A "contingent claim" is one which has not accrued, and which is dependent on the happening of some future

event. A "contingent claim," within the rule that claims against an estate which are not contingent are barred if
not presented within a certain time, is one depending upon something thereafter to happen.

RULE 88

Payment of the Debts of the Estate

Section 1. Debts paid in full if estate sufficient. — If, after hearing all the money claims against the estate, and
after ascertaining the amount of such claims, it appears that there are sufficient assets to pay the debts, the
executor or administrator pay the same within the time limited for that purpose.

Section 2. Part of estate from which debt paid when provision made by will. — If the testator makes provision by
his will, or designates the estate to be appropriated for the payment of his debts, the expenses of administration,
or the family expenses, they shall be paid according to the provisions of the will; but if the provision made by the
will or the estate appropriated, is not sufficient for that purpose, such part of the estate of the testator, real or
personal, as is not disposed of by will, if any shall be appropriated for that purpose.

Section 3. Personalty first chargeable for debts, then realty. — The personal estate of the deceased not disposed
of by will shall be first chargeable with the payment of debts and expenses; and if said personal estate is not
sufficient for tat purpose, or its sale would redound to the detriment of the participants for the estate, the whole
of the real estate not dispose of by will, or so much thereof as is necessary, may be sold, mortgaged, or otherwise
encumbered for that purpose by the executor or administrator, after obtaining the authority of the court therefor.
Any deficiency shall be met by contributions in accordance with the provisions of section 6 of this rule.

Section 4. Estate to be retained to meet contingent claims. — If the court is satisfied that a contingent claim duly
filed is valid, it may order the executor or administrator to retain in his hands sufficient estate to pay such
contingent claim when the same becomes absolute, or if the estate is insolvent, sufficient to pay a portion equal to
the dividend of the other creditors.

Section 5. How contingent claim becoming absolute in two years allowed and paid. Action against distributees
later. — If such contingent claim becomes absolute and is presented to the court, or to the executor or
administrator, within two (2) years from the time limited for other creditors to present their claims, it may be
allowed by the court if not disputed by the executor or administrator and, if disputed, it may be proved and
allowed or disallowed by the court as the facts may warrant. If the contingent claim is allowed, the creditor shall
receive payment to the same extent as the other creditors if the estate retained by the executor or administrator is
sufficient. But if the claim is not so presented, after having become absolute, within said two (2) years, and
allowed, the assets retained in the hands of the executor or administrator, not exhausted in the payment of claims,
shall be disturbed by the order of the court to the persons entitled to the same; but the assets so distributed may
still be applied to the payment of the claim when established, and the creditor may maintain an action against the
distributees to recover the debt, and such distributees and their estates shall be liable for the debt in proportion to
the estate they have respectively received from the property of the deceased.

Section 6. Court to fix contributive shares where devisees, legalitees, or heirs have been possession . — Where
devisees, legalitees, or heirs have entered into possession of portions of the estate before the debts and expenses
have been settled and paid, and have become liable to contribute for the payment of such debts and expenses, the
court having jurisdiction of the estate may, by order for that purpose, after hearing, settle the amount of their
several liabilities, and order how much and in what manner each person shall contribute, and may issue execution
as circumstances require.
Section 7. Order of payment if estate insolvent — If the assets which can be appropriated for the payment of
debts are not sufficient for that purpose, the executor or administrator shall pay the debts against the estate,
observing the provisions of Articles 1059 and 2239 to 2251 of the Civil Code.

Section 8. Dividends to be paid in proportion to claims. — If there are no assets sufficient to pay the credits of any
once class of creditors after paying the credits entitled to preference over it, each creditor within such class shall
be paid a dividend in proportion to his claim. No creditor of any one class shall receive any payment until those of
the preceding class are paid.

Section 9. Estate of insolvent non-resident, how disposed of. — In case administration is taken in the Philippine of
the estate of a person who was at the time of his death an inhabitant of another country, and who died insolvent,
hi estate found in the Philippines shall, as far as practicable, be so disposed of that his creditors here and
elsewhere may receive each an equal share, in proportion to their respective credits.

Section 10. When and how claim proved outside the Philippines against insolvent resident's estate paid. — If it
appears to the court having jurisdiction that claims have been duly proven in another country against the estate of
an insolvent who was at the time of his death an inhabitant of the Philippines, and that the executor or
administrator in the Philippines had knowledge of the presentation of such claims in such country and an
opportunity to contest their allowance, the court shall receive a certified list of such claims, when perfected in such
country, and add the same to the list of claims proved against the deceased person in the Philippines so that a just
distribution of the whole estate may be made equally among all its creditors according to their respective claims;
but the benefit of this and the preceding sections shall not be extended to the creditors in another country if the
property of such deceased person there found is not equally apportioned to the creditors residing in the
Philippines and the other creditor, according to their respective claims.

Section 11. Order for payment of debts. — Before the expiration of the time limited for the payment of the debts,
the court shall order the payment thereof, and the distribution of the assets received by the executor or
administrator for that purpose among the creditors, as the circumstances of the estate require and in accordance
with the provisions of this rule.

Section 12. Orders relating to payment of debts where appeal is taken. — If an appeal has been taken from a
decision of the court concerning a claim, the court may suspend the order for the payment of the debts or may
order the distributions among the creditors whose claims are definitely allowed, leaving in the hands of the
executor or administrator sufficient assets to pay the claim disputed and appealed. When a disputed claim is finally
settled the court having jurisdiction of the estate shall order the same to be paid out of the assets retained to the
same extent and in the same proportion with the claims of other creditors.

Section 13. When subsequent distribution of assets ordered. — If the whole of the debts are not paid on the first
distribution, and if the whole assets are not distributed, or other assets afterwards come to the hands of the
executor or administrator, the court may from time to time make further orders for the distributions of assets.

Section 14. Creditors to be paid in accordance with terms of order. — When an order is made for the distribution
of assets among the creditors, the executor or administration shall, as soon as the time of payment arrives, pay the
creditors the amounts of their claims, or the dividend thereon, in accordance with the terms of such order.

Section 15. Time for paying debts and legacies fixed, or extended after notice, within what periods. — On
granting letters testamentary or administration the court shall allow to the executor or administrator a time for
disposing of the estate and paying the debts and legacies of the deceased, which shall not, in the first instance,
exceed one (1) year; but the court may, on application of the executor or administrator and after hearing on such
notice of the time and place therefor given to all persons interested as it shall direct, extend the time as the
circumstances of the estate require not exceeding six (6) months for a single extension not so that the whole
period allowed to the original executor or administrator shall exceed two (2) years.
Section 16. Successor of dead executor or administrator may have time extended on notice within certain period.
— When an executor or administrator dies, and a new administrator of the same estate is appointed, the court
may extend the time allowed for the payment of the debts or legacies beyond the time allowed to the original
executor or administrator, not exceeding six (6) months at a time and not exceeding six (6) months beyond the
time which the court might have allowed to such original executor or administrator; and notice shall be given of
the time and place for hearing such application, as required in the last preceding section.