INTESTATE ESTATE OF THE LATE HOWARD J. EDMANDS.

The questions for decision on this appeal are, when is an order of
distribution in a probate proceeding deemed effective within the
meaning of Section 2 of Rule 87 of the Rules of Court? And has the
Court of First Instance discretion to admit claims against a decedent’s
estate after such order has feeen entered?

Section 2 of Rule 87 reads:

“Sec. 2. Time within which claims shall be filed.—In
the notice provided in the preceding section, the court shall.state the
time for the filing of claims against the estate, which shall not be
more than twelve nor less than six months after the date of the first
publication of the notice. However, at any time before an order of
distribution is entered, on application of a creditor who has failed to
file his claim within the time previously limited, the court may, for
cause shown and on such terms as are equitable, allow such claim to be
filed within a time not exceeding one month.”

It appears that Howard J. Edmands having died in Baguio, testate
proceedings were instituted in the Court of First Instance of that City
for the administration and settlement of his estate.

On February 12, 1947, a notice to creditors was ordered published,
requiring such creditors to file their claims within six months from
the date of first publication of the notice. The notice was published
once a week for three consecutive weeks, beginning February 12, 1947,
in the Manila Post, a daily newspaper said to be of general
circulation in the Philippines, in Mountain Province and in the City of
Baguio» Other legal requirements in connection with the publication of
the notice were complied with; at least such compliance is not denied.

The period of six months having expired on August 22, 1947, and no
claims having been filed, the ancillary administrator, on September 29,
1947 filed his final inventory and project of partition which gave the
sum. of P17,100 as the value of the estate, and listed the liabilities
which consisted of expenses advanced by the petitioner and the
attorneys, estate and income taxes, and attorneys’ fees, totalling
P4,613.54.

On November 14, 1947, the court made an order authorizing the
ancillary administrator to pay the above liabilities and, after such
payment, to make and file his final report of accounts and to deliver
to Jane E. Edmands, the decedent’s widow, the residue of the conjugal
estate, which, it turned out, was U.S. $6,428.28.

After these disbursements there remained only other income taxes
due, the amount of which was pending determination by the Collector of
Internal Revenue. The estimated amount of these taxes was P2,052 and
this amount in cash was set aside for the above purpose.

On December 22, the ancillary administrator filed a petition to close the estate.

On August 12, 1948, the Philippine Trust Company, through counsel,
filed a motion to allow presentation of claim accompanied by a copy of
the claim, which was to be for the sum of P200. Counsel explained that
the Philippine Trust Company had just come to know of Edmands’ death,
and said that they had sent on July 21, 1948, to the clerk of court a
letter of inquiry regarding the status of the testate proceedings.

It will be seen from Section 2 of Rule 87 that there is a time
limit for the exercise by the court of discretion to allow claims
presented beyond the period previously fixed. The time is one month
from the expiration of such period but in no case beyond the date of
entry of the order.

It is manifest from these facts that the court below properly
declared the appellant’s claim barred. There is no merit to the
argument that, since not all the debts had been paid, distribution of
the assets was premature. Distribution is permitted even though there
are outstanding obligations if sufficient bond is filed or provision
made to meet them. Thus the last paragraph of Section 1 of Rule 91
provides that “No distribution shall be allowed until the payment of
the obligations above mentioned has been made or provided for, unless
the distributees, or any of them, give a bond, in a sum to be fixed by
the court, conditioned for the payment of said obligations within such
time as the court directs.” In this case the distributees deposited in
court P2,052 in lawful currency to answer for the still pending
liability of the estate to the Government for taxes. This deposit
conformed to or at least was in substantial compliance with the
provision of the Rule just quoted.

The appealed order is affirmed with costs.

Moran, C.J., Ozaeta, Paras, Pablo, Bengzon, and Montemayor, Reyes, JJ., concur.