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[G.R. No. 116909. February 25, 1999]
RUIZ vs. CA
FACTS: Respondent Pedro V. Garcia engaged the
legal services of herein petitioners, Attys. Vivencio M.
Ruiz and Emilio D. Castellanes, and an Agreement
denominated as a Contract of Retainership. Pablo V.
Garcia unilaterally terminated the said Contract of
Retainership on the alleged ground that the
petitioners, his lawyers, failed to settle amicably his
differences with V. C. Ponce Co., Inc. Petitioners were
paid attorney’s fees up to the month of July, 1982.
Thereafter, the petitioners Ruiz and Castellanes
manifested their withdrawal as counsel for Pedro V.
Garcia and moved that their attorney’s lien be put on
record, in the cases involved. Such motion was
granted by the trial court.
Petitioners Ruiz and Castellanes brought their action
“For Collection of Sum of Money and for Specific
Performance”, before RTC Makati City. While the said
case was pending before the said lower court of origin,
Pedro V. Garcia died. And so, after notifying the trial
court of the demise of their client, counsel moved for
the dismissal of the case, invoking Section 21, Rule 3
of the Rules of Court. RTC issued an Order
dismissing petitioners’ complaint. On appeal, CA
affirmed.
ISSUE: Whether or not the case at bar has survived
the death of the private respondent, Pedro V. Garcia.
RULING: To determine whether the action survives or
not, the Court ruling in Bonilla vs. Barcena (71 SCRA
491) comes to the fore, thus:
“The question as to whether an action survives or
not depends on the nature of the action and the
damage sued for (Iron Gate Bank vs. Brady, 184
U.S. 665, 22 SCT, 46 L.ed 739). In the cause of
action which survive, the wrong complained
affects primarily and principally property and
property rights, the injuries to the person being
merely incidental, while in the causes of action
which do not survive, the injury complained of is to
the person, the property and rights of property
affected being incidental xxx..”
The core of petitioners’ argument is that action should
not be dismissed since their complaint involves not just
monetary claim but also real properties, as well.
Petitioners’ contention is untenable. While they
maintain that what they are claiming include real
properties, their Complaint is captioned as “For
Collection of Money and for Specific Performance.”
Danniel Ancheta Page 1 of 16
Obviously, the petitioners themselves, who are lawyers,
believed that their cause of action against the private
respondent is in the nature of actio in personam.
“Actio in personam is a personal action seeking redress
against a particular person. Personal actions are such
whereby a man claims a debt, or personal duty, or
damages in lieu thereof.” In the present case, petitioners
seek to recover attorney’s fees from private respondent for
professional services they rendered to the latter.
Attorney’s fee is basically a compensation. In its ordinary
sense, “the term (compensation) applies not only to
salaries, but to compensation by fees for specific service.”
Viewed in proper perspective, an action to recover
attorney’s fees is basically a monetary claim, which under
Section 21, Rule 3 of B.P. 129 is an action that does not
survive. Such is the fate of Civil Case No. 6465.
Petitioners theorize that the inclusion of real properties as
part of the attorney’s fees private respondent owe them,
converted the action into one that survives or at the very
least, split the action into one that did not survive, with
respect to the monetary obligation, and which survived,
with respect to the real properties of the deceased.
In Harden vs. Harden, 20 SCRA 706, the Court ruled that
an action for the satisfaction of attorney’s fees is founded
on a personal obligation which does not survive the
death of the defendant before adjudication.
As enunciated in Bonila, the litmus test in determining
what action survives and what does not depends on the
nature of the action and not on the object or kind of
property sought to be recovered. All things studiedly
considered, we are of the opinion, and, so hold, that the
respondent Court of Appeals erred not in affirming the
decision of the court a quo.
[G.R. No. 122947. July 22, 1999]
BALUYOT vs. CA
FACTS: Petitioners filed a complaint for specific
performance and damages against private respondent
University of the Philippines before the RTC QC. The
complaint was later on amended to include private
respondent Quezon City government as defendant.
Herein petitioners and their ascendants have been in
open, peaceful, adverse and continuous possession in the
concept of an owner since memory can no longer recall of
that parcel of riceland (now Diliman, Quezon City); U.P.
Board of Regents approved the donation of about 9.2
hectares of the site, directly to the residents of Brgy. Krus
Na Ligas; Notwithstanding the willingness of U.P. to
proceed with the donation, Execution of the legal
instrument to formalize it failed because of the
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unreasonable demand of the residents for an area
bigger than 15.8 hectares.”
That upon advise of counsel and close study of the
said offer of defendant UP to donate 15.8379
hectares, plaintiff Association proposed to accept and
the defendant UP manifested in writing [its] consent to
the intended donation directly to the plaintiff
Association for the benefit of the bonafide residents of
Barrio Cruz-na-Ligas and plaintiffs’ Association have
agreed to comply with the terms and conditions of the
donation;
UP backed-out from the arrangement to donate
directly to the plaintiff Association for the benefit of the
qualified residents and high-handedly resumed to
negotiate the donation thru the defendant Quezon City
Government under the terms disadvantageous or
contrary to the rights of the bonafide residents.
A joint Motion to Dismiss was filed by UP and the
Quezon City government on the ground that the
complaint fails to state a cause of action. RTC denied
respondents’ motion to dismiss. Respondents filed a
petition for certiorari with the Court of Appeals,
charging the trial court with grave abuse of discretion
in refusing to dismiss the complaint filed by
petitioners.
CA rendered a decision setting aside the trial court’s
order. Petitioners argue that, on its face, their
amended complaint alleges facts constituting a cause
of action which must be fully explored during trial.
They cite paragraphs 18, 19, and 20 of their complaint
questioning the validity of the revocation of the
donation and seek the enforcement of the donation
through specific performance.
On the other hand, respondents contend that by
seeking specific performance of the deed of donation
as their primary cause of action, petitioners cannot at
the same time claim ownership over the property
subject of the donation by virtue of laches or
acquisitive prescription. Petitioners cannot base their
case on inconsistent causes of action. Moreover, as
the trial court already found the deed to have been
validly revoked, the primary cause of action was
already thereby declared inexistent. Hence, according
to respondents, the Court of Appeals correctly
dismissed the complaint.
First. The trial court held that inasmuch as the
donation made by UP to the Quezon City government
had already been revoked, petitioners, for whose
benefit the donation had been made, had no cause of
action for specific performance. Nevertheless, it
Danniel Ancheta Page 2 of 16
denied respondents’ joint motion to dismiss petitioners’
action on the ground that respondent UP was barred from
contesting petitioners’ right to remain in possession on the
ground of laches.
This is error. While prescription does not run against
registered lands, nonetheless a registered owner’s action
to recover possession of his land may be barred by
laches.
We hold that while defendant may not be considered as
having acquired title by virtue of his and his predecessors’
long continued possession for 37 years, the original
owner’s right to recover back the possession of the
property and the title thereto from the defendant has, by
the long period of 37 years and by patentee’s inaction and
neglect, been converted into a stale demand.
Thus, laches is a defense against a registered owner suing
to recover possession of the land registered in its name.
But UP is not suing in this case. It is petitioners who are,
and their suit is mainly to seek enforcement of the deed of
donation made by UP in favor of the Quezon City
government. The appellate court therefore correctly
overruled the trial court on this point. Indeed, petitioners
do not invoke laches. What they allege in their complaint
is that they have been occupying the land in question from
time immemorial, adversely, and continuously in the
concept of owner, but they are not invoking laches. If at
all, they are claiming ownership by prescription which, as
already stated, is untenable considering that the land in
question is a registered land. Nor can petitioners question
the validity of UP’s title to the land. For as the Court of
Appeals correctly held, this constitutes a collateral attack
on registered title which is not permitted.
On the other hand, we think that the Court of Appeals
erred in dismissing petitioners’ complaint for failure to state
a cause of action. A cause of action exists if the following
elements are present, namely:
(1) a right in favor of the plaintiff by whatever means
and under whatever law it arises or is created;
(2) an obligation on the part of the defendant to
respect or not to violate such right; and
(3) an act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a
breach of the obligations of the defendant to the
plaintiff for which the latter may maintain an action for
recovery of damages.
We find all the elements of a cause of action contained in
the amended complaint of petitioners. While, admittedly,
petitioners were not parties to the deed of donation, they
anchor their right to seek its enforcement upon their
allegation that they are intended beneficiaries of the
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donation to the Quezon City government. (Refer to
Art. 1311 on stipulation pour autrui)
It is hardly necessary to state that our conclusion that
petitioners’ complaint states a cause of action against
respondents is in no wise a ruling on the merits. That
is for the trial court to determine in light of respondent
UP’s defense that the donation to the Quezon City
government, upon which petitioners rely, has been
validly revoked.
