G.R. No. L-17175; July 31, 1962
RICARDO M. GUTIERREZ, plaintiff-appellant, vs. LUCIA MILAGROS BARRETTO-DATU, Executrix of the Testate Estate of the deceased MARIA GERARDO VDA. DE BARRETTO, defendant-appellee.

FACTS

Ricardo M. Gutierrez leased fishpond lands from Maria Gerardo Vda. de Barretto in 1940. In 1941, government authorities ordered the dikes opened, destroying the fishponds and causing Gutierrez significant loss. He alleged this constituted a breach of the lessor’s warranty against government claims over the property. After the lessor’s death in 1948, Gutierrez filed a claim in her testate estate proceeding in 1956. This claim included P32,000 for advance rental refund and P60,000 for damages representing unrealized profits due to the alleged breach.
In 1957, Gutierrez withdrew the P60,000 damage claim from the estate proceedings and instead filed a separate ordinary civil action against the estate’s executrix to recover that same amount. The trial court initially dismissed this separate action for alleged abandonment by the parties. Upon Gutierrez’s motion for reconsideration, the court denied it on a substantive ground: it ruled that the claim should have been prosecuted exclusively within the testate proceeding and could not be pursued by an independent suit.

ISSUE

Whether a claim for damages based on unrealized profits, arising from an alleged breach of contract by the decedent during her lifetime, is a money claim that must be filed in the testate estate proceedings under Rule 87, Section 5 of the Rules of Court, barring its pursuit via an ordinary civil action.

RULING

Yes. The Supreme Court affirmed the dismissal of the ordinary civil action. The legal logic is anchored on the mandatory nature of the claims filing procedure under Rule 87, Section 5. This rule requires all claims for money against the decedent arising from contract, whether due, not due, or contingent, to be filed within the time limit set in the notice to creditors; otherwise, they are barred forever.
The Court construed the term “claims” in this context to mean debts or demands of a pecuniary nature that could have been enforced against the deceased in her lifetime and reduced to a simple money judgment. Gutierrez’s claim for P60,000 in damages, founded on an alleged breach of a contractual warranty by the decedent, falls squarely within this definition. It is a claim arising from a contract broken during the decedent’s lifetime, for which her personal representative is answerable from the estate assets.
The Court distinguished the case from Gavin v. Melliza, cited by appellant, where the claim was based on a breach committed by the executrix herself after the decedent’s death, which is not a claim against the decedent’s estate. Here, the breach was allegedly committed by the decedent. The Court also noted that independent suits against an executor or administrator are limited to actions to recover property, enforce a lien thereon, or recover damages for an injury to person or property. A claim for contractual breach damages is not among these exceptions. Therefore, Gutierrez’s proper remedy was to prosecute his claim within the estate proceedings, and his withdrawal of the claim therefrom and filing of a separate action was procedurally fatal.