Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails.・Read the official text ↗
Debts to be paid in full if estate sufficient.
SEC. 734. Debts to be paid in full if estate sufficient. — If, after the report of the committee and ascertaining the amount of the claims against an estate, it appears that the executor or administrator has in his possession sufficient assets to pay the debts, he shall pay the same by the time limited for that purpose.
Order of payment if estate insolvent.
SEC. 735. Order of payment if estate insolvent. — If the assets which can be appropriated for the payment of debts are not sufficient for that purpose, the executor or administrator shall, after paying the necessary expenses of administration, pay the debts against the estate in the following order: 1. The necessary funeral expenses; 2. The expenses of the last sickness; 3. Debts due to the United States; 4. Taxes and assessments due to the Government, or any branch or subdivision thereof; 5. Debts due to the province; 6. Debts due to other creditors.
Dividends to be paid in proportion to claim.
SEC. 736. Dividends to be paid in proportion to claim. — If there are not assets sufficient to pay the debts of any one of the aforesaid classes, after paying the preceding ones, each creditor within the class for which there are not sufficient assets for payment in full, shall be paid a dividend in proportion to his claim. No creditor of any one class shall receive any payment until those of the preceding class are paid.
Estate of insolvent nonresident.
SEC. 737. Estate of insolvent nonresident. — In case administration is taken in the Philippine Islands of the estate of a person who was at the time of his decease an inhabitant of another country or state, and who died insolvent, his estate found in the Philippine Islands shall, as far as practicable, be so disposed of that his creditors here and elsewhere, may receive each an equal share in proportion to their respective debts.
Payment of claim proved outside the islands, against insolvent resident's estate.
SEC. 738. Payment of claim proved outside the islands, against insolvent resident's estate. — If it appears to the court having jurisdiction of the estate that claims have been duly proven in another State or country against the estate of an insolvent debtor, who was at his decease an inhabitant of the Philippine Islands, the executor or administrator in the Islands having had knowledge of the presentation of such claims under foreign jurisdiction, and an opportunity to contest their allowance, such court shall receive a certified list of such claims, when perfected in such other state or country, and add the same to the list of claims proved against the deceased person in the Islands, so that a just distribution of the whole estate may be made equally among all its creditors, according to their respective claims; but the benefit of this and the preceding sections shall not be extended to the creditors in another state or country, if the property of such deceased person there found is not equally appropriated to the creditors residing in the Philippine Islands with other creditors, according to their respective debts.
Decree for payment of debts.
SEC. 739. Decree for payment of debts. — Subsequent to the return of a report of the committee, and at or before the expiration of the time limited for the payment of the debts, the court shall order the payment of the debts and the distribution of the assets received by the executor or administrator at the time, for that purpose, among the creditors, as the circumstances of the estate require, according to the provisions of this chapter.
In case of appeal.
SEC. 740. In case of appeal. — If an appeal has been taken from the decision of the committee, the court may suspend the order for the payment of the debts, or may order the distribution among the creditors whose claims are allowed, leaving in the hands of the executor or administrator sufficient assets to pay the claim disputed and appealed. When a disputed claim is finally settled, the court having jurisdiction of the estate shall order the same to be paid out of the assets retained, to the same extent and in the same proportion with the claims of other creditors.
Subsequent distributions.
SEC. 741. Subsequent distributions. — If the whole of the debts are not paid by the first distribution and if the whole assets are not distributed, or other assets afterwards come to the hands of the executor or administrator, the court may from time to time, make further order for the distribution of assets.
After time fixed for payment, administrator personally liable.
SEC. 742. After time fixed for payment, administrator personally liable. — When an order is made for the distribution of assets among the creditors the executor or administrator, after the time of payment arrives, shall be personally liable to the creditors for their debts, or the dividend thereon, as for his own debt; he shall also be liable on his bond.
Court to fix time for paying debts and legacies.
SEC. 743. Court to fix time for paying debts and legacies. — The court, at the time of granting letters testamentary or of administration, shall allow to the executor or administrator a time for disposing of the estate and paying the debts and legacies of the deceased person, which time shall not, in the first instance, exceed one year; but the court may, on application of the executor or administrator, from time to time, as the circumstances of the estate require, extend the time not exceeding six months at a time, nor so that the whole time allowed to the original executor or administrator shall exceed three years.
Hearing on question of extending time.
SEC. 744. Hearing on question of extending time. — When an executor or administrator makes application to have the time for paying debts or legacies extended beyond one year, the court shall appoint a time for hearing and deciding on such application, and shall cause notice thereof to be given to all persons interested, by publication three weeks successively in a newspaper of general circulation in the province, to be designated by the court; and an order extending the time shall not be granted unless such notice has been given.
Successor of administrator dying, may have time extended.
SEC. 745. Successor of administrator dying, may have time extended. — When an executor or administrator dies and a new administrator of the same estate is appointed, the court may extend the time allowed for the payment of the debts or legacies beyond the time allowed to the original executor or administrator, not exceeding six months at a time, and not exceeding six months beyond the time which the court might have allowed to such original executor or administrator; and notice shall be given of such application and of the time and place of hearing, as required in the preceding section. CONTINGENT CLAIMS
Claims may be presented to committee.
SEC. 746. Claims may be presented to committee. — If a person is liable as surety for the deceased, or has other contingent claims against his estate which can not be proved as a debt before the committee, the same may be presented with the proof, to the committee, who shall state in their report that such claim was presented to them.
Estate to be retained to meet claims.
SEC. 747. Estate to be retained to meet claims. — If the court is satisfied from the report of the committee, or from proof exhibited to it, that such contingent claim is valid, it may order the executor or administrator to retain in his hands sufficient estate to pay such contingent claim, when the same becomes absolute, or, if the estate is insolvent, sufficient to pay a portion equal to the dividend of the other creditors.
Claim becoming absolute in two years, how allowed.
SEC. 748. Claim becoming absolute in two years, how allowed. — If such contingent claim becomes absolute and is presented to the court, or to the executor or administrator, within two years from the time limited for other creditors to present their claims, it may be allowed by the court if not disputed by the executor or administrator, and if disputed, it may be proved before the committee already appointed, or before others to be appointed, for that purpose, as if presented for allowance before the committee had made its report.
Such creditor to receive in same proportion as others.
SEC. 749. Such creditor to receive in same proportion as others. — If such contingent claim is allowed, the creditor shall receive payment to the same extent as the other creditors, if the estate retained by the executor or administrator is sufficient. But if the claim is not established during the time limited in the preceding section, or if the assets retained in the hands of the executor or administrator are not exhausted in the payment of such claims, such assets, or the residue of them, shall be disposed of by the order of the court to the persons entitled to the same; but the assets so distributed shall still remain subject to the liability of the claim when established, and the creditor may maintain an action against the distributees to recover his debt, and such distributees and their estates shall be liable for such debts in proportion to the estate they have respectively received from the property of the deceased.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).