It is evident that the trial court’s ruling on this question
was only tentative, without prejudice to the final
resolution of the question after the presentation by the
parties of their evidence.
Second. It is further contended that the amended
complaint alleges inconsistent causes of action for
specific performance of the deed of donation.
Respondents make much of the fact that while
petitioners claim to be the beneficiaries-donees of 15.8
hectares subject of the deed, they at the same time
seek recovery/delivery of title to the 42 hectares of
land included in UP’s certificate of title. These are not
inconsistent but, rather, alternative causes of action
which Rule 8, §2 of the Rules of Court allows:
Alternative causes of action or defenses.- A party
may set forth two or more statements of a claim or
defense alternatively or hypothetically, either in
one cause of action or defense or in separate
causes of action or defenses. When two or more
statements are made in the alternative and one of
them if made independently would be sufficient,
the pleading is not made insufficient by the
insufficiency of one or more of the alternative
statements.
Thus, the parties are allowed to plead as many
separate claims as they may have, regardless of
consistency, provided that no rules regarding venue
and joinder of parties are violated. WHEREFORE, the
decision of the Court of Appeals is REVERSED and
the case is REMANDED to the Regional Trial Court of
Quezon City, Branch 89, for trial on the merits.
SO ORDERED.
[G.R. No. 125465. June 29, 1999]
SPOUSES HONTIVEROS vs. RTC
FACTS: Petitioner spouses Hontiveros, filed a
complaint for damages against private respondents
Gregorio Hontiveros and Teodora Ayson before the
RTC Iloilo City. Petitioners alleged that they are the
owners of a parcel of land, in the Province of Capiz,
that petitioners were deprived of income from the land
as a result of the filing of the land registration case;
Danniel Ancheta Page 3 of 16
that such income consisted of rentals from tenants of the
land and that private respondents filed the land registration
case and withheld possession of the land from petitioners
in bad faith.
Petitioners filed an Amended Complaint to insert therein
an allegation that “earnest efforts towards a compromise
have been made between the parties but the same were
unsuccessful.”
Private respondents filed an Answer to Amended
Complaint with Counterclaim, in which they denied, among
other things, that earnest efforts had been made to reach a
compromise but the parties were unsuccessful.
Petitioners moved for a judgment on the pleadings on the
ground that private respondents’ answer did not tender an
issue or that it otherwise admitted the material allegations
of the complaint. RTC denied petitioners’ motion.
Petitioners in their amended complaint allege that earnest
efforts towards a compromise with the defendants were
made, the fact is that their complaint was not verified as
provided in Article 151 of the Family Code. Besides, it is
not believed that there were indeed earnest efforts made
to patch up and/or reconcile the two feuding brothers,
Gregorio and Augusto, both surnamed Hontiveros.
RTC orders the dismissal of this case. Petitioners moved
for a reconsideration of the order of dismissal, but their
motion was denied. Hence, this petition for review on
certiorari.
Private respondents raise a preliminary question. They
argue that petitioners should have brought this case on
appeal to the Court of Appeals since the order of the trial
court judge was actually a decision on the merits. On the
other hand, even if petition for certiorari were the proper
remedy, they contend that the petition is defective because
the judge of the trial court has not been impleaded as a
respondent.
Private respondents’ contention is without merit. The
petition in this case was filed pursuant to Rule 45 of the
Rules of Court.
The rule, therefore, is that direct appeals to this Court from
the trial court on questions of law have to be through the
filing of a petition for review on certiorari. It has been held
that:
x x x when a CFI (RTC) adjudicates a case in the
exercise of its original jurisdiction, the correct mode of
elevating the judgment to the Court of Appeals is by
ordinary appeal, or appeal by writ of error, involving
merely the filing of a notice of appeal - except only if
the appeal is taken in special proceedings and other
cases wherein multiple appeals are allowed under the
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law, in which even the filing of a record on appeal
is additionally required. Of course, when the
appeal would involve purely questions of law or
any of the other cases (except criminal cases as
stated hereunder) specified in Section 5(2), Article
X of the Constitution, it should be taken to the
Supreme Court by petition for review on certiorari
in accordance with Rules 42 and 45 of the Rules
of Court.
By way of implementation of the aforestated provisions
of law, this Court issued on March 9, 1990 Circular No.
2-90, paragraph 2 of which provides:
Appeals from Regional Courts to the Supreme
Court. – Except in criminal cases where the
penalty imposed is life imprisonment or reclusion
perpetua, judgments of regional trial courts may
be appealed to the Supreme Court only by petition
for review on certiorari in accordance with Rule 45
of the Rules of Court in relation to Section 17 of
the Judiciary Act of 1948, as amended, this being
the clear intendment of the provision of the Interim
Rules that (a)ppeals to the Supreme Court shall
be taken by petition for certiorari which shall be
governed by Rule 45 of the Rules of Court.
On the other hand, petitioners contend that the trial
court erred in dismissing the complaint when no
motion to that effect was made by any of the parties.
They point out that, in opposing the motion for
judgment on the pleadings, private respondents did
not seek the dismissal of the case but only the denial
of petitioners’ motion. Indeed, what private
respondents asked was that trial be held on the merits.
Of course, there are instances when the trial court may
order the dismissal of the case even without a motion
to that effect filed by any of the parties. In Baja v.
Macandog, this Court mentioned these cases, to wit:
The court cannot dismiss a case motu proprio
without violating the plaintiff’s right to be heard,
except in the following instances: if the plaintiff
fails to appear at the time of the trial; if he fails to
prosecute his action for an unreasonable length of
time; or if he fails to comply with the rules or any
order of the court; or if the court finds that it has no
jurisdiction over the subject matter of the suit.
However, none of these exceptions appears in this
case. Moreover, the trial court itself found that
“judgment on the pleadings is inappropriate not only
for the fact that [private respondents] in their answer . .
. specifically denied the claim of damages against
them, but also because of the [rule] . . . that the party
Danniel Ancheta Page 4 of 16
claiming damages must satisfactorily prove the amount
thereof. . . .” Necessarily, a trial must be held.
Under the rules, if there is no controverted matter in the
case after the answer is filed, the trial court has the
discretion to grant a motion for judgment on the pleadings
filed by a party. Where there are actual issues raised in the
answer, such as one involving damages, which require the
presentation of evidence and assessment thereof by the
trial court, it is improper for the judge to render judgment
based on the pleadings alone. In this case, aside from the
amount of damages, the following factual issues have to
be resolved, namely, (1) private respondent Teodora
Ayson’s participation and/or liability, if any, to petitioners
and (2) the nature, extent, and duration of private
respondents’ possession of the subject property. The trial
court, therefore, correctly denied petitioners’ motion for
judgment on the pleadings.
However, the trial court erred in dismissing petitioners’
complaint on the ground that, although it alleged that
earnest efforts had been made toward the settlement of
the case but they proved futile, the complaint was not
verified for which reason the trial court could not believe
the veracity of the allegation.
The absence of the verification required in Art. 151 does
not affect the jurisdiction of the court over the subject
matter of the complaint. The verification is merely a formal
requirement intended to secure an assurance that matters
which are alleged are true and correct. If the court
doubted the veracity of the allegations regarding efforts
made to settle the case among members of the same
family, it could simply have ordered petitioners to verify
them.
As this Court has already ruled, the court may simply order
the correction of unverified pleadings or act on it and waive
strict compliance with the rules in order that the ends of
justice may be served. Otherwise, mere suspicion or doubt
on the part of the trial court as to the truth of the allegation
that earnest efforts had been made toward a compromise
but the parties’ efforts proved unsuccessful is not a ground
for the dismissal of an action. Only if it is later shown that
such efforts had not really been exerted would the court be
justified in dismissing the action.
[G.R. No. 122269. September 30, 1999]
REPUBLIC vs. CA, ET. AL.,
FACTS: The parcel of land that is presently the subject of
the dispute in the instant case Lot 3 Portion forms part of
the above-mentioned parcel of land declared by this
Honorable Court as belonging to the public domain,
classified/zonified land available for fishpond development.
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This lot has been leased to Mr. Porfirio Morado by the
Republic of the Philippines, represented by the
Secretary of Agriculture, for a period of 25 years, or up
to December 31, 2013, under Fishpond Lease
Agreement.
