TEOVILLE HOMEOWNERS ASSOCIATION,
INC., petitioner, vs. EDWARD L. FERREIRA,
REAM DEVELOPMENT CORPORATION and
GUILLERMO BUENAVENTURA, respondents.
DECISION
CHICO-NAZARIO, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the resolution dated 10 June 1998 of the
[1]
Court of Appeals dismissing the petition in CA-G.R. SP No. 47276
and the resolution dated 16 September 1999 dismissing petitioners
[2]
motion for reconsideration.
This case stemmed from a dispute over a 711-square meter lot
designated as Lot 98 of the Teoville Subdivision in Paraaque City
previously owned by the Villongco Realty Corporation. Based on the
original plans of the subdivision project approved by the Municipal
Council of Paraaque City in 1968, the lot was designated as a
saleable lot.
[3]
Before its completion, however, the subdivision project including
all the unsold lots therein was transferred through a Deed of Sale
and Assignment by Villongco Realty Corporation to REAM
Development Corporation (REAM). The sale included all the
improvements erected upon Lot 98 such as the water system,
equipment and appurtenances thereto. Sometime in 1985, the
Teoville Subdivision II residents experienced a severe water crisis
occasioned by the complete breakdown of the centralized water
system and a dispute between REAM and Teoville (Paraaque)
Homeowners Association, Inc. (Teoville) as to who was responsible
for the unpaid electricity bills of the centralized water system.
1
Through a Deed of Transfer and Donation, dated 18 January 1985,
[4]
REAM donated to Teoville the water distribution system of 30,000.00
gallons capacity water tank, including the 30-horsepower deepwell
submersible motor pump, respectively, all their facilities and
appurtenances thereof, situated at Teoville Subdivision II, Phases 1 and
2. The donation was accepted by Edward L. Ferreira in his capacity as
[5]
the then Chairman of Teoville Subdivision II Homeowners Association,
Phases 1 and 2. This water pump and the water tank soon became
unoperational and were subsequently dismantled.
On 16 April 1985, with the approval of the Land Registration
Authority, REAM caused the subdivision of Lot 98 into Lot 98-A with an
area of 300 square meters and Lot 98-B with an area of 411 square
meters. REAM then sold Lot 98-A to Edward L. Ferreira on 20
September 1985. By virtue of the sale of the lot to Ferreira, Transfer
Certificate of Title (TCT) No. 95354 of the Registry of Deeds of Pasay
City in the name of REAM was cancelled and TCT No. 102423 was
issued in the name of Ferreira.
On 04 August 1993, Teoville filed a Verified Complaint before the
Adjudication Board of the Housing and Land Use Regulatory Board
(HLURB) docketed as HLURB Case No. R-IV-080993-0122, against
REAM Development Corporation and Edward Ferreira praying that: (1)
it be awarded ownership over the entire Lot 98, (2) the re-subdivision of
Lot 98 be nullified, and (3) the sale of Lot 98-A in favor of Ferreira be
cancelled. Teoville complained that the sale between REAM and
Ferreira was illegal and should be annulled because REAM cannot
dispose of Lot 98 since it is an open space where the water tank which
allegedly belongs to the homeowners association was built. In lieu of an
Answer, Ferreira filed a Motion to Dismiss on the ground of lack of
jurisdiction. The motion was totally disregarded by the HLURB Arbiter,
Atty. Gerardo L. Dean, who considered Ferreira as in default and
consequently was disallowed to file a position paper.
Nevertheless, in a decision dated 10 July 1994, Arbiter Dean
[6]
dismissed the Complaint for lack of jurisdiction rationalizing that since
the Registry of Deeds of Pasay City had already issued a title to Lot
98-A as early as 04 April 1986, the appropriate Regional Trial Court
and not the HLURB had jurisdiction to declare the nullity of the
Torrens Title issued to Ferreira. Dean, though, ordered REAM to
comply with its undertaking to donate Lot 98-B to Complainant
Teoville. The HLURB held:
On the second issue, we hold that complainant has the right
to acquire ownership over Lot 98-B. While it is not mandatory
on the part of respondent REAM to donate the said lot to
complainant, evidences presented indicate that respondent
REAM has intended to donate the same to complainant.
Respondent REAM has already donated the entire water
system facilities erected on Lot No. 98 to complainant. For
them to assume the responsibility of operating a water
system that will supply the water needs of the residents of
Teoville Subdivision II, they should have a lot on which to
erect the facilities for a water system. While the Deed of
Donation did not include the lot, a letter coming from
respondent Buenaventura dated February 20, 1992, in his
capacity as president of respondent REAM and addressed to
Mr. Romeo Paguyo, president of complainant, certified that,
we have already donated the said lot, water tank,
submersible pump and the facilities necessary for its function
2
to the Homeowners Association under the presidency of
Edward L. Ferreira (Annex D of complainants position paper).
The foregoing indicate an intention on the part of complainant
and respondent REAM to include in the donation the lot on
which the water system facilities were erected. [7]
A Motion for Partial Reconsideration filed by Teoville was treated as
a Petition for Review by the HLURB Board of Commissioners per
Section 21 of the 1987 Rules of Procedure of the HLURB. Ferreira
[8]
opposed the motion. On 21 May 1996, the HLURB Board of
Commissioners rendered a decision setting aside the decision of
[9]
HLURB Arbiter Dean. The HLURB Board of Commissioners reasoned
that while Lot 98 previously appeared to be a saleable lot, however,
since the water system, a form of subdivision development, was
situated in Lot 98, REAM, in effect, made a representation that the lot
was part of the open space, a facility for public use. The re-subdivision
thereof resulted in the alteration of an open space which to be valid
required the prior approval of the HLURB upon written conformity or
consent of the homeowners, under Section 22 of Presidential Decree
No. 957. With this, the HLURB disposed:
[10]
WHEREFORE, the decision of the Office a quo dated July 10,
1994, is hereby SET ASIDE and new decision entered:
1. Declaring the re-subdivision of the former Lot No. 98,
Teoville Subdivision, Paraaque, as null and void;
2. Declaring the sale of Lot No. 98-A to respondent
Edward L. Ferreira as null and void;
 3. Ordering respondent Ream to execute a deed of
donation over Lot No. 98-A in favor of the
complainant; and
4. Ordering respondent Ream to pay this Board the
administrative fine in the amount of P10,000.00
pursuant to Section 22, in relation to Section 38 of
P.D. 957.
