**Facts:** This case involves a legal dispute arising from the extrajudicial settlement of the estate of the late Alfonso P. Orfinada, Jr., who died intestate on May 13, 1995. He left behind real and personal properties, a widow, Esperanza P. Orfinada, their seven children (respondents), a paramour, Teodora Rioferio, and their three children (petitioners). On June 29, 1995, Rioferio and her children executed an Extrajudicial Settlement of Estate of a Deceased Person with Quitclaim involving properties located in Dagupan City, which were subsequently mortgaged. Learning of this, the legal heirs (respondents) initiated a Complaint for Annulment/Rescission of the extrajudicial settlement in the Dagupan City RTC, while petitioners contended that the estate should be the complaining party, not the individual heirs.
The RTC denied petitioners’ motion to recognize the estate as the proper party to sue. The Court of Appeals affirmed this decision, leading to the present Petition for Review on Certiorari under Rule 45.
**Issues:**
1. Whether heirs have legal standing to sue for recovery of property of the estate pending the appointment of an administrator.
2. Whether the Court of Appeals erred in upholding the lower court’s recognition of the heirs as the proper parties to bring the suit.
**Court’s Decision:**
The Supreme Court denied the petition, affirming the appellate court’s decisions. It held:
1. Pending the filing of administrative proceedings, heirs have the legal personality to bring suit on behalf of the estate, grounded on Article 777 of the Civil Code. This right persists even if administration proceedings have commenced but no administrator has been appointed.
2. There exist three exceptions to the rule barring heirs from suing for recovery of estate property during administration proceedings: (a) if the executor or administrator is unwilling or refuses to sue; (b) if the administrator is alleged to have participated in the act complained of; and (c) when there is no appointed administrator, as was the case here. Thus, the heirs’ standing to sue was correctly recognized.
**Doctrine:**
The Court reiterated the doctrine that heirs have the legal standing to sue for the recovery of estate property during the pendency of administration proceedings in the absence of an appointed administrator, as well as under specific exceptions to general rule precluding such action.
**Class Notes:**
– Article 777 of the Civil Code states, “The rights to the succession are transmitted from the moment of the death of the decedent.”
– Exceptions to the rule barring heirs from suing for estate recovery include: the unwillingness of the executor/administrator to sue, participation of the administrator in the contested act, and absence of an appointed administrator.
– The legal principle here emphasizes the proactive role heirs may assume in defending the estate’s rights, particularly in administrations lacking prompt oversight.
**Historical Background:** This case illustrates the complexities involved in the settlement of intestate estates, highlighting issues of legal representation and standing in the context of extrajudicial settlements. It underscores the importance of judicial oversight to safeguard the rights of all parties involved, especially in situations where estates are left without a will or formal administration.
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