SPECIAL PROCEEDINGS – Rule 85 of the Rules of Court Notes by Rafael Chan (Provisions Only)

1. SPECIAL PROCEEDINGS – Rule 85 of the Rules of Court
Notes by Rafael Chan (Provisions Only)
SPECIAL PROCEEDINGS – Rule 85 - Page 1 of 4
SPECIAL PROCEEDINGS – RULE 85
Accountability and Compensation of Executors
and Administrators
RULE 85 Section 1.
-Establishes the fundamental principle that every
executor or administrator is held accountable for the
entirety of the deceased person's estate that comes into
their possession.
1. Full responsibility: The executor or
administrator is fully responsible for managing
and accounting for all aspects of the deceased
person's estate unless otherwise specified in
subsequent sections of the law.
2. Entire estate: This includes all assets,
properties, belongings, and financial resources
belonging to the deceased individual, regardless
of their nature or value.
3. Value at appraisal: The executor or
administrator is tasked with assessing the
estate's value based on the inventory provided,
typically conducted through an appraisal
process. They are then accountable for this
assessed value in their records.
4. Interest, profit, and income: In addition to the
initial value of the estate, the executor or
administrator must also account for any interest,
profit, or income generated by the estate during
their management.
5. Proceeds from sales: If any part of the estate is
sold by the executor or administrator, they must
record and be accountable for the proceeds
obtained from these sales. The recorded value
should match the price at which the assets were
sold.
RULE 85 Section 1 emphasizes the comprehensive
responsibility of executors or administrators in
managing and accurately documenting all aspects
of the deceased person's estate, including its value,
income, and transactions such as sales.
RULE 85 Section 2.
-Outlines the principle that an executor or administrator
should not personally benefit from any increase in the
value of the estate nor suffer losses unless it is due to
their fault.
1. No personal profit or loss: The executor or
administrator is not allowed to personally benefit
from any increase in the value of the estate, nor
should they suffer financial losses, unless these
changes are directly attributable to their actions
or negligence.
2. Accounting for excess: If the executor or
administrator sells any part of the estate for more
than its appraised value, they are required to
account for the excess amount gained from the
sale.
3. No responsibility for losses without fault:
Conversely, if any part of the estate is sold for less
than its appraised value, the executor or
administrator is not held responsible for the loss
incurred, provided that the sale was conducted
fairly and justly.
4. Settling claims: When settling claims against the
estate, if the executor or administrator reaches a
settlement for less than the nominal value of the
claim, they are only entitled to charge the actual
amount paid for the settlement in their accounts.
They are not permitted to profit from negotiating
lower settlements.
RULE 85 Section 2 emphasizes the fiduciary duty of
the executor or administrator to act in the best
interests of the estate and its beneficiaries,
ensuring fair treatment and proper management of
the estate's assets without personal gain or loss,
except where directly warranted by their actions or
negligence.
RULE 85 Section 3.
-Stipulates that an executor or administrator is not held
accountable for debts owed to the deceased estate if
those debts remain uncollected through no fault of the
executor or administrator.
1. Debts due to the deceased: These are financial
obligations that the deceased had at the time of
their passing. It could include loans, unpaid bills,
or any other outstanding financial liabilities.
2. Accountability: Executors or administrators are
typically responsible for managing the
deceased's estate, which includes settling debts
using the assets of the estate.
3. Uncollected debts: If there are debts owed to the
deceased but they remain uncollected, the
executor or administrator cannot be held
accountable for these debts if their failure to
collect them is not due to their own negligence or
fault.
4. Without his fault: This phrase emphasizes that
the executor or administrator must not be
responsible for the inability to collect the debts.
If they have made reasonable efforts to collect the
debts but have been unsuccessful due to
circumstances beyond their control, they are not
held accountable.
RULE 85 Section 3 protects the executor or
administrator from being personally liable for
debts that remain uncollected through no fault of
their own, ensuring that they are only accountable
for matters within their control during the estate
administration process.
RULE 85 Section 4.
-Addresses the scenario where the executor or
administrator of an estate utilizes or occupies any
portion of the real estate belonging to the deceased.

2. SPECIAL PROCEEDINGS – Rule 85 of the Rules of Court
Notes by Rafael Chan (Provisions Only)
SPECIAL PROCEEDINGS – Rule 85 - Page 2 of 4
1. Usage of real estate: If the executor or
administrator decides to use or occupy any part
of the real estate that formspart of the deceased's
estate, they are required to account for this usage.
2. Agreement with interested parties: Initially,
the executor or administrator should attempt to
come to an agreement with the parties interested
in the estate regarding the compensation or
terms of this usage.
3. Adjustment by the court: If there is
disagreement among the interested parties
regarding the compensation or terms, or if no
agreement can be reached, the matter can be
brought before the court.
4. Final determination by the court: The court
has the authority to determine the appropriate
compensation or terms for the usage of the real
estate by the executor or administrator. Once the
court makes a decision in this regard, it is final
and binding.
