HERRERA BOOK: Also, administrator has no right to intervene in any way

RULE 74: SUMMARY SETTLEMENT OF ESTATES whatsoever in the division of the estate among the heirs when
they are adults and no debts against the estate.
SECTION 1. Extrajudicial settlement by agreement
between heirs. If the decedent left no will and no debts There Must Be Good Reason to Warrant Judicial
and the heirs are all of age, or the minors are represented Administration
by their judicial or legal representatives duly authorized
for the purpose, the parties may without securing letters Section 1 does not preclude heirs from instituting
of administration, divide the estate among themselves as administration proceedings if they don’t desire to resort for
they see fit by means of a public instrument filed in the good reasons to an ordinary action for partition. In other words,
office of the register of deeds, and should they disagree, such provision does not compel them to not to take a different
they may do so in an ordinary action of partition. If there is course of action.
only one heir, he may adjudicate to himself the entire
estate by means of an affidavit filled in the office of the Such administration is resorted only when heirs have good
register of deeds. The parties to an extrajudicial reasons for not resorting to an action.
settlement, whether by public instrument or by stipulation
in a pending action for partition, or the sole heir who “Good reason” depends on the Circumstances of Each
adjudicates the entire estate to himself by means of an Case
affidavit shall file, simultaneously with and as a condition
precedent to the filing of the public instrument, or The following are instances not considered by the Court as
stipulation in the action for partition, or of the affidavit in “good reasons”:
the office of the register of deeds, a bond with the said
register of deeds, in an amount equivalent to the value of 1. Dispute among heirs;
the personal property involved as certified to under oath
by the parties concerned and conditioned upon the 2. Multiplicity of suits;
payment of any just claim that may be filed under section
4 of this rule. It shall be presumed that the decedent left 3. To have legal capacity to appear is not ab good reason.
no debts if no creditor files a petition for letters of
administration within two (2) years after the death of the Validity of Oral Partition
decedent.
There is no law that requires partition among heirs to be in
The fact of the extrajudicial settlement or administration writing to be valid.
shall be published in a newspaper of general circulation in
the manner provided in the nest succeeding section; but The requirement of partition to be put in a public document and
no extrajudicial settlement shall be binding upon any registered has its purpose of protecting the creditors and heirs
person who has not participated therein or had no notice themselves against tardy claims. It serves as a constructive
thereof. notice others.

GR: When a person dies, same should be judicially But when rights of creditors are not affected, it is competent for
administered and court appoints qualified administrator in the the heirs of an estate to enter in an agreement different than
order established under Section 6 Rule 78, if decedent left no that provided by law.
will (surviving spouse, next of kin and the creditors).
XPN: Reason why it is not covered within Statute of Frauds is
(1) All heirs are of lawful age; and because partition is not a conveyance of real property because
it does not involve transfer of property to another but rather a
(2) No debts are due from the estate;
confirmation or ratification of title or right of property by the heir
If satisfied, they may agree in writing to partition the property
renouncing in favor of another heir accepting and receiving the
without instituting the judicial administration or applying for the
appointment of an administrator. inheritance.