On July 6, 1988, however, the late Zenaida Bustria
[daughter of Isidro Bustria] filed a complaint against
Porfirio Morado in the Regional Trial Court of
Alaminos, Pangasinan for ownership and possession
over the lot in question. Herein petitioner, the Republic
of the Philippines, was not made a party to that suit.
In her complaint, Zenaida Bustria claimed absolute
ownership and quiet and peaceful possession of
several lots under PSU-155696 surveyed in the name
of her father, Isidro Bustria. She further asserted that
said Porfirio Morado maliciously applied for a fishpond
permit with the Bureau of Fisheries and Aquatic
Resources over Lot 3 thereof (the subject lot), well-
knowing that said lot had always been occupied,
possessed and worked by her and her predecessors-
in-interest.
Porfirio Morado denied the allegations in the
complaint, claiming that the lot in question is part of
the public domain which he developed and converted
into a fishpond. Due, however, to Porfirio Morado’s
and his counsel’s failure to appear at the pre-trial and
subsequent court hearings, the trial court subsequently
declared Porfirio Morado ‘as in default.’
Respondent Judge rendered a decision declaring the
plaintiff as the exclusive and absolute owner of the
land in question. Petitioner (REPUBLIC), filed with the
CA a petition for the annulment of the trial court’s
decision. Petitioner alleged that the land in question is
within the classified/zonified alienable and disposable
land for fishpond development and that since the land
formed part of the public domain, the BFAR has
jurisdiction over its disposition in accordance with P.D.
No. 704, §4. CA rendered a decision dismissing the
petition. Hence, this petition for review.
The judgment rendered in a case may be annulled on
any of the following grounds: (a) the judgment is void
for want of jurisdiction or for lack of due process of
law; or (b) it was obtained through extrinsic fraud. The
question in this case is whether the decision of the
Regional Trial Court is void on any of these grounds.
The preliminary question, however, is whether the
government can bring such action even though it was
not a party to the action in which the decision sought
to be annulled was rendered. We shall deal with these
questions in inverse order.
Danniel Ancheta Page 5 of 16
RULING: First, is the question whether petitioner has
personality to bring the action below. To begin with, an
action to recover a parcel of land is in personam. As such,
it is binding only between the parties thereto, as this Court
explained in Ching v. Court of Appeals, viz:
An action to redeem, or to recover title to or
possession of, real property is not an action in rem or
an action against the whole world, like a land
registration proceeding or the probate of a will; it is an
action in personam, so much so that a judgment
therein is binding only upon the parties properly
impleaded and duly heard or given an opportunity to
be heard. Actions in personam and actions in rem
differ in that the former are directed against specific
persons and seek personal judgments, while the latter
are directed against the thing or property or status of a
person and seek judgments with respect thereto as
against the whole world. An action to recover a parcel
of land is a real action but it is an action in personam,
for it binds a particular individual only although it
concerns the right to a tangible thing.
The appellate court, holding that the proceedings before
the trial court were in personam, ruled that since petitioner
was not a party to Civil Case No. A-1759, it is not a real
party-in-interest and, therefore, has no personality to bring
the action for annulment of the judgment rendered in that
case.
The appellate court is in error. In Islamic Da’wah Council
of the Phils. v. Court of Appeals, this Court held that a
party claiming ownership of a parcel of land which is the
subject of foreclosure proceedings has a sufficient interest
to bring an action for annulment of the judgment rendered
in the foreclosure proceedings even though it was not a
party in such proceedings. It was held:
[A] person need not be a party to the judgment sought
to be annulled. What is essential is that he can prove
his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely
affected thereby.
Private respondents do not deny that Isidro Bustria, to
whom they trace their ownership, previously filed a
fishpond application with the BFAR over the disputed land.
Neither do they deny that the disputed land formed part of
the public domain.
We agree with petitioner. The State clearly stands to be
adversely affected by the trial court’s disposition of
inalienable public land. The land involved in this case was
classified as public land suitable for fishpond development.
In controversies involving the disposition of public land, the
burden of overcoming the presumption of state ownership
of lands of the public domain lies upon the private
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claimant. Private respondents have not discharged this
burden.
The fact that the land in dispute was transformed into
a “fully developed fishpond” does not mean that it has
lost its character as one declared “suitable for fishpond
purposes” under the decree. By applying for a
fishpond permit with BFAR, Isidro Bautista admitted
the character of the land as one suitable for fishpond
development since the disposition of such lands is
vested in the BFAR. Consequently, private
respondents, as his successors-in-interests, are
estopped from claiming otherwise.
It is settled under the Public Land Law that alienable
public land held by a possessor, personally or through
his predecessor-in-interest, openly, continuously, and
exclusively for 30 years is ipso jure converted to
private property by the mere lapse of time. However,
only public lands classified as agricultural are
alienable. Lands declared for fishery purposes are not
alienable and their possession, no matter how long
continued, cannot ripen into ownership.
Since the disposition of lands declared suitable for
fishpond purposes fall within the jurisdiction of the
BFAR, in accordance with P.D. No 704, §4, the trial
court’s decision is null and void. The trial court has no
jurisdiction to make a disposition of inalienable public
land.
[G.R. No. 124062. January 21, 1999]
COMETA vs. CA
FACTS: Petitioner State Investment Trust, Inc. (SITI),
formerly State Investment House, Inc. (SIHI), is an
investment house engaged in quasi-banking activities.
Petitioner Reynaldo Cometa is its president. Private
respondent Honeycomb Builders, Inc. (HBI), on the
other hand, is a corporation engaged in the business
of developing, constructing, and selling townhouses
and condominium units. Private respondent Reynaldo
Guevara is president of HBI and chairman of the board
of directors of Guevent Industrial Development Corp.
(GIDC).
An information for Falsification of Public Document
was thus filed against private respondent Guevara in
the Regional Trial Court of Makati. After the
prosecution presented its evidence, Guevara filed a
demurrer to evidence which the trial court granted.
Following the dismissal of the criminal case against
him, private respondents Reynaldo S. Guevara and
HBI filed a complaint for malicious prosecution against
petitioners Cometa and SITI in the Regional Trial
Court of Quezon City.
Danniel Ancheta Page 6 of 16
Petitioners SITI and Cometa filed their respective answers.
After the pre-trial of the case, they filed a joint motion to
dismiss with alternative motion to drop respondent HBI as
a party plaintiff, upon the following grounds: The complaint
states no cause of action; Secretary Drilon,
Undersecretary Bello and the prosecutor, not impleaded
herein, are the real parties in-interest-defendants, which
again makes the complaint lack a cause of action. At the
least, the above public official are indispensable parties,
and their non-inclusion renders this court without
jurisdiction over the case; The action seeks to impose a
penalty on the right to litigate and for that reason is
unconstitutional and against settled public policy.
Trial court after a thorough perusal of the contents
embodied in said pleadings, in the exercise of its sound
judicial discretion finds that there are sufficient allegations
of cause of action in the Complaint. The defense of lack of
cause of action, and that defendants are not the real
parties in interest, in the considered opinion of this Court,
are matters of defense, which will be considered, after the
contending parties thru counsel shall have rested their
cases, and the case submitted for Decision.
Petitioners, in separate motions, asked for a
reconsideration but their motions were denied. CA
rendered its decision denying the petition for certiorari and
prohibition of petitioners. Petitioners filed a motion for
reconsideration but the appellate court denied their motion.
Hence, this petition. The principal question for decision is
whether the complaint filed by private respondents against
petitioners in the Regional Trial Court states a cause of
action. First, petitioners maintain it does not as the
allegations in the complaint are insufficient and
indispensable parties were not impleaded in the case.
Secondly, they contend that private respondent HBI should
have been dropped as a party plaintiff upon petitioners’
motion therefor. Both contentions are without merit.
First. A complaint for malicious prosecution states a cause
of action if it alleges:
1. that the defendant was himself the prosecutor or
that at least he instigated the prosecution;
2. that the prosecution finally terminated in the
plaintiff’s acquittal;
3. that in bringing the action the prosecutor acted
without probable cause; and
4. that the prosecutor was actuated by malice, i.e., by
improper and sinister motives.
Whether the facts pleaded and the substantive law entitle
plaintiff to a judgment. Otherwise stated, can a judgment
be rendered upon the facts alleged and deemed admitted,
in accordance with the prayer in the complaint? To
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resolve this, the allegations of the complaint must be
examined.
