. Soler, 2 SCRA 755).