Rule 74 Sec.1 Rules Of Court 433f1g

RULE 74 Summary Settlement of Estate GENERAL RULE: If a person dies, his estate is submitted to a judicial settlement proceeding. EXCEPTION: The heirs may resort to: 1. Extrajudicial settlement of estate; or 2. Summary settlement of estate – must be conducted in accordance with regular procedure NOT under rules of summary procedure. (Regalado)  In these exceptions an or executor need not be appointed. EXTRAJUDICIAL SETTLEMENT AGREEMENT BETWEEN HEIRS (Sec.1)

BY

Requisites: A. Substantive 1. The decedent left a) no will b) no debts 2. The heirs are all of age or the minors are represented by their judicial or legal representatives duly authorized for the purpose B. Procedural 1. Division of estate must be in a PUBLIC INSTRUMENT or by AFFIDAVIT of ADJUDICATION in the case of a sole heir. 2. Filed with proper Registry of Deeds 3. Publication of notice of the fact of extrajudicial settlement once a week for 3 CONSECUTIVE WEEKS. 4. Bond filed equivalent to the value of PERSONAL property.  The bond is required only when personalty is involved or the real estate is subject to a lien in favor of creditors, heirs or other persons for the full period of 2 years from such distribution and such lien cannot be substituted by a bond.  The bond is the value of the personal property certified by the parties under oath and CONDITIONED upon payment of just claims filed under Sec. 4, Rule 74. BOND 1. equivalent to the value of personal property 2. certified by parties under oath by an affidavit 3. conditioned upon the payment of just claims filed under Sec. 4. If they cannot agree to the manner of partition among themselves, they may resort to Ordinary Action of Partition.

If despite the institution of such action they subsequently arrived at an agreement, they may enter into the corresponding stipulation and the same with the of Deeds. (Regalado) Is a Public Instrument necessary for the validity of an extrajudicial settlement? NO. Private instrument/document or Oral agreement of partition is valid among the heirs who participated in the extrajudicial settlement. The requirement under Sec. 1, Rule 74 that it must be in public instrument is NOT constitutive of the validity but is merely evidentiary in nature. (Hernandez vs Andal) However, Reformation (Regalado) EXTRAJUDICIAL SETTLEMENT No court intervention value of the estate immaterial allowed only in intestate succession there must be no outstanding debts of the estate at the time of settlement resorted at the instance and by agreement of ALL heirs

amount of bond is equal to the value of personal property

may

be

compelled.

JUDICIAL SETLLEMENT requires summary judicial adjudication gross estate must not exceed P10T allowed in both testate and intestate available even if there are debts; it is the court which will make provision for its payment May be instituted by ANY INTERESTED PARTY even a creditor of the estate without the consent of all heirs bond to be determined by the court

While the Rules provide that the decedent must not have left any debts, it is sufficient if any debts he may have left have been paid at the time of the extrajudicial settlement is entered into. (Guico vs. Bautista, 110 Phil 584) DISPUTABLE PRESUMPTION DECEDENT LEFT NO DEBTS

THAT

If no creditor files a petition for letters of istration within 2 years after the death of the decedent.