HERRERA BOOK:
RULE 74: SUMMARY SETTLEMENT OF ESTATES
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.
GR: When a person dies, same should be judicially
administered and court appoints qualified administrator in the
order established under Section 6 Rule 78, if decedent left no
will (surviving spouse, next of kin and the creditors).
XPN:
(1) All heirs are of lawful age; and
(2) No debts are due from the estate;
If satisfied, they may agree in writing to partition the property
without instituting the judicial administration or applying for the
appointment of an administrator.
Requisites:
1. Decedent died intestate;
2. Left no debts or heirs have already paid such at the time
of partition;
3. Heirs are of all age, minors represented by their legal or
judicial representatives.
Modes of Settlement:
1. Extrajudicial settlement of Estate;
2. Partition;
3. Summary Settlement of Estates of Small Value;
4. Probate of Will;
5. Petition for letters of Administration in cases of intestacy/
Judicial Administration Not Favored
When exceptions of are satisfied, his heirs are not bound to
submit the property to a judicial administration and the
appointment of an administrator are superfluous and
unnecessary proceedings.
Also, administrator has no right to intervene in any way
whatsoever in the division of the estate among the heirs when
they are adults and no debts against the estate.
There Must Be Good Reason to Warrant Judicial
Administration
Section 1 does not preclude heirs from instituting
administration proceedings if they don’t desire to resort for
good reasons to an ordinary action for partition. In other words,
such provision does not compel them to not to take a different
course of action.
Such administration is resorted only when heirs have good
reasons for not resorting to an action.
“Good reason” depends on the Circumstances of Each
Case
The following are instances not considered by the Court as
“good reasons”:
1. Dispute among heirs;
2. Multiplicity of suits;
3. To have legal capacity to appear is not ab good reason.
Validity of Oral Partition
There is no law that requires partition among heirs to be in
writing to be valid.
The requirement of partition to be put in a public document and
registered has its purpose of protecting the creditors and heirs
themselves against tardy claims. It serves as a constructive
notice others.
But when rights of creditors are not affected, it is competent for
the heirs of an estate to enter in an agreement different than
that provided by law.
Reason why it is not covered within Statute of Frauds is
because partition is not a conveyance of real property because
it does not involve transfer of property to another but rather a
confirmation or ratification of title or right of property by the heir
renouncing in favor of another heir accepting and receiving the
inheritance.
Validity of Compromise Agreement
When entered into by heirs in their personal capacity, such is
binding to them upon perfection of the contract even without
previous authority of the Court.
Heirs Cannot Divest Court of Its Already Acquired
Jurisdiction
1. By filing of the application form probate of the will; and
2. Publication thereof by the mere fact of dividing and
distributing extrajudicially the estate of the deceased
among themselves.
But if extrajudicial partition made by the heirs is submitted and
approved by court and no rights of third parties are prejudiced
through proper verification, testate proceedings pending will be
legally terminated.
The extrajudicial partition of the estate becomes a judicial
partition after the approval by the court which previously
acquired jurisdiction over the estate.
Moreover, SC held in one case the termination and dismissal
of the pending intestate proceedings in the separate action for
partition/ court found that they were both same parties, actual
division is primary objective, both cases assigned to same
judge. The dismissal was a judicious move for effective and
speedy administration of justice.
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 interest 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 divide it
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.
When Allowed
Whenever the gross value of the estate does not exceed
P10K.
Procedure
1. Petition by interested person alleging that estate less than
10K.
2. Notice published once for three weeks in newspaper of
general circulation.
3. Other notices as court may direct.
4. Hearing held within 1-3 months counted from last notice
publication.
5. Bond fixed by court if personal property.
Summary Effect
The Court may, without appointment of executor or
administrator and without delay do the following:
1. Grant will;
2. Determine who are legally entitled;
3. Apportion and divide property after payment of debts;
4. Will be entitled to receive and enter into possession of the
portions of the estate awarded to them.
SECTION 3. Bond to be filed by distributees. The court,
before allowing a partition in accordance with the
provisions of the preceding section, my require the
distributees, if property other than real is to be distributed,
to file a bond in an amount to be fixed by court,
conditioned for the payment of any just claim which may
be filed under the next succeeding section.
SECTION 4. Liability of distributes and estate. If it shall
appear at any time within two (2) years after the settlement
and distribution of an estate in accordance with the
provisions of either of the first two sections of this rule,
that an heir or other person has been unduly deprived of
his lawful participation in the estate, such heir or such
other person may compel the settlement of the estate in
the courts in the manner hereinafter provided for the
purpose of satisfying such lawful participation. And if
within the same time of two (2) years, it shall appear that
there are debts outstanding against the estate which have
not been paid, or that an heir or other person has been
unduly deprived of his lawful participation payable in
money, the court having jurisdiction of the estate may, by
order for that purpose, after hearing, settle the amount of
such debts or lawful participation and order how much
and in what manner each distributee shall contribute in
the payment thereof, and may issue execution, if
circumstances require, against the bond provided in the
preceding section or against the real estate belonging to
the deceased, or both. Such bond and such real estate
shall remain charged with a liability to creditors, heirs, or
other persons for the full period of two (2) years after such
distribution, notwithstanding any transfers of real estate
that may have been made.
1. Rule on Limitations Not Applicable to Those Who Had
No Knowledge of Settlement
The provisions of Section 4 of Rule 74, barring distributes or
heirs from objecting an extrajudicial partition after the
expiration of two years from such extrajudicial partition is
applicable only to persons who have participated or taken part
or had notice of the extrajudicial partition and in addition, when
the provisions of Section 1 Rule 74 have been strictly complied
with- that all the persons or heirs of the decedent have taken
part in the extrajudicial settlement or are represented by
themselves or through guardians.
Moreover, Section 4 of Rule 78 is only a bar against the parties
who had taken part in the extrajudicial proceedings but not
against third persons not parties thereto.
None of the defendants participated in the partition but none of
the heirs assumed to act for the absent heirs. Court ruled in
this case that defendants are not bound by such a transaction,
in which they did not take part and that plaintiff cannot recover
the exclusive possession of the property.
2. Prescriptive Period to Annul Settlement
Gerona vs. De Amerol vs. Separate
Guzman Bagumaran Opinion,J. Padilla
An action for An action for There should be a
reconveyance of reconveyance distinction of the
real property on based on an fraud. If the
the ground of fraud implied or registration of the
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.