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Victoria Pereira v. CA & Rita Pereira Nagac | G.R. No. 81147 | Jun. 20, 1989 | Gancayo, J.

Topic: Rule 74 Summary Settlement of Estate


Section 1. Extrajudicial settlement by agreement between heirs. — If the decedent left no will and no debts and the heirs are all of
age, or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the parties may without
securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office
of the register of deeds, and should they disagree, they may do so in an ordinary action of partition. If there is only one heir, he may
adjudicate to himself the entire estate by means of an affidavit filled in the office of the register of deeds. The parties to an
extrajudicial settlement, whether by public instrument or by stipulation in a pending action for partition, or the sole heir who
adjudicates the entire estate to himself by means of an affidavit shall file, simultaneously with and as a condition precedent to the
filing of the public instrument, or stipulation in the action for partition, or of the affidavit in the office of the register of deeds, a bond
with the said register of deeds, in an amount equivalent to the value of the personal property involved as certified to under oath by the
parties concerned and conditioned upon the payment of any just claim that may be filed under section 4 of this rule. It shall be
presumed that the decedent left no debts if no creditor files a petition for letters of administration within two (2) years after the death
of the decedent.

The fact of the extrajudicial settlement or administration shall be published in a newspaper of general circulation in the manner
provided in the nest succeeding section; but no extrajudicial settlement shall be binding upon any person who has not participated
therein or had no notice thereof.

Facts:
1. Andres de Guzman Pereira, an employee of PAL, passed away on Jan. 3, 1983 without a will in Bacoor, Cavite. He was survived
by his legitimate spouse of 10 months (Petitioner) and his sister (Respondent).
2. 2 months after his death, Respondent instituted a Special Proceeding for the issuance of letters of administration in her favor
before the RTC of Bacoor, Cavite. She alleged that:
a. She and Petitioner are the only surviving heirs of the deceased
b. The deceased left no will
c. The deceased has no creditors
d. The deceased left several properties: death benefits from PAL, PAL Employees Association (PALEA), PAL Employees
Savings and Loan Associating (PESALA), and from the SSS, savings deposits with PNB and PCIB, and a 200 sqm lot in Las
Pińas; and
e. That Respondent was working as an auxiliary nurse in London, and one-half of her salary formed part of the deceased’s
estate.
3. Petitioner filed her opposition and motion to dismissed, alleging that the deceased left no estate for purposes of administration, or
in the alternative, if an estate does exist, that letters of administration be granted in her favor as the surviving spouse.
4. RTC appointed Respondent as administratix upon her posting of a bond in the amount of 1k. The RTC then ordered her to take
custody of all real and personal properties of the deceased and to file an inventory within 3 months.
5. CA affirmed Respondent’s appointment as administratix. Petitioner filed this petition for review on certiorari.

Preliminary issue: Whether there exists an estate of the deceased for purposes of administration? Unresolved, the Court said that
this issue is best left for the settlement of the probate court.

1. Petitioner claims that there is no separate estate because the death benefits exclusively belonged to her (in fact, she received letter
replies from these institutions showing that she is the exclusive beneficiary off the death benefits), as to the savings deposits –
these were used to defray the funeral expenses, and finally, the only real property has been extrajudicially settled between
petitioner and respondent.
2. Respondent argues that it is not for petitioner to decide what properties form part of the estate of the deceased and to appropriate
them for herself. This function is vested in the court in charge of the intestate proceedings.
3. SC: This Court is not a trier of facts, we cannot specify which properties belong to the estate of the deceased based on Petitioner’s
bare allegations. The probate court is in the best position to receive evidence on the contents of the parties as to the decedent’s
estate, the valuations thereof and the rights of the transferees, if any. The probate court’s determination, however, is only
provisional in character, not conclusive and is subject to the final decision in a separate action, which may be instituted by the
parties.

MAIN ISSUE: Whether a judicial administration proceeding is necessary where there are no debts left by the decedent? No,
the administration proceedings instituted by Respondent is unnecessary.

1. GENERAL RULE: when a person dies leaving property, the same should be judicially administered and the competent court
should appoint a qualified administrator, in the order established in Sec. 6 of Rule 78, in case the deceased didn’t leave a will or if
he left one but failed to name an executor.
2. EXCEPTION as provided by Sec. 1 Rule 74: when all the heirs are of lawful age and there are no debts due from the
estate, they may agree in writing to partition the property without instituting the judicial administration or apply for the
appointment of an administrator.
3. Sec. 1 of Rule 74, however, does NOT preclude the heirs from instituting administration proceedings, EVEN IF the estate
has no debts or obligations, IF THEY DO NOT DESIRE TO RESORT FOR GOOD REASONS TO AN ORDINARY
ACTION FOR PARTITION. Where partition is possible, either in or out of court, the estate should not be burdened with an
administration proceeding without good and compelling reasons.
4. It has been repeatedly held that when a person dies without leaving pending obligations to be paid, his heirs, whether of age or
not, are not bound to submit the property to a judicial administration, which is always long and costly, or to apply for the
appointment of an administrator by the Court. It has been uniformly held that in such case the judicial administration and the
appointment of an administrator are superfluous and unnecessary proceedings.
5. What constitutes “good reason” to warrant a judicial administration of the estate of a deceased when the heirs are all of
legal age and there are no creditors will depend on the circumstances of each case.
a. In one case, the court said the petitioner argues that 'only when the heirs do not have any dispute as to the bulk of the
hereditary estate but only in the manner of partition does section 1, Rule 74 of the Rules of Court apply and that in this case
the parties are at loggerheads as to the corpus of the hereditary estate because respondents succeeded in sequestering some
assets of the intestate. The argument is unconvincing, because, as the respondent judge has indicated, questions as to what
property belonged to the deceased (and therefore to the heirs) may properly be ventilated in the partition proceedings,
especially where such property is in the hands of one heir.
b. In another case, the court said: if the reason for seeking an appointment as administrator is merely to avoid a multiplicity of
suits since the heir seeking such appointment wants to ask for the annulment of certain transfers of property, that same
objective could be achieved in an action for partition and the trial court is not justified in issuing letters of administration.
6. Here, there are only 2 surviving heirs who are both of age and who admit that there are no debts of the deceased to be paid. It is
once apparent that these two are are not in good terms. Respondent appears to be seeking appointment as administratix for her to
obtain possession of the properties of the deceased for her own purposes since these are in the hands of petitioner who allegedly
fraudulently disposed of them. This is NOT a compelling reason which necessitates a judicial administration of the estate of the
deceased. The estate does not appear to be substantial since the only real property has been extrajudicially settled, hence to subject
it to an administration proceeding would only unnecessarily expose it to the risk of being wasted or squandered.
7. Hence, the RTC was not justified in issuing letters of administration to Respondent. This being the case, the court no longer
resolved the issue of who among the 2 heirs should be preferred to be appointed as administratix.

WHEREFORE, the letters of administration issued by the Regional Trial Court of Bacoor to Rita Pereira Nagac are hereby revoked
and the administration proceeding dismissed without prejudice to the right of private respondent to commence a new action for
partition of the property left by Andres de Guzman Pereira. No costs.