Gutierrez v. Barretto-Datu
REITERATIONFacts
The Antecedents: Maria Gerardo Vda. de Barretto leased fishpond lands to Ricardo M. Gutierrez for a term expiring May 1, 1947. In 1940, pursuant to a government decision, the dikes of the fishponds were opened, causing destruction and loss of fish, to the prejudice of the lessee. The lessor died in 1948, and her testate estate proceeding was opened. Procedural History: In 1956, Gutierrez filed a claim in the testate proceeding for P32,000.00 (advance rentals) and P60,000.00 (unrealized profits due to breach of contract). In July 1957, Gutierrez commenced an ordinary civil action against the executrix for the P60,000.00. In July 1957, Gutierrez amended his claim in the testate proceeding, withdrawing the P60,000.00 claim. The ordinary civil action proceeded, and after postponements, the trial court dismissed it for abandonment. The court later denied Gutierrez's motion for reconsideration, ruling that the claim should have been prosecuted in the testate proceeding. The Petition: Gutierrez appealed, questioning whether his claim for damages based on unrealized profits was a money claim against the estate within the purview of Rule 87, Section 5.
Issue(s)
Whether the claim for damages based on unrealized profits is a money claim against the estate of the deceased within the purview of Rule 87, Section 5 of the Rules of Court. Whether the ordinary civil action for damages was the proper remedy.
Ruling
The Supreme Court affirmed the orders of the Court of First Instance of Rizal dismissing the complaint and denying the motion for reconsideration. The claim for damages based on unrealized profits was deemed a money claim that should have been filed in the testate proceeding.
Ratio Decidendi
On the issue of whether the claim for damages based on unrealized profits is a money claim against the estate within the purview of Rule 87, Section 5: The Court held that the claim for damages based on unrealized profits, arising from a breach of contract by the deceased lessor, falls squarely under the definition of a "claim" as used in statutes requiring the presentation of claims against a decedent's estate. Such claims are generally construed to mean debts or demands of a pecuniary nature which could have been enforced against the deceased in his lifetime and reduced to money judgments. The claim in this case was founded on contract, specifically a breach thereof, and thus it must be presented in the testate proceeding. The Court cited authorities stating that upon all contracts by the decedent broken during his lifetime, the personal representative is answerable out of the assets. A claim for breach of a covenant in a deed of the decedent must be presented under statutes requiring such presentment of all claims grounded on contract. On the issue of whether the ordinary civil action for damages was the proper remedy: The Court clarified that the only actions that may be instituted against an executor or administrator are those to recover real or personal property from the estate, to enforce a lien thereon, or to recover damages for an injury to person or property. The instant suit, seeking recovery of damages for breach of contract, did not fall under these exceptions. Therefore, an ordinary civil action was not the proper remedy for a money claim that should have been filed in the testate proceeding.
Main Doctrine
A claim for damages based on unrealized profits arising from a breach of contract by a deceased lessor, which could have been enforced against the lessor during her lifetime, constitutes a money claim against the estate that must be filed in the testate proceeding under Rule 87, Section 5, and cannot be pursued through an ordinary civil action against the executrix.