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  Republic of the Philippines SUPREME COURT  Manila FIRST DIVISION G.R. No. L-81147 June 20, 1989 VICTORIA BRINGAS PEREIRA, petitioner, vs. THE HONORABLE COURT OF APPEALS and RITA PEREIRA NAGAC, respondents. Benjamin J. Quitoriano for petitioner. Linzag-Arcilla & Associates Law Offices for private respondent. GANCAYCO, J.: Is a judicial administration proceeding necessary when the decedent dies intestate without leaving any debts? May the probate court appoint the surviving sister of the deceased as the administratrix of the estate of the deceased instead of the surviving spouse? These are the main questions which need to be resolved in this case. Andres de Guzman Pereira, an employee of the Philippine Air Lines, passed away on January 3, 1983 at Bacoor, Cavite without a will. He was survived by his legitimate spouse of ten months, the herein petitioner Victoria Bringas Pereira, and his sister Rita Pereira Nagac, the herein private respondent. On March 1, 1983, private respondent instituted before Branch 19 of the Regional Trial Court of Bacoor, Cavite, Special Proceeding No. RTC-BSP-83-4 for the issuance of letters of administration in her favor pertaining to the estate of the deceased Andres de Guzman Pereira.  1  In her verified petition, private respondent alleged the following: that she and Victoria Bringas Pereira are the only surviving heirs of the deceased; that the deceased left no will; that there are no creditors of the deceased; that the deceased left several properties, namely: death benefits from the Philippine Air Lines (PAL), the PAL Employees Association (PALEA), the PAL Employees Savings and Loan Association, Inc. (PESALA) and the Social Security System (SSS), as well as savings deposits with the Philippine National Bank (PNB) and the Philippine Commercial and Industrial Bank (PCIB), and a 300 square meter lot located at Barangay Pamplona, Las Pinas, Rizal and finally, that the spouse of the deceased (herein petitioner) had been working in London as an auxiliary nurse and as such one-half of her salary forms part of the estate of the deceased. On March 23,1983, petitioner filed her opposition and motion to dismiss the petition of private respondent  2  alleging that there exists no estate of the deceased for purposes of administration and praying in the alternative, that if an estate does exist, the letters of administration relating to the said estate be issued in her favor as the surviving spouse. In its resolution dated March 28, 1985, the Regional Trial Court, appointed private respondent Rita Pereira Nagac administratrix of the intestate estate of Andres de Guzman Pereira upon a bond posted by her in the amount of Pl,000.00. The trial court ordered her to take custody of all the real and personal properties of the deceased and to file an inventory thereof within three months after receipt of the order.  3  Not satisfied with the resolution of the lower court, petitioner brought the case to the Court of Appeals. The appellate court affirmed the appointment of private respondent as administratrix in its decision dated December 15, 1987.  4  Hence, this petition for review on certiorari where petitioner raises the following issues: (1) Whether or not there exists an estate of the deceased Andres de Guzman Pereira for purposes of administration; (2) Whether or not a judicial administration proceeding is necessary where there are no debts left by the decedent; and, (3) Who has the better right to be appointed as administratrix of the estate of the deceased, the surviving spouse Victoria Bringas Pereira or the surviving sister Rita Pereira Nagac? Anent the first issue, petitioner contends that there exists no estate of the deceased for purposes of administration for the following reasons: firstly, the death benefits from PAL, PALEA, PESALA and the SSS belong exclusively to her, being the sole beneficiary and in support of this claim she submitted letter-replies from these institutions showing that she is the exclusive beneficiary of said death benefits; secondly, the savings deposits in the name of her deceased husband with the PNB and the PCIB had been used to defray the funeral expenses as supported by several receipts; and, finally, the only real property of the deceased has been extrajudicially settled between the petitioner and the private respondent as the only surviving heirs of the deceased. Private respondent, on the other hand, 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. She points out that this function is vested in the court in charge of the intestate proceedings. Petitioner asks this Court to declare that the properties specified do not belong to the estate of the deceased on the basis of her bare allegations as aforestated and a handful of documents. Inasmuch as this Court is not a trier of facts, We cannot order an unqualified and final exclusion or non-exclusion of the property involved from the estate of the deceased.  