The Registry of Deeds of Pasay City therefore is hereby
directed to cancel TCT No. 102423 (Lot No. 98-A), to restore
the previous title thereon, and to annotate thereon that the
same is open space for community facilities, and may not be
sold or converted into another use without the approval of
this Board.
Let a copy of this decision be furnished the Registry of Deeds
of Pasay City for its information and appropriate action. [11]
Ferreira filed a motion for reconsideration praying that the
decision of the HLURB Board of Commissioners be set aside and
that the decision of Arbiter Dean be reinstated and affirmed in toto. In
a resolution dated 27 September 1996, the HLURB Board of
Commissioners, Special Division, set aside the 21 May 1996
decision of the HLURB Board of Commissioners and held that REAM
had the right to re-subdivide Lot 98 without prior clearance from the
HLURB because there was no more facility for public use set up
therein and further held that since REAM expressed willingness to
donate Lot 98-B to Teoville, the HLURB Board of Commissioners can
only go so far as directing REAM to comply with its voluntary
undertaking. Teoville filed a Motion for Reconsideration which was
[12]
denied by the Special Division of the HLURB Board of
3
Commissioners in a resolution dated 15 January 1997 on the ground
that the water system in Lot 98 was no longer functioning. Teoville
elevated the case to the Office of the President (O.P.), docketed as O.P.
Case No. 97-C-7086. In a decision of the O.P. dated 06 March 1998,
[13]
the appeal of Teoville was ordered dismissed and the resolutions of the
HLURB Board of Commissioners, Special Division, dated 27
September 1996 and 15 January 1997 were affirmed in toto. Teoville
[14]
filed a Petition for Review before the Court of Appeals praying that the
[15]
Court of Appeals reverse and set aside the decision of the O.P. dated
06 March 1998 and affirm in toto the decision of the HLURB Board of
Commissioners, Special Division, dated 21 May 1996. In a resolution of
the Court of Appeals dated 10 June 1998, the petition was ordered
[16]
dismissed by virtue of Section 7, Rule 43 of the 1997 Rules of Civil
Procedure. The Court of Appeals held:
Considering that the certification of non-forum shopping was
executed by petitioners counsel Atty. Antonio G. Conde, instead
of the petitioners authorized corporate official, in clear
contravention of Section 5, Rule 7 and Section 6, Rule 43 in
relation to Section 2, Rule 42 of the 1997 Rules of Civil
Procedure and that aside from the certified true copy of the
decision dated March 6, 1998 marked as Annex A, the petition
is not accompanied by any other duplicate original/certified true
copies of the other pleadings, orders, decisions and other
supporting papers referred to therein.
WHEREFORE, the petition is ordered DISMISSED on authority
of Section 7, Rule 43 of the 1997 Rules of Civil Procedure. [17]
Teoville filed a Motion for Reconsideration and Supplemental
[18]
Motion for Reconsideration. In a resolution of the Court of Appeals
[19]
dated 16 September 1999, the Motion for Reconsideration was
[20]
denied:
. . . The certification of non-forum shopping must be signed
by the plaintiff or principal party, and not just by the counsel.
Sec. 5 of Rule 7 of the 1997 Rules of Civil Procedure
specifies that:
SEC. 5. Certification against forum shopping. The plaintiff or
principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief, or in a
sworn certification annexed thereto and simultaneously filed
therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should
thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint
or initiatory pleading has been filed.
The authority of a counsel to represent his client is limited,
and the reason why the client himself must issue this
certification is obviously because he could not feign
ignorance of his other cases, ergo of forum shopping. On the
other hand a counsel can wiggle his way out by claiming that
he is not privy to the other cases which his clients may have,
4
and thus render effete and nugatory this measure against
forum shopping.
The certification of non-forum shopping appended to the
petition was signed by Antonio Conde as a counsel for the
petitioner. There is no assertion or intimation at all that he is too
an officer of the petitioner duly authorized to subscribe to the
said certification, nor has any proof been submitted since then
showing that he is such.
Even conceding as correct for the nonce his contention that as
counsel he was authorized to subscribe the certification on non-
forum shopping, nevertheless the petition is still fatally flawed
because except for the certified true copy of the decision dated
March 6, 1998 marked as Annex A, the petition was not
accompanied by any other duplicate original/certified true
copies of the other pleadings, orders, decisions and other
supporting papers referred to therein. These would be the:
1. Decision dated July 10, 1994 of HLURB Arbiter Dean
2. Decision of the HLURB dated May 21, 1996
3. Resolution dated September 27, 1996 of the HLURB
Board of Commissioners; and
4. Resolution dated January 15, 1997 of the HLURB
Board of Commissioners denying petitioners motion
for reconsideration of its resolution dated
September 27, 1996.
And other supporting papers in violation of Sec. 6, Rule 43 of
the1997 Rules of Civil Procedure and therefore, a sufficient
ground for the dismissal of the petition on authority of Sec. 7,
Rule 43, ibid.
The afterthought of petitioner in its Supplemental To Motion
For Reconsideration that the Records Division, Legal Affairs
Department of the Office of the President, does not issue
certified true copies of the decisions, resolutions and other
matters pertinent to an appealed case, does not convince Us
at all. Neither are We satisfied with his explanation that the
absent documents are anyway found in the body of the
petition. What it contains are only smattering quotes and
paraphrases suitable to petitioners objectives, but which do
not fulfill the purposes of the requirement to append said
copies.
