G.R. No.

181132 FACTS:

June 5, 2009

Loreto Maramag designated as beneficiary his concubine Eva de Guzman Maramag Vicenta Maramag and Odessa, Karl Brian, and Trisha Angelie (heirs of Loreto Maramag) and his concubine Eva de Guzman Maramag, also suspected in the killing of Loreto and his illegitimate children are claiming for his insurance. Vicenta alleges that Eva is disqualified from claiming RTC: Granted motion for recon of defendants- civil code does NOT apply--but dismissed the petition of the petitioners for failure to state a cause of action. CA: dismissed the case for lack of jurisdiction for filing beyond reglementary period..dismissed the appeal..holding that the decision of the trial court dismissing the complaint for failure to state a cause of action involved a pure question of law.

ISSUE: a. In determining the merits of a motion to dismiss for failure to state a cause of action, may the Court consider matters which were not alleged in the Complaint, particularly the defenses put up by the defendants in their Answer? b. In granting a motion for reconsideration of a motion to dismiss for failure to state a cause of action, did not the Regional Trial Court engage in the examination and determination of what were the facts and their probative value, or the truth thereof, when it premised the dismissal on allegations of the defendants in their answer which had not been proven?

HELD: In essence, petitioners posit that their petition before the trial court should not have been dismissed for failure to state a cause of action because the finding that Eva was either disqualified as a beneficiary by the insurance companies or that her designation was revoked by Loreto, hypothetically admitted as true, was raised only in the answers and motions for reconsideration of both Insular and Grepalife. They argue that for a motion to dismiss to prosper on that ground, only the allegations in the complaint should be considered. They further contend that, even assuming Insular disqualified Eva as a beneficiary, her share should not have been distributed to her children with Loreto but, instead, awarded to them, being the legitimate heirs of the insured deceased, in accordance with law and jurisprudence. The petition should be denied. The grant of the motion to dismiss was based on the trial courts finding that the petition failed to state a cause of action, as provided in Rule 16, Section 1(g), of the Rules of Court, which reads SECTION 1. Grounds. Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: (g) That the pleading asserting the claim states no cause of action. A cause of action is the act or omission by which a party violates a right of another.16 A complaint states a cause of action when it contains the three (3) elements of a cause of action (1) the legal right of the plaintiff; (2) the correlative obligation of the defendant; and (3) the act or omission of the defendant in violation of the legal right. If any of these elements is absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.17 When a motion to dismiss is premised on this ground, the ruling thereon should be based only on the facts alleged in the complaint. The court must resolve the issue on the strength of such allegations, assuming them to be true. The test of sufficiency of a cause of action rests on whether, hypothetically admitting the facts alleged in the complaint to be true, the court can render a valid judgment upon the same, in accordance with the prayer in the complaint. This is the general rule. However, this rule is subject to well-recognized exceptions, such that there is no hypothetical admission of the veracity of the allegations if: 1. the falsity of the allegations is subject to judicial notice; 2. such allegations are legally impossible; 3. the allegations refer to facts which are inadmissible in evidence; 4. by the record or document in the pleading, the allegations appear unfounded; or 5. there is evidence which has been presented to the court by stipulation of the parties or in the course of the hearings related to the case. Petition denied Cost against the petitioners

DANFOSS, INC. V. CONTINENTAL CEMENT CORP., G.R. NO. 143788, 9/9/05

TOPIC: UNDER CAUSE OF ACTION, IN CONTRAST WITH THE BLOSSOM CASE, THIS IS A CASE WHERE THE PRINCIPLE OF ANTICIPATORY BREACH CANNOT BE APPLIED

DANFOSS, INC. V. CONTINENTAL CEMENT CORP., G.R. NO. 143788, 9/9/05

NATURE OF THE CASE: The CA affirmed the decision of the RTC that the CCCs (herein respondent) complaint for damages against Danfoss. So, the case was elevated to the Supreme Court on appeal of the said ruling of the CA and the CAs denial for Danfoss motion for reconsideration.

