Atty. Pedro M. Ferrer -versusSps. Alfredo Diaz and Imelda Diaz G.R. No.

165300 April 23, 2010

Fact: The Diazes, represented by their daughter obtained from him a loan of P1, 118,228.00 which was secured by a Real Estate Mortgage Contract and a promissory note. P600,000 of which was obtained earlier wherein she executed a document an instrument entitled Waiver of Hereditary Rights and Interests Over a Real Property which basically states that she waives and repudiates her hereditary right over the still undivided property. The respondents in their answer presented a different version of the story. Comandante alleged that petitioner and his wife were her fellow members in the Couples for Christ Movement. Sometime in 1998, she sought the help of petitioner with regard to the mortgage with a bank of her parents lot located at No. 6, Rd. 20, Project 8, Quezon City and covered by TCT No. RT-6604. She also sought financial accommodations from the couple on several occasions which

totaled P500,000.00. Comandante, however, claimed that these loans were secured by chattel mortgages over her taxi units in addition to several postdated checks she issued in favor of petitioner.

As she could not practically comply with her obligation, petitioner and his wife, presented to Comandante sometime in May 1998 a document denominated as Waiver of Hereditary Rights and Interests Over a Real

Property (Still Undivided) pertaining to a waiver of her hereditary share over her parents abovementioned property. Purportedly, the execution of said waiver was to secure Comandantes loan with the couple which at that time had already ballooned to P600,000.00 due to interests. A year later, the couple again required Comandante to sign the following documents: (1) a Real Estate Mortgage Contract over her parents property; and, (2) an undated Promissory Note, both

corresponding to the amount of P1,118,228.00, which petitioner claimed to be the total amount of Comandantes monetary obligation to him exclusive of charges and interests. Comandante alleged that she reminded petitioner that she was not the registered owner of the subject property and that although her parents granted her SPA, same only pertains to her authority to mortgage the property to banks and other financial institutions and not to individuals. Petitioner nonetheless assured Comandante that the SPA was also applicable to their transaction. As Comandante was still hesitant, petitioner and his wife threatened to foreclose the formers taxi units and present the postdated checks she issued to the bank for payment. For fear of losing her taxi units which were the only source of her livelihood, Comandante was thus constrained to sign the mortgage agreement as well as the promissory note. Petitioner, however, did not furnish her with copies of said documents on the pretext that they still have to be notarized, but, as can be gleaned from the records, the documents were never notarized. Moreover, Comandante claimed that the SPA alluded to by petitioner in his complaint was not the same SPA under which she thought she derived the authority to execute the mortgage contract. Furthermore, she executed an Affidavit of

Repudiation/Revocation of Waiver of Hereditary Rights and Interests Over A (Still Undivided) Real Property, which she caused to be annotated on the title of the subject property with the Registry of Deeds of Quezon City on the same day. Interestingly, petitioner filed his complaint later that day too.

By way of special and affirmative defenses, Comandante asserted in her Answer to the amended complaint that said complaint states no cause of action against her because the Real Estate Mortgage Contract and the waiver referred to by petitioner in his complaint were not duly, knowingly and validly executed by her; that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) is a useless document as its execution is prohibited by Article 1347 of the Civil Code, hence, it cannot be the source of any right or obligation in petitioners favor; that the Real Estate Mortgage was of doubtful validity as she executed the same without valid authority from her parents; and, that the prayer for collection and/or judicial foreclosure was irregular as petitioner cannot seek said remedies at the same time.

RTC ruled in favor of the herein petitioner but was reversed by the court of appeals on the ground that Comandantes waiver of hereditary rights null and void. However, it found the Real Estate Mortgage executed by Comandante on behalf of her parents as binding between the parties thereto.

Issue: W/N waiver of hereditary rights in favor of another executed by a future heir while the parents are still living valid.

Held: No. Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases expressly authorized by law. For the inheritance to be considered future, the succession must not have been opened at the time of the contract. A contract may be classified as a contract upon future

inheritance, prohibited under the second paragraph of Article 1347, where the following requisites concur:

(1)

That the succession has not yet been opened.

(2)

That the object of the contract forms part of the inheritance; and,

(3)

That the promissor has, with respect to the object, an expectancy

of a right which is purely hereditary in nature.

In this case, there is no question that at the time of execution of Comandantes Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided), succession to either of her parents properties has not yet been opened since both of them are still living. With respect to the other two requisites, both are likewise present considering that the property subject matter of Comandantes waiver concededly forms part of the properties that she expect to inherit from her parents upon their death and, such expectancy of a right, as shown by the facts, is undoubtedly purely hereditary in nature. From the foregoing, it is clear that Comandante and petitioner entered into a contract involving the formers future inheritance as embodied in the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by her in petitioners favor.