G.R. No. 47764 . June 10, 1941.
IN THE MATTER OF THE INTESTATE ESTATE OF THE DECEASED ROSENDO SANTIAGO. FRANCISCO V. VILLARICA, petitioner and appellant, vs. CONCEPCION MANIKIS, respondent and appellee.

FACTS

On September 30, 1937, appellant Francisco V. Villarica, alleging to be a creditor of the deceased Rosendo Santiago, initiated intestate proceedings (Civil Case No. 7713) in the Court of First Instance of Nueva Ecija, as the heirs had not done so. At his recommendation, Amparo Santiago, the deceased’s daughter from a second marriage, was appointed judicial administratrix on November 16, 1937. On the same date, Jose Reus and Ramon Los were appointed Commissioners of Appraisal and Claims. In their session on January 8, 1938, the commissioners accepted and declared valid and binding the claims presented against the estate by appellant Villarica (for 1,022 cavans and 42 kilos of palay), Alejandro Memita, and Elisa Victoria viuda de Yangco. Twenty-one days later, on January 29, 1938, appellee Concepcion Manikis (the deceased’s granddaughter and only heir from a first marriage) filed a motion in the intestate proceedings seeking their dismissal. She alleged that a separate civil case (No. 51339) was pending before the Court of First Instance of Manila since May 19, 1937, entitled “Concepcion Manikis and Felix German, plaintiffs, vs. Amparo Santiago and Antonio de Guzman, defendants,” which sought the rescission of a partition agreement (memorandum) prepared and signed by the parties on March 9, 1937, and ratified on April 7 of the same year. She further alleged that the properties involved in the memorandum and the intestate proceedings were exactly the same. The Nueva Ecija court granted the administratrix, Amparo Santiago, thirty days to seek the dismissal of the Manila case, warning that if successful, it would deny Manikis’s motion; otherwise, it would dismiss the intestate proceedings. The Manila court refused to dismiss its case, believing it could coexist with the intestate proceedings. Consequently, on August 2, 1938, the Nueva Ecija court ordered the dismissal of the intestate estate proceedings. Villarica appealed this order after his motion for reconsideration was denied.

ISSUE

Whether the Court of First Instance of Nueva Ecija erred in dismissing the intestate proceedings of Rosendo Santiago.

RULING

Yes, the lower court erred in dismissing the intestate proceedings. The dismissal was improper as it would completely disregard the claims filed against the estate by the appellant and other creditors. While the two sole heirs (Concepcion Manikis and Amparo Santiago), both of age, could and did divide the estate extrajudicially, one of them (Manikis) repudiated their agreement to the extent of filing a court action for its rescission and nullity. Given this repudiation, creditors like the appellant, not knowing against which heir to direct their action to collect their credits, acted justly in instituting the intestate proceedings. It is also just that the appellant expects the decision of the Commissioners of Appraisal to have value and efficacy, as no appeal was taken from it. Article 596 of the Code of Civil Procedure ( Act No. 190 ), as amended by Act No. 2331 , which permits extrajudicial partition among heirs of age, does not grant an absolute privilege to partition at will. It is conditioned upon the deceased leaving no debts or obligations to satisfy. The article explicitly states that such partition is allowed only when the estate has no debts, or when all debts have been paid. Furthermore, as correctly held by the Court of First Instance of Manila in denying the motion to dismiss the civil case there, the two proceedings can coexist because the action in Manila (for rescission of contract) is of a different nature from that which gave rise to the institution of the intestate proceedings (liquidation and payment of debts). The fact that the two heirs agreed in their memorandum that Amparo Santiago would answer for all debts of the deceased does not alter this conclusion. Aside from the clear provision of the law, it remains to be seen and decided whether that memorandum—in whose execution the appellant did not participate—has binding force. Moreover, even granting it has such force, there is no sure guarantee that the appellant could collect his credit from the party who obligated herself to pay it. The appealed order is reversed, and costs are taxed against the appellee.