Pereira v CA and Nagac By: Alexis De La Cruz

GR No. L-81147 Topic: Estates Covered and Procedure (Rule

June 20, 1989 69)
Ponente: J. Gancayco
DOCTRINE
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 order established in Section 6, Rule 78, in case deceased
left no will, or in case he had left one, should he fail to name an executor therein. An exception to this rule is established
in Section 1 of Rule 74. 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 judicial administration or applying for
the appointment an administrator.

Facts
 A certain Andres de Guzman Pareira died intestate leaving only two heirs herein petitioner, the wife for 10-
months, and herein private respondent, the sister of the decedent.
 The estate has no debts. 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 a 300 sqm lot.
 Private respondent, filed a petition to issue a letters of administration in her favor alleging that a part of the
estate of the deceased (a 300 sqm lot in Las Pinas Rizal) was bought half with her salary as a nurse in London
and therefore is partly owned by her.
 Petitioner opposed the petition contending that there is no estate for the purpose of administration, but the trial
court ultimately ruled in the respondent’s favor after she posted a bond. The court ordered her to take possession
of all the property left by the deceased and make an inventory thereof.
 Petitioner elevated the case to the CA which affirmed the decision of the RTC.
 Hence, this petition.
 Petitioner’s argument:
o First there is no estate to be subjected to administration. All the properties left by the decedent except
the PNB savings and the lot had her as beneficiary. While the PNB savings were used for the funeral
expenses and the lot was extrajudicially partitioned between the petitioner and private respondent.

Issue/s
WON the trial court correctly granted the petition for letters of administration. NO
Ruling
The issue on which property should be included in the estate is within the competence of the probate
court not the SC (unless the decision was appealed to the SC)

The SC cannot order the exclusion and inclusion of the properties in the estate. The resolution of this issue is better left
to the probate court before which administration proceedings are pending. Trial court is in the best position to receive
evidence on discordant contentions of the parties as to the assets decedent’s estate, valuations thereof and rights of
transferees of some of the assets, if any. The function resolving whether or not a certain property should be included in
inventory or list of properties to be administered by administrator is one clearly within competence probate court.
However, the 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.

Procedure when a person dies leaving property/ies.

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 order established in Section 6, Rule 78, in case deceased
left no will, or in case he had left one, should he fail to name an executor therein. An exception to this rule is established
in Section 1 of Rule 74. 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 judicial administration or applying for
the appointment an administrator.

When the estate has no debt, the heirs cannot institute an administrative proceeding except for good
reason.

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. 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.

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.

What constitute good reason is dependent on the circumstances.

There is no good reason to resort to an administrative proceeding for this case.

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 apparent 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 propertie of the deceased for her own purposes, since these properties are presently in the
hands of petitioner who supposedly disposed of them fraudulently. The court is of the opinion that this is not a
compelling reason, which will necessitate a judicial administration of the estate of deceased. To subject the estate of
Andres de Guzman , 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 a similar nature, claims of both parties as to properties left by
deceased may be properly ventilated in simple partition proceedings where the creditors, should there be any, are
protected in any event.

Notes