Pasco v. Heirs of De Guzman
G.R. No. 165554, July 26, 2010
Petitioners Lazaro and Lauro Pasco obtained a loan from Filomena de Guzman in the amount of P140,000.00, which was secured by a chattel mortgage over Lauro’s Isuzu Jeep. Upon Filomena’s death, her heirs sought to collect the proceeds of the loan from petitioners but to no avail. Hence, they filed a collection case against petitioners. They authorized Cresencia, a co-heir, to act as their attorney-in-fact through a Special Power of Attorney. Petitioners later questioned the authority of Cresencia to represent her co-heirs because Filomena’s estate had a personality of its own.
ISSUE: Whether or not the heirs of Filomena have the capacity to sue for collection of the proceeds of the loan obtained by petitioners on behalf of the estate of the deceased
Yes. Unpaid loans are considered assets of the estate of the creditor-decedent. While it is true that Filomena’s estate has a different juridical personality that that of the heirs, the latter certainly have an interest in the preservation of the estate and the recovery of its properties for at the moment of Filomena’s death, the heirs start to own the property, subject to the decedent’s liabilities. This is consistent with Article 777 of the Civil Code which provides that “the rights to the succession are transmitted from the moment of the death of the decedent. Nonetheless, the Court ruled that the proceeds of the loan should be released to Filomena’s heirs only upon settlement of her estate because to allow the release of the funds directly to the heirs would amount to distribution of the estate, which distribution and delivery should be made only after, not before, the payment of all debts, charges, expenses, and taxes of the estate have been paid.