RULE 85 Section 4 ensures transparency and
fairness in situations where the executor or
administrator of an estate personally uses or
occupies real estate assets belonging to the
deceased, providing a mechanism for resolving
disputes overcompensation or terms if needed.
RULE 85 Section 5.
-Establishes the accountability of an executor or
administrator if they neglect or unreasonably delay in
raising or paying money related to the deceased's estate.
1. Neglect or delay in raising money: This refers
to situations where the executor or administrator
fails to promptly collect debts owed to the
deceased or delays in selling real or personal
estate assets that could generate funds for the
estate.
2. Failure to pay over money: Additionally, if the
executor or administrator fails to distribute the
funds they have in their possession to the rightful
beneficiaries or creditors of the estate, it
constitutes a breach of their duties.
3. Consequences of neglect or delay: If neglect or
delay in raising or paying money occurs, several
negative outcomes may arise:
• The value of the estate may decrease.
• Unnecessary costs or interest may
accrue.
• Interested parties, such as beneficiaries
or creditors, may suffer financial losses.
4. Deemed waste: In such cases of neglect or delay,
the actions or inactions of the executor or
administrator are considered as "waste" of the
estate's resources.
5. Liability: The executor or administrator is held
liable for any damages resulting from their
neglect or delay. These damages may be charged
against them in their account, and they are liable
for these damages on their bond.
RULE 85 Section 5 emphasizes the importance of
prompt and diligent action by the executor or
administrator in managing the financial affairs of
the deceased's estate to prevent any unnecessary
losses or expenses and to ensure the timely
distribution of assets to the rightful parties. Failure
to do so may result in the executor or administrator
being held accountable for any resulting damages.
RULE 85 Section 6.
-Outlines the circumstances under which the amount paid
by an executor or administrator for costs awarded against
them can be included in their administration account.
1. Costs awarded against the executor or
administrator: This refers to any expenses or
fees that the executor or administrator is
required to pay as a result of legal actions or
proceedings brought against them. These costs
could include court fees, legal fees, or any other
expenses associated with the legal process.
2. Inclusion in the administration account: The
amount paid for these costs can be included in
the administration account of the executor or
administrator. This means that they can account
for these expenses as part of the overall financial
record-keeping of the estate.
3. Exceptional circumstances: However, there is
an exception to this rule. If it appears that the
legal action or proceeding in which the costs are
taxed was prosecuted or resisted without just
cause and not in good faith, then the costs may
not be allowed in the administration account.
4. Judgment of just cause and good faith: The
decision on whether the costs should be included
in the administration account depends on the
judgment of whether the legal action or
proceeding was conducted with just cause and in
good faith. If it is determined that the executor or
administrator acted improperly or unreasonably
in the legal matter, then the costs may not be
allowed.
RULE 85 Section 6 ensures that the costs incurred
by an executor or administrator as a result of legal
actions or proceedings can be included in their
administration account, except in cases where it is
found that the legal action was unjustified or
conducted in bad faith.
RULE 85 Section 7.
-Delineates the expenses and fees permissible for an
executor or administrator in managing and settling the
estate.
1. Allowable expenses and fees: The executor or
administrator is entitled to necessary expenses
incurred in caring for, managing, and settling the
estate. Additionally, they are entitled to
compensation for their services.

3. SPECIAL PROCEEDINGS – Rule 85 of the Rules of Court
Notes by Rafael Chan (Provisions Only)
SPECIAL PROCEEDINGS – Rule 85 - Page 3 of 4
2. Daily rate or commission: The compensation
for the executor's services can be either a daily
rate of four pesos per day for the time actually
and necessarily employed or a commission based
on the value of the estate handled by them.
3. Commission structure: The commission is
calculated based on the value of the estate
disposed of by the executor. For the first five
thousand pesos of the estate's value, the
commission is two per cent. For any amount
exceeding five thousand pesos but not exceeding
thirty thousand pesos, the commission is one per
cent. For any amount exceeding thirty thousand
pesos, the commission is one-half per cent.
4. Exceptional cases: In cases where the estate is
particularly large or the settlement process is
exceptionally difficult and requires a high degree
of expertise from the executor, a greater sum may
be allowed as compensation.
5. Apportionment of compensation: If there are
multiple executors or administrators involved,
the court will allocate the compensation among
them based on the services rendered by each
individual.
6. Restriction on charging legal fees: If the
executor or administrator is also an attorney,
they are prohibited from charging the estate for
any professional fees for legal services rendered
by them.
7. Control by will: If the deceased has specified a
different provision for the compensation of the
executor in their will, that provision will govern.
However, the executor can renounce that
compensation by filing a written instrument with
the court.
RULE 85 Section 7 sets out the permissible
expenses and fees for an executor or administrator,
including compensation for their services, with
provisions for different scenarios such as multiple
executors, legal professionals serving in the role,
and the deceased's instructions in their will.
RULE 85 Section 8.
-Outlines the obligation of every executor or
administrator to provide an account of their
administration of the estate within a specified timeframe.
