Special Rules and Proceedings: Rule 81

Special Rules and Proceedings


RULE 81


Bond of Executors and Administrators



Section 1. Bond to be given issuance of letters. Amount. Conditions. — 

Before an executor or administrator 

enters upon the execution of his trust, 

and letters testamentary or administration issue, 

he shall give a bond, 

in such sum as the court directs, 

conditioned as follows:


(a) To make and return to the court, 

within three (3) months, 

a true and complete inventory 

of all goods, chattels, rights, credits, and estate 

of the deceased which shall come

 to his possession or knowledge 

or to the possession of any other person for him;


(b) To administer according to these rules, 

and, if an executor, according to the will of the testator, 

all goods, chattels, rights, credits, and estate

which shall at any time come to his possession

 or to the possession of any other person for him, 

and from the proceeds to pay and discharge 

all debts, legacies, and charges on the same, 

or such dividends thereon as shall be decreed by the court;


(c) To render a true and just account of his administration 

to the court within one (1) years, 

and at any other time when required by the court;


(d) To perform all orders of the court by him to be performed.


Bond Requirement Before Issuance of Letters

  • An executor or administrator must post a bond before assuming duties.

  • Bond amount is determined by the court and conditioned as follows:

    1. Submit a true and complete inventory of the decedent’s estate within three (3) months.

    2. Administer the estate according to the will (if any) and legal rules, ensuring debts, legacies, and charges are properly settled.

    3. Provide a true and just accounting of administration within one (1) year or as required by the court.

    4. Perform all court orders related to administration.


  • The bond required by law is for the benefit of the heirs, creditors, and the estate. 

  • It answers for the administrator or executor's failure to fulfill any of the conditions of the bond. 

  • The administrator's standard of responsibility is comparable to that of a bailee. 

  • Given this standard, the executor or administrator must act honestly and in good faith; otherwise, he becomes personally liable to those interested in the estate for waste, conversion, or embezzlement.

  • For as long as there is good faith and the acts are done following the usual rules and methods of conducting business, the administrator cannot be held responsible for business losses.

  • The first condition of the bond is for the administrator or executor to submit a true and complete inventory of the decedent's properties that shall comprise his estate. 

  • The inventory must include properties in the administrator's physical possession and even those that come to his knowledge. 

  • In other words, for as long as the administrator has knowledge that a certain property belongs to the decedent's estate, he must include it in the inventory.

  • It may happen, however, that another person claims ownership of the decedent's property. In such a case, the court may provisionally rule on the title to the property for purposes of its inclusion or exclusion from the inventory. However the court decides the matter, the decision shall not be conclusive, because title over property is a subject of a separate action.



Section 2. Bond of executor where directed in will. When further bond required. — 

If the testator in his will directs 

that the executors serve without bond, 

or with only his individual bond, 

he may be allowed by the court to give bond 

in such sum and with such surety 

as the court approves 

conditioned only to pay the debts of the testator; 

but the court may require of the executor 

a further bond in case of a change in his circumstance, 

or for other sufficient case, 

with the conditions named in the last preceding section.


Bond Exemptions and Additional Requirements

  • If a will exempts the executor from a bond, the court may allow them:

    • to serve without bond or 

    • with a limited bond only for paying debts.

  • The court may require an additional bond if the:

    • executor’s circumstances change or 

    • for other sufficient reasons.


  • As a rule, an executor is required to give a bond conditioned on one's performance of the obligations enumerated in Section 1. 

  • An exception to this rule is a provision in the decedent's will exempting the named executor from giving a bond. 

    • In such case, the court may nevertheless require the executor to give a bond on the condition that the executor shall pay the decedent's debts. The court also has the discretion to require the executor to give additional bond whenever there is a change in his circumstance or in other sufficient cases.



Section 3. Bonds of joint executors and administrators. — 

When two or more persons 

are appointed executors or administrators 

the court may take a separate bond from each, 

or a joint bond from all.


Bonds for Joint Executors or Administrators

  • If multiple executors or administrators are appointed, the court may require:

    1. Separate bonds from each, or

    2. A joint bond covering all appointees.



Section 4. Bond of special administrator. — 

A special administrator before entering 

upon the duties of his trust 

shall give a bond, 

in such sum as the court directs, 

conditioned that he will make and return 

a true inventory of the goods, 

chattels, rights, credits, and estate of the deceased 

which come to his possession or knowledge, 

and that he will truly account 

for such as are received by him 

when required by the court, 

and will deliver the same to the person 

appointed executor or administrator, or 

to such other person as may be authorized 

to receive them.


Bond of a Special Administrator

  • A special administrator must post a bond before performing duties.

  • The bond ensures compliance with the following:

    1. Make and return an inventory of the estate.

    2. Account for all assets received when required by the court.

    3. Deliver assets to the appointed executor, administrator, or other authorized person.


  • The conditions for the special administrator's bond are limited compared with the conditions for the administrator's bond. 

  • Specifically, the conditions for the special administrator's bond cover only the following matters:

  1. Make and return a true inventory of the goods, chattels, rights, credits, and estate of the deceased which come to his possession or knowledge.

  2. Truly account for the decedent's estate as received by him when required by the court.

  3. Deliver the same to the person appointed executor or administrator, or to such other person as may be authorized to receive them.



Case: 

Tan vs. Go Chiong Lee (GR No. 21969, September 25, 1924)

  • The involves the estate proceedings of the deceased Go Bung Kiu.

  • Maximina Tan, the plaintiff, succeeded Go Chiong Lee as the administratrix of the estate.

  • She sought to recover P54,700.39 from Go Chiong Lee and his sureties: Tio Liok, Ang Changco, and Manuel Go Tianuy.

  • Go Chiong Lee was originally Go Bung Kiu’s encargado and was later appointed special administrator of the estate on April 26, 1920, with a bond of P30,000.

  • On May 25, 1920, he was appointed administrator and authorized to operate two estate-owned stores.

  • He failed to submit monthly reports as required.

  • He was relieved on October 28, 1921, and replaced by Maximina Tan.

  • The estate suffered a loss of P19,773.75 during his administration.

  • The committee on claims recognized debts of P69,099.91 and ordered their payment.

  • Go Chiong Lee distributed P16,700.39 among creditors but failed to make full payments.

  • The trial court awarded P42,849.08 but limited the liability of the sureties to P30,000.

  • The defendants appealed.

  • Whether Go Chiong Lee is liable for estate losses.

  • Whether he has authority to operate the stores.

  • Whether he is liable for the financial losses.

    • No liability. 

    • The court found that he acted in good faith, and the losses were due to business risks rather than mismanagement.

  • Whether Go Chiong Lee failed to account for 850 sacks of corn.

  • Whether he is responsible for unaccounted goods.

    • Yes, he failed to inventory the sacks. He and his sureties were held liable for P6,375.

  • Whether the payment of estate debts was mishandled.

  • Whether Go Chiong Lee improperly distributed funds to creditors.

    • No bad faith was found. Though he did not strictly follow the court's order, his actions were not deemed fraudulent or negligent.

  • The trial court's decision was modified:

    • Plaintiff can only recover P6,375 plus legal interest.

    • The other claims were disallowed.

    • No costs were awarded.

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