G.R. No. 30750, October 24, 1929
INTESTATE ESTATE OF JACINTO BAUN, DECEASED. SIMPLICIO BAUN, administrator-appellee, vs. HEIRS OF THE DECEASED JACINTO BAUN, oppositors-appellants.

FACTS

1. Simplicio Baun, the administrator of the intestate estate of Jacinto Baun, filed a motion for authority to sell estate properties to pay debts, citing obligations to a credit association and a private creditor.
2. The heirs (except the widow, Damiana Manankil) gave written conformity to sell the estate’s only real property (land with machinery and building) to Genara Pineda for P20,000.
3. The court appointed a guardian ad litem for minor heirs, who recommended the sale.
4. The court issued a general order authorizing the administrator to sell estate properties in the manner he deemed most advantageous.
5. The administrator instead sold the property to Pedro Santos for a higher price of P22,000, which the court approved.
6. The heirs (including those who initially consented) filed a motion to set aside the sale, arguing: (a) personal property should have been sold first; (b) the widow’s consent was not obtained; (c) no notice of hearing for the sale application was served as required by the Code of Civil Procedure; and (d) no hearing was held.
7. The lower court denied the motion, upholding the sale’s validity, primarily citing the heirs’ prior written consent and the need to pay accruing interest on debts.
8. The heirs appealed.

ISSUE

Was the sale of the real property by the administrator valid despite non-compliance with the procedural requirements under the Code of Civil Procedure for the sale of estate properties?

RULING

No. The sale was declared null and void.

The Supreme Court reversed the lower court’s order. The procedural requirements for the sale of estate properties under the Code of Civil Procedure are mandatory. Specifically:
1. Notice and Hearing: The application for authority to sell must be set for hearing, and notice must be served upon the heirs personally or by publication as required by law (Section 722, paragraph 3). The heirs’ prior written consent does not dispense with this mandatory requirement.
2. Priority of Personal Property: The law requires that personal property be sold first to pay debts before resorting to the sale of real property, unless an exception applies. The administrator failed to demonstrate that the personal property was insufficient, as the motion only alleged a lack of funds.
3. Rights of Creditors and Heirs: While heirs succeed to the rights and obligations of the decedent immediately upon death (Civil Code, Articles 657, 661), the hereditary property remains liable for the decedent’s debts. The administrator is the proper party to administer the estate and settle claims. The heirs’ offer to pay the debts after the sale was approved could have been accepted to avoid further litigation, but this did not cure the procedural defects in the sale itself.

The case was remanded to the lower court with instructions to cite all heirs, creditors, and the vendee (Pedro Santos) for a proper hearing. The appellants (heirs) were ordered to deposit the full amount necessary to pay all estate debts and interest; otherwise, the court was to proceed with a lawful sale of the property to satisfy the obligations.