Union Bank v. Santibañez

Summary

Union Bank sued heirs Edmund and Florence Santibañez to collect on their deceased father's agricultural tractor loans totaling P251,156.00. The heirs had executed a Joint Agreement in 1981 partitioning the tractors and assuming corresponding debts while probate proceedings were pending. All three court levels dismissed the bank's claims, ruling that: (1) money claims against decedents must be filed with the probate court, not through separate civil actions; (2) the heirs' partition agreement was invalid as no partition can occur before will probation; (3) the heirs' assumption of debt was tied to the invalid partition and thus unenforceable; and (4) the bank failed to prove it was the proper successor-in-interest to the original creditor. The case establishes that creditors cannot circumvent mandatory probate procedures by seeking separate judgments against heirs, and that extra-judicial partitions during pending probate proceedings are void.