DOLORES B. GUICO, ET AL., PLAINTIFFS AND APPELLANTS VS. PABLO G. BAUTISTA, ET AL., DEFENDANTS AND APPELLEES.

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 grand-children 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 donate any properties to her grandchildren, the plantiffs, with the
exception of Dolores B. Guico; that the deeds of donation aforesaid 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 the security of its creditors.

We are inclined to hold with 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 tiie partition of the estate of a
deceased person by the heirs, extrajudicially or through an ordinary action for
partition, 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 where 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 creditors1 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 proceedings
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’ claims
are only extinguished by the expiration of the period of 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 proceedings sought to be
avoided, and he may properly object to an action for partition on 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 said debts would be paid.

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 a special proceeding, because even before the known debts of
the estate are settled and paid and pending the expiration of the period 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.

Order affirmed.