CD - 35. Barredo VS CA

G.R. No.
L-17863 November 28, 1962

MANUEL H. BARREDO, ET AL., petitioners, vs. THE COURT OF APPEALS, ET
AL., respondents.
FACTS: The present appeal by the heirs of the late Fausto Barredo involves a
tardy claim to collect the face value of a promissory note from the intestate estate of
the late Charles A. McDonough, represented herein by the administrator, W. I.
Douglas.
The promissory note was secured by a mortgage in favor of Fausto Barredo over the
leasehold rights of McDonough on the greater portion of a parcel of registered land
owned by Constantino Factor, and over four (4) houses which McDonough had
constructed on the leased land. The lease contract between Factor and McDonough
provided for a term of 10 years.
Upon Fausto Barredo's death, his heirs, in a deed of extrajudicial partition,

adjudicated unto themselves the secured credit of the deceased, and had the same
recorded on the aforesaid certificate of title.
This annotation was, however, cancelled when Manuel H. Barredo was ordered to
appeal before an officer of the Japanese Imperial Army at the Army and Navy Club and
was commanded to bring with him all the documents pertaining to the mortgage
executed by the late McDonough whose private properties, because of his enemy
citizenship, were, in the words of the Court of Appeals, "appropriated by the
triumphant invader". Manuel H. Barredo was paid P20,000.00 in Japanese war notes by
the occupation authorities and made to sign, as he did sign, a certification stating "that in
consideration of P20,000.00 which I have received today, I am requested the Register of
Deeds to cancel the mortgage of these properties"; and, as requested, the cancellation was
inscribed at the back of the title.
Charles McDonough died; thereupon, Special Proceedings No. 70173 of the Court of
First Instance of Manila, captioned "In re: Intestate Estate of Charles A. McDonough",
was instituted; and pursue a court order of 17 August 1945, the administrator caused to be
published in the "Philippine Progress" for three consecutive weeks, on 23 and 30 August
1945 and 6 September 1945, a notice to creditors requiring them to their claims with the
clerk of court within 6 months reckoned from the date of its first publication and expiring 23
February 1946.
On 22 October 1947, the heirs of Fausto Barredo filed their belated claim against the
estate of McDonough. This claim was opposed by the administrator. After hearing the
lower court allowed the claim, but the Court of Appeals reversed the order of
allowance; hence, the Barredo heirs appealed to this Court, assigning the alleged errors:
1. That the Court of Appeals erred in holding that the "one month" period referred to
in Section 2 of Rule 87 of Rules of Court is to be counted from and after the
expiration of the six-month period fixed in the published notice to claims, and in
further holding that the trial court had therefore committed a reversible error in
admitting and allowing the claim of herein petitioners; and
2. That the respondent Court of Appeals erred in holding that the only logical
conclusion is that the P20,000.00 in Japanese money paid by the Japanese military
authorities to petitioner Manuel H. Barredo were paid for the redemption of
promissory note secured by mortgage of the four buildings.
It is pertinent to state before discussing the argumentation of counsel that in view of the
burning and destruction of the buildings which were the 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, and that when the Barredo heirs filed their
claim, no order of distribution had entered in the proceedings.
ISSUE: Whether or not petitioner’s tardy claim should be allowed.
HELD: No.
Section 2, Rule 87, of the Rules of Court reads:
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 twelve nor less than six 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 previously fixed the period for filing claims at six (6) months reckoned from
the date of first publication, and the said notice to creditors was first published on 23
August 1945. The present claim was filed on 22 October 1947. There is no doubt,
therefore, that the claim was filed outside of the period previously fixed. But a tardy
claim may be allowed, at the discretion of the court, upon showing of cause for failure
to present said claim on time.
The respondent administrator, relying on the case of the Estate of Howard J. Edmands, 87
Phil. 405, argues that the one-month period for filing late claims mentioned in Section 2, Rule
87, of the Rules of Court should be counted from the expiration of the regular six-month
period, but this pronouncement was but an obiter dictum that did not resolve the issue
involved in said case. The true ruling appears in the case of Paulin vs. Aquino, L-11267,
March 20, 1958, wherein the controverted one month period was clarified as follows:
The one-month period specified in this section is the time granted claimants, and
the same is to begin from the order authorizing the filing of the claims. It does not
mean that the extension of one month starts from the expiration of the original period
fixed by the court for the presentation of claims.
However, 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 claim for apparent
merit but also that cause existed to justify the tardiness in filing the claim. Here, petitioners
alleged 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. This ground
insufficient, due to the availability, and knowledge by the petitioners, of the annotation
at the back of the certificate of title of the mortgage embodying the instant claim, as
well as the payment of P20,000.00 made by the Japanese military authorities.
The order of the trial court allowing the late claim without justification, because under
Section 2, Rule 8 of the Rules of Court, said court has no authority to admit a belated
claim for no cause or for an insufficient cause.1
In view of the conclusions thus arrived at, it becomes unnecessary to discuss whether the
payment by the Japanese was intended as a discharge of the promissory note. Suffice it to
say that there is no other cogent explanation for the payment made to the mortgagees, who
were not the owners of the encumbered property.
FOR THE FOREGOING REASONS, the appealed decision is affirmed, with costs against
the petitioners.

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G.R. No.

L-17863 November 28, 1962

Upon Fausto Barredo's death, his heirs, in a deed of extrajudicial partition,

ISSUE: Whether or not petitioner’s tardy claim should be allowed.

Section 2, Rule 87, of the Rules of Court reads:

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