FACTS: Mechatronics Instruments and Controls, Inc. (MINCI) is an agent of Danfoss, Inc.s products here i n the Philippines. On September 1997, CCC ordered two unit 132 KW Danfoss Brand Frequency Converter/Inverter from MINCI to be used in the Finish Mill of its Cement Plant in Bulacan. In the terms of conditions of the original purchase order, the two unit Frequency Converter shall be delivered by Danfoss within 8 to 10 weeks from the opening of the letter of credit. The letter of credit opened by CCC in favour of Danfoss on September 9, 1997. On September 17, 1997, MINCI informed CCC that its order are already ready for shipment and MINCI requested to amend the letter of credit changing the port of origin/loading from Singapore to Denmark (Singapore is the Asian Regional Office of Danfoss, the Head Office of the company is Denmark). CCC complied and the port of origin in the letter of credit was changed. On November 6, 1997, MINCI relayed to CCC that Danfoss Inc. was still checking the status of their order. CCC replied that every delay in the delivery of the order will cause loss to their company, so CCC requested for early work out and immediate shipment to avoid further loss. But, on November 9, 1997, Danfoss Inc. informed MINCI through fax, that the reason for the delivery problems was that some of the supplied components for the new VLT 5000 series (this may be a part of the converter which is the subject thing in this case or a machine to create the converter) did not meet the agreed quality standard. So, Danfoss was canvassing for another supplier for the said VLT 5000 series. In the fax, there was no clear message as to when normal production will resume. Upon receiving the relayed information, CCC surmised that Danfoss would not be able to deliver their order. There was also no definite commitment of the delivery from Danfoss and MINCI, so CCC informed MINCI that they intend to cancel its order. The order was cancelled on November 13, 1997. Hence the complaint for damages filed by CCC with the RTC of Quezon City against Danfoss and MINCI on November 5, 1998. In reply, Danfoss filed a motion to dismiss the complaint.

CCC: Due to the impending delay in the delivery of its order, it suffered more than P8 million and was compelled to look for another supplier.

Danfoss: The case should be dismissed on the ground that it did not state a cause of action. 1) The letter of credit was opened on September 9, 1997, so, since the agreed delivery period is 8 to 10 weeks from the opening of the letter of credit, the due date is until November 19, 1997. Although Danfoss was having a problem with its supplier prior to CCCs cancellation of its order, CCC only surmised that Danfoss could not deliver within the due date agreed upon. Neither Danfoss nor CCC agreed to change the date of delivery. Only the port of origin was changed in the letter of credit. Danfoss has until November 19, 1997 to deliver the order, CCC cancelled the order on November 13, 1997. CCC never made an extrajudicial demand for the delivery of its order on its due date as it cancelled the order before the due date.

2)

3)

4)

5)

Damages sought for by CCC could not have accrued yet since the order was cancelled before the delivery was actually delayed.

RTC: Judgment in favor of CCC. According to the RTC: ...the issue of whether or not the defendants incur delay in the deliver y of the equipment in question within the period stipulated is a debatable question which necessitates actual trial on the merits where the parties have to adduce evidence in support of their respective stance. While the defendants contend that the stipulated period of delivery had not lapsed yet when the plaintiff cancelled its order of the two equipments in question as the cancellation took place seven (7) days before the expiry date of the defendants obligation to deliver, the plaintiffs po sition is that the acts of the defendants had made compliance with their obligation to deliver within the period stipulated, impossible, hence, there was no need for a demand as the law provides that when demand would be useless, as when the obligor has rendered it beyond his power to perform. The plaintiffs contention if properly and strongly supported by evidence during the hearing of the merits of the case may well negates (sic) the defendants contrary stand.

CA: Affirmed the decision of the RTC and denied the Motion for Reconsideration of Danfoss.

ISSUE: WON there was a cause of action in the complaint filed by CCC against Danfoss and WON the principle of anticipatory breach can be applied in the case.

HELD: No, there was no cause of action in the complaint for damages filed by CCC.

In order to sustain a dismissal on the ground of lack of cause of action, the insufficiency must appear on the face of the complaint. And the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the facts alleged, the court can render a valid judgment thereon in accordance with the prayer of the complaint. For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint.

