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ATTY. PEDRO M. FERRER v. SPS. ALFREDO DIAZ

FACTS:

The respondents, Spouses Diaz and Comandante, obtained a loan from petitioner Atty. Ferrer. The loan was secured by a Real Estate Mortgage Contract and a Promissory Note. Comandante also executed a Waiver of Hereditary Rights and Interests Over a Real Property as part of the loan transaction. Atty. Ferrer then caused an adverse claim to be annotated on the title of the property covered by the waiver. However, the respondents failed to pay the loan and dishonored the checks issued as payment. As a result, Atty. Ferrer filed a complaint for collection of sum of money against the respondents. Amendments were made to the complaint, including the inclusion of the Spouses Pangan as additional defendants as they were the subsequent owners of the mortgaged property.

One version of the facts is that Comandante was pressured into signing the mortgage agreement and promissory note by Atty. Ferrer and his wife. She feared losing her taxi units and livelihood. Comandante argued that the documents were not duly, knowingly, and validly executed by her. She also claimed that the Waiver of Hereditary Rights and Interests Over a Real Property is null and void. The Diazes denied executing any SPA authorizing Comandante to mortgage the property. The Pangans alleged that they purchased the property from the Diazes through Comandante, who had an SPA acknowledged before the Consul of New York. They argued that petitioner's adverse claim and the waiver document could not impair their ownership rights because the waiver is null and void.

The petitioner filed a Motion for Summary Judgment, claiming that his adverse claim is based on a Waiver of Hereditary Rights and Interests and a Real Estate Mortgage executed by one of the respondents. The respondents opposed the motion, arguing that the documents were defective and that the adverse claim is frivolous and non-registrable. The trial court granted the petitioner's motion and rendered a Summary Judgment in his favor. The respondents appealed the decision to the Court of Appeals. The CA modified the summary judgment, excluding one set of respondents from being held liable, but affirmed the decision in all other respects. The petitioner's motion for reconsideration was denied, prompting him to file a petition for review on certiorari before the Supreme Court.

ISSUES:

  1. Is Comandante's waiver of hereditary rights valid?

  2. Is petitioner's adverse claim based on the waiver valid and effective?

  3. Whether the trial court properly ruled on the validity and effectivity of petitioner's adverse claim without conducting a hearing.

  4. Whether the Waiver of Hereditary Rights and Interest Over a Real Property executed by Comandante is null and void.

  5. Whether petitioner's adverse claim is valid and registrable.

  6. Whether summary judgment was proper in this case.

  7. Whether there are genuine issues of fact that need to be resolved.

  8. Whether the Diazes are obligated to the petitioner or if the obligation is solely a personal obligation of Comandante.

  9. Whether the amount of P1,118,228.00 as shown in the Real Estate Mortgage and the Promissory Note is the actual amount due to the petitioner.

RULING:

  1. The court ruled that the petition lacks merit. The petitioner's contentions were deemed untenable. The court emphasized that the petitioner's adverse claim was based solely on the waiver of hereditary interest executed by Comandante. There was no basis for the petitioner's assertion that the adverse claim was also anchored on the mortgage contract allegedly executed by Comandante on behalf of her parents. Furthermore, the validity of petitioner's adverse claim should have been determined by the trial court after the petition for cancellation of petitioner's adverse claim filed by Comandante was consolidated with Civil Case No. Q-99-38876. Accordingly, the court found no merit in the petitioner's arguments and affirmed the trial court's ruling.

  2. The trial court erred in ruling on the validity and effectivity of petitioner's adverse claim without conducting a hearing. The court should have ordered an immediate hearing upon petition of an interested party to determine the validity or efficaciousness of an adverse claim. The registration of the adverse claim may only be cancelled if it is found to be unmeritorious.

  3. The Waiver of Hereditary Rights and Interest Over a Real Property executed by Comandante is null and void. Pursuant to Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases expressly authorized by law. The waiver in question involves Comandante's future inheritance from her parents, which has not yet been opened at the time of the contract. This makes the waiver void for being violative of Article 1347.

  4. Petitioner's adverse claim is not valid and registrable. As no right or interest on the subject property flows from the invalid waiver of hereditary rights, petitioner is not entitled to the registration of his adverse claim.

  5. Summary judgment was not proper in this case because there are genuine issues of fact that need to be resolved. The Court held that summary judgment can only be granted when there are no genuine issues of fact to be tried. A genuine issue is one that requires the presentation of evidence and is not sham, fictitious, contrived, or false. In this case, there are variances in the allegations of the parties regarding the validity and execution of the documents involved. The existence of genuine issues removes the case from the coverage of summary judgment.

  6. The case is remanded to the trial court for further proceedings and proper disposition according to a regular trial on the merits. The trial court's issuance of a summary judgment is deemed inappropriate as there are genuine issues that require the presentation of evidence. The trial court should have conducted a full-blown trial to determine the validity and due execution of the relevant documents and the actual amount due to the petitioner.

PRINCIPLES:

  • An adverse claim is effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition by the party in interest.

  • The validity of an adverse claim shall be determined by the court upon the filing of a petition for cancellation. The court will grant a speedy hearing upon the question of validity and render a judgment based on what is just and equitable.

  • The court has the discretion to fine a claimant if it finds that the adverse claim registered was frivolous.

  • The validity or efficaciousness of an adverse claim may only be determined by the court upon petition by an interested party, with an immediate hearing to be conducted. The court shall make the proper adjudication based on justice and equity. The registration of the adverse claim may only be cancelled if found unmeritorious.

  • No contract may be entered into upon a future inheritance except in cases expressly authorized by law. A contract may be classified as a contract upon future inheritance if the succession has not yet been opened, the object of the contract forms part of the inheritance, and the promissor has an expectancy of a right which is purely hereditary in nature.

  • A waiver of hereditary rights and interest over a real property that involves a future inheritance is null and void for being violative of Article 1347 of the Civil Code.

  • To be valid and registrable, an adverse claim must arise subsequent to registration and the claimant must have a right or interest in the registered land adverse to the registered owner.

  • Summary judgment is a procedural device used to avoid long drawn out litigations and unnecessary delays.

  • Summary judgment can only be granted when there are no genuine issues of fact to be tried and the court can decide the case summarily by applying the law to the material facts.

  • A genuine issue is one that requires the presentation of evidence and is not sham, fictitious, contrived, or false.

  • Trial courts have limited authority to render summary judgments and should refrain from doing so when there are disputed or contested facts.

  • Summary judgments can only be issued if there is clearly no genuine issue as to any material fact.

  • If the facts as pleaded by the parties are disputed or contested, summary judgment cannot be used in place of a trial.