The mere allegation in a complaint for malicious
prosecution that an information was filed after
preliminary investigation and that a warrant of arrest
was thereafter issued does not by itself negate
allegations in the same complaint that the prosecution
was malicious. All criminal prosecutions are by
direction and control of the public prosecutor. To
sustain petitioners’ stand that an allegation in a
complaint for malicious prosecution that the
information in the criminal case was filed after
appropriate preliminary investigation negates a
contrary allegation that the filing of the case was
malicious would result in the dismissal of every action
for malicious prosecution.
In contrast, the decision of the criminal court in the
present case indicates that there was not even prima
facie evidence to prove the alleged guilt of the
accused. Consequently, a trial was in fact
unnecessary and the criminal court dismissed the case
against private respondent Guevara on the basis of a
demurrer to evidence.
Second. Petitioners contend that the Secretary and
the Undersecretary of the Department of Justice and
the Assistant Provincial Prosecutor should have been
included in the case for malicious prosecution because
it was they who found probable cause against private
respondents and under the law the prosecution of
criminal actions is vested in the public prosecutor.
According to petitioners, they did not conduct the
preliminary investigation or order the filing of an
information and their participation was limited to
initiating the investigation in the NBI and testifying.
There is no merit in this contention. The issue in those
cases was not whether the complaint stated a cause of
action against defendants who were complainants in
the criminal cases which led to the filing of civil cases
for damages but whether they were liable to the
plaintiffs. The Court merely ruled in those cases that
the complainant in the criminal case is not necessarily
liable simply because he initiated the criminal case
which eventually was dismissed. It is noteworthy that,
in the case at bar, private respondents do not only
allege that petitioners initiated the filing of the criminal
case against them but that because of the evidence
they (petitioners) presented, the Department of Justice
could have been induced to order the filing of a
criminal case in court.
Third. It is contended that HBI is not a real-party-in-
interest, whatever interest it may have being purely
Danniel Ancheta Page 7 of 16
speculative. On this point, we think the Court of Appeals
correctly ruled.
It is true that a criminal case can only be filed against the
officers of a corporation and not against the corporation
itself. It does not follow from this, however, that the
corporation cannot be a real-party-in-interest for the
purpose of bringing a civil action for malicious prosecution.
[G.R. No. 132644. November 19, 1999]
DAVID vs. MALAY
FACTS: The spouses Andres Adona and Leoncia Abad,
husband and wife for a good number of years, were
blessed with five children among them being Carmen
Adona. Carmen married Filomeno Malay; three children
were begotten by the marriage (among the herein private
respondents). Following the death of Leoncia Abad in
1923, Andres Adona cohabited with Maria Espiritu, herself
a widow, apparently without the benefit of marriage.
Andres and Maria sired two children, represented herein
by her heirs. Maria Espiritu likewise had a child by her
previous marriage, now herein represented also by his
own heirs.
During his lifetime, Andres Adona applied for a homestead
patent over a parcel of agricultural land located at Iba,
Zambales. After Andres Adona had died, Maria Espiritu,
predecessor-in-interest of herein petitioners, succeeded in
obtaining OCT over the land in her name. After Maria
Espiritu had died in 1945, the children, as well as
descendants of Andres Adona by his marriage with
Leoncia Abad, continued to be in peaceful and quiet
possession of the subject land.
Sometime in 1989, petitioners executed a deed of
“Extrajudicial Settlement with Sale” over the subject
property in favor of Mrs. Venancia Ungson. Private
respondents protested the sale claiming that they were the
true owners of the land. Ultimately, in any event, the sale
in favor of Mrs. Ungson was rescinded in view of the
latter’s failure to pay in full the consideration agreed upon.
Subsequently, petitioners executed another deed of
Extrajudicial Settlement with Sale. In this new instrument,
dated 15 December 1990, petitioners divided the land
equally among themselves and sold their respective
shares to their co-petitioners herein, Antonio de Ubago,
Jr., TCT was issued in favor of the de Ubagos.
Private respondents filed a complaint for “Annulment of
Sale with Restraining Order, Injunction and Damages”
against petitioners. Private respondents averred that the
disputed land sold by the heirs of Maria Espiritu to the de
Ubagos was the subject of a homestead application by
their great grandfather, Andres Adona, but that OCT was
instead fraudulently issued to Maria Espiritu,
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Upon her false representation that she was the widow
of Andres Adona. After a hearing on the merits of the
case, the trial court dismissed the complaint for lack of
cause of action and on the ground of prescription. It
opined that the action being one for annulment of sale
anchored on a fraudulent titling of the subject property,
the cause of action constituted a collateral attack on
the Torrens Certificate of Title. The court a quo added
that even if the action were to be treated as being one
for reconveyance, the suit would still have to fail since
an action for reconveyance could only be brought
within 10 years counted from the date of issuance of
the certificate of title (in 1933).
On appeal, CA set aside the order of the trial court and
directed the cancellation of TCT. Petitioners have
come to this Court and seek to dispute the judgment of
the CA.
Private respondents, upon the other hand, asks this
Court to sustain the decision of the Court of Appeals
on the thesis that the property in question indubitably
belongs to the estate of Andres Adona whose
incontestable right to it is derived from the perfected
homestead application two years prior to his death as
so admitted by Maria Espiritu herself in her affidavit
submitted to the Director of Lands.
RULING: The Court rules for the affirmance of the
challenged decision. A certificate of title issued under
an administrative proceeding pursuant to a homestead
patent covering a disposable public land within the
contemplation of the Public Land Law or
Commonwealth Act No. 141 is as indefeasible as a
certificate of title issued under a judicial registration
proceeding. Under the Land Registration Act, title to
the property covered by a Torrens certificate becomes
indefeasible after the expiration of one year from the
entry of the decree of registration. Such decree of
registration is incontrovertible and becomes binding on
all persons whether or not they were notified of, or
participated in, the in rem registration process.
There is no specific provision in the Public Land Law
or the Land Registration Act (Act 496), now
Presidential Decree 1529, fixing a similar one-year
period within which a public land patent can be
considered open to review on the ground of actual
fraud, such as that provided for in Section 38 of the
Land Registration Act, and now Section 32 of
Presidential Decree 1529, and clothing a public land
patent certificate of title with indefeasibility.
Original Certificate of Title No. 398 was issued in the
name of Maria Espiritu on 04 December 1933 and
would have become indefeasible a year thereafter had
Danniel Ancheta Page 8 of 16
not its issuance been attended with fraud. The attendance
of fraud created an implied trust in favor of private
respondents and gave them the right of action to seek the
remedy of reconveyance of the property wrongfully
obtained. In Javier vs. Court of Appealsthis Court ruled:
“x x x The basic rule is that after the lapse of one (1)
year, a decree of registration is no longer open to
review or attack although its issuance is attended with
actual fraud. This does not mean however that the
aggrieved party is without a remedy at law. If the
property has not yet passed to an innocent purchaser
for value, an action for reconveyance is still
available. The decree becomes incontrovertible and
can no longer be reviewed after one (1) year from the
date of the decree so that the only remedy of the
landowner whose property has been wrongfully or
erroneously registered in another’s name is to bring an
ordinary action in court for reconveyance, which is an
action in personam and is always available as long as
the property has not passed to an innocent third party
for value. If the property has passed into the hands of
an innocent purchaser for value, the remedy is an
action for damages.”
The caption of the case before the court a quo while
denominated as being one for “Annulment of Sale with
Damages” is in reality an action for reconveyance since
the ultimate relief sought by private respondents would be
for the property covered by Original Certificate of Title No.
398 to be reconveyed to the estate of Andres Adona. In
this jurisdiction, the dictum adhered to is that the nature of
an action is determined, more importantly, by the body of
the pleading or complaint itself than by its title or heading.
The Court of Appeals did not err in treating the action
brought by private respondents as one for reconveyance
or as one that seeks the transfer of the property,
wrongfully registered by another, to its rightful and legal
owner. It would seem that Andres Adona did perfect his
homestead application prior to his death, the right to the
issuance of the patent on which vests after complying with
all the requirements of the law.
The next crucial issue focuses on the ruling of the Court of
Appeals to the effect that if a person who claims to be the
owner of the property is in actual possession thereof, the
right to seek reconveyance does not prescribe.
There is no doubt about the fact that an action for
reconveyance based on an implied trust ordinarily
prescribes in ten years. This rule assumes, however, that
there is an actual need to initiate that action, for when the
right of the true and real owner is recognized, expressly or
implicitly such as when he remains undisturbed in his
possession, the statute of limitation would yet be
irrelevant. An action for reconveyance, if nonetheless
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brought, would be in the nature of a suit for quieting of
title, or its equivalent, an action that is imprescriptible.