Validity of Compromise Agreement

Requisites:
1. Decedent died intestate;
When entered into by heirs in their personal capacity, such is
2. Left no debts or heirs have already paid such at the time
binding to them upon perfection of the contract even without
of partition;
previous authority of the Court.
3. Heirs are of all age, minors represented by their legal or
judicial representatives.
Heirs Cannot Divest Court of Its Already Acquired
Jurisdiction
Modes of Settlement:
1. Extrajudicial settlement of Estate; 1. By filing of the application form probate of the will; and
2. Partition;
3. Summary Settlement of Estates of Small Value; 2. Publication thereof by the mere fact of dividing and
4. Probate of Will; distributing extrajudicially the estate of the deceased
5. Petition for letters of Administration in cases of intestacy/ among themselves.
Judicial Administration Not Favored But if extrajudicial partition made by the heirs is submitted and
approved by court and no rights of third parties are prejudiced
When exceptions of are satisfied, his heirs are not bound to through proper verification, testate proceedings pending will be
submit the property to a judicial administration and the legally terminated.
appointment of an administrator are superfluous and
unnecessary proceedings.
The extrajudicial partition of the estate becomes a judicial 2. Determine who are legally entitled;
partition after the approval by the court which previously 3. Apportion and divide property after payment of debts;
acquired jurisdiction over the estate. 4. Will be entitled to receive and enter into possession of the
portions of the estate awarded to them.
Moreover, SC held in one case the termination and dismissal SECTION 3. Bond to be filed by distributees. The court,
of the pending intestate proceedings in the separate action for before allowing a partition in accordance with the
partition/ court found that they were both same parties, actual provisions of the preceding section, my require the
division is primary objective, both cases assigned to same distributees, if property other than real is to be distributed,
judge. The dismissal was a judicious move for effective and to file a bond in an amount to be fixed by court,
speedy administration of justice. conditioned for the payment of any just claim which may
be filed under the next succeeding section.
SECTION 2. Summary settlement of estates of small value.
Whenever the gross value of the estate of a deceased SECTION 4. Liability of distributes and estate. If it shall
person, whether he died testate or intestate, does not appear at any time within two (2) years after the settlement
exceed ten thousand pesos, and that fact is made to and distribution of an estate in accordance with the
appear to the Court of First Instance having jurisdiction of provisions of either of the first two sections of this rule,
the estate by the petition of an interested person and upon that an heir or other person has been unduly deprived of
hearing, which shall be held not less than one (1) month his lawful participation in the estate, such heir or such
nor more than three (3) months from the date of the last other person may compel the settlement of the estate in
publication of a notice which shall be published once a the courts in the manner hereinafter provided for the
week for three (3) consecutive weeks in a newspaper of purpose of satisfying such lawful participation. And if
general circulation in the province, and after such other within the same time of two (2) years, it shall appear that
notice to interest persons as the court may direct, the there are debts outstanding against the estate which have
court may proceed summarily, without the appointment of not been paid, or that an heir or other person has been
an executor or administrator, and without delay, to grant, unduly deprived of his lawful participation payable in
if proper, allowance of the will, if any there be, to money, the court having jurisdiction of the estate may, by
determine who are the persons legally entitled to order for that purpose, after hearing, settle the amount of
participate in the estate, and to apportion and divide it such debts or lawful participation and order how much
among them after the payment of such debts of the estate and in what manner each distributee shall contribute in
as the court shall then find to be due; and such persons, the payment thereof, and may issue execution, if
in their own right, if they are of lawful age and legal circumstances require, against the bond provided in the
capacity, or by their guardians or trustees legally preceding section or against the real estate belonging to
appointed and qualified, if otherwise, shall thereupon be the deceased, or both. Such bond and such real estate
entitled to receive and enter into the possession of the shall remain charged with a liability to creditors, heirs, or
portions of the estate so awarded to them respectively. other persons for the full period of two (2) years after such
The court shall make such order as may be just respecting distribution, notwithstanding any transfers of real estate
the costs of the proceedings, and all orders and that may have been made.
judgments made or rendered in the course thereof shall be
recorded in the office of the clerk, and the order of 1. Rule on Limitations Not Applicable to Those Who Had
partition or award, if it involves real estate, shall be No Knowledge of Settlement
recorded in the proper register's office.
The provisions of Section 4 of Rule 74, barring distributes or
When Allowed heirs from objecting an extrajudicial partition after the
expiration of two years from such extrajudicial partition is
Whenever the gross value of the estate does not exceed applicable only to persons who have participated or taken part
P10K. or had notice of the extrajudicial partition and in addition, when
the provisions of Section 1 Rule 74 have been strictly complied
Procedure with- that all the persons or heirs of the decedent have taken
part in the extrajudicial settlement or are represented by
1. Petition by interested person alleging that estate less than themselves or through guardians.
10K.
Moreover, Section 4 of Rule 78 is only a bar against the parties
2. Notice published once for three weeks in newspaper of who had taken part in the extrajudicial proceedings but not
general circulation. against third persons not parties thereto.

3. Other notices as court may direct. None of the defendants participated in the partition but none of
the heirs assumed to act for the absent heirs. Court ruled in
4. Hearing held within 1-3 months counted from last notice this case that defendants are not bound by such a transaction,
publication. in which they did not take part and that plaintiff cannot recover
the exclusive possession of the property.
5. Bond fixed by court if personal property.
2. Prescriptive Period to Annul Settlement

Gerona vs. De Amerol vs. Separate

Summary Effect Guzman Bagumaran Opinion,J. Padilla
An action for An action for There should be a
The Court may, without appointment of executor or reconveyance of reconveyance distinction of the
administrator and without delay do the following: real property on based on an fraud. If the
the ground of fraud implied or registration of the
1. Grant will;
must be filed within constructive trust land was but of an
4 years from the must perforce incident to the
discovery of the prescribe in ten registration of land
fraud. Such years and not (dolo incidente),
discovery is otherwise. then it prescribes
deemed to have in ten years. But if
taken place from it is necessary to
the issuance of annul a deed or
certificates of titles. title before relief
But old Civil Code could be granted
applied here. as when fraud
vitiates consent
(dolo causante),
shall be filed within
four years from the
discovery of fraud.

Action for Reconveyance is Ten Years

Almerol Doctrine has been reiterated in Marquez vs. Court of

Appeals. Period for an action for reconveyance based on
implied trust which should be ten years from the date of
registration of the deed or the issuance of title.

When Ten Year Period is Reckoned

The general rule is an action for reconveyance based on

implied or constructive trust prescribes in ten years from the
alleged fraudulent registration or date of issuance of the
certificate of title over the property. Registration serves as
constructive notice and four year period should be counted
therefrom.

Exception

Prescription based on implied trust should be reckoned from

the actual delivery of the fraud where the registration where
there was bad faith in securing the certificates of titles and is
therefore a holder of the said certificate in bad faith. The
Torrens title does not furnish a shield for fraud.

3. Rescission as Remedy for Pretirition

Article 1104 of the NCC provides that a partition made with

preterition of any of the compulsory heirs shall not be
rescinded, unless it be proved that there was bad faith or fraud
on the part of the other persons interested.

4. Exception to Prescription of Actions

That is when the plaintiff is in possession of the land to be

reconveyed. In those cases, Court permitted the filing of an
action despite the lapse of ten years and declared that said
action, when based on fraud, is imprescriptible as long as the
land has not passed to an innocent purchaser for value.

SECTION 5. Period for claim of minor or incapacitated

person. If on the date of the expiration of the period of two
(2) years prescribed in the preceding section the person
authorized to file a claim is a minor or mentally
incapacitated, or is in prison or outside the Philippines, he
may present his claim within one (1) year after such
disability is removed.