The RTC erred in ruling that the issue of whether or not the defendants incurred delay in the delivery of the equipment within the period stipulated was a debatable question. How could Danf oss be liable for damages when Danfoss had not yet breached his obligation to deliver the order of CCC, aside from the fact that the obligation was already negated when CCC cancelled the order before the prestation became due and demandable? Thus, there was no breach and there was no damage caused by Danfoss. The principle of anticipatory breach cannot be applied here because the obligation was single and indivisible to deliver two units of frequency converter by November 19, 1997. There was no showing that Danfoss refused to deliver, and on the contrary, Danfoss made an effort to make good in its obligation by looking for other suppliers who could provide the parts needed to make the timely delivery of the order. Thus, the case was prematurely filed. CCCs fear that Danfoss might not be able to deliver its order on time was not the cause of action referred to by the Rules and jurisprudence. PETITION GRANTED. THE CAS DECISIONS ARE REVERSED AND SET ASIDE.

CEROFERR REALTY CORPORATION, petitioner, vs. COURT OF APPEALS and ERNESTO D. SANTIAGO, respondents. The Case This is an appeal via certiorarii[1] from the decision of the Court of Appealsii[2] dismissing petitioners appeal from the orderiii[3] of the Regional Trial Court, Branch 93, Quezon City, whic h dismissed petitioners complaint for damages and injunction with preliminary injunction, as well as its resolutioniv[4] denying reconsideration.v[5] The Facts The facts, as found by the Court of Appeals,vi[6] are as follows: On March 16, 1994, plaintiff (Ceroferr Realty Corporation) filed with the Regional Trial Court, Quezon City, Branch 93, a complaintvii[7] against defendant Ernesto D. Santiago (Santiago), for damages and injunction, with preliminary injunction. In the complaint, Ceroferr prayed that Sa ntiago and his agents be enjoined from claiming possession and ownership over Lot No. 68 of the Tala Estate Subdivision, Quezon City, covered by TCT No. RT-90200 (334555); that Santiago and his agents be prevented from making use of the vacant lot as a jeepney terminal; that Santiago be ordered to pay Ceroferr P650.00 daily as lost income for the use of the lot until possession is restored to the latter; and that Santiago be directed to pay plaintiff Ceroferr moral, actual and exemplary damages and attorneys fees, plus expenses of litigation. In his answer, defendant Santiago alleged that the vacant lot referred to in the complaint was within Lot No. 90 of the Tala Estate Subdivision, covered by his TCT No. RT-78 110 (3538); that he was not claiming any portion of Lot No. 68 claimed by Ceroferr; that he had the legal right to fence Lot No. 90 since this belonged to him, and he had a permit for the purpose; that Ceroferr had no color of right over Lot No. 90 and, hence, was not entitled to an injunction to prevent Santiago from exercising acts of ownership thereon; and that the complaint did not state a cause of action. In the course of the proceedings, an important issue metamorphosed as a result of the conflicting claims of the parties over the vacant lot actually used as a jeepney terminal the exact identity and location thereof. There was a verification survey, followed by a relocation survey, whereby it would appear that the vacant lot is inside Lot No. 68. The outcome of the survey, however, was vigorously objected to by defendant who insisted that the area is inside his lot. Defendant, in his manifestation dated November 2, 1994, adverted to the report of a geodetic engineer. Mariano V. Flotildes, to the effect that the disputed portion is inside the boundaries of Lot No. 90 of the Tala Estate Subdivision which is separate and distinct from Lot No. 68, and that the two lots are separated by a concrete fence. Because of the competing claims of ownership of the parties over the vacant lot, it became i nevitable that the eye of the storm centered on the correctness of property boundaries which would necessarily result in an inquiry as to the regularity and validity of the respective titles of the parties. While both parties have been brandishing separate certificates of title, defendant asserted a superior claim as against that of the plaintiff in that, according to defendant, his title has been confirmed through judicial reconstitution proceedings, whereas plaintiffs title does not carry any technical description of the property except only as it is designated in the title as Lot No. 68 of the Tala Estate Subdivision. It thus became clear, at least from the viewpoint of defendant, that the case would no longer merely involve a simple case of collection of damages and injunction which was the main objective of the complaint - but a review of the title of defendant vis--vis that of plaintiff. At this point, defendant filed a motion to dismiss the complaint premised primarily on his contention that the trial court cannot adjudicate the issue of damages without passing over the conflicting claims of ownership of the parties over the disputed portion. On May 14, 1996, the trial court issued the order now subject of this appeal which, as earlier pointed out , dismissed the case for lack of cause of action and lack of jurisdiction. The court held that plaintiff was in effect impugning the title of defendant which could not be done in the case for damages and injunction before it. The court cited the hoary rule that a Torens certificate of title cannot be the subject of collateral attack but can only be challenged through a direct proceeding. It concluded that it could not proceed to decide plaintiffs claim for damages and injunction for lack of jurisdiction be cause its judgment would depend upon a determination of the validity of defendants title and the identity of the land covered by it. From this ruling, plaintiff appealed to this court insisting that the complaint stated a valid cause of action which was determinable from the face thereof, and that, in any event, the trial court could proceed to try and decide the case before it since, under present law, there is now no substantial distinction between the general jurisdiction vested in a regional trial court and its limited jurisdiction when acting as a land registration court, citing Ignacio v. Court of Appeals 246 SCRA 242 (1995). On March 26, 1999, the Court of Appeals promulgated a decision dismissing the appeal.viii[8] On May 13, 1999, petitioner filed with the Court of Appeals a motion for reconsideration of the decision.ix[9] On July 29, 1999, the Court of Appeals denied petitioners motion for reconsideration for lack of merit. x[10]

