RICARDO M. GUTIERREZ, PLAINTIFF AND APPELLANT, VS. LUCIA MILAGROS BARRETO DATU, EXECUTRIX OF THE TESTATE ESTATE OF THE DECEASED MARIA GERARDO VDA. DE BARRETO, DEFENDANT AND APPL…

Ricardo M. Gutierrez appeals from the orders of the Court of First
Instance of Rizal (1) dismissing his complaint against Lucia Milagros
Barreto-Datu, as executrix of the estate of the deceased Maria Gerardo
Vda. de Barreto, and (2) denying his motion for reconsideration of the
dismissal.

The relevant facts alleged by appellant are as follows: In 1940
Maria Gerardo Vda. de Barreto, owner of 371 hectares of fishpond lands
in Pampanga, leased the same to appellant Gutierrez for a term to
expire on May 1, 1947. On November 1, 1941, pursuant to a decision of
the Department of Public Works rendered after due investigation, the
dikes of the fishponds were opened at several points, resulting in
their destruction and in the loss of great quantities of fish inside,
to the damage and prejudice of the lessee.

In 1956, the lessor having died in 1948 and the corresponding
testate proceeding to settle her estate having been opened (Sp, Proc.
No. 5002, C.F.I., Manila), Gutierrez filed a claim therein for two
items: first, for the sum of P32,000.00 representing advance rentals he
had paid to the decedent (the possession of the leased property, it is
alleged, having ten returned to her after the opening of the dikes
ordered by the government); and second, for the sum of P60,000.00 as
damages in the concept of unearned profits, that is, profits which the
claimant failed to realize because of the breach of the lease contract
allegedly committed by the lessor.

On June 7, 1957 appellant commenced the instant ordinary civil
action in the Court of First Instance of Rizal (Quezon City branch)
against the executrix of the testate estate for the recovery of the
same amount of P60,000.00 referred to as the second item claimed in the
administration proceeding. The complaint specifically charges the
decedent Maria Gerardo Vda. de Barreto, as lessor, with having violated
a warranty in the lease contract against any damages the lessee might
suffer by reason of the claim of the government that several rivers and
creeks of the public domain, were included in the fishponds.

In July 1957 appellant amended his claim in the testate proceeding
by withdrawing therefrom the item of F60,000.00, leaving only the one
for refund of advance rentals in the sum of P32,000.00.

After the issues were joined in the present case with the filing of
the defendant’s answer, together with a counterclaim, and after two
postponements of the trial were granted, the second of which was in
January 1958, the court dismissed the action for abandonment by both
parties in an order dated July 31, 1959. Appellant moved to reconsider;
appellee opposed the motion; and after considerable written argument
the court, on March 7, 1960, denied the motion for reconsideration on
the ground that the claim should have been prosecuted in the testate
proceeding and not by ordinary civil action.

Appellant submits his case on this lone legal question: whether or
not his claim for damages based on unrealized profits is a money claim
against the estate of the deceased Maria Gerardo vda. de Barreto within
the purview of Rule 87, Section 5. This section states:

“Sec. 5. Claims which must be filed under the
notice. If not filed, barred; exception.— All claims for money against
the decedent, arising from contract, express or implied, whether the
same be due, not due, or contingent, all claims for funeral expenses
and expenses of the last sickness of the decedent, and judgment for
money against the decedent, must be filed within the time limited in
the notice; otherwise they are barred forever, except that they may be
set forth as counterclaims in any action that the executor or
administrator may bring against the claimants. Where an executor or
administrator commences an action, or prosecutes an action already
commenced by the deceased in his lifetime, the debtor may set forth by
answer the claims he has against the decedent, instead of presenting
them independently to the court as herein provided, and mutual claims
may be set off against each other in such action; and if final judgment
is rendered in favor of the defendant, the amount so determined shall
be considered the true balance against the estate, as though the claim
had been presented directly before the court in the administration
proceedings. Claims not yet due, or contingent, may be approved at
their present value.”

The word “claims” as used in statutes requiring the presentation of
claims against a decedent’s estate is generally construed to mean debts
or demands of a pecuniary nature which could have been enforced against
the deceased in his lifetime and could have been reduced to simple
money judgments; and among these are those founded upon contract. 21
Am. Jur. 579. The claim in this case is based on contract—specifically,
on a breach thereof. It falls squarely under section 5 of Rule 87.

“Upon all contracts by the decedent broken during his lifetime, even
though they were personal to the decedent in liability, the personal
representative is answerable for the breach out of the assets.” 3
Schouler on Wills, Executors and Administrators, 6th Ed., 2395. A claim
for breach of a covenant in a deed of the decedent must be presented
under a statute requiring such presentment of all claims grounded on
contract. Id 2461; Clayton vs. Dinwoody, 93 P. 723; James vs. Corvin, 51 P. 2nd 689.^[1]

The only actions that may be instituted against the executor or
administrator are those to recover real or personal property from the
estate, or to enforce a lien thereon, and actions to recover damages
for an injury to person or property, real or personal. Rule 88, section
1. The instant suit is not one of them.

Appellant invokes Gavin vs. Melliza, 84 Phil., 794, in
support of his contention that this action is proper against the
executrix. The citation is not in point. The claim therein, which was
filed in the testate proceeding, was based upon a breach of contract
committed by the executrix herself, in dismissing the claimant as
administrator of the hacienda of the deceased. While the
contract was with the decedent, its violation was by the executrix and
hence personal to her. Besides, the claim was for indemnity in the form
of a certain quantity of palay every year for the unexpired
portion of the term of the contract. The denial of the claim was
affirmed by this Court on the grounds that it was not a money claim and
that it arose after the decedent’s demise, placing it outside the scope
of Rule 87, Section 5.

The orders appealed from are affirmed, with costs against appellant.

Bengzon, C.J., Labrador, Conception, Barrera, Paredes, Dizon, and Regala, JJ., concur.

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^[1] Plaintiff’s claim
arose from a breach of a covenant in the deed. It is very clearly
expressed by the statute that all claims arising on contracts whether
due, not due, or contingent, must be presented. The only exception made
by the statute is that a mortgage or lien “against the property of the
estate subject thereto” may be enforced without first presenting a
claim to the executor or administrator “where all recourse against any
other property of the estate is expressly waived in the complaint.” But
this was not an action to enforce a lien. It was not one seeking to
have the claim satisfied out of specific property of the estate, or to
subject any particular property of the estate to the satisfaction
thereof. Clayton vs. Dinwoody, 93 P. 723.

The claim for damages for the unexpired portion of the lease is not
an obligation incurred by the administratrix in the course of her
administration of the estate. It arises out of a contractual obligation
incurred by Louis Johnson and is governed by the statute of non-claim.
By the terms of the lease, he obligated himself, his heirs, executors,
administrators and assigns to pay $4,860 for the premises for a term of
five years, covering the time involved in this action. A claim for
damages for a breach of that contract arises out of that obligation
requiring as pre-requisite to a suit thereon, that the claim be served
on the administratrix and filed with the clerk of court. James vs. Corvin,51 P (2d) 689.