5  The resolution of this issue is better left to the probate court before which the administration proceedings are pending. The trial court is in the best position to receive evidence on the discordant contentions of the parties as to the assets of the decedent's estate, the valuations thereof and the rights of the transferees of some of the assets, if any.  6  The function of resolving whether or not a certain property should be included in the inventory or list of properties to be administered by the administrator is one clearly within the competence of the probate court. However, the court's determination 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. 7  Assuming, however, that there exist assets of the deceased Andres de Guzman Pereira for purposes of administration, We nonetheless find the administration proceedings instituted by private respondent to be unnecessary as contended by petitioner for the reasons herein below discussed. 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.  8  An exception to this rule is established in Section 1 of Rule 74.  9  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. Section 1, Rule 74 of the Revised Rules of Court, 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. 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.  10  It should be noted that recourse to an administration proceeding even if the estate has no debts is sanctioned only if the heirs have good reasons for not resorting to an 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.  11  Thus, 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 .  12  Now, 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. In one case,  13  We said: Again 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. In another case, We held that 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.  14  In still another case, We 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. 15  We see no reason not to apply this doctrine to the case at bar. There are only two surviving heirs, a wife of ten months and a sister, both of age. The parties admit that there are no debts of the deceased to be paid. What is at once apparent is that these two heirs are not in good terms. The only conceivable reason why private 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. We are of the opinion that this is not a compelling reason which will necessitate a judicial administration of the estate of the deceased. To subject the estate of Andres de Guzman Pereira, which does not appear to be substantial especially since the only real property left has been extrajudicially settled, to an administration proceeding for no useful purpose would only unnecessarily expose it to the risk of being wasted or squandered. In most instances of a similar nature,  16  the claims of both parties as to the properties left by the deceased may be properly ventilated in simple partition proceedings where the creditors, should there be any, are protected in any event. We, therefore, hold that the court below before which the administration proceedings are pending was not  justified in issuing letters of administration, there being no good reason for burdening the estate of the deceased Andres de Guzman Pereira with the costs and expenses of an administration proceeding. With the foregoing ruling, it is unnecessary for us to delve into the issue of who, as between the surviving spouse Victoria Bringas Pereira and the sister Rita Pereira Nagac, should be preferred to be appointed as administratrix. 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. SO ORDERED. Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.    Republic of the Philippines SUPREME COURT  Manila EN BANC G.R. No. L-14921 December 31, 1960   DOLORES B. GUICO, ET AL.,  plaintiffs-appellants, vs. PABLO G. BAUTISTA, ET. AL.,  defendants-appellees. P.M. Beltran, M.B. Bautista and R.E. Gonzales for appellants. M.H. de Joya, Primicias and Del Castillo for appellees.   REYES, J.B.L.,  J.:  This is an action for liquidation and partition of the estate left by the spouses Mariano Bautista and Gertrudes Garcia, filed on October 20, 1956 by plaintiffs Dolores B. Guico, et al., against defendants Pablo G. Bautista, et al., legitimate grandchildren and children, respectively, of said deceased spouses. The complaint alleged inter alia that Mariano G. Bautista died intestate on December 5, 1947 and that his properties had already been extrajudicially partitioned among his heirs; that Gertrudes Garcia likewise died intestate on August 31, 1956 leaving as her legitimate heirs plaintiffs and defendants; that said Gertrudes Garcia, during her lifetime, made several deeds of donation of some of her properties in favor of all the defendants, but did not provide that the properties donated would not be subject to collation, so that the donees are legally bound to bring into the mass of the estate by way of collation the value of the properties received by them in order that the net hereditary estate may be divided equally among the heirs; and that the deceased Gertrudes Garcia left outstanding obligations to the Rehabilitation Finance Corporation and the G.A. Machineries, Inc. On a motion to dismiss filed by defendants alleging, among other