Loans can be claimed from estate of the deceased

Persida Acosta

Persida Acosta

Dear PAO,
Mr. Tilog obtained a loan from me in the amount of P500,000, and he promised to pay me within two years.We signed a loan agreement and this was duly notarized. Mr. Tilog died because of a heart ailment before he could start paying his loan. His estranged wife for 10 years appeared and began claiming or administering the properties left by Mr. Tilog. I informed her of the existing contract between her husband and me, but she said that she had nothing to do with the contract. Thus, I cannot collect from her. She further claimed that when her husband died, his obligations died with him. How can I collect the money loaned by Mr. Tilog from me?

Dear Oscar,
Under Article 774 of the New Civil Code of the Philippines, it is stated that “succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law” (Emphasis supplied). Correlative thereto is Article 776 of the same code which provides that “the inheritance includes all the property rights and obligations of a person which are not extinguished by his death.”

Mrs. Tilog erred in saying that when her husband died, the latter’s obligation was also extinguished. The general rule is the party’s contractual rights and obligations are transmissible. The death of Mr. Tilog did not extinguish the obligations contracted by him when he was still alive.

In Genato vs. Bayhon et. al.(G.R. No. 171035, August 24, 2009), the Honorable former Supreme Court Chief Justice Reynato S. Puno said that:

“Under our law, therefore, the general rule is that a party’s contractual rights and obligations are transmissible to the successors. The rule is a consequence of the progressive ‘depersonalization’ of patrimonial rights and duties that, as observed by Victorio Polacco, has characterized the history of these institutions. From the Roman concept of a relation from person to person, the obligation has evolved into a relation from patrimony to patrimony, with the persons occupying only a representative position, barring those rare cases where the obligation is strictly personal, i.e., is contracted intuitu personae, in consideration of its performance by a specific person and by no other. The transition is marked by the disappearance of the imprisonment for debt. (Emphasis supplied)

“The loan in this case was contracted by respondent. He died while the case was pending before the Court of Appeals. While he may no longer be compelled to pay the loan, the debt subsists against his estate. No property or portion of the inheritance may be transmitted to his heirs unless the debt has first been satisfied.”

In your case, you can still collect the loan of Mr. Tilog by filing a claim against the estate and the properties left by him which will not pass to his heirs until the amount you are collecting has been satisfied.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to


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