Special Rules and Proceedings: Rule 89


RULE 89


SALES, MORTGAGES, AND OTHER ENCUMBRANCES OF PROPERTY OF DECEDENT 


SEC. 1. Order of sale of personalty. 

Upon the application of the executor or administrator, and on written notice to the heirs and other persons interested, the court may order the whole or a part of the personal estate to be sold, if it appears necessary for the purpose of paying debts, expenses of administration, or legacies, or for the preservation of the property.


  • The executor or administrator is prohibited from selling personal property of the decedent without a court order, even if the heirs and other persons interested have consented thereto. 

  • An executor or administrator may be held answerable for selling the decedent's property without a court order. The assent of the heirs is insufficient to vest in him the power to dispose of the decedent's property.

  • Moreover, the court cannot motu proprio order the sale of personal property. It is essential that:

    1. The executor or administrator applies for such sale with the court;

    2. Written notice is given to the heirs and other persons interested; and

    3. It is shown that the sale is necessary for:

      • Payment of debts,

      • Expenses of administration,

      • Legacies, or

      • Preservation of the property.


SEC. 2. When court may authorize sale, mortgage, or other encumbrance of realty to pay debts and legacies through personalty not exhausted. 

When the personal estate of the deceased is not sufficient to pay the debts, expenses of administration, and legacies, or where the sale of such personal estate may injure the business or other interests of those interested in the estate, and where a testator has not otherwise made sufficient provision for the payment of such debts, expenses, and legacies, the court, on the application of the executor or administrator and on written notice of the heirs, devisees, and legatees residing in the Philippines, may authorize the executor or administrator to sell, mortgage, or otherwise encumber so much as may be necessary of the real estate, in lieu of personal estate, for the purpose of paying such debts, expenses, and legacies, if it clearly appears that such sale, mortgage, or encumbrance would be beneficial to the persons interested; and if a part cannot be sold, mortgaged, or otherwise encumbered without injury to those interested in the remainder, the authority may be for the sale, mortgage, or other encumbrance of the whole of such real estate, or so much thereof as is necessary or beneficial under the circumstances.


  • The court, upon application, may authorize the executor or administrator to sell, mortgage, or otherwise encumber the decedent's real estate instead of his personal property, in order to pay debts, expenses, and legacies. 

  • This authorization is subject to the following conditions:

    1. The executor or administrator must apply for the sale, mortgage, or encumbrance;

    2. Written notice must be given to heirs, devisees, and legatees residing in the country; and

    3. The action must be beneficial to the persons interested.

  • The executor or administrator is not constrained to sell, mortgage, or encumber the whole property or none at all. Only so much as may be necessary of the real estate needs to be sold, mortgaged, or encumbered. However, the whole property may be affected in the following instances:

    1. If the sale, mortgage, or encumbrance of a part will injure those interested in the remainder; and

    2. If it is necessary under the circumstances.


SEC. 3. Persons interested may prevent such sale, etc., by giving bond. 

No such authority to sell, mortgage, or otherwise encumber real or personal estate shall be granted if any person interested in the estate gives a bond, in a sum to be fixed by the court, conditioned to pay the debts, expenses of administration, and legacies within such time as the court directs; and such bond shall be for the security of the creditors, as well as of the executor or administrator, and may be prosecuted for the benefit of either.


  • Any person interested in the estate may prevent the sale, mortgage, or encumbrance of real or personal property by giving a bond in an amount fixed by the court. The bond is conditioned on:

    1. The payment of debts,

    2. Expenses of administration, and

    3. Legacies, as well as security of the creditors, executor, or administrator.


SEC. 4. When court may authorize sale of estate as beneficial to interested persons. Disposal of proceeds.

When it appears that the sale of the whole or a part of the real or personal estate, will be beneficial to the heirs, devisees, legatees, and other interested persons, the court may, upon application of the executor or administrator and on written notice to the heirs, devisees, and legatees who are interested in the estate to be sold, authorize the executor or administrator to sell the whole or a part of said estate, although not necessary to pay debts, legacies, or expenses of administration; but such authority shall not be granted if inconsistent with the provisions of a will. In case of such sale, the proceeds shall be assigned to the persons entitled to the estate in the proper proportions.


  • The primary consideration for the court is the interest and benefit of the heirs, devisees, legatees, and other interested persons. While the sale may not be necessary for the payment of debts, expenses of administration, or legacies, the court may still authorize such sale. Any proceeds derived from such sale shall be assigned to the persons entitled to the estate in the proper portions.