things, that the action was premature because it is admitted in the complaint that the deceased left certain debts, the lower court dismissed the complaint on that ground without prejudice and without costs. From the order of dismissal, plaintiffs appealed to this Court, urging that their action for partition and liquidation may be maintained, notwithstanding that there are pending obligations of the estate, subject to the taking of adequate measures either for the payment or security of its creditors. We are inclined to hold at the lower court that until all the debts of the estate in question are paid, appellants' action for partition and liquidation is premature. There is no question that the law allows the partition of the estate of a deceased person by the heirs, extrajudicially or through an ordinary action for petition, without the filing of a special proceeding and the appointment of an administrator for the purpose of the settlement of said estate, but this they may do only if the decedent left no debts and the heirs and legatees are all of age or the minors are represented by their  judicial guardians (sec. 1, Rule 74). The reason is that were the deceased dies without pending obligations, there is no necessity for the appointment of an administrator to administer the estate for them and to deprive the real owners of their possession to which they are immediately entitled (Bondad vs . Bondad, 34 Phil., 232; Fule vs . Fule, 46 Phil., 317; Macalinao vs . Valdez, et al., 95 Phil., 318; 50 Off. Gaz., 3041; Intestate Estate of Rufina Mercado vs . Magtibay, et al., 96 Phil., 383). The situation is different, however, where the deceased left pending obligations. In such cases, such obligations must be first paid or compounded with the creditors before the estate can be divided among the heirs; and unless they reach an amicable settlement as to how such obligations should be settled, the estate would inevitably be submitted to administration for the payment of such debts. As compared to ordinary partition, the regular estate proceeding offer the advantage of requiring all creditors of the deceased to disclose themselves and submit their respective claims within a comparatively short period (12 months under Rule 87, unless claims are contingent), otherwise, they are forever barred; while in ordinary judicial partitions the creditors 1 claims are only extinguished by the expiration of the period extinctive prescription. An heir, therefore, may have an interest in making sure that the share allocated to him will be freed from invisible claims, so that creditors may not later appear and initiate the very estate proceeding sought to be avoided, and he may properly object to an action for partition this ground. Unless, therefore, all the heirs are agreeable to assuming personal liability for all the decedent's obligations, those known as well as those undisclosed, regular estate proceedings can not be avoided. It is no argument that under regular administration, the estate will incur greater expenses. As a matter of fact, plaintiffs-appellants include in their complaint a prayer for the appointment of an administrator during the pendency of this case, in view of the existence of debts of the estate and the lack of agreement among the heirs as to how debts would be paid. lawphil.net   Appellants claim that there is nothing that would prevent the trial court from directing and ordering that the pending obligations of the estate be paid first, or that they should constitute as liens on the respective shares to be received by the heirs. In other words, appellants propose that the administration of the estate for the purpose of paying off its debts be accomplished right in this partition suit, with either the Court performing the duties of the administrator, or an administrator appointed to take care of such debts, as prayed for in their complaint. Obviously, an ordinary action for partition can not be converted into a proceeding for the settlement of the estate of a deceased, without compliance with the procedure outlined by Rules 79-90 of the rules of Court, especially the provisions on publication and notice to creditors. As we see it, appellants' major objective in filing this action for partition is to have an early determination of the question whether or not the donation inter vivos received by the defendants from the deceased are subject to collation. But there is no reason why this question can not be determined just as expeditiously in special proceeding, because even before the known debts of the estate are settled and paid and pending the expiration for the filing of other claims, the issue can, upon motion of the heirs, be set for hearing, tried, and definitely settled. Wherefore, the order appealed from is affirmed, with costs against appellants. Paras, C.J., Bengzon, Padilla, Labrador, Barrera, Gutierrez David, Paredes and Dizon, JJ., concur.    