Petitioner never attempted to cure these deficiencies which
were the causes for the dismissal of its petition. [21]
Hence, this Petition for Review on Certiorari filed by Teoville.
[22]
Respondents REAM and Guillermo R. Buenaventura filed their
Comment to the Petition on 04 April 2002. [23]
Respondent Ferreira, for his part, manifested that he was
adopting the Comment and position filed by respondent REAM. [24]
In this Courts resolution dated 07 June 2000, Teoville was
[25]
required to file its Reply to the Respondents Comment. On 07 August
2000, Teoville filed its Reply. On 04 December 2000, this Court
[26]
resolved to give due course to the petition and required the parties to
submit their respective memoranda within thirty (30) days from
notice.
[27]
The issues raised for resolution are:
5
1. whether liberal construction or substantial compliance is
permissible under Section 6 (c) and (d) of Rule 43 of the
Rules of Court; and
2. whether or not the appeal by certiorari by Petitioner from
the decision of the Office of the President dated March
6, 1998 is meritorious. [28]
We now come to the resolution of the issues raised.
In support of its stand, petitioner Teoville argues that its counsel of
record, who is its representative and whose acts can bind Teoville, can
validly sign the certification. Revised Supreme Court Circular No. 28-
91, upon which Section 2 of Rule 42 of the 1997 Rules of Civil
Procedure is based, impliedly permits the counsel of record to
[29]
execute it since the provision states that the counsel may be held liable
not only for disciplinary action but also for commission of criminal
offenses. Teoville further submits that its failure to attach duplicate
original/certified true copies of other pleadings, orders, decisions and
other supporting papers referred to in the petition, may be overlooked
considering the substantial, if not full reproduction of the material
portions of the adverted pleadings, orders, decisions as shown by the
detailed recitation/verbatim reproduction in its petition before the Court
of Appeals. Prevailing jurisprudence discourages dismissals of appeals
based on purely technical grounds; hence, the Office of the President
committed grave abuse of discretion in disturbing and manipulating the
findings of facts and conclusions of HLURB Arbiter Dean in his decision
dated 10 July 1994 and HLURB Board of Commissioners, Special
Division, in its decision dated 21 May 1996 to favor Ferreira. Petitioner
therefore prays that this Court order the Court of Appeals to give due
course to its petition.
 On the issue of forum shopping, in BA Savings Bank v. Sia the [30]
Court of Appeals denied due course to a petition for certiorari filed by
BA Savings Bank on the ground that the Certification on anti-forum
shopping incorporated in the petition was signed not by the duly
authorized representative of the petitioner, as required under
Supreme Court Circular No. 28-91, but by its counsel, in
contravention of said circular. In a petition for review
on certiorari under Rule 45 of the Rules of Court filed by BA Savings
Bank to assail the denial of the Court of Appeals, this Court allowed a
relaxation of the rules and held that the certificate of non-forum
shopping required by Supreme Court Circular No. 28-91 may be
signed, for and on behalf of a corporation, by a specifically
authorized lawyer who has personal knowledge of the facts required
to be disclosed in such document. In this case, however, Teoville has
not shown to the satisfaction of the Court that its counsel has been
specifically authorized to sign the verification and certification against
non-forum shopping in its petition. It follows, therefore, that a
relaxation of the rule would not be justified. Thus, the prevailing
jurisprudence enunciated in the case of Marcopper Mining
Corporation v. Solidbank Corporation, that the certification against
[31]
forum shopping must be executed by the party-pleader and not by
his counsel, applies.
Additionally, petitioner failed to attach to its petition copies of
pertinent pleadings required under the Rules. The consequence of
this failure is provided under Sections 7 and 8 of Rule 43 of the Rules
of Court:
SEC. 7. Effect of failure to comply with requirements. The
failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other
6
lawful fees, the deposit for costs, proof of service of the petition,
and the contents of and the documents which should
accompany the petition shall be sufficient ground for the
dismissal thereof.
SEC. 8. Action on the petition. The Court of Appeals may
require the respondent to file a comment on the petition, not a
motion to dismiss, within ten (10) days from notice, or dismiss
the petition if it finds the same to be patently without merit,
prosecuted manifestly for delay, or that the questions raised
therein are too unsubstantial to require consideration. [32]
In the case of Manila Midtown Hotel v. NLRC this Court upheld
[33]
the dismissal of a petition for failure of a party to attach the required
documents to his petition.
In the subsequent case of Sea Power Shipping Enterprises, Inc. v.
Court of Appeals where a Petition for Certiorari was not accompanied
[34]
by copies of the pleadings and documents relevant and pertinent
thereto, this Court held:
It is true that a litigation is not a game of technicalities and that
the rules of procedure should not be strictly enforced at the cost
of substantial justice. However, it does not mean that the Rules
of Court may be ignored at will and at random to the prejudice
of the orderly presentation and assessment of the issues and
their just resolution. It must be emphasized that procedural
rules should not be belittled or dismissed simply because their
non-observance may have resulted in prejudice to a partys
substantial rights. Like all rules, they are required to be followed
except only for the most persuasive of reasons.
 In the case of Republic v. Hernandez this Court stressed:
[35]
It cannot be overemphasized that procedural rules have their
own wholesome rationale in the orderly administration of
justice. Justice has to be administered according to the Rules
in order to obviate arbitrariness, caprice, or whimsicality. We
have been cautioned and reminded in Limpot v. CA, et
al., that:
Rules of procedure are intended to ensure the orderly
administration of justice and the protection of substantive
rights in judicial and extrajudicial proceedings. It is a mistake
to propose that substantive law and adjective law are
contradictory to each other, or, as has often been suggested,
that enforcement of procedural rules should never be
permitted if it will result in prejudice to the substantive rights
of the litigants. This is not exactly true; the concept is much
misunderstood. As a matter of fact, the policy of the courts is
to give both kinds of law, as complementing each other, in the
just and speedy resolution of the dispute between the parties.
