G.R. No. L-17863; November 28, 1962
MANUEL H. BARREDO, ET AL., petitioners, vs. THE COURT OF APPEALS, ET AL., respondents.

FACTS

The petitioners, heirs of Fausto Barredo, filed a belated claim against the intestate estate of Charles A. McDonough to collect on a promissory note secured by a mortgage on McDonough’s leasehold rights and buildings. The note matured in December 1949. During the Japanese occupation, petitioner Manuel H. Barredo was summoned by Japanese military authorities, paid P20,000 in Japanese war notes for the mortgage, and compelled to sign a certification requesting the Register of Deeds to cancel the mortgage annotation, which was done.
The estate proceedings for McDonough commenced after his death in March 1945. A notice to creditors was published, requiring claims to be filed within six months from August 23, 1945, expiring on February 23, 1946. The Barredo heirs filed their claim only on October 22, 1947. The trial court allowed this tardy claim, but the Court of Appeals reversed the allowance.

ISSUE

Whether the probate court properly exercised its discretion in allowing the petitioners’ tardy claim against the estate.

RULING

No, the probate court improperly allowed the belated claim. The legal framework is governed by Section 2, Rule 87 of the Rules of Court. It provides that after the expiration of the regular period set for filing claims (which was six months here), the court may, for cause shown and on equitable terms, allow a late claim to be filed within an additional period not exceeding one month, provided this is done before an order of distribution is entered. Contrary to the administrator’s argument, this one-month extension period runs from the court’s order authorizing the late filing, not from the expiration of the original period, as clarified in Paulin vs. Aquino.
However, the court’s discretionary power to admit a late claim is contingent upon a valid cause or justification for the delay. The petitioners’ proffered excuse—the recent recovery of documents from their deceased lawyer—was insufficient. The Court found that the petitioners knew or should have known of the claim through the annotated mortgage on the certificate of title and were aware of the Japanese wartime payment. The trial court thus had no authority to admit a claim delayed without a satisfactory cause. Given this conclusion, the Court deemed it unnecessary to definitively rule on the legal effect of the Japanese payment. The decision of the Court of Appeals disallowing the claim was affirmed.