FACTS:

A parcel of residential land was left behind by the late Paulina Vargas. A notarized Extra Judicial
Settlement Among Heirs was executed by and among the heirs, partitioning and adjudicating
unto themselves the lot in question and was published for 3 weeks. An Extra Judicial Settlement
Among Heirs with Sale was again executed by and among the same heirs over the same property
and also with the same sharings. Only 5 of the 9 heirs signed the document and their respective
shares were sold to Joseph Cua, petitioner herein. 
On November 15, 1994, an Extra Judicial Settlement Among Heirs with Sale 4 was again
executed by and among the same heirs over the same property and also with the same sharings.
Once more, only Ester, Visitacion, Juan, Zenaida and Rosario signed the document and their
respective shares totaling 55 square meters were sold to Joseph Cua, petitioner herein.
After knowing of such sale to petitioner, Gloria Vargas tried to redeem the property. When the
offer to redeem was refused, Gloria Vargas and her children filed a case for annulment of Extra
Judicial Settlement and Legal Redemption of the lot with the MTC.
The MTC dismissed the complaint, declaring the Deed of Extra Judicial Settlement Among Heirs
with Sale valid and binding.
The RTC affirmed the MTC decision.
The CA reversed the ruling of both lower courts, declaring that the Extra Judicial Settlement
Among Heirs and the Extra Judicial Settlement
Among Heirs with Sale were void and without any legal effect.
The CA held that, pursuant to Section 1, Rule 74 of the Rules of Court, the extrajudicial
settlement made by the other co-heirs is not binding upon respondents considering the latter
never participated in it nor did they ever signify their consent to the same
Respondents argue that said Extra Judicial Settlement cannot bind them for it was executed
without their consent and participation.
ISSUE/S: WON said Settlement would bind the respondents who did not give their consent?
HELD: No. It would not bind them. The Supreme Court gave the following reason. The
procedure outlined in Section 1 of Rule 74 is an ex parte proceeding. The rule plainly states,
however, that persons who do not participate or had no notice of an extrajudicial settlement will
not be bound thereby. It contemplates a notice that has been sent out or issued before any deed of
settlement and/or partition is agreed upon (i.e., a notice calling all interested parties to participate
in the said deed of extrajudicial settlement and partition), and not after such an agreement has
already been executed as what happened in the instant case with the publication of the first deed
of extrajudicial settlement among heirs.
The publication of the settlement does not constitute constructive notice to 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 creditors and was never intended to
deprive heirs of their lawful participation in the decedent’s estate.
The heirs who actually participated in the execution of the extrajudicial settlements, which
included the sale to petitioner of their pro indiviso shares in the subject property, are bound by
the same.
Respondents are given the right to redeem these shares pursuant to Article 1088 of the Civil
Code. The right to redeem was never lost because respondents were never notified in writing of
the actual sale by their co-heirs. Based on the provision, there is a need for written notice to start
the period of redemption, thus.
Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-
heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they were notified in writing of the sale
by the vendor.
Considering, therefore, that respondents’ co-heirs failed to comply with this requirement, there is no legal
impediment to allowing respondents to redeem the shares sold to petitioner.

Pereira vs CA
The petitioner asks this court to declare that the properties specified do not belong to the estate of
the deceases. The facts of the case.
Andres De guzman Pereira, an employee of the Philippine Air Lines, passed away 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. 

Rita instituted for the issuance of letters of administration in her favor pertaining to the estate of
the deceased Andres de Guzman Pereira and 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.

Victoria filed her opposition and motion to dismiss the petition of private respondent 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. 
The RTC appointed Rita as adminiztratrix of the estate of decease upon a bond posted by her and
ordered her totake custody of all the real and personal properties of deceased and file an
inventory within 3months after receipt.

Victoria brought the case to CA, but the CA affirmed the appointment.

Hence, this petition.

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 

HELD:

1. The court cannot order an unqualified and final exclusion or non-exclusion of the
property involved from the estate of the deceased.

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. 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 

2. NO, 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.

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. It has been uniformly held that in such case the judicial
administration and the appointment of an administrator are superfluous and unnecessary
proceedings.

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.

therefore, the court ruled that 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.

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. 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 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.

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, 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.