Observance of both substantive rights is equally guaranteed
by due process, whatever the source of such rights, be it the
Constitution itself or only a statute or a rule of court.
...
. . . (T)hey are required to be followed except only when for
the most persuasive of reasons they may be relaxed to
relieve a litigant of an injustice not commensurate with the
degree of his thoughtlessness in not complying with the
7
procedure prescribed. x x x. While it is true that a litigation is
not a game of technicalities, this does not mean that the Rules
of Court may be ignored at will and at random to the prejudice
of the orderly presentation and assessment of the issues and
their just resolution. Justice eschews anarchy.
Reiterated in Lanzaderas v. Amethyst Security and General
Services, Inc.:
[36]
. . . Although technical rules of procedure are not ends in
themselves, they are necessary, however, for an effective and
expeditious administration of justice. It is settled that a party
who seeks to avail of certiorari must observe the rules thereon
and non-observance of said rules may not be brushed aside as
mere technicality. While litigation is not a game of technicalities,
and that the rules of procedure should not be enforced strictly
at the cost of substantial justice, still it does not follow that the
Rules of Court may be ignored at will and at random to the
prejudice of the orderly presentation, assessment and just
resolution of the issues. Procedural rules should not be belittled
or dismissed simply because they may have resulted in
prejudice to a partys substantial rights. Like all rules, they are
required to be followed except only for compelling reasons.
Finally, on the issue of substance, a less stringent interpretation of
the rules is not justified in the instant case which raises factual issues
already passed upon by both the HLURB and the Office of the
President. Findings of fact by administrative agencies are generally
accorded great respect, if not finality, by the Court because of the
special knowledge and expertise over matters falling under their
jurisdiction. [37]
More, the title to the land of Ferreira has acquired the character
of indeafeasibility having been registered under the Torrens system
of registration. Once a decree of registration is made under the
Torrens system, and the reglementary period has passed within
which the decree may be questioned, the title is perfected and
cannot be collaterally questioned later on. To permit a collateral
[38]
attack on his title, such as what petitioner now attempts, would
reduce the vaunted legal indeafeasibility of Torrens Title to
meaningless verbiage. A Torrens Title cannot be collaterally
[39]
attacked. A direct attack against a judgment is made through an
[40]
action or proceeding the main object of which is to annul, set aside,
or enjoin the enforcement of such judgment, if not yet carried into
effect; or, if the property has been disposed of, the aggrieved party
may sue for recovery. A collateral attack is made when, in another
[41]
action to obtain a different relief, an attack on the judgment is made
as an incident in said action. [42]
It has, therefore, become an ancient rule that the issue on the
validity of title, i.e., whether or not it was fraudulently issued, can only
be raised in an action expressly instituted for that purpose. [43]
WHEREFORE, premises considered, the instant petition
is DENIED. No costs.
SO ORDERED.
G.R. No. 152131 April 29, 2009
FLORAIDA TERAÑA, Petitioner,
vs.
HON. ANTONIO DE SAGUN, PRESIDING JUDGE, REGIONAL TRIAL
8
COURT, BRANCH XIV, NASUGBU, BATANGAS AND ANTONIO B.
SIMUANGCO, Respondents.
DECISION
BRION, J.:
The petitioner Floraida Terana (petitioner) asks us to reverse and set aside,
through this Petition for Review on Certiorari,1 the September 7, 2001 Decision 2 of
the Court of Appeals (CA), and its subsequent Resolution 3denying the petitioner’s
motion for reconsideration.
THE FACTS
The respondent Antonio Simuangco (respondent) owned a house and lot at 138
J.P. Laurel St., Nasugbu, Batangas, which he leased to the petitioner. 4 Sometime
in 1996, the petitioner demolished the leased house and erected a new one in its
place.5 The respondent alleged that this was done without his consent. 6 The
Contract of Lease7 defining the respective rights and obligations of the parties
contained the following provisions, which the petitioner allegedly violated:
3. That the lessee obligated herself with the Lessor by virtue of this Lease, to do
the following, to wit:
a) xxx
b) To keep the leased property in such repair and condition as it was in the
commencement of the Lease with the exception of portions or parts which may be
impaired due to reasonable wear and tear;
c) xxx
d) Not to make any alterations in the Leased property without the knowledge and
consent of the Lessor; x x x
The petitioner allegedly also gave the materials from the demolished house to her
sister, who built a house adjacent to the respondent’s property. 8 When the
respondent discovered what the petitioner did, he immediately confronted her and
advised her to vacate the premises.9 She refused. On February 3, 1997, the
respondent sent a letter demanding the petitioner to vacate the leased
property.10 Despite this letter of demand, which the petitioner received on
February 10,11 she still refused to vacate the said property.
The respondent thus filed a complaint for unlawful detainer12 against the petitioner
on April 16, 1997 on the ground of the petitioner’s violation of the terms of the
Contract of Lease.13 The respondent prayed for the petitioner’s ejectment of the
leased property, and for the award of P70,000.00, representing the cost of the
materials from the demolished house, attorney’s fees, and costs.14
The presiding judge of the Municipal Trial Court (MTC) of Nasugbu,
Batangas, Hon. Herminia Lucas, inhibited from the case on the ground that she
is related to the respondent.15
The petitioner denied allegations of the complaint in her "Sagot."16 She claimed
that she demolished the old building and built a new one with the knowledge
and consent of the respondent; that the original house was old and was on the
verge of collapsing;17 that without the timely repairs made by the petitioner, the
house’s collapse would have caused the death of the petitioner and her family.
