Sheker vs. Estate of Sheker

Facts:

Alice Sheker died and her estate was left under the administration of Victoria Medina. Alice left a holographic will which was admitted to probate by the Regional Trial Court of Iligan City. The trial court issued an order for all creditors to file their claims against the estate. In compliance therewith, Alan Joseph Sheker filed a contingent money claim in the amount of P206,250.00 representing the amount of his commission as an agent for selling some properties for Alice; and another P275k as reimbursements for expenses he incurred.

Medina moved for the dismissal of Alan Sheker’s claim alleging among others that the money claim filed by Alan Sheker is void because the latter did not attach a certification of non-forum shopping thereto.

ISSUE: Whether or not the money claim filed by Alan Sheker is void.

HELD:

No. The Supreme Court emphasized that the certification of non-forum shopping is required only for complaints and other initiatory pleadings. In the case at bar, the probate proceeding was initiated NOT by Alan Sheker’s money claim but rather upon the filing of the petition for allowance of the Alice Sheker’s will. Under Sections 1 and 5, Rule 86 of the Rules of Court, after granting letters of testamentary or of administration, all persons having money claims against the decedent are mandated to file or notify the court and the estate administrator of their respective money claims; otherwise, they would be barred, subject to certain exceptions.

A money claim in a probate proceeding is like a creditor’s motion for claims which is to be recognized and taken into consideration in the proper disposition of the properties of the estate. And as a motion, its office is not to initiate new litigation, but to bring a material but incidental matter arising in the progress of the case in which the motion is filed. A motion is not an independent right or remedy, but is confined to incidental matters in the progress of a cause. It relates to some question that is collateral to the main object of the action and is connected with and dependent upon the principal remedy.

OSCAR D. RAMOS and LUZ AGUDO, vs. HON. COURT OF APPEALS, ADELAIDA RAMOS and LAZARO E. MENESES

Facts :

          Adelaida Ramos borrowed from her brother, Oscar Ramos, the amounts P5,000 and 9,000 in connection with her business transaction with Flor Ramiro, Fred Nabba and Atty. Ruperto sarandi involving the recovery of parcel of land. The amount was used to finance the trip to Hawaii of Ramiro, Nabba and Sarandi. As security of the loan, Adelaida Ramos (private respondent) execuded in favor of Oscar and Luz two deeds of conditional sale of her rights, shares and interests and participation respectively over lot no. 4033 registered in the name of their parents and lot no. 4221 covered by a certificate of title registered in the names of Socorro Ramos,Josefina Ramos and Adelaida Ramos, aid properties being of the cadastral survey.

          Upon the failure of Adelaida Ramos as vendor a retro to exercise her right of repurchase within the redemption, petitioners filed a petition for approval of the pacto de retro sale of lot no. 4221 in the CFI acting as a cadastral court. CFI conveyed the deed of the conditional sale to spouses Oscar and Luz by way of pacto de retro sale whatever right and interests Adelaida may have in lot no. 4033, approving the notarial register of notary public Sibal. The court also ordered the consolidation of ownership and dominion to spouses Oscar and Luz over the rights, shares and interests of Adelaida in lot no. 4221 which she sold to the spouses under a pacto de retro sale.

          Adelaida filed a civil case with the CFI for the declaration of nullity of orders, reformation of instrument, recovery of possession with preliminary injunction and damages. Adelaida alleged in her complaint that the deeds of conditional sale  are mere mortgages and were vitiated by misrepresentation, fraud and undue influence and the orders issued by the cadastral court were null and void for lack of jurisdiction. Petitioners, in their answer, specifically denied the allegations of fraud and misrepresentation and interposed as defense the fact that the conditional sales were voluntarily executed by Adelaida and truly expressed  the intention of the parties, that the action as long prescribed, the orders questioned approving the consolidation of ownershop of the lands where within the jurisdiction of the lower court in its capacity as a probate court and as a cadastral court; that the land subject of the conditional sales were in custodial egis in connection with the settlement of the properties of the late Denoga, the predecessor in interest of both petitioners and the private respondent.

          The RTC  denied the defendant’s motion to dismiss ,declared the loan transaction secured by the Real Estate Mortgage as equitable mortages. On appeal the CA affirmed the ruling of the RTC.

Issue : WON the transaction was deemed to be an equitable mortgage.

Held :

          Yes. Article 1602 of the Civil Code provides: The contract shall be presumed to be an equitable mortgage, in any of the following cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation. 

 In any of the foregoing cases, any money, fruits or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws.

The SC denied the petition and affirmed the CA ruling. The court ruled that in practically all of the so called contracts of sale with right of repurchase, the real intention of the parties is that the pretended purchase price is money loaned, and in order to secure the payment of the loan, a contract purporting to be sale with pacto de retro is drawn up. The provisions contained in articles 1859 and 1858 of the civil code which respectively prohibit the creditor from appropriating the things given in pledge or mortgage and ordering that said things be sold or alienated when the principal obligation becomes due, are circumvented.

