Spec Pro Class 2020

SECTION 1. Extra Judicial Settlement Agreement Between Heirs

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      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.

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      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.

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      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 next succeeding section; but no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.

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GENERAL RULE : Judicial Administration; Exception: Summary Settlement of Estate
      The general rule is that 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 Section 6, Rule 78, in case the deceased left no will, or in case he had left one, should he fail to name an executor therein.

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EXCEPTION:

      Under this exception, 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 applying for the appointment of an administrator.

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• While the law provides that the rights to succession are transmitted from the moment of death of the decedent,  the modes of transmission may either be testamentary, legal or intestate, or mixed

 

• Testamentary succession is that which results from the designation of an heir, made in a will executed in the form prescribed by law, while mixed succession is that effected partly by will and partly by operation of law

• The proceedings for the settlement of the estate of a deceased person may be testate, if there is a will, or intestate if there is none, or the heirs may resort to an ordinary action for partition, or without going to court may extrajudicially settle the estate of the deceased. The rules provide for the manner in effecting these different modes of succession.

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DIFFERENT MODES OF SETTLEMENT OF ESTATE OF DECEASED PERSON

 

                 1.  Extrajudicial settlement of Estate (Sec. 1, Rule 74)

                2.  Partition (Rule 69)

                3.  Summary Settlement of Estate of Small Value (Sec. 3, Rule 74)

                4.  Probate of Will (Rule 75 to 79)

                5.  Petition for Letters of Administration in cases of intestacy

                                  (Rule 79)

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• JUDICIAL ADMINISTRATION NOT FAVORED

      If the heirs cannot agree in the extra judicial partition and apportionment of the same, nothing prohibits them from instituting special proceeding for the administration of the intestate estate. 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. In such judicial administration and the appointment of an administrator are superfluous and unnecessary proceedings.
           
      When the heirs are all of lawful age and there are no debts there is no reason why the estate should be burdened with the cost and expenses of an administrator. The administrator has no right to intervene in any way whatsoever in the division of the estate among the heirs when they are adults and when there are no debts against the estate.

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• THERE MUST BE GOOD REASON TO WARRANT JUDICIAL ADMINISTRATION

      While Section 1 allows the heirs to divide the estate among themselves as they may see fit, or to resort to an ordinary action for partition, the said provision does not compel them to do so if they have good reasons to take a different course of action.

      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.

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"GOOD REASON" DEPENDS ON THE CIRCUMSTANCES OF EACH CASE

          (a) 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.

          (b) Dispute among heirs is not a good reason

    Where the heirs are not in good terms and the only reason why respondent seeks appointment as administratrix is for her to obtain possession of the alleged properties of the deceased for her own purposes, since these properties are presently in the hands of petitioner who supposedly disposed of them fraudulently, this is not a compelling reason which will necessitate a judicial administration of the estate of the deceased.

 

          (c) Multiplicity of suits not a good reason
 

      If the reason for seeking an appointment as administrator is merely to avoid a multiplicity of suits that same objective could be achieved in an action for partition and the trial court is not justified in issuing letters of administration

         (d) To have legal capacity to appear is not a good reason

     The Supreme Court did not find so powerful a reason the argument that the appointment of the husband, a usufructuary forced heir of his deceased wife, as judicial administrator is necessary in order for him to have legal capacity to appear in the intestate proceedings of his wife's deceased mother, since he may just adduce proof of his being a forced heir in the intestate proceedings of the latter.

 

VALIDITY OF ORAL PARTITION
 

• Partition although oral, is Valid and Binding. There is no law that requires partition among heirs to be in writing to be valid   In Hernandez v. Andal,11 the Court, interpreting Section 1 of Rule 74 of the Rules of Court, held that the requirement that a partition be put in a public document and registered has for its purpose the protection of creditors and at the same time the protection of the heirs themselves against tardy claims

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VALIDITY OF COMPROMISE AGREEMENT

 

      It has been held that where the compromise agreement entered into by and between the various heirs in their personal capacity, the same is binding upon them as individuals, upon the perfection of the contract, even without previous authority of the Court to enter into such agreement
 

HEIRS CANNOT DIVEST COURT OF ITS ALREADY ACQUIRED JURISDICTION

    It has been held that where the compromise agreement entered into by and between the various heirs in their personal capacity, the same is binding upon them as individuals, upon the perfection of the contract, even without previous authority of the Court to enter into such agreement. if the extrajudicial partition made by the heirs is submitted to the court and approved after verification that it does not prejudice the rights of third parties, the testate proceedings pending would have been legally terminated.

 

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SECTION 2. SUMMARY SETTLEMENT OF ESTATES OF SMALL VALUE

 

      Whenever the gross value of the estate of a deceased person, whether he died testate or intestate, does not exceed ten thousand pesos, and that fact is made to appear to the Court of First Instance having jurisdiction of the estate by the petition of an interested person and upon hearing, which shall be held not less than one (1) month nor more than three (3) months from the date of the last publication of a notice which shall be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the province, and after such other notice to interested persons as the court may direct, the court may proceed summarily, without the appointment of an executor or administrator and without delay, to grant, if proper, allowance of the will, if any there be, to determine who are the persons legally entitled to participate in the estate  and to apportion and divideit among them after the payment of such debts of the estate as the court shall then find to be due; and such persons, in their own right, if they are of lawful age and legal capacity, or by their guardians or trustees legally appointed and qualified, if otherwise, shall thereupon be entitled to receive and enter into the possession of the portions of the estate so awarded to them respectively. The court shall make such order as may be just respecting the costs of the proceedings, and all orders and judgments made or rendered in the course thereof shall be recorded in the office of the clerk, and the order of partition or award, if it involves real estate, shall be recorded in the proper register's office.

NOTES:

     The Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court. (Sees. 19[4] and 33[1], B.P. Big. 129, as amended now has probate jurisdiction where the value of the estate does not exceed PIOO.OOO.OO or P200,000.00 in Metro Manila).