The petitioner prayed for the court to: 1) dismiss the ejectment case against
her; and 2) award in her favor: a) P100,000.00 as moral damages,
b) P200,000.00 as reimbursement for the expenses incurred in building the
new house, c) P50,000.00 as attorney’s fees, and d) P10,000.00 as costs
incurred in relation to the suit.18
The trial court called for a preliminary conference under Section 7 of the
Revised Rules of Summary Procedure (RSP) and Section 8 of Rule 70 of the
Rules of Court, and required the parties to file their position papers and
affidavits of their witnesses after they failed to reach an amicable
settlement.19 Instead of filing their position papers, both parties moved for an
extension of time to file the necessary pleadings. The trial court denied both
motions on the ground that the RSP and the Rules of Court, particularly Rule
70, Section 13(5), prohibit the filing of a motion for extension of time. 20
The MTC framed the issues in the case as follows:
1. Whether or not there was a violation of the contract of lease when the old
house was demolished and a new house was constructed by the defendant;
and
2. Whether or not defendant is entitled to be reimbursed for her expenses in
the construction of the new house.21
THE MTC’S DECISION22
The MTC rendered its decision on November 5, 1997 23 despite the parties’
failure to timely file their respective position papers. 24 The decision stated that:
according to the parties’ Contract of Lease, the consent of the respondent must
be obtained before any alteration or repair could be done on the leased
9
property; that the petitioner failed to produce any evidence that the respondent
had given her prior permission to demolish the leased house and construct a new
one; that even in her answer, she failed to give specific details about the consent
given to her; that in demolishing the old structure and constructing the new one,
the petitioner violated the Contract of Lease; that this violation of the terms of the
lease was a ground for judicial ejectment under Article 1673(3) of the Civil Code;
and that since the demolition and construction of the new house was without the
consent of the respondent, there was no basis to order the respondent to
reimburse the petitioner.
The MTC thus ruled:
IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the
plaintiff Antonio B. Simuangco and against the defendant Aida Terana as follows:
1. Ordering the defendant Aida Terana and all persons claiming right under her to
vacate and surrender possession of the subject house to the plaintiff;
2. Ordering the said defendant to pay the amount of Five Thousand Pesos
(P5,000.00) as Attorney’s fees; and
3. To pay the costs of suit.
SO ORDERED.25
Unaware that a decision had already been rendered, the petitioner filed a letter
entitled Kahilingan,26 to which she attached her position paper and the affidavits of
her witnesses.27 The submission was essentially a motion for reconsideration of
the denial of motion for extension of time. On November 6, 1977, the MTC denied
the petitioner’s Kahilingan as follows:
Defendant Aida Terania’s "KAHILINGAN" dated November 5, 1997 is DENIED for
being moot and academic on account of the decision on the merits rendered by
this court dated November 4, 1997 relative to the instant case.
SO ORDERED.28
Petitioner then filed a Notice of Appeal on November 12, 1997. 29 The records of
the case were ordered elevated to the Regional Trial Court (RTC) where the case
was docketed as Civil Case No. 439.
THE RTC’S DECISION30
The RTC rendered judgment affirming the decision of the MTC on February 26,
1998. The RTC ruled that: 1) the ruling of the MTC was supported by the facts on
record; 2) although the respondent failed to submit his position paper and the
affidavits of his witnesses, the MTC correctly rendered its decision on the basis
of the pleadings submitted by the parties, as well as the evidence on record; 3)
the petitioner failed to show enough reason to reverse the MTC’s decision. The
court further declared that its decision was immediately executory, without
prejudice to any appeal the parties may take.
The petitioner filed a Motion for Reconsideration and/or for New Trial on March
3, 1998.31 The petitioner argued that the appealed MTC decision was not
supported by any evidence, and that the respondent failed to substantiate the
allegations of his complaint and to discharge the burden of proving these
allegations after the petitioner denied them in her Sagot. In effect, the petitioner
argued that the allegations of the complaint should not have been the sole
basis for the judgment since she filed an answer and denied the allegations in
the complaint; the RTC should have also appreciated her position paper and
the affidavit of her witnesses that, although filed late, were nevertheless not
expunged from the records.
In her motion for a new trial, the petitioner argued that her failure to submit her
position paper and the affidavits of her witnesses within the 10-day period was
due to excusable negligence. She explained that she incurred delay because
of the distance of some of her witnesses’ residence. The petitioner alleged that
she had a good and meritorious claim against the respondent, and that aside
from her position paper and the affidavits of her witnesses, she would adduce
receipts and other pieces of documentary evidence to establish the costs
incurred in the demolition of the old house and the construction of the new one.
On April 28, 1998, the RTC granted the motion for reconsideration, and thus
reversed its February 26, 1998 judgment, as well as the November 5, 1997
decision of the MTC. It noted that: 1) the MTC rendered its decision before the
petitioner was able to file her position paper and the affidavit of her witnesses;
2) the rule on the timeliness of filing pleadings may be relaxed on equitable
considerations; and 3) the denial of the petitioner’s motion for reconsideration
and/or new trial will result to a miscarriage of justice. Thus, believing that it was
equitable to relax the rules on the timeliness of the filing of pleadings, the RTC
remanded the case to the MTC for further proceedings, after giving the
respondent the opportunity to submit his position paper and the affidavits of his
witnesses. The fallo reads:
10
WHEREFORE, on considerations of equity and substantial justice, and in the light
of Section 6, Rule 135 of the Rules of Court, the judgment of this Court dated
February 26, 1998, as well as the Decision dated November 4, 1997 of the Lower
Court in Civil Case No. 1305, are hereby both set aside. The lower court to which
the records were heretofore remanded is hereby ordered to conduct further
proceedings in this case, after giving the plaintiff-appellee an opportunity to file his
position paper and affidavits of witnesses as required by Section 10, Rule 70, of
the 1997 Rules of Civil Procedure. [Underscoring supplied.]
SO ORDERED.
On May 9, 1998, the petitioner challenged the order of remand through another
motion for reconsideration. 32 The petitioner argued that since the original action
for unlawful detainer had already been elevated from the MTC to the RTC, the
RSP no longer governed the disposal of the case. Before the RTC, the applicable
rule is the Rules of Court, particularly Section 6 of Rule 37, which reads:
Sec. 6. Effect of granting of motion for new trial. – If a new trial is granted in
accordance with the provisions of this Rule, the original judgment or final order
shall be vacated, and the action shall stand for trial de novo; but the recorded
evidence taken upon the former trial, in so far as the same is material and
competent to establish the issues, shall be used at the new trial without retaking
the same.