SECOND DIVISION [G.R. No. 115181. March 31, 2000]   MARIA SOCORRO AVELINO,  petitioner, vs . COURT OF APPEALS, ANGELINA AVELINO, SHARON AVELINO, ANTONIO AVELINO, JR., TRACY AVELINO, PATRICK MICHAEL AVELINO and MARK ANTHONY AVELINO, respondents . Sdaa miso   R E S O L U T I O N   QUISUMBING,  J  .:  Before us is a petition for review on certiorari   of the Decision of the Court of Appeals dated February 16, 1994 in CA-G.R. SP No. 31574 as well as its Resolution dated April 28, 1994 denying petitioner's Motion for Reconsideration. The assailed Decision affirmed the Order of the Regional Trial Court of Quezon City, Branch 78, in Sp. Proc. No. Q-91-10441 converting petitioner's petition for the issuance of letters of administration to an action for judicial partition. Petitioner Maria Socorro Avelino is a daughter and compulsory heir of the late Antonio Avelino, Sr., and his first wife private respondent Angelina Avelino. The other private respondents, Sharon, Antonio Jr., Tracy, Patrick and Mark Anthony all surnamed Avelino are likewise compulsory heirs of Avelino, Sr. Sharon, an American, is the second wife of Avelino, Sr. The other private respondents are siblings of petitioner Ma. Socorro. The records reveal that on October 24, 1991, Ma. Socorro filed before the Regional Trial Court of Quezon City, Branch 78, docketed as SP Proc. No. Q-91-10441, a petition for the issuance of letters of administration of the estate of Antonio Avelino, Sr., who died intestate on April 10, 1989. She asked that she be appointed the administrator of the estate. On December 3, 1992, Angelina, and the siblings filed their opposition by filing a motion to convert the said  judicial proceedings to an action for judicial partition which petitioner duly opposed. On February 16, 1993, public respondent judge issued the assailed Order which reads: Acting on the Motion to Convert Proceedings to Action for Judicial Partition, considering that the petitioner is the only heir not amenable to a simple partition, and all the other compulsory heirs manifested their desire for an expeditious settlement of the estate of the deceased Antonio Avelino, Sr., the same is granted. WHEREFORE, the petition is converted into judicial partition of the estate of deceased Antonio Avelino, Sr. The parties are directed to submit a complete inventory of all the real and personal properties left by the deceased. Set the hearing of the judicial partition on APRIL 13, 1993, at 8:30 o'clock in the morning. Notify all the parties and their counsel of this assignment. SO ORDERED. [1]  On March 17, 1993, petitioner filed a motion for reconsideration which was denied in an Order dated June 16, 1993. On July 23, 1993, Ma. Socorro filed before the Court of Appeals, a petition for certiorari  , prohibition, and mandamus  alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the trial court, in granting private respondents' motion to convert the judicial proceeding for the issuance of letters of administration to an action for judicial partition. Her petition was docketed as CA-G.R. SP No. 31574. Sdaad On February 18, 1994, the respondent appellate court rendered the assailed decision, stating that the petition is DENIED DUE COURSE and accordingly dismissed. [2]  On March 1, 1994, petitioner duly moved for reconsideration, but it was denied on April 28, 1994. Hence, this petition. Petitioner assigns the following errors: THE COURT OF APPEALS ERRED IN UPHOLDING THE LOWER COURT'S FINDING THAT PARTITION IS PROPER UNDER THE PREMISES. ADMINISTRATION SHOULD BE THE PROPER REMEDY PENDING THE DETERMINATION OF THE CHARACTER AND EXTENT OF THE DECEDENT'S ESTATE. [3]  For resolution, we find that given the circumstances in this case, the sole issue here is whether respondent appellate court committed an error of law and gravely abused its discretion in upholding the trial court's finding that a partition is proper. Petitioner submits that: First, no partition of the estate is possible in the instant case as no determination has yet been made of the character and extent of the decedent's estate. She points to the Court's ruling in  Arcilles v. Montejo , 26 SCRA 197 (1969), where we held that when the existence of other properties of the decedent is a matter still to be reckoned with, administration proceedings are the proper mode of resolving the same. [4]  In addition, petitioner contends that the estate is in danger of being depleted for want of an administrator to manage and attend to it. Second, petitioner insists that the Rules of Court does not provide for conversion of a motion for the issuance of letters of administration to an action for judicial partition. The conversion of the motion was, thus, procedurally inappropriate and should be struck down for lack of legal basis. When a person dies intestate, or, if testate, failed to name an executor in his will or the executor so named is incompetent, or refuses the trust, or fails to furnish the bond required by the Rules of Court, then the decedent's estate shall be judicially administered and the competent court shall appoint a qualified administrator in the order established in Section 6 of Rule 78. [5] The exceptions to this rule are found in Sections 1 and 2 of Rule 74 [6]  which provide:
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