          Furthermore, it is well known that the practice in these contracts of sale with pacto de retro is to draw up another contract purporting to be a lease of the property to the supposed vendor, who pays in the money, or in rent, and in fact rent is the interest on the money loaned The interest is usurious, thus the usury law is circumvented. The contract under consideration is preserved in the civil code, but with adequate safeguards and restrictions.

Testate Estate of Jose M. Valero, FLORA VALERO VDA. DE RODRIGUEZ and ROSIE VALERO DE GUTIERREZ,vs. COURT OF APPEALS and CARMEN VALERO-RUSTIA

Facts :

          Beatriz Bautista and Jose M. Valero, did not beget any child during their marriage In 1951 Beatriz adopted Carmen (Carmencita) Bautista. Jose wanted also to adopt her but because, by his first marriage, he had two children named Flora Valero Vda. de Rodriguez and Rosie Valero Gutierrez. he was disqualified to adopt Carmen. Jose manifested in the adoption proceeding that he consented to the use by Carmen of his surname Valero. On September 18, 1964, Jose M. Valero donated to Carmen B. Valero (who was already married to Doctor Sergio Rustia) his one-half proindiviso share (apparently his inchoate share) in two conjugal lots, with the improvements thereon, located at San Lorenzo Village, Makati, Rizal, with an area of 1,500 square meters. His wife, Beatriz, consented to the donation. However, the deed of donation was not registered. 

On January 13, 1966, Jose M. Valero, who was then seventy-three years old, executed his last will and testament wherein he enumerated the conjugal properties of himself and his wife, including the two San Lorenzo Village lots. In that will, he did not mention the donation. He devised to his wife properties sufficient to constitute her legitime and bequeathed the remainder to his two children, Mrs. Rodriguez and Mrs. Gutierrez. 

About a month later, or on February 15, 1966, the Valero spouses, by means of a deed of absolute sale, conveyed the San Lorenzo Village lots and the improvements thereon to Carmen B. Valero-Rustia for the sum of one hundred twenty thousand pesos. The sale was registered on the following day. Transfer Certificates of Title Nos. 163270 and 163271 were issued to the vendee, Mrs. Rustia. On December 4, 1967 she mortgaged the two lots to the Quezon City Development Bank as security for a loan of fifty thousand pesos.

Beatriz B. Valero died intestate on September 12, 1972, survived by her husband and her adopted child. Her estate is pending settlement in Special Proceeding in the CFI of Manila. Mrs. Rustia was named administratrix of her adopted mother's estate. More than a month later, or on October 18, 1972, Jose M. Valero died testate, survived by his two children, Mrs. Rodriguez and Mrs. Gutierrez. His will was duly probated in Special Proceeding also in the CFI of Manila. Lawyer Celso F. Unson, the executor, submitted an inventory wherein, following the list of conjugal assets in the testator's will, the two San Lorenzo Village lots were included as part of the testate estate. 

That inclusion provoked Mrs. Rustia, the adopted child of Mrs. Valero, and Mrs. Rodriguez and Mrs. Gutierrez, the legitimate children of the testator, Jose M. Valero, to file (through Mrs. Rustia's lawyer) in the testate proceeding a motion for the exclusion of the two San Lorenzo Village lots from the testator's inventoried estate. 

Adduced as reason for the exclusion is the fact that since February 16, 1966 Mrs. Rustia has been the registered owner of the lots as shown by two Torrens titles, copies of which were attached to the motion. 

The executor opposed the motion on the ground that the two lots were donated to Mrs. Rustia and the donation would allegedly involve collation and the donee's title to the lots. The executor revealed that he was informed by Mrs. Gutierrez and Mrs. Rodriguez (supposed movants) that the two lots should be included in the inventory. Thus, the issue of collation was prematurely raised.

The probate court in its order of August 9, 1973 excluded the two lots from the inventory of the testator's estate but with the understanding "that the same are subject to collation". 

Mrs. Rustia filed a motion for reconsideration. No one opposed that motion. At the hearing of that motion, Mrs. Rustia's lawyer apprised the court that the executor informed him over the phone that he was not opposing the motion.

The probate court in its order ruled that the two lots were unconditionally excluded from the inventory of Jose M. Valero's estate, meaning "that they are not subject to collation". That order is the bone of contention in this case.

Mrs. Rodriguez (without being joined by her sister, Mrs. Gutierrez) filed a motion for the reconsideration of the order of December 14, 1973. She alleged that the two San Lorenzo Village lots were really conveyed to Mrs. Rustia by way of donation because the consideration for the sale was allegedly only one-fifth of the true value of the lots. Mrs. Rodriguez further contended that the order of August 9, 1973 was final in character. 