Thus, the RTC should have conducted a trial de novo instead of remanding the
case to the MTC. The petitioner further argued that a remand to the court a
quo may only be ordered under Section 8, Rule 4033 of the Rules of Court.
The RTC denied the motion noting that the petitioner missed the whole point of
the reversal of the decision. First, the reversal was made in the interest of
substantial justice and the RTC hewed more to the "spirit that vivifieth than to the
letter that killeth,"34 and that "a lawsuit is best resolved on its full merits, unfettered
by the stringent technicalities of procedure." The RTC further emphasized that a
remand is not prohibited under the Rules of Court and that Section 6 of Rule 135
allows it:
Sec. 6. Means to carry jurisdiction into effect – When by law jurisdiction is
conferred on a court or judicial officer, all auxiliary writs, processes and other
means necessary to carry it into effect may be employed by such court or officer,
and if the procedure to be followed in the exercise of such jurisdiction is not
specifically pointed out by law or by these rules, any suitable process or mode
of proceeding may be adopted which appears conformable to the spirit of said
law or rules.
Second, Rule 40 governs appeals from the MTC to the RTC. Nowhere in Rule
40 is there a provision similar to Section 6 of Rule 37.
Third, Section 6 of Rule 37 contemplates a motion for new trial and for
reconsideration filed before a trial court a quo. The RTC in this case was acting
as an appellate court; the petitioner’s motion for new trial and reconsideration
was directed against the appellate judgment of the RTC, not the original
judgment of the trial court.
Fourth, after Republic Act No. 6031 mandated municipal trial courts to record
their proceedings, a trial de novo at the appellate level may no longer be
conducted. The appellate courts may instead review the evidence and records
transmitted to it by the trial court. Since the petitioner is asking the court to
review the records of the MTC, inclusive of her position paper and the affidavits
of her witnesses, it is also important to give the respondent an opportunity to
file his position paper and the affidavits of his witnesses before the MTC
renders a judgment. It is the MTC or the trial court that has the jurisdiction to
do that.
THE CA’S DECISION
The CA affirmed the RTC in a decision promulgated on September 7,
2001.35 The CA noted that the RTC’s order of remand was not just based on
equity and substantial justice, but was also based on law, specifically Section 6
of Rule 135. Thus, the CA ruled that the RTC did not err in remanding the case
to the MTC and ordering the conduct of further proceedings after giving the
respondent an opportunity to present his position paper and the affidavits of his
witnesses. This ruling did not satisfy petitioner, giving way to the present
petition.
THE PETITION
Before this Court, the petitioner alleges: 1) that the respondent made a request
for the petitioner to vacate the subject property because his nearest of kin
needed it; 2) that she was only going to vacate the premises if she were
reimbursed the actual cost incurred in building the said house; 36 3) that the
case be decided on the basis of the entire record of the proceedings in the
11
court of origin, including memoranda and briefs submitted by the parties, instead
of being remanded to the MTC.
In his Comment37 and Memorandum,38 the respondent joins the petitioner’s prayer
for a ruling based on the records instead of remanding the case to the MTC. He
prays that, as the MTC ruled, the petitioner be ordered to vacate the leased
property, and that the petitioner’s claim for reimbursement be denied. The
respondent argues that the MTC correctly ruled on the basis of the parties’
pleadings, the stipulation of facts during the preliminary conference, and the
records of the proceedings.
ISSUES
The petitioner submits the following as the issue to be decided:
[W]hether under the Rules of Summary Procedure, the Regional Trial Court, as
well as the Court of Appeals, may order the case remanded to the MTC after the
plaintiff, herein respondent, failed to submit evidence in support of his complaint
because his Position Paper, affidavit of witnesses and evidence, were not
submitted on time and the extension of time to file the same was denied because
it is prohibited under the Rules on Summary Procedure. 39
which we break down into the following sub-issues: 1) whether a remand is
proper; 2) whether the Court should appreciate the petitioner’s position paper and
the affidavits of her witnesses; and 3) whether the complaint for unlawful detainer
should be dismissed.
THE COURT’S RULING
The petition is partly meritorious.
Remand Not Necessary
We find that a remand of the case to the lower courts is no longer necessary,
given the pleadings and submissions filed, and the records of the proceedings
below. A remand would delay the overdue resolution of this case (originally filed
with the MTC on April 16, 1997), and would run counter to the spirit and intent of
the RSP.40
Petitioner’s Position Paper and the Affidavits of Her Witnesses Cannot Be
Admitted
Should the Court admit the petitioner’s position paper and the affidavits of her
witnesses attached to her Kahilingan?
The intent and terms of the RSP both speak against the liberality that the
petitioner sees. By its express terms, the purpose of the RSP is to "achieve an
expeditious and inexpensive determination" of the cases they cover, among
them, forcible entry and unlawful detainer cases.41 To achieve this objective,
the RSP expressly prohibit certain motions and pleadings that could cause
delay, among them, a motion for extension of time to file pleadings, affidavits or
any other paper. If the extension for the filing of these submissions cannot be
allowed, we believe it illogical and incongruous to admit a pleading that is
already filed late. Effectively, we would then allow indirectly what we prohibit to
be done directly. It is for this reason that in Don Tino Realty Development
Corporation v. Florentino,42 albeit on the issue of late filing of an answer in a
summary proceeding, we stated that "[t]o admit a late answer is to put a
premium on dilatory measures, the very mischief that the rules seek to
redress."
The strict adherence to the reglementary period prescribed by the RSP is due
to the essence and purpose of these rules. The law looks with compassion
upon a party who has been illegally dispossessed of his property. Due to the
urgency presented by this situation, the RSP provides for an expeditious and
inexpensive means of reinstating the rightful possessor to the enjoyment of the
subject property.43 This fulfills the need to resolve the ejectment case quickly.