1. Timeframe for rendering account: The
executor or administrator is required to submit
an account of their administration within one
year from the time they receive letters
testamentary or letters of administration. These
letters grant them the legal authority to act on
behalf of the estate.
2. Exceptions to the timeframe: The court may
allow extensions of time for rendering the
account under certain circumstances:
• Extensions may be granted to
accommodate the presentation of claims
against the estate or the payment of
debts.
• Extensions may also be granted for the
disposal of estate assets.
3. Obligation for further accounts: The executor
or administrator must continue to render
accounts as required by the court until the estate
is wholly settled. This means that they may need
to provide additional accounts if the court deems
it necessary for the proper management and
settlement of the estate.
RULE 85 Section 8 emphasizes the importance of
transparency and accountability in the
administration of an estate by requiring the
executor or administrator to provide regular
accounts of their actions and decisions. It also
allows for flexibility in the timeframe for
submitting these accounts to accommodate various
factors that may affect the settlement process.
RULE 85 Section 9.
-Pertains to the examination of the executor or
administrator by the court regarding the accounts they
have rendered concerning the administration of the
estate.
1. Examination on oath: The court is granted the
authority to examine the executor or
administrator under oath concerning any matter
related to the accounts they have submitted. This
means that they can be questioned regarding the
accuracy and completeness of the accounts they
have provided.
2. Verification of correctness: The court is
required to examine the executor or
administrator to ensure the correctness of the
accounts before allowing them. This ensures that
the accounts are thoroughly scrutinized and
verified for accuracy before being accepted as
valid.
3. Exception to examination: There is an
exception to the examination requirement if no
objection is raised to the allowance of the
account, and its correctness is satisfactorily
established by competent proof. In such cases,
where there are no objections and the
correctness of the account is confirmed, the
examination may be waived.
4. Privilege for interested parties: The heirs,
legatees, distributees, and creditors of the estate
are granted the same privilege as the executor or
administrator to be examined under oath
regarding any matter relating to the
administration account. This ensures that
interested parties have the opportunity to verify
the accuracy of the accounts and raise any
concerns they may have.
RULE 85 Section 9 underscores the importance of
thorough examination and verification of the

4. SPECIAL PROCEEDINGS – Rule 85 of the Rules of Court
Notes by Rafael Chan (Provisions Only)
SPECIAL PROCEEDINGS – Rule 85 - Page 4 of 4
accounts rendered by the executor or
administrator to ensure transparency and
accuracy in the administration of the estate. It also
provides an opportunity for interested parties to
participate in the examination process to safeguard
their interests.
RULE 85 Section 10.
-Outlines the procedure for settling the account of an
executor or administrator, emphasizing the importance of
providing notice to all interested parties.
1. Notice requirement: Before the account of an
executor or administrator is allowed by the court,
notice must be given to persons who have an
interest in the estate. This includes heirs,
beneficiaries, creditors, and any other individuals
or entities with a stake in the estate.
2. Content of notice: The notice must specify the
time and place where the examination and
allowance of the account will take place. This
ensures that interested parties are informed
about when and where they can review and
discuss the account.
3. Methods of providing notice: The section
provides flexibility regarding the methods of
providing notice. It can be given personally to
individuals interested in the estate, or it can be
advertised in one or more newspapers as
directed by the court.
4. Purpose of notice: The purpose of providing
notice is to ensure transparency and give
interested parties the opportunity to review the
accounts submitted by the executor or
administrator. This allows them to raise any
objections or concerns they may have before the
court makes a decision on whether to allow the
account.
RULE 85 Section 10 emphasizes the importance of
providing notice to all interested parties before
settling the account of an executor or
administrator. It ensures transparency in the
administration of the estate and gives interested
parties the opportunity to participate in the
process and safeguard their interests.
RULE 85 Section 11.
-Allows a person who has acted as a surety on the bond
related to the account of an executor or administrator to
become involved in the settlement of that account.
1. Settlement of the account: The section pertains
to the process of settling the account of an
executor or administrator, which involves
reviewing and finalizing the financial records and
transactions associated with the administration
of the estate.
2. Surety on bond: A surety is someone who
provides a guarantee or assurance to ensure the
fulfillment of a legal obligation by another party.
In this context, the surety has likely provided a
bond to secure the faithful performance of the
executor or administrator's duties.
3. Admission as a party: The section allows the
surety to apply for admission as a party to the
accounting process. This means that the surety
can participate in the review and settlement of
the executor or administrator's account,
potentially providing input or raising concerns
related to their obligations under the bond.
4. Purpose: Allowing the surety to become involved
in the accounting process provides an additional
layer of oversight and accountability. It ensures
that parties who have a financial interest in the
proper administration of the estate, such as the
surety, have the opportunity to participate in the
resolution of any issues related to the executor or
administrator's performance.
RULE 85 Section 11 enables a person who has acted
as a surety in relation to the account of an executor
or administrator to participate in the settlement of
that account, contributing to the overall
transparency and integrity of the estate
administration process.