In Faja vs. Court of Appeals, the Court has held that a
person in actual possession of a piece of land under
claim of ownership may wait until his possession is
disturbed or his title is attacked before taking steps to
vindicate his right, and that his undisturbed possession
gives him the continuing right to seek the aid of a court
of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his title.
In the words of the Court -
“x x x There is settled jurisprudence that one who
is in actual possession of a piece of land claiming
to be owner thereof may wait until his possession
is disturbed or his title is attacked before taking
steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a
continuing right to seek the aid of a court of equity
to ascertain and determine the nature of the
adverse claim of a third party and its effect on his
own title, which right can be claimed only by one
who is in possession. No better situation can be
conceived at the moment for Us to apply this rule
on equity than that of herein petitioners whose
mother, Felipa Faja, was in possession of the
litigated property for no less than 30 years and
was suddenly confronted with a claim that the land
she had been occupying and cultivating all these
years, was titled in the name of a third person.
We hold that in such a situation the right to quiet
title to the property, to seek its reconveyance and
annul any certificate of title covering it, accrued
only from the time the one in possession was
made aware of a claim adverse to his own, and it
is only then that the statutory period of prescription
commences to run against such possessor.”
The same dictum is reiterated in Heirs of Jose Olviga
vs. Court of Appeals; thus -
“With regard to the issue of prescription, this Court
has ruled a number of times before that an action
for reconveyance of a parcel of land based on
implied or constructive trust prescribes in ten
years, the point of reference being the date of
registration of the deed or the date of the issuance
of the certificate of title over the property (Vda de
Portugal vs. IAC, 159 SCRA 178) But this rule
applies only when the plaintiff is not in possession
of the property, since if a person claiming to be the
owner thereof is in actual possession of the
property, the right to seek reconveyance, which in
effect seeks to quiet title to the property, does not
prescribe.”
Danniel Ancheta Page 9 of 16
Finally, this Court sees no cogent reasons to disturb the
finding of the Court of Appeals that the de Ubagos may not
be considered buyers in good faith. Said the Appellate
Court.
“x x x An innocent purchaser for value is one who
buys property of another, without notice that some
other person has a right to, or interest in, such
property and pays a full and fair price for the same, at
the time of such purchase, or before he has notice of
the claim or interest of some other persons in the
property. He buys the property with the belief that the
person from whom he receives the thing was the
owner and could convey title to the property. A
purchaser can not close his eyes to facts which should
put a reasonable man on his guard and still claim he
acted in good faith (Sandoval vs. Court of Appeals,
260 SCRA 283, 296 [1996])
“It is well settled that one who deals with property
registered under the Torrens system need not go
beyond the same, but only has to rely on the title. He
is charged with notice only of such burdens and claims
as are annotated on the title. (Sandoval, supra., at p.
295)
“The aforestated principle admits of an unchallenged
exception: that a person dealing with registered land
has a right to rely on the Torrens certificate of title and
to dispense with the need of inquiring further except
when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious
man to make such inquiry or when the purchaser has
some knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably
prudent man to inquire into the status of the title of the
property in litigation. The presence of anything which
excites or arouses suspicion should then prompt the
vendee to look beyond the certificate and investigate
the title of the vendor appearing on the face of said
certificate. One who falls within the exception can
neither be denominated an innocent purchaser for
value nor a purchaser in good faith and hence does
not merit the protection of the law. (Sandoval, supra.)
(Underscoring supplied)
The rule is settled that a buyer of real property which is in
the possession of persons other than the seller must be
wary and should investigate the rights of those in
possession. Otherwise, without such inquiry, the buyer
can hardly be regarded as a buyer in good faith. The
buyer who has failed to know or discover that the land sold
to him is in the adverse possession of another buyer in
bad faith. (Embrado vs. Court of Appeals, 233 SCRA 335,
347 [1994]).WHEREFORE, the decision of CA is
AFFIRMED.
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[G.R. No. 115794. June 10, 1999]
MANANGAN vs. DELOS REYES
FACTS: Respondents were co-owners of 3 parcels of
land located in San Narciso, Zambales, covered by
OCT No. 7372 of the Register of Deeds of Zambales.
Petitioner, on the other hand, was a tenant of the
respondents and had been sharing the harvest of the
land with respondents’ mother, Macaria Villanueva,
during her lifetime.
On December 11, 1932, Macaria Villanueva sold the
parcels of land in question to Victoriano Manangan,
petitioner’s father, evidenced by a duly notarized deed
of sale signed by Macaria and the respondents except
Inocencio de los Reyes. After cadastral proceedings
were initiated over the land, the registration court
decreed registration under the torrens system of the
parcels of land involved in the names of Macaria
Villanueva, Cirilo de los Reyes, and Francisco de los
Reyes.
RD of Zambales, pursuant to the decree of
registration, issued Original Certificate of Title No.
7372 in the names of Macaria Villanueva, Cirilo de los
Reyes, and Francisco de los Reyes, now all
deceased. Macaria is survived by three children,
respondents herein. Francisco is survived by two
children, respondents herein. Cirilo died without any
issue.
On July 6, 1974, respondents filed with the Court of
First Instance of Zambales, a complaint for recovery of
possession of the aforesaid parcels of land against
petitioner claiming the right of possession of said land.
Petitioner resisted such claim alleging fraud in causing
the land to be registered in respondents’ names
despite its sale to petitioner’s father. Petitioner filed
with the lower court an amended answer for
reconveyance of the lots in question.
RTC rendered a decision in favor of respondents
declaring that they had a better right over the subject
parcels of land. Petitioners appealed to CA. CA
affirmed the trial court’s conclusion and ruling that
petitioner’s action had prescribed and was barred by
laches. Hence, this petition for review on certiorari.
ISSUE: Can possession by a vendee of an
unregistered real property defeat the torrens title
thereon later secured by the vendor inspite of the sale,
where the title was obtained in land registration
proceedings filed thirty eight (38) years ago?
RULING: In this appeal via certiorari, petitioner seeks
to reverse the decision of the Court of Appeals holding
that an action for reconveyance or recovery of
Danniel Ancheta Page 10 of 16
ownership of the land fraudulently titled to respondent has
prescribed and is barred by laches. We affirm.
Petitioner’s right of action to recover ownership of the land
in question has prescribed and is barred by laches.
In Alvarez vs. Intermediate Appellate Court, we ruled that
the remedy of the landowner whose property has been
wrongfully or erroneously registered in another’s name is
to bring an action in the ordinary courts of justice for
reconveyance. The Court of Appeals correctly ruled that
an action for reconveyance based on an implied or
constructive trust prescribes in ten (10) years from the
issuance of the torrens title over the property, citing Tale
vs. Court of Appeals.
Petitioner slept on his right for thirty eight (38) years
counted from the time the Original Certificate of Title was
issued on June 21, 1937, until he filed his amended
answer to respondents’ complaint on March 14, 1975,
asking for reconveyance of the lots in question. The
petitioner’s right to bring such action was barred by laches
as he took no step towards that direction reasonably after
the title to the property was issued under the torrens
system. Finally, petitioner cannot invoke Article 1141 of the
Civil Code as this law provides only a period of thirty (30)
years to bring real actions over immovable property.
[G.R. No. 63145. October 5, 1999]
VENTURA vs. HON. MILITANTE
FACTS: Private respondent filed a Complaint for a Sum of
Money and Damages against petitioner. During the lifetime
of Carlos Ngo he was indebted with the plaintiff (herein
priv. resp.). Said obligation is already due and demandable
and the defendant thru Ms. Ventura who is ostensibly
taking care of the properties/estate of deceased Carlos
Ngo, refused, failed and neglected and still continues to
refuse, fail and neglect to pay despite repeated demands.
Petitioner moved to dismiss the foregoing complaint on the
ground that “the estate of Carlos Ngo has no legal
personality,” the same being “neither a natural nor legal
person in contemplation of law.”
In his Opposition to Motion to Dismiss, petitioner insisted
that since “the money claim subject of this case actually
represents the costs of automotive spare
parts/replacements contracted by deceased Carlos Ngo
during his lifetime for the benefit/business of the family x x
x the conjugal partnership x x x shall be accountable for
the payment thereof.” Subsequently, private respondent's
counsel manifested that he is poised to “amend the
complaint in order to state the correct party defendant that
he intends to sue in this case”. The public respondent
gave private respondent fifteen (15) days to make the
amendment.