Thus, we cannot reward the petitioner’s late filing of her position paper and the
affidavits of her witnesses by admitting them now.
The failure of one party to submit his position paper does not bar at all the
MTC from issuing a judgment on the ejectment complaint. Section 10 of the
RSP states:
Section 10. Rendition of judgment. – Within thirty (30) days after receipt of the
last affidavits and position papers, or the expiration of the period for filing the
same, the court shall render judgment. [Underscoring supplied.]
However, should the court find it necessary to clarify certain material facts, it
may, during the said period, issue an order specifying the matters to be
clarified, and require the parties to submit affidavits or other evidence on the
said matters within ten (10) days from receipt of said order. Judgment shall be
rendered within fifteen (15) days after the receipt of the last affidavit or the
expiration of the period for filing the same.
12
The court shall not resort to the foregoing procedure just to gain time for the
rendition of the judgment.
Thus, the situation obtaining in the present case has been duly provided for by
the Rules; it was correct to render a judgment, as the MTC did, after one party
failed to file their position paper and supporting affidavits.
That a position paper is not indispensable to the court’s authority to render
judgment is further evident from what the RSP provides regarding a preliminary
conference: "on the basis of the pleadings and the stipulations and admissions
made by the parties, judgment may be rendered without the need for further
proceedings, in which event the judgment shall be rendered within 30 days from
the issuance of the order." 44 Thus, the proceedings may stop at that point, without
need for the submission of position papers. In such a case, what would be extant
in the record and the bases for the judgment would be the complaint, answer, and
the record of the preliminary conference.
Unlawful detainer
The special civil action for unlawful detainer has the following essential requisites:
1) the fact of lease by virtue of a contract, express or implied;
2) the expiration or termination of the possessor's right to hold possession;
3) withholding by the lessee of possession of the land or building after the
expiration or termination of the right to possess;
4) letter of demand upon lessee to pay the rental or comply with the terms of the
lease and vacate the premises; and
5) the filing of the action within one year from the date of the last demand
received by the defendant.45
Requisites 1, 4, and 5 have been duly established. The presence of the Contract
of Lease is undisputed; the letter of demand was sent on February 3, 1997, and
received by the petitioner on February 10, 1997; and the action was filed on April
16, 1997, well within the one-year period from the letter of demand. For our
determination is whether the petitioner’s right to possess the subject property may
be terminated by virtue of her violation of the terms of the contract. If we answer
in the affirmative, her continued detention of the property is illegal.
Section 1673(3) of the Civil Code answers this question by providing that the
lessor may terminate the lease contract for violation of any of the conditions or
terms agreed upon,46 and may judicially eject the lessee.47 One of the stipulated
terms of the parties’ Contract of Lease, as narrated above, is that no alterations
may be made on the leased property without the knowledge and consent of the
lessor. The issue in this case is beyond the fact of alteration since it is not
disputed that the petitioner demolished the house under lease and built a new
one. The crucial issue is whether the demolition was with or without the
knowledge and consent of the respondent.
The petitioner contends that the Court should not give credence to the
respondent’s claim that he neither had knowledge of nor gave his consent to
her acts. She argued that the respondent had the burden of proving this
allegation with positive evidence after she frontally denied it in her answer.
Since the respondent failed to discharge this burden, she argues that she no
longer needed to prove her defense that the demolition and construction were
done with the respondent’s knowledge and consent. 48
The petitioner’s contention is misplaced.
First, the material allegations in a complaint must be specifically denied by the
defendant in his answer. Section 10, Rule 8 of the 1997 Rules of Court,
provides:
A defendant must specify each material allegation of fact the truth of which he
does not admit and, whenever practicable, shall set forth the substance of the
matters upon which he relies to support his denial. Where a defendant desires
to deny only a part of an averment, he shall specify so much of it as is true and
material and shall deny the remainder. Where a defendant is without
knowledge or information sufficient to form a belief as to the truth of a material
averment made in the complaint, he shall so state, and this shall have the
effect of a denial.
Section 11, Rule 8 of the Rules of Court likewise provides that material
allegations in the complaint which are not specifically denied, other than the
amount of unliquidated damages, are deemed admitted. A denial made without
setting forth the substance of the matters relied upon in support of the denial,
even when to do so is practicable, does not amount to a specific denial. 49
The petitioner’s denial in her answer consists of the following:
1. Maliban sa personal na katangian at tirahan ng nasasakdal, ay walang
katotuhanan ang mga isinasakdal ng nagsasakdal;
2. Na hindi lumabag sa kasunduan ng upahan ang nasasakdal;
13
3. Na, ang pagpapagawa ng bahay na inuupahan ng nasasakdal ay sa kaalaman
at kapahintulutan ng nagsasakdal at higit na gumanda at tumibay ang bahay ng
nagsasakdal sa pamamagitan ng pagpapagawa ng nasasakdal; xxx50
We do not find this denial to be specific as the petitioner failed to set forth the
substance of the matters in which she relied upon to support her denial. The
petitioner merely alleged that consent was given; how and why, she did not say. If
indeed consent were given, it would have been easy to fill in the details. She
could have stated in her pleadings that she verbally informed the respondent of
the need for the repairs, or wrote him a letter. She could have stated his
response, and how it was conveyed, whether verbally or in writing. She could
have stated when the consent was solicited and procured. These, she failed to
do. Ergo, the petitioner is deemed to have admitted the material allegations in the
complaint.
Second, both parties failed to present evidence other than the allegations in their
pleadings. Thus, the court may weigh the parties’ allegations against each other.
