IN RE INTESTATE ESTATE OF THE LATE PIO DURAN, CIPRIANO DURAN AND MIGUEL DURAN, PETITIONERS AND APPELLANTS, VS. JOSEFINA B. DURAN, MOVANT-OPPOSITOR AND APPELLEE.

Duran versus Duran

The Case

This is the case In re Intestate Estate of the Late Pio Duran, decided by the Supreme Court in June 1967. Cipriano Duran and Miguel Duran, brothers of the deceased, appeal from an order dismissing their petition to settle the estate of Pio Duran. The opposing party is Josefina Duran, who claims to be the surviving spouse. The case matters because it fixes who counts as an interested person entitled to commence settlement proceedings, and it draws a sharp line between an assignment made while a settlement court already holds the estate and one made before any proceedings exist.

Procedural History

Cipriano Duran filed a petition for intestate proceedings in the Court of First Instance of Albay, asking to be named administrator, and separately moved to be appointed special administrator. Josefina Duran opposed, moving to dismiss on the ground that Cipriano was no longer an interested person, and alternatively asking to be appointed administratrix. Miguel Duran then filed a petition to be joined as co-petitioner. On June 5, 1964, the trial court issued an order dismissing Cipriano's petition for lack of interest, holding that it had no power in those proceedings to examine, collaterally, the alleged fraud, inadequacy of price and lesion in the deed. Miguel's petition was deemed without leg to stand on. Cipriano and Miguel appealed directly to the Supreme Court on questions of law.

Facts

Pio Duran died without a will on February 28, 1961, in Guinobatan, Albay. Among his alleged heirs were Josefina Duran, as surviving spouse, several brothers and sisters, and nephews and nieces.

On June 2, 1962, Cipriano Duran, a surviving brother, executed a public instrument assigning and renouncing his hereditary rights to the estate in favor of Josefina Duran, for the consideration of 2,500 pesos.

A year later, on June 8, 1963, Cipriano filed a petition for intestate proceedings and asked to be administrator. Josefina opposed, invoking the deed of transfer and renunciation. Cipriano replied that Josefina was not the decedent's wife, and that the deed was procured through fraud, with gross inadequacy of price, and vitiated by lesion. Miguel then sought to join as co-petitioner, and Josefina moved to strike that petition out.

Issues

• Whether or not Cipriano Duran remained an interested person entitled to petition for settlement after executing the deed of assignment and renunciation in favor of Josefina Duran.
• Whether or not the trial court could examine, collaterally, the alleged fraud, inadequacy of price and lesion in that deed within the settlement proceedings.
• Whether or not Miguel Duran's petition to be joined as co-petitioner could be allowed.
• Whether or not Josefina Duran's alternative prayer to be appointed administratrix amounted to a ratification of the petition for settlement.

Applicable Provisions

Section 2 of Rule 79 of the Rules of Court provides:

Section 2. Petition for administration of estate of deceased person. A petition for the administration of the estate of a deceased person shall be filed in the Court of First Instance of the province in which the deceased resided at the time of his death, by an interested person, and shall contain, so far as known to the petitioner, the names, ages, and residences of the heirs and creditors of the deceased, and the probable value and character of the property of the estate.

This is the provision that supplies the standing requirement, and the whole appeal turns on whether Cipriano still satisfies the phrase interested person.

Section 1 of Rule 74 of the Rules of Court is discussed by the Court in connection with extrajudicial partition:

Section 1. Extrajudicial settlement by agreement between heirs. If the decedent left no will and no debts and the heirs and legatees are all of age, or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the parties may, without securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do so in an ordinary action of partition.

The Court holds that these requisites are for the purpose of binding creditors and non-participating heirs only, so that an extrajudicial partition remains valid as between the participants even if they are not followed.

Ruling

On the first issue, the Court ruled against Cipriano. He relied on the Santos case, where an assignment between co-heirs was made during settlement proceedings already validly commenced, so that the settlement court had jurisdiction and its approval was required, leaving the assigning heir interested until the estate was closed. The Court distinguished that situation: here the assignment took place when no settlement proceeding was pending, and the properties were not under any settlement court's jurisdiction. Allowing that the assignment must be deemed a partition between assignor and assignee, it needed no court approval to be effective between the parties. The Court said:

An extrajudicial partition is valid as between the participants even if the requisites of Section 1, Rule 74 for extrajudicial partition are not followed, since said requisites are for purposes of binding creditors and non-participating heirs only.

On the second issue, the remedy for fraud, lesion or inadequacy of price is to rescind or annul the deed in an action for that purpose. Until then, the deed is deemed valid and effective against the assignor, who is left without the interest required to petition for settlement.

On the third issue, Miguel's petition adopted all the allegations of Cipriano's petition and therefore amounted to a petition to intervene. Since there was really no settlement proceeding in the first place, the petition to intervene had to be denied.

On the fourth issue, Josefina's prayer to be appointed administratrix did not ratify the petition, because she made it merely by way of an alternative prayer should her motion to dismiss fail. The dismissal was properly sustained.

Doctrine

An heir who assigns and renounces his hereditary share before any settlement proceedings are commenced ceases to be an interested person under Section 2 of Rule 79, and cannot initiate settlement proceedings until the deed is annulled or rescinded in a separate action. The assignee, not the assignor, holds the interest. An extrajudicial partition is valid between the participants even without complying with Section 1 of Rule 74, because those requisites exist to bind creditors and non-participating heirs. Collateral attacks on the deed for fraud, lesion or inadequacy of price are not entertained in the settlement proceedings. A petition that adopts all the allegations of the main petition is a petition to intervene, and it fails where no settlement proceeding validly exists. An alternative prayer for appointment as administratrix does not ratify a defective petition.

Disposition

The Supreme Court affirmed the dismissal order, with costs against the appellants.

Remember This

Memorize the line: until the deed of assignment is annulled or rescinded, it is deemed valid and effective against the assigning heir, who is left without the interest required to petition for settlement. Examiners use this case to test the interested person requirement under Rule 79 and the distinction between an assignment made before, and one made during, settlement proceedings.