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Petitioner filed a Motion for Reconsideration of the
order of public respondent permitting private
respondent to amend his complaint. Public respondent
issued the herein assailed order that the indebtedness
was incurred by Carlos Ngo and defendant Sulpicia
Ventura and since Carlos Ngo is now dead that will not
preclude the plaintiff from filing a case against the
living defendant, Sulpicia Ventura.
Petitioner scurried to this Court praying that the
foregoing order of the public respondent be set aside
and the amended complaint of private respondent.
RULING: We grant the petition. The original complaint
of petitioner named the “estate of Carlos Ngo as
represented by surviving spouse Ms. Sulpicia Ventura”
as the defendant. Petitioner moved to dismiss the
same on the ground that the defendant as named in
the complaint had no legal personality. We agree.
Neither a dead person nor his estate may be a party
plaintiff in a court action. A deceased person does not
have such legal entity as is necessary to bring action
so much so that a motion to substitute cannot lie and
should be denied by the court. An action begun by a
decedent's estate cannot be said to have been begun
by a legal person, since an estate is not a legal entity;
such an action is a nullity and a motion to amend the
party plaintiff will not likewise lie, there being nothing
before the court to amend. Considering that capacity
to be sued is a correlative of the capacity to sue, to the
same extent, a decedent does not have the capacity to
be sued and may not be named a party defendant in a
court action.
It is clear that the original complaint of private
respondent against the estate of Carlos Ngo was a suit
against Carlos Ngo himself who was already dead at
the time of the filing of said complaint. At that time,
and this, private respondent admitted, no special
proceeding to settle his estate had been filed in court.
As such, the trial court did not acquire jurisdiction over
either the deceased Carlos Ngo or his estate.
To cure this fatal defect, private respondent amended
his original complaint. In his amended complaint,
private respondent deleted the estate of Carlos Ngo
and named petitioner as the defendant. When
petitioner, in her comment to the amended complaint,
reasoned that the conjugal partnership of gains
between her and Carlos Ngo was terminated upon the
latter's death and that the debt which he contracted,
assuming it was a charge against the conjugal
property, could only be paid after an inventory is made
in the appropriate testate or intestate proceeding,
private respondent simply reiterated his demand that
Danniel Ancheta Page 11 of 16
petitioner pay her husband's debt which, he insisted,
redounded to the benefit of everyone in her family.
It is true that amendments to pleadings are liberally
allowed in furtherance of justice, in order that every case
may so far as possible be determined on its real facts, and
in order to speed the trial of causes or prevent the circuitry
of action and unnecessary expense. But amendments
cannot be allowed so as to confer jurisdiction upon a court
that never acquired it in the first place. When it is evident
that the court has no jurisdiction over the person and the
subject matter and that the pleading is so fatally defective
as not to be susceptible of amendment, or that to permit
such amendment would radically alter the theory and the
nature of the action, then the court should refuse the
amendment of the defective pleading and order the
dismissal of the case.
Moreover, as correctly argued by petitioner, the conjugal
partnership terminates upon the death of either spouse.
After the death of one of the spouses, in case it is
necessary to sell any portion of the conjugal property in
order to pay outstanding obligations of the partnership,
such sale must be made in the manner and with the
formalities established by the Rules of Court for the sale of
the property of deceased persons. Where a complaint is
brought against the surviving spouse for the recovery of an
indebtedness chargeable against said conjugal property,
any judgment obtained thereby is void. The proper action
should be in the form of a claim to be filed in the testate or
intestate proceedings of the deceased spouse.
In many cases as in the instant one, even after the death
of one of the spouses, there is no liquidation of the
conjugal partnership. This does not mean, however, that
the conjugal partnership continues. And private
respondent cannot be said to have no remedy. Under
Sec. 6, Rule 78 of the Revised Rules of Court, he may
apply in court for letters of administration in his capacity as
a principal creditor of the deceased Carlos Ngo if after
thirty (30) days from his death, petitioner failed to apply for
administration or request that administration be granted to
some other person.
[G.R. No. 116151. July 2, 1999]
ALMORA vs. CA
FACTS: As found by the lower court, the disputed property
is public land, such being a part of the Mount Data
National Reservation Park, over which Ben Almora, the
late father of petitioners, was granted an occupancy permit
by the Bureau of Forestry, and over which Ben Almora and
petitioners herein have consistently paid real property
taxes since the property’s declaration in 1945 until 1987.
Ben Almora leased the disputed property and the building
situated thereon in favor of Federico Peralta, the now
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deceased father of private respondents, as evidenced
by a Contract of Lease, in which Ben Almora
represented himself to be the “true and lawful owner”
of the leased property, and in which Federico Peralta
acknowledged the said true and lawful ownership of
Ben Almora.
Federico Peralta failed to pay the rentals as they fell
due, thus prompting Ben Almora to file a case for
unlawful detainer and recovery of unpaid rentals. MTC
ruled in favor of Almora, ordering Peralta to vacate the
premises of the leased property and to pay the arrears
in rentals. The MTC decision was affirmed by the
defunct Court of First Instance of Baguio which
decision on appeal became final and executory, no
appeal having been interposed to the Court of Appeals
or Supreme Court.
Inspite of said decision, the Peraltas refused to vacate
the premises of the disputed property; rather, they
continued to occupy it. When Federico Peralta died,
his three children built their respective houses on the
lot and continued to occupy the same. Before his
death, Ben Almora sold the land in question, covered
by and forming part of the property declared under Tax
Declaration No. 9577, together with his other lands, to
his children, petitioners herein, through a Deed of Sale
of Unregistered Lands.
Private respondents did not dispute the fact of the
lease between Ben Almora and their father, Federico
Peralta, but contended that their father, along with the
other lessees of Lots A and B, ceased to pay rentals
upon learning that Ben Almora had no title to the lands
he was leasing out, but was merely issued an
occupancy permit by the Bureau of Forestry. They also
pointed out that the permit granted to Ben Almora
embodied specific restrictions against the alienation or
subletting of the subject property.
These conflicting claims to occupy and use the
disputed lots reached the Secretary of Agriculture and
Natural Resources (SANR) and the Office of the
President for resolution. Per Decision No. 1039 dated
July 18, 1974, series of 1974, the Office of the
President decided in favor of Federico Peralta and the
other lessees-applicants, upholding their right to also
file applications for permits to occupy and use the
respective portions occupied by them as against the
claim of Ben Almora that he already owned the said
properties by virtue of prescription, and directing that
Almora and all the occupants of the land be allowed to
continue their occupation thereof upon the issuance of
occupancy permits by the Bureau of Forest
Development.
Danniel Ancheta Page 12 of 16
RTC Baguio City rendered a decision in favor of plaintiffs,
petitioners herein ordering private respondents to vacate
the premises of the property and to restore the possession
thereof to petitioners. CA reversed the decision of the
RTC.
In the course of this appeal, private respondents brought
up several procedural matters which we summarize as
follows: (1) the petition was filed out of time, resulting in
this Court’s failure to acquire jurisdiction and take
cognizance of the appeal; (2) no motion for
reconsideration was filed in the Court of Appeals, thus
depriving the said court of an opportunity to correct any
errors as it may have made; and (3) the petition raises
questions of fact which are not the proper subject of review
in a petition for review under Rule 45.
RULING: Rule 45, Section 1 of the Rules of Court,
however, distinctly provides that
“A party may appeal by certiorari from a judgment of
the Court of Appeals, by filing with the Supreme Court
a petition for certiorari within fifteen (15) days from
notice of judgment, or of the denial of his motion for
reconsideration filed in due time. (Emphasis
supplied)”
The conjunctive “or” clearly indicates that the 15-day
reglementary period for the filing of a petition for certiorari
under Rule 45 commences either from notice of the
questioned judgment or from notice of denial of the
appellant’s motion for reconsideration. A prior motion for
reconsideration is not indispensable for a petition for
review on certiorari under Rule 45 to prosper. The
reliance of private respondents in the cases cited in their
Comment is unfounded, for all of these cases addressed
petitions for certiorari grounded on grave abuse of
discretion, or what is now known as special civil action of
certiorari under Rule 65 of the Rules of Court. For such
action to commence, the Rules require that the petitioner
be left with “no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law.” A motion
for reconsideration of an assailed decision is deemed a
plain and adequate remedy provided by law.
