SPECIAL PROCEEDINGS

RULE 74
SUMMARY SETTLEMENT OF ESTATES
Reported by: Lex Vincent Pacamana Dagdag

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What are the rules with respect to the estate left by a decedent?
General Rule: When a person dies leaving a property, the same should be
judicially administered and the court should appoint a qualified administrator, in
order to 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.
Exception:

EXTRAJUDICIAL SETTLEMENT

SUMMARY SETTLEMENT OF ESTATE OF SMALL VALUE (not exceeding 10,000

pesos)

EXTRAJUDICIAL SETTLEMENT (Section 1)

Does not require court intervention

Value of estate is immaterial

Allowed only in intestate succession

Proper only where there are no outstanding debts of the estate at the time of
settlement

Can be resorted to only at the instance and by agreement of all heirs (If heirs
do not agree, they may resort to an action for partition.)

EXTRAJUDICIAL SETTLEMENT BY AGREEMENT OF HEIRS

Scenario 1:
Decedent left several heirs
Scenario 2:
Decedent has only one Heir
DECEDENT LEFT SEVERAL HEIRS

If the decedent left no will and no debts and the heirs are of legal age, the party
without securing letters of administration may divide the estate among themselves
by means of public instrument or by stipulation for partition and shall file it at the
registry of together with a bond equivalent to the value of the property involved as
certified to under oath by the parties concerned.
REQUITSITES OF VALID EXTRAJUDICIAL SETTLEMENT
SUBSTANTIVE:

Decedent died intestate

The estate has no outstanding debts at the time of settlement

The heirs are of all legal age, or the minors are represented by their judicial
guardians or legal representatives.

Procedural:

Settlement is made in public instrument duly filed with the register of deeds
or by an affidavit of adjudication in the case of a sole heir.

The fact must be published in news papers of general circulation once a week
for the consecutive weeks.

Bond filed equivalent to the value of the personal property.

JUDICIAL ADMINISTRATION OF ESTATE

If the heirs cannot agree in the extrajudicial partition and apportionment of the
estate, the heirs can institute a special proceeding for administration of the estate.
There must be a good reason to warrant judicial administration but not including the
following reasons:

Disputes among heirs

Multiplicity of suits

To have legal capacity to appear

DECEDENT LEFT ONLY ONE HEIR

Under the rule, if there is only one heir, he may adjudicate to himself the entire
estate by means of an affidavit filed in the office of registry of deeds.
AFFIDAVIT OF SELF ADJUDICATION

It is an affidavit require in Rule 74 section 1, to be executed by the sole heir of the

deceased person in adjudicating to himself the entire estate left by the decedent. It
is filed with the register of deeds.
SUMMARY OF ESTATE OF SMALL VALUE (Section 2)
It is a summary proceeding without need of an appointment of an administrator or
executor for the settlement of the estate of a deceased person who died testate or
intestate. Where the gross value thereof does not exceed P10,000.00.

Requires court intervention by summary proceeding

Applies only if the value of estate does not exceed P10,000.00

Allowed in both testate and intestate estates

Available even if there are debts as the court will make provisions for the
payment thereof.

Instituted by any interested party and even by the creditor of the estate,
without the consent of all the heirs.

BOND TO BE FILED BY DISTRIBUTEES (Section 3)

The Court before allowing the partition, may require the distributees if the property
other than real is to be distributed, to file a bond in an amount to be fixed by the
court conditioned for the payment of any just claims which may be filed
PRESUMPTION OF THAT THE DECEDENT LEFT NO DEBTS (Section 4)
It shall be presumed that the decedent left no debts if no creditor files a petition for
the letters of administration within two (2) years after the death of the decedent.
The rule bars distributees or heirs from objecting the partition after two years from
such partition.
Is the rule applicable to persons who had no knowledge of it?
The limitation are not applicable. The provision of Section 4, barring the distributee
or heirs from objecting to an extra judicial partition is applicable only to Person who
participated or taken part or had notice of the extrajudicial partition. When the
provision of Section 1 has been strictly complied with.
PERIOD FOR THE MINOR OR AN INCAPACITATED PERSON (Section 5)
If on the date of the expiration of the period of 2 years prescribed in preceding
section the person authorized to file claim is a minor or mentally incapacitated, or is
in prison or outside of the Philippines, he may present his claim within one year
after such disability is removed.

An heir deprive of his share, may file an action for reconveyance based on implied
or constructive trust which precribes in 10 years
If on the date of the expiration of the 2 year period, the creditor or heir is:

Minor or incapacitated person

In prison

Outside the Philippines

REMEDIES OF AGGRIEVED PARTIES AFTER SETTLEMENT OF ESTATE

Within 2 years claim against the bond or the real estate

Recession in case of preterition of compulsory heir in partition tainted with

bad faith

Reconveyance of real property

Action to annul deed of extrajudicial settlement on the ground of fraud which

would be filed within 4 years from discovery.

Illustration No.1
A died intestate, leaving several heirs and subtantial property here in the
Philippines.
1. Assuming that A died without debts, as a counsel for A heirs, what step would
you suggest to settle As estate in least expensive manner?
Estate be settled in a least expensive manner by an extrajudicial settlement of
estate by agreement among heirs excited by means of public instrument to be file
to the registry of deeds together with a bond in an amount equivalent to the value
of the property involved as certified under oath and conditioned upon payment of
any just claim that may be filed within two years by an heir or other person unduly
deprived of participation in the estate.
2. Assuming that A left only one heir and no debts, as counsel for As lone heir what
step would you suggest?
As lone heir may adjudicate to himself the entire estate by executing an affidavit
of self adjudication to be filed with the office of the registry of deeds upon
submission of other documents.
3. Assuming that the value of As estate does not exceed P10,000,00 what remedy
is available to obtaion speedy settlement of his estate?

To obtain speedy settlement of his estate the remedy available is to proceed with
the summary settlement of estate of small value under adhering to the provision of
Section 2, Rule 74 of the Rules of Court
Illustration no. 2
Vincent claim to be an illegitimate child of the deceased Carla, instituted an
intestate proceeding to settle the estate of the latter. He also prayed that he be
appointed administrator of the said estate. Michael the surviving spouse opposed to
the petition and Vincents application to be appointed as administrator of the said
estate. Subsequently, Michael claiming to be the sole heir of Carla, executed an
affidavit of adjudication, adjudicating unto himself the entire estate of the deceased
wife. Afterwards Michael sold the entire estate to Cathy and Tony. Is the action of
Michael valid?
The action of Michael in adjudicating the entire estate of his late wife to himself is
not legal because under the Rules, an affidavit of Self adjudication is allowed only if
the affiant is the sole heir of the deceased. In this case, it appears that there is
someone who also claims to be an heir that there is a pending judicial proceeding
for the settlement of the estate suggest that there is a doubt to whether he is the
sole heir.
Sub-question:
If the person had no knowledge or had not participated in the extrajudicial
settlement, is he bound thereby by reason of constructive notice of publication?
Answer:
No, publication in this case does not constitute constructive notice. Extrajudicial
settlement of estate under section 1 of rule 74 is an ex-parte proceeding, and the
rule plainly states that person who does participate or had no notice of an
extrajudicial settlement will no be bound thereby and contemplate a notice that
has sent out or issued before any deed of settlement or partition is agreed upon,
and not after such an agreement has been executed.
The publication of the settlement does not constitute constructive notice of the
heirs who had no knowledge or did not take part in it because the same was notice
after the fact of execution; the requirement of publication is geared for the
protection of the creditor and was never intended to deprived heirs of their lawful
participation in the decedent estate.