CHAPTER II

REALISATION OF ASSETS, PAYMENT OF DEBTS

AND DISTRIBUTION OF AN ESTATE

 

Section 1734.- The creditors of an estate are entitled to be paid only out of the property in the estate.

 

Section 1735.- The heir is bound to disclose to the administrator all the properties and debts of the deceased known to him.

 

Section 1736.- So long as all the known creditors of the estate on legatees have not been satisfied by performance of distribution, the succession is deemed to be under management.

During such period the administrator is entitled as such to do necessary acts of management such as to enter actions or to submit answers in Court and so on. He shall take all necessary steps to collect the debts due to estate within the shortest possible time. After the creditors of the estate have been satisfied he shall divide the estate.

 

Section 1737.- A creditor of the estate may enforce his claim against any heir. However, where there is an administrator of the estate, he must be summoned by the creditor to appear in the action.

 

Section 1738.- Before the division of the estate, the creditor of the estate may enforce full payment of his claim from the estate. In such case each heir may, up to the time of the division inclusively, require that the performance be made out of the de cujus’s estate or secured therefrom.

After the division of the estate, the creditor may claim performance from any heir up to the extent of the property received by him. In such case, as heir who has made performance to the creditor in excess of his proportionate share in the obligation has a right of recourse against the other heirs.

 

Section 1739.- Without prejudice to the creditors having special preferential rights under the provisions of this Code or other law and to the creditors secured by pledge or mortgage, the debts due by the estate shall be paid in the following order and in accordance with the provisions of this Code concerning preferential rights :

                  (1) Expenses incurred for the common benefit of the estate ;

                  (2) Expenses incurred for the funeral of the de cujus ;

                  (3) Taxes and rates due by the estate ;

                  (4) Wages due by the de cujus to any clerk, servant and workman ;

                  (5) Supplies of daily necessaries made to the de cujus ;

                  (6) Ordinary debts of the de cujus ;

                  (7) Remuneration to the administrator.

 

Section 1740.- Unless otherwise provided by the de cujus or by law, his property shall be appropriated to payment of debts in the following order :

                  (1) Property other than immovable property ;

                  (2) Immovable property expressly appropriated to that purpose by will, if any ;

                  (3) Immovable property to which the statutory heirs are entitled as such ;

                  (4) Immovable property bequeathed to a person upon the condition that he shall pay the debts of the de cujus ;

                  (5) Immovable property bequeathed under a general title as provided by Section 1651 ;

                  (6) Any specific property bequeathed under a particular title as provided by Section 1651.

Any property appropriated under the foregoing provision shall be sold by way of public auction, but any heir may prevent such sale by paying, to the extent required for the satisfaction of the creditors, the value of the whole or part of the property as may be determined by an appraiser appointed by the Court.