Hence, this appeal. The Issues The issues are: (1) whether Ceroferrs complaint states a sufficient cause of action and (2) whether the trial court has jurisdiction to determine the identity and location of the vacant lot involved in the case. The Courts Ruling We grant the petition. The rules of procedure require that the complaint must state a concise statement of the ultimate facts or the essential facts constituting the plaintiffs cause of action. A fact is essential if it cannot be stricken out without leaving the statement of the cause of action inadequate. A complaint states a cause of action only when it has its three indispensable elements, 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 named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.xi[12] If these elements are not extant, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action.xii[13] These elements are present in the case at bar. The complaintxiii[14] alleged that petitioner Ceroferr owned Lot 68 covered by TCT No. RT-90200 (334555). Petitioner Ceroferr used a portion of Lot 68 as a jeepney terminal. The complaint further alleged that respondent Santiago claimed the portion of Lot 68 used as a jeepney terminal since he claimed that the jeepney terminal was within Lot 90 owned by him and covered by TCT No. RT-781 10 (3538) issued in his name. Despite clarification from petitioner Ceroferr that the jeepney terminal was within Lot 68 and not within Lot 90, respondent Santiago persisted in his plans to have the area fenced. He applied for and was issued a fencing permit by the Building Official, Quezon City. It was even alleged in the complaint that respondent- Santiago was preventing petitioner Ceroferr and its agents from entering the property under threats of bodily harm and destroying existing structures thereon. A defendant who moves to dismiss the complaint on the ground of lack of cause of action, as in this case, hypothetically admits all the averments thereof. The test of sufficiency of the facts found in a complaint as constituting a cause of action is whether or not admitting the facts alleged the court can render a valid judgement upon the same in accordance with the prayer thereof. The hypothetical admission extends to the relevant and material facts well pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defense that may be assessed by the defendants.xiv[15] In this case, petitioner Ceroferrs cause of action has been sufficiently averred in the complaint. If it were admitted that the right of ownership of petitioner Ceroferr to the peaceful use and possession of Lot 68 was violated by respondent Santiagos act of encroachment and fencing of the same, then petitioner Ceroferr would be entitled to damages. On the issue of jurisdiction, we hold that the trial court has jurisdiction to determine the identity and location of the vacant lot in question. Jurisdiction over the subject matter is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.xv[16] The jurisdiction of a court over the subject matter is determined by the allegations of the complaint and cannot be made to depend upon the defenses set up in the answer or pleadings filed by the defendant.xvi[17] While the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such question may be estopped if he has actively taken part in the very proceedings which he questions and he only objects to the courts jurisdiction because the judgment or the order subsequently rendered is adverse to him.xvii[18] In this case, respondent Santiago may be considered estopped to question the jurisdiction of the trial court for he took an active part in the case. In his answer, respondent Santiago did not question the jurisdiction of the trial court to grant the reliefs prayed for in the complaint. His geodetic engineers were present in the first and second surveys that the LRA conducted. It was only when the second survey report showed results adverse to his case that he submitted a motion to dismiss.

Both parties in this case claim that the vacant lot is within their property. This is an issue that can be best resolved by the trial court in the exercise of its general jurisdiction. After the land has been originally registered, the Court of Land Registration ceases to have jurisdiction over contests concerning the location of boundary lines. In such case, the action in personam has to be instituted before an ordinary court of general jurisdiction.xviii[19] The regional trial court has jurisdiction to determine the precise identity and location of the vacant lot used as a jeepney terminal. The Fallo IN VIEW WHEREOF, we GRANT the petition. We REVERSE the decision of the Court of Appealsxix[20] and the order of the trial courtxx[21] dismissing the case. We remand the case to the Regional Trial Court, Branch 93, Quezon City, for further proceedings.

