G.R. No. L-18079; May 26, 1964
MACONDRAY & CO., INC., plaintiff-appellant, vs. BERNARDO S. DUNGAO and RIZAL SURETY & INSURANCE CO., INC., defendants-appellants.

FACTS

Macondray & Co., Inc. filed a collection suit against Bernardo S. Dungao in the Court of First Instance of Manila to recover a debt evidenced by a promissory note. During the pendency of the case, the court issued a writ of attachment on Dungao’s properties. This attachment was later dissolved after Dungao, with Rizal Surety & Insurance Co., Inc. as surety, filed an attachment bond to secure any potential judgment. Subsequently, Bernardo S. Dungao died. The administratrix of his estate, Maria Gervacio Blas Vda. de Dungao, was substituted as defendant and moved to dismiss the case, arguing that the action for a sum of money did not survive the death of the defendant debtor. The trial court denied the motions to dismiss and eventually rendered judgment against the estate and the surety company.

ISSUE

The principal issue is whether an action for the recovery of a sum of money based on a promissory note survives the death of the defendant debtor, thereby allowing the suit to continue against his estate in a regular court, or if such a claim must instead be pursued exclusively in the probate proceedings of the estate.

RULING

The Supreme Court ruled that the action did not survive. The Court explained that under Section 21, Rule 3 of the Rules of Court, money claims, debts, or interest thereon are among the actions that do not survive the death of a party. The rationale is to ensure the orderly settlement of the estate and to grant all creditors a proportionate share should the estate be insufficient to pay all debts in full. The fact that the promissory note mentioned it was secured by a mortgage on personal property was immaterial, as the plaintiff did not seek foreclosure and the property was not described in the complaint. The initial writ of attachment did not alter this rule, as its subsequent discharge upon the filing of the bond freed the properties from any specific lien, reverting the claim to a general money claim. Consequently, the trial court should have dismissed the case. The plaintiff’s proper remedy was to file its claim in the probate proceedings for the settlement of Dungao’s estate pending in the Court of First Instance of Rizal, which it had already initiated. Regarding the surety bond, the Court held it remained valid and subsisting to answer for any money claim allowed by the probate court, as its purpose was to secure the potential judgment from the validly issued attachment prior to the defendant’s death. The appealed judgments were set aside, without prejudice to the prosecution of the claim in the probate court.