Where, under Rule 45, certiorari is resorted to as a mode
of appeal, the indispensability of a motion for
reconsideration is negated, and the party aggrieved may
validly file a petition for review on certiorari with the
Supreme Court within 15 days from notice of judgment of
the Court of Appeals.
Thirdly, petitioners seek to involve us in a re-evaluation of
the factual veracity and probative value of the evidence
they submitted in the lower court, contrary to the dictates
of Rule 45 that only questions of law may be raised and
resolved on petition. Absent any whimsical or capricious
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exercise of judgment, and unless the lack of any basis
for the conclusions made by the lower courts be amply
demonstrated, the Supreme Court will not disturb such
factual findings.
Having set aside these procedural issues, We proceed
to evaluate the merits of this Petition. Do private
respondents hold a better right of possession over the
property than petitioners, who had prior possession
thereof?
We hold in the affirmative. A perusal of the entire
records of the case shows that Federico Peralta was
granted an occupancy permit over the disputed
property by the Bureau of Forestry.
The possession of the Almoras of the contested lots
was not exclusive and was in fact interrupted by the
adverse possessions of the other claimants who were
similarly granted occupancy permits by the Bureau of
forestry (now Bureau of Forest Development).
The issuance of an occupancy permit to Federico
Peralta as a claimant in the administrative case vested
upon him and private respondents, as his successors-
in-interest, possessory rights over the land in dispute
to the exclusion of all others, except the State and
such persons as may hold legal and equitable title
under law. Such issuance also resulted in the
dispossession of petitioners and the tacit cancellation
of petitioners’ permit over the same land, to the extent
of the property covered by the permit issued to
Peralta, as the fact of possession cannot be
recognized at the same time in two different persons.
As the present possessors of the property, by virtue of
a permit to ocuupy granted by the governmental
authority vested with the power to issue the same,
prior to the perfection of a sales application over the
same property, private respondents’ possessory rights
are preferred over anyone else’s, and clearly surpass
the claim of petitioners of prior possession, which has
long since terminated.
Firstly, recovery upon claim of ownership has no place
in an accion publiciana. Where the object of the
parties is to recover dominion over the property as
owner, the appropriate action to file is an accion
reinvindicatoria, and not a plenary action to recover
possession as the case herein, which involves
restitution of possession only, when the cause of
dispossession is not among those covered by the
grounds for forcible entry and unlawful detainer, or
when possession has been lost for more than one year
and can no longer be maintained under Rule 70 of the
Rules of Court.
Danniel Ancheta Page 13 of 16
[G.R. No. 133491. October 13, 1999]
ASUNCION vs. EVANGELISTA
FACTS: Private respondent organized Embassy Farms,
Inc. and registered it with the Securities and Exchange
Commission. Private respondent was the majority
stockholder of the corporation, with 90% of the shares in
his name. He also served as its president and chief
executive officer. Private respondent borrowed from
several financial institutions to use as working capital for
Embassy Farms. He executed a real estate mortgage on
three of his properties as security for the loan. Private
respondent defaulted in his loan payments.
Petitioner and private respondent executed a
Memorandum of Agreement ceding to petitioner his assets
in exhange for the former’s assumption of his obligations.
However, more than a year after the signing of the
Memorandum of Agreement, the landholdings of private
respondent which were mortgaged to Paluwagan ng
Bayan Savings and Loan Association, PAIC Savings and
Mortgage Bank and Mercator Finance Corporation still
remained titled in his name. Neither did he inform said
mortgagees of the transfer of his lands.
Petitioner filed in RTC a complaint for rescission of the
Memorandum of Agreement with a prayer for damages.
RTC rendered judgment in favor of private respondent. It
ruled "The Memorandum of Agreement is essentially a
contract of sale where [private respondent] agreed to sell
his nineteen parcels of land and his shares in Embassy
Farms, in consideration, among others, of the assumption
by [petitioner] of [private respondent’s] loans with three
financial institutions. As a matter of law and practice, it is
incumbent upon the vendee to first comply with his
obligations under the contract of sale before he can
demand performance by the vendor. In a contract of sale,
the vendor is not required to deliver the thing sold until the
price is paid. Court hereby declared the MOA rescinded
and of no further force and effect.
A copy of the decision of the trial court was sent by
registered mail to petitioner’s counsel of record, Atty.
Romeo Z. Comia. However, unknown to petitioner, Atty.
Comia died while the case was still pending in the trial
court. Private respondent filed in the trial court a Notice of
Death of petitioner’s counsel, with a request that a copy of
its decision be personally served on petitioner.
Private respondent filed by registered mail a Motion for
Execution. RTC issued a writ of execution against
petitioner. Petitioner filed in the trial court a Notice of
Appeal, Substitution of Counsel, and an Urgent Motion to
Recall the Order of Execution and Quash the Writ of
Execution. Trial court issued an Order suspending the
execution of its decision. CA affirmed the decision of the
trial court and ordered its immediate execution.
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CA issued a Resolution denying petitioner’s Motion for
Reconsideration and noting private respondent’s Ex-
Parte Motion for Issuance of a Writ of Attachment.
Hence this petition raising the following issues:
“1. WHETHER OR NOT THE JULY 1, 1994
DECISION OF THE REGIONAL TRIAL COURT
WAS ALREADY FINAL AND EXECUTORY
WHEN ASUNCION FILED HIS NOTICE OF
APPEAL.
"2. WHETHER OR NOT THE MEMORANDUM
OF AGREEMENT EXECUTED BETWEEN
ASUNCION AND EVANGELISTA WAS IN THE
NATURE OF A CONTRACT OF SALE OR A
JOINT VENTURE.
"3. WHETHER IT WAS ASUNCION OR
EVANGELISTA WHO FIRST RENEGED OR
FAILED TO COMPLY WITH HIS
CORRESPONDING OBLIGATIONS UNDER THE
MEMORANDUM OF AGREEMENT.”
The petition is meritorious.
One. The respondent Court of Appeals erred in
holding that the decision of the trial court dated July 1,
1994 had become final and executory. It is
established that petitioner was not aware of his
counsel’s death while the case was pending in the trial
court. He could not have known, therefore, that a copy
of the trial court’s decision was sent by registered mail
to his counsel. Indeed, it was private respondent who
notified the trial court of the death of petitioner’s
counsel and who requested that a copy of the decision
be served personally to petitioner. His request was,
however, denied.
While petitioner was furnished a copy of the decision
by mail, the registry receipt evidencing its date of
mailing did not bear a date. There was, therefore, no
date from which to reckon the reglementary period to
appeal. That petitioner received a copy of the motion
and order for writ of execution should not be taken as
a waiver of his right to appeal. Not only is petitioner a
non-lawyer who could not be expected to know the
legal consequences of the motion and the order, but
the case is of such merit that it deserves a liberal
interpretation of the rules in the interest of justice.
Two. After a meticulous perusal of the voluminous
records of this case, we hold that the respondent Court
of Appeals grossly misappreciated the facts and the
applicable law. Under the Memorandum of
Agreement, it was the obligation of private respondent
to cede and convey, in a manner absolute and
irrevocable, his real properties and stockholdings in
the farm in favor of petitioner in exchange for, among
Danniel Ancheta Page 14 of 16
others, the outright payment by petitioner of a lump sum,
the continuous operation of the piggery at his expense and
the assumption by petitioner of all the financial obligations
of private respondent upon their restructuring.
The records show that while petitioner paid private
respondent the stipulated lump sum and gave more money
for the restructuring of private respondent’s loans and for
the continued operation of Embassy Farms, Inc., private
respondent never executed a deed of sale with
assumption of mortgage over his landholdings, and
although he endorsed in blank his certificates of stock, he
never delivered them to petitioner to effectuate their valid
transfer.
Private respondent is clearly obliged under the
Memorandum of Agreement to execute the deed of
conveyance with assumption of mortgage in favor of
petitioner. Had such deed been executed, the interests of
both petitioner and private respondent would have been
simultaneously secured, the former, as regards his
ownership rights over the subject lands sold to him, and
the latter, as regards the substitution, in his place, of
petitioner as the new debtor in his loan obligations with
Paluwagan ng Bayan Savings and Loan Association, PAIC
Savings and Mortgage Bank and Mercator Finance
Corporation.
Private respondent, however, failed and refused, despite
demands, to execute this legal document. It follows that
petitioner could not be faulted when he desisted from
further paying private respondent's debts.
Three. In fine, petitioner and private respondent entered
into what the law regards as reciprocal obligations. Of
such specie of legal contracts, Tolentino says:
“x x x Reciprocity arises from identity of cause, and
necessarily the two obligations are created at the
same time.