[G.R. No. 149627. September 18, 2003] KENNETH O. NADELA, petitioner, vs. THE CITY OF CEBU and METRO CEBU DEVELOPMENT PROJECT, respondents. FACTS Before us is a petition for review on certiorari of the Decision of the Court of Appeals promulgated on which affirmed the Order of the Regional Trial Court of Cebu City, Branch 12, dated March 12, 1998, dismissing the action of petitioner Kenneth O. Nadela for recovery of ownership and possession of a parcel of land with damages against respondents City of Cebu and Metro Cebu Development Project (MCDP). On March 4, 1997, herein petitioner, Kenneth O. Nadela, filed an action before the Regional Trial Court of Cebu City, Branch 12, for recovery of ownership and possession of a parcel of land with damages and a prayer for the issuance of a temporary restraining order and/or preliminary injunction against respondents. Respondent City of Cebu filed a Motion to Dismiss on the ground that petitioner has no cause of action since (1) the suit is against the State and there is no allegation that it has given its consent; and (2) the Complaint itself shows that the case is premature since petitioner admitted that he is in possession in the concept of owner of an unregistered parcel of land. Respondent MCDP, represented by the Solicitor General, also filed a Motion to Dismiss on the following grounds: (1) the Complaint states no cause of action as the land involved is a public land and thus belongs to the State, petitioner being a mere claimant thereof; (2) petitioner failed to exhaust available administrative remedies; and (3) petitioners suit is barred under the doctrine of state immunity from suit. Petitioner filed an Opposition to respondents respective motion to dismiss asserting that the property in litigation is a private agricultural land and that neither the doctrine of state immunity from suit nor the general rule of exhaustion of administrative remedies applies in this case. ISSUE: Whether or not there is a cause of action? The Courts Ruling Petitioner contends that the Court of Appeals erred in affirming the Order of the trial court which granted the motion to dismiss of respondents on the ground that the Complaint states no cause of action. In essence, petitioner asserts in his assigned errors that the allegations in his Amended Complaint are sufficient to establish his cause of action, and said allegations were hypothetically admitted by respondents when they filed a motion to dismiss. Petitioner prays that he be given an opportunity to prove ownership over the subject property in a trial on the merits. The contention is untenable. The test of the sufficiency of the facts to constitute a cause of action is whether admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer of the complaint.iii[24] In answering the query, only the facts asserted in the complaint must be taken into account without modification

although with reasonable inferences therefrom.iii[25] Nevertheless, in Tan v. Director of Forestryiii[26] and Santiago v. Pioneer Savings and Loan Bank,iii[27] evidence submitted by the parties during a hearing in an application for a writ of preliminary injunction was considered by the court in resolving the motion to dismiss. In Llanto v. Ali Dimaporo,iii[28] this Court held that the trial court can properly dismiss a complaint on a motion to dismiss due to lack of cause of action even without a hearing, by taking into consideration the discussion in said motion and the opposition thereto. In Marcopper Mining Corporation v. Garcia,iii[29] this Court ruled that the trial court did not err in considering other pleadings, aside from the complaint, in deciding whether or not the complaint should be dismissed for lack of cause of action. A cause of action exists if the following elements are present: (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 named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages.iii[30] From the allegations in the Complaint, petitioner claims ownership of the subject property for having possessed it in the concept of an owner openly, adversely, peacefully and exclusively for more than 30 years. Petitioner did not allege in his Complaint the actual date when his ownership of the subject property accrued. However, in his Oppositioniii[31] to respondents motion to dismiss, petitioner brought to the attention of the trial court the fact that the said lot is a portion of a parcel of land originally owned by Alipio O. Bacalso, whose possession of the same commenced way back in 1962, as evidenced by a tax declaration issued in his name. (Emphasis supplied.) Petitioners claim is an assertion that the subject property is private land, or that even assuming it was part of the public domain, petitioner had already acquired imperfect title thereto under Section 48 (b) of Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended by Republic Act No. 1942.iii[