  • Limitation on the Sale:

    • The only limitation on a sale otherwise beneficial to interested persons is its inconsistency with the provisions of a will.


SEC. 5. When court may authorize sale, mortgage, or other encumbrance of estate to pay debts and legacies in other countries. 

When the sale of personal estate, or the sale, mortgage, or other encumbrance of real estate is not necessary to pay the debts, expenses of administration, or legacies in the Philippines, but it appears from records and proceedings of a probate court in another country that the estate of the deceased in such other country is not sufficient to pay the debts, expenses of administration, and legacies there, the court here may authorize the executor or administrator to sell the personal estate or to sell, mortgage, or otherwise encumber the real estate for the payment of debts or legacies in the other country, in same manner as for the payment of debts or legacies in the Philippines.


SEC. 6. When court may authorize sale, mortgage, or other encumbrance of realty acquired on execution or foreclosure. 

The court may authorize an executor or administrator to sell mortgage, or otherwise encumber real estate acquired by him on execution or foreclosure sale, under the same cicumstances and under the same regulations as prescribed in this rule for the sale, mortgage, or other encumbrance of other real estate.


SEC. 7. Regulation for granting authority to sell, mortgage, or otherwise encumber estate. 

The court having jurisdiction of the estate of the deceased may authorize the executor or administrator to sell personal estate, or to sell, mortgage, or otherwise encumber real estate, in cases provided by these rules and when it appears necessary or beneficial under the following regulations.


(a) The executor or administrator shall file a written petition setting forth the debts due from the deceased, the expenses of administration, the legacies, the value of the personal estate, the situation of the estate to be sold, mortgaged, or otherwise encumbered, and such other facts as show that the sale, mortgage, or other encumbrance is necessary or beneficial.


(b) The court shall thereupon fix a time and place for hearing such petition, and cause notice stating the nature of the petition, the reasons for the same, and the time and place of hearing, to be given personally or by mail to the persons interested, and may cause such further notice to be given, by publication or otherwise, as it shall deem proper;


(c) If the court requires it, the executor or administrator shall give an additional bond, in such sum as the court directs, conditioned that such executor or administrator will account for the proceeds of the sale, mortgage, or other encumbrance;


(d) If the requirements in the preceding subdivisions of this section have been complied with, the court, by order stating such compliance, may authorize the executor or administrator to sell, mortgage, or otherwise encumber, in proper cases, such part of the estate as is deemed necessary, and in case of sale the court may authorize it to be public or private, as would be most beneficial to all parties concerned. The executor or administrator shall be furnished with a certified copy of such order;


(e) If the estate is to be sold at auction, the mode of giving notice of the time and place of the sale shall be governed by the provisions concerning notice of execution sale;


(f) There shall be recorded in the registry of deeds of the province in which the real estate thus sold, mortgage, or otherwise encumbered is situated, a certified copy of the order of the court, together with the deed of the executor or administrator for such real estate, which shall be as valid as if the deed had been executed by the deceased in his lifetime.


SEC. 8. When court may authorize conveyance of realty which deceased contracted to convey. Notice. Effect of deed.

 Where the deceased was in his lifetime under contract, binding in law, to deed real property, or an interest therein, the court having jurisdiction of the estate may, on application for that purpose, authorize the executor or administrator to convey such property according to such contract, or with such modifications as are agreed upon by the parties and approved by the court; and if the contract is to convey real property to the executor or administrator, the clerk of court shall execute the deed. The deed executed by such executor, administrator, or clerk of court shall be as affectual to convey the property as if executed by the deceased in his lifetime; but no such conveyance shall be authorized until notice of the application for that purpose has been given personally or by mail to all persons interested, and such further notice has been given, by publication or otherwise, as the court deems proper; nor if the assets in the hands of the executor or administrator will thereby be reduced so as to prevent a creditor from receiving his full debt or diminish his dividend.


  • The provision presupposes that:

    1. The contract entered into by the deceased during his lifetime is valid and binding;

    2. There is no controversy involving real property or interest therein; and

    3. The sale must not reduce the value of the estate to the extent of depriving creditors of payment of their claims.



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

Where the deceased in his lifetime held real property in trust for another person, the court may after notice given as required in the last preceding section, authorize the executor or administrator to deed such property to the person, or his executor or administrator, for whose use and benefit it was so held; and the court may order the execution of such trust, whether created by deed or by law.


  • It is necessary that notice be given to all persons interested in the estate prior to authorization to deed the property held in trust by the decedent to the person entitled to the same.