“Reciprocal obligations, therefore, are those which
arise from the same cause, and in which each party is
a debtor and a creditor of the other, such that the
obligation of one is dependent upon the obligation of
the other. They are to be performed simultaneously,
so that the performance of one is conditioned upon the
simultaneous fulfillment of the other."
We find that private respondent failed to perform his
substantial obligations under the Memorandum of
Agreement. Hence, petitioner sought the rescission of the
Memorandum of Agreement and ceased infusing capital
into the piggery business of private respondent.
This Court holds, in fine, that the Memorandum of
Agreement entered into by petitioner and private
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respondent should indeed be rescinded. As
aforediscussed, the respondent appellate court erred
in assessing damages against petitioner for his refusal
to fully pay private respondent's overdue loans. Such
refusal was justified, considering that private
respondent was the first to refuse to deliver to
petitioner the lands and certificates of stock that were
the consideration for the almost six million pesos in
debt that petitioner was to assume and pay.
Five. Nevertheless, neither is petitioner entitled to
recover the amount of P3,194,941.88 that he spent as
lump sum payment, as feeds and veterinary costs for
the continued operation of the piggery and as loan
restructuring fees. Mutual restitution is required in
rescission, but this presupposes that both parties may
be restored in their original situation. In this case, it
cannot be gainsaid that an essential part of the
consideration of the amount of P3,194,941.88 paid by
the petitioner was taking over the effective
management of Embassy Farms, Inc.
Mutual restitution would require, thus, that petitioner
restore private respondent in the effective
management of said corporation and that private
respondent return said amount to petitioner. This,
however, has been rendered impossible by the
foreclosure of the landholdings of private respondent
and the shutdown of the piggery's operations. Private
respondent has lost in his venture, and while he is not
blameless for his unfortunate fate, to still order him to
remit a considerable amount of money without
receiving anything in return would certainly run counter
to the essence of rescission as a remedy in equity.
[G.R. No. 132294. August 26, 1999]
VOLUNTAD vs. SPOUSES DIZON
FACTS: For failure of petitioners to pay the loan, the
Rural Bank of Pandi foreclosed the mortgage and the
property was sold at public auction with the Bank
becoming the highest bidder. More than three (3)
months after the certificates of sheriff's sale were
registered, the mortgagee-vendee Bank, without the
knowledge of petitioners, assigned its rights over the
property to respondent-spouses Magtanggol and
Corazon Dizon. In their petition with the trial court,
petitioners prayed to be allowed to exercise their right
of redemption over the subject property.
The Dizons then filed an omnibus motion to dismiss
the petition and to strike out the notice of lis pendens.
Trial court issued an order dismissing the case on the
ground of res judicata and granting the motion to strike
out the notice of lis pendens "there is no longer need
for such annotation on the title of the subject property
with the dismissal of the case."
Danniel Ancheta Page 15 of 16
Upon denial of the motion for reconsideration, petitioners
went to the CA and rendered a decision setting aside the
order of the trial court. Trial court rendered a decision in
favor of petitioners directing respondent-spouses Dizon (a)
to render a true and correct accounting of the financial
obligation of petitioners to the Rural Bank of Pandi, Inc., in
Bulacan as assigned to respondent Dizons; (b) to allow
petitioners to exercise their right of redemption over the
one-half undivided portion of the parcel of land covered by
TCT.
After the judgment had become final and executory, the
trial court issued an order directing the issuance of a writ
of execution. A writ of execution was issued which was
however returned unsatisfied for the reason that the
property was already sold to respondent-spouses Eugenio
and Vicenta Reyes.
TCT was issued in the name of the spouses Eugenio and
Vicenta Reyes. Petitioners filed a Motion for Second Alias
Writ of Execution claiming, inter alia, that a notice of lis
pendens had been annotated in the title with the filing of
Civil Case and respondents Vicenta and Eugenio Reyes
were transferees pendente lite when respondent-spouses
Dizon sold and transferred to them the property subject of
a pending litigation.
Trial court issued an order denying petitioners’ motion for
second alias writ of execution. Petitioner's motion for
reconsideration was also denied. CA dismissed the
petition.
RULING: We find the petition meritorious. Based on the
records and the pleadings of the parties with this Court,
the following facts are undisputed: that during the
pendency of Civil Case No. 142-M-93 with the trial court,
petitioners caused the annotation of a notice of lis
pendens on TCT covering the subject property; that
pursuant to the order of the trial court the Register of
Deeds cancelled the previous annotation of lis pendens.
The following inscriptions appear in TCT:
Entry No. 74364(M): Lis Pendens in favor of Delfin R.
Voluntad - An action has been commenced and is now
pending in RTC of Bulacan Branch
From the attendant circumstances, it is crystal clear that
an examination of the certificate of title and the
annotations therein would disclose that a civil action was
filed with the trial court involving the property described in
the title. The annotation in the title that the property was
involved in a suit should have prompted the prudent
purchaser to inquire and verify if the suit was finally
terminated and the property freed from any legal infirmity
or judicial inquiry.
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Although the notice of lis pendens was cancelled
pursuant to the order of the trial court dismissing the
civil action, the cancellation effected after barely 4
days was premature because the court order was not
yet final, as petitioners still had the remaining period of
11 days to appeal the order. In fact, a mere inquiry
with the trial court which issued the order of dismissal
and the cancellation of the lis pendens would reveal
that petitioners timely appealed the dismissal to the
Court of Appeals.
The general rule is that a person dealing with
registered land has a right to rely on the Torrens
Certificate of Title without the need of inquiring further.
But this rule cannot apply when the party has actual
knowledge of facts and circumstances that would
impel a reasonably cautious man to make such inquiry
or when the purchaser has knowledge of a defect or
lack of title in his vendor or of sufficient facts to induce
a reasonably prudent man to inquire into the status of
the title of the property in litigation.
Hence, when there is something in the certificate of
title to indicate any cloud or vice in the ownership of
the property or any encumbrance thereon, the
purchaser is required to explore further than what the
Torrens title upon its face indicates in quest for any
hidden defect or inchoate right which may
subsequently defeat his right thereto.
As a purchaser, respondent-spouses Reyes should
have examined the certificate of title and all factual
circumstances necessary for them to determine
whether or not flaws existed which might invalidate
their title. It is a settled rule that a purchaser of real
estate with knowledge of any defect or lack of title of
the vendor cannot claim that he has acquired title
thereto in good faith as against the true owner of the
land or interest therein.
petitioners to file a separate action to enforce their right to
repurchase the property as against the new registered
owners.
In Lising v. Plan, this Court ruled that a writ of execution
may be issued against a person not a party to the case
where the latter’s remedy which he did not avail of was to
intervene in the case involving rights over the same parcel
of land of which he claims to be the vendee. The
cancellation of the lis pendens on the title of respondent-
spouses Dizon prior to the purchase by the respondent-
spouses Reyes need not alter our conclusion as the
cancellation was prematurely done while the appeal in the
case between petitioners and respondent-spouses Dizon
was still pending with the appellate court.
Having purchased registered land with full notice of the
fact that it is in litigation between the vendor and a third
party, respondent-spouses Reyes stand in the place of
their vendor and their title is subject to the incidents and
results of the pending litigation. Ought to have been
aware of the pendency of the case, respondent-spouses
Reyes should have intervened in the suit for the protection
of their alleged rights. Having failed to do so, they are
bound by the results.
A transferee pendente lite stands exactly in the shoes of
the transferor and is bound by any judgment or decree
which may be rendered for or against the transferor.
Petitioners can legally enforce the final judgment of the
trial court against respondent-spouses Eugenio and
Vicenta Reyes with respect to the petitioners' right to
repurchase the property from the Reyeses as transferees
pendente lite of respondent-spouses Magtanggol and
Corazon Dizon.

The same rule applies to one with knowledge of facts

which should have put him on inquiry and investigation
as might be necessary to acquaint him with the defects
in the title of his vendor. If circumstances exist that
require a prudent man to investigate and he does not,
he is deemed to have acted in mala fide. A party’s
mere refusal to believe that a defect exists or his willful
closing of his eyes to the possibility of the existence of
a defect in his vendor’s title will not make him an
innocent purchaser for value if it afterwards develops
that the title was in fact defective.

Similarly, a buyer of registered land who fails to act

with the diligence of a prudent man cannot be a
purchaser in good faith. Therefore, given the facts of
this case which are clearly set forth in the records and
established by the evidence, there is no need for
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