In reply, Mrs. Rustia countered that the prior order was interlocutory and that in 1966 the true value of the two lots was around P120,000 and that their value increased considerably in 1973 or 1974. Moreover, the relatively low price of the sale could be attributed to the fact that Mrs. Rustia and her husband lived with the Valeros and were taking care of them. 

          The probate court denied the motion for reconsideration. Mrs. Rodriguez and Mrs. Gutierrez, in their petition for certiorari in the Court of Appeals, assailed the probate court's order declaring that the two lots were not subject to collation.

The Court of Appeals held that the order of exclusion was interlocutory and that it could be changed or modified at anytime during the course of the administration proceedings. 

It further held that it was immaterial whether the two lots were donated or sold to Mrs. Rustia as "a mere subterfuge to avoid payment of the donor's and donee's taxes". According to the Appellate Court, it was immaterial because under article 1061 of the Civil Code, only compulsory heirs are required to make collation for the determination of their legitimes and, under section 2, Rule 90 of the Rules of Court, only heirs are involved in questions as to advancement and Mrs. Rustia is not an heir of the testator, Jose M. Valero.

Issue : WON the properties are subject to collation.

Held :

No. The SC found that the proceedings have not yet reached the stage when the question of collation or advancement to an heir maybe raised and decided. The numerous debts of the decedents are still being paid. The net remainder of their conjugal estate has not yet been determined. No separate action has been brought by appellants (two sisters) to nullify Mrs. Rustia's Torrens titles to the disputed lots or to show that the sale was in reality a donation. proper to pass upon the question of collation and to decide whether Mrs. Rustia's titles to the disputed lots are questionable. The proceedings below have not reached the stage of partition and distribution when the legitimes of the compulsory heirs have to be determined.

CYNTHIA V. NITTSCHER, vs. DR. WERNER KARL JOHANN NITTSCHER (Deceased), ATTY. ROGELIO P. NOGALES and THE REGIONAL TRIAL COURT OF MAKATI

Facts :

          Dr. Werner Karl Johann Nittscher filed with the RTC of Makati City a petition for the probate of his holographic will and for the issuance of letters testamentary to herein respondent Atty. Rogelio P. Nogales. the probate court issued an order allowing the said holographic will. On September 26, 1994, Dr. Nittscher died. Hence, Atty. Nogales filed a petition for letters testamentary for the administration of the estate of the deceased. Dr. Nittscher’s surviving spouse Cynthia V. Nittscher, she moved for the dismissal of the said petition. However, the court petitioner’s motion to dismiss, and granted respondent’s petition for the issuance of letters testamentary. Motion for reconsideration denied for lack of merit. On appeal, the CA dismissed the case.
          Cynthia contends that Nogales petition lacked a certification against forum shopping. She adds, the RTC has no jurisdiction over the subject matter because Dr. Werner was allegedly not a resident of the Philippines.

Issue : WON Cynthia’s contentions are correct .

Held :

          No. Revised Circular No. 28-91 and Administrative Circular No. 04-94 of the Court require a certification against forum-shopping for all initiatory pleadings filed in court. However, in this case, the petition for the issuance of letters testamentary is not an initiatory pleading, but a mere continuation of the original petition for the probate of Dr. Nittscher’s will. Hence, respondent’s failure to include a certification against forum-shopping in his petition for the issuance of letters testamentary is not a ground for outright dismissal of the said petition. 

Section 1, Rule 73 of the Rules of Court provides:

SECTION 1. Where estate of deceased persons settled. – If the decedent is an inhabitant of the Philippines at the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First Instance (now Regional Trial Court) in the province in which he resides at the time of his death, and if he is an inhabitant of a foreign country, the Court of First Instance (now Regional Trial Court) of any province in which he had estate. … (Emphasis supplied.)

In this case, the RTC and the Court of Appeals are one in their finding that Dr. Nittscher was a resident of Las Piñas, Metro Manila at the time of his death.

Hence, applying the aforequoted rule, Dr. Nittscher correctly filed in the RTC of Makati City, which then covered Las Piñas, Metro Manila, the petition for the probate of his will and for the issuance of letters testamentary to respondent.

Furthermore, Dr. Nittscher asked for the allowance of his own will. In this connection, Section 4, Rule 76 of the Rules of Court states:

SEC. 4. Heirs, devisees, legatees, and executors to be notified by mail or personally. – …

If the testator asks for the allowance of his own will, notice shall be sent only to his compulsory heirs.

In this case, records show that petitioner, with whom Dr. Nittscher had no child, and Dr. Nittscher’s children from his previous marriage were all duly notified, by registered mail, of the probate proceedings. Petitioner even appeared in court to oppose respondent’s petition for the issuance of letters testamentary and she also filed a motion to dismiss the said petition. She likewise filed a motion for reconsideration of the issuance of the letters testamentary and of the denial of her motion to dismiss. We are convinced petitioner was accorded every opportunity to defend her cause. Therefore, petitioner’s allegation that she was denied due process in the probate proceedings is without basis.