  • Moreover, the fact that creditors would be affected does not prevent the conveyance since the property does not form part of the estate.




Cases: 

Manotok Realty, Inc. vs. CA (149 SCRA 174)

  • The Court of First Instance (probate court) authorized the co-administrators to sell the Legarda-Tambunting Subdivision, requiring court approval of executed documents.

  • Vicente Legarda, co-administrator, allegedly sold 280 sqm of Lot 6, Block 4, to Abelardo Lucero for P30/sqm.

    • Sale was on installment; 

    • Lucero paid P200, took possession.

    • No formal contract or probate court approval.

  • Lucero leased portions to tenants, including the private respondent Apolonio Siojo.

    • Tenants defaulted; compromise agreement allowed continued occupancy.

  • Philippine Trust Company, with probate court approval, sold the entire subdivision to Manotok Realty.

    • Manotok Realty obtained clean Transfer Certificates of Title.

    • Manotok Realty issued notices to occupants, then filed ejectment complaints.

    • Lucero assigned his “rights” to his tenants, including the private respondent.

  • Trial Court: Ruled in favor of the petitioner, affirming ownership and ordering eviction.

  • CA: Reversed the trial court, upholding the sale between Legarda and Lucero, ruling that probate court approval was unnecessary.

  • Whether the sale between Legarda and Lucero valid despite the lack of probate court approval.

  • The sale to Lucero was invalid:

    • Even with general court authorization, an administrator must comply with specific conditions set by the probate court.

    • It lacked probate court approval, as required for estate property sales.

    • It was not executed in a public instrument or registered, failing Article 1358 of the Civil Code.

    • A mere receipt does not constitute a valid contract of sale.

    • Lucero did not fulfill payment obligations, and no formal deed of sale was ever issued.

  • Probate courts have exclusive jurisdiction over estate settlement.

    • Under Rule 89, Section 4 of the Rules of Court, sales of estate property must be court-approved.

    • The private respondent had no right to the lot:

      • As a lessee of Lucero, he had no legal claim to ownership.

      • His possession was in bad faith since he was aware of the petitioner’s ownership claim.

      • A buyer from a defective sale cannot claim superior rights over a duly registered owner.


Maneclang vs. Baun (G.R.No. 27876, April 22, 1992)

  • Margarita Suri Santos died intestate on June 12, 1947, survived by her husband, Severo Maneclang, and nine children (some of whom were minors).

  • A petition for estate settlement was filed by Hector Maneclang.

    • No guardian ad litem was appointed for the minor heirs.

    • The estate included several parcels of land, including Lot No. 203.

  • In 1949, Estate administrator Pedro M. Feliciano sought court approval to sell estate properties to settle debts. 

    • Only the surviving spouse was notified of the petition; the heirs were not.

    • The probate court authorized the sale without notifying all heirs.

  • In 1952, judicial administrator Oscar Maneclang executed a deed of sale of 4,515 sq. m. of Lot No. 203 to the City of Dagupan for ₱11,687.50.

  • The sale was approved by the probate court, and Dagupan City took possession and built the Perez Boulevard Public Market (costing ₱100,000).

  • In 1965, the new estate administratrix, Adelaida Maneclang, filed a civil case to annul the sale, arguing lack of notice.

  • Dagupan City defended the sale, invoking validity, estoppel, laches, prescription, and good faith.

  • Whether the notice given only to the surviving spouse satisfies Rule 89 of the Rules of Court.

  • Should all heirs (especially minors) have been directly notified?

  • The sale was null and void ab initio due to the lack of notice to minor heirs.

    • The probate court lacked jurisdiction over the sale since proper notice is a mandatory procedural requirement.

    • Estoppel does not apply to acts that are void from the beginning.

    • The minor heirs never consented, so they could not be bound by estoppel.

  • Laches applies to undue delay, but prescription does not apply to void contracts.

    • The legal-age heirs (Hector, Cesar, and Amanda) were barred by laches for failing to act earlier.

    • Minors were not at fault and retained their right to recover their share (5/9 of the property).

    • Actions to declare a void contract do not prescribe.

  • The City of Dagupan was not a buyer in good faith due to irregularities in the sale.

    • However, the City’s good faith possession was recognized until it was served with summons or filed an answer.

    • The City was ordered to pay ₱500 per month from November 5, 1965, for the unrecovered 5/9 share of the property.

    • The City could retain possession until reimbursed for improvements.

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