The petitioner presented a general denial, while the respondent set forth an
affirmative assertion. This Court has time and again said that a general denial
cannot be given more weight than an affirmative assertion. 51
Damages recoverable in an unlawful detainer action are limited to rentals or
reasonable compensation for the use of the property
This Court has no jurisdiction to award the reimbursement prayed for by both
parties. Both parties seek damages other than rentals or reasonable
compensation for the use of the property, which are the only forms of damages
that may be recovered in an unlawful detainer case. 52 Rule 70, Section 17 of the
Rules of Court authorizes the trial court to order the award of an amount
representing arrears of rent or reasonable compensation for the use and
occupation of the premises if it finds that the allegations of the complaint are
true.53
1avvphil.zw+
The rationale for limiting the kind of damages recoverable in an unlawful detainer
case was explained in Araos v. Court of Appeals,54 wherein the Court held that:
The rule is settled that in forcible entry or unlawful detainer cases, the only
damage that can be recovered is the fair rental value or the reasonable
compensation for the use and occupation of the leased property. The reason for
this is that in such cases, the only issue raised in ejectment cases is that of
rightful possession; hence, the damages which could be recovered are those
which the plaintiff could have sustained as a mere possessor, or those caused
by the loss of the use and occupation of the property, and not the damages
which he may have suffered but which have no direct relation to his loss of
material possession.
An action for reimbursement or for recovery of damages may not be properly
joined with the action for ejectment. The former is an ordinary civil action
requiring a full-blown trial, while an action for unlawful detainer is a special civil
action which requires a summary procedure. The joinder of the two actions is
specifically enjoined by Section 5 of Rule 2 of the Rules of Court, which
provides:
Section 5. Joinder of causes of action. – A party may in one pleading assert, in
the alternative or otherwise, as many causes of action as he may have against
an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder
of parties;
(b) The joinder shall not include special civil actions or actions governed
by special rules;
(c) Where the causes of action are between the same parties but pertain to
different venues or jurisdictions, the joinder may be allowed in the Regional
Trial Court provided one of the causes of action falls within the jurisdiction of
said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of
money, the aggregate amount claimed shall be the test of jurisdiction.
[Underscoring supplied.]
WHEREFORE, the petition is PARTIALLY GRANTED. The decision of the
Court of Appeals in CA-G.R. No. SP-48534 is REVERSED AND SET
ASIDE. The petitioner FLORAIDA TERANA and all persons claiming right
under her are ordered to vacate and surrender possession of the subject
property to the respondent ANTONIO SIMUANGCO. No costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
14
SECOND DIVISION
G.R. No. L-31061 August 17, 1976
SULO NG BAYAN INC., plaintiff-appellant,
vs.
GREGORIO ARANETA, INC., PARADISE FARMS, INC., NATIONAL
WATERWORKS & SEWERAGE AUTHORITY, HACIENDA CARETAS, INC, and
REGISTER OF DEEDS OF BULACAN, defendants-appellees.
Hill & Associates Law Offices for appellant.
Araneta, Mendoza & Papa for appellee Gregorio Araneta, Inc.
Carlos, Madarang, Carballo & Valdez for Paradise Farms, Inc.
Leopoldo M. Abellera, Arsenio J. Magpale & Raul G. Bernardo, Office of the
Government Corporate Counsel for appellee National Waterworks & Sewerage
Authority.
Candido G. del Rosario for appellee Hacienda Caretas, Inc.
ANTONIO, J.:
The issue posed in this appeal is whether or not plaintiff corporation (non- stock f
for the nullification of the transfer certificates of title issued in favor of defendants
appellees covering the aforesaid parcels of land; for a declaration of "plaintiff's
members as absolute owners of the property" and the issuance of the
corresponding certificate of title; and for damages.
On April 26, 1966, plaintiff-appellant Sulo ng Bayan, Inc. filed an accion de
revindicacion with the Court of First Instance of Bulacan, Fifth Judicial District,
Valenzuela, Bulacan, against defendants-appellees to recover the ownership and
possession of a large tract of land in San Jose del Monte, Bulacan, containing an
area of 27,982,250 square meters, more or less, registered under the Torrens
System in the name of defendants-appellees' predecessors-in-interest. 1 The
complaint, as amended on June 13, 1966, specifically alleged that plaintiff is a
corporation organized and existing under the laws of the Philippines, with its principal
office and place of business at San Jose del Monte, Bulacan; that its membership is
composed of natural persons residing at San Jose del Monte, Bulacan; that the
members of the plaintiff corporation, through themselves and their predecessors-in-
interest, had pioneered in the clearing of the fore-mentioned tract of land, cultivated
the same since the Spanish regime and continuously possessed the said property
openly and public under concept of ownership adverse against the whole world;
that defendant-appellee Gregorio Araneta, Inc., sometime in the year 1958,
through force and intimidation, ejected the members of the plaintiff corporation fro
their possession of the aforementioned vast tract of land; that upon investigation
conducted by the members and officers of plaintiff corporation, they found out for
the first time in the year 1961 that the land in question "had been either fraudelently
or erroneously included, by direct or constructive fraud, in Original Certificate of
Title No. 466 of the Land of Records of the province of Bulacan", issued on May 11,
1916, which title is fictitious, non-existent and devoid of legal efficacy due to the
fact that "no original survey nor plan whatsoever" appears to have been submitted
as a basis thereof and that the Court of First Instance of Bulacan which issued the
decree of registration did not acquire jurisdiction over the land registration case
because no notice of such proceeding was given to the members of the plaintiff
corporation who were then in actual possession of said properties; that as a
consequence of the nullity of the original title, all subsequent titles derived
therefrom, such as Transfer Certificate of Title No. 4903 issued in favor of Gregorio
Araneta and Carmen Zaragoza, which was subsequently cancelled by Transfer
Certificate of Title No. 7573 in the name of Gregorio Araneta, Inc., Transfer
Certificate of Title No. 4988 issued in the name of, the National Waterworks &
Sewerage Authority (NWSA), Transfer Certificate of Title No. 4986 issued in the
name of Hacienda Caretas, Inc., and another transfer certificate of title in the name
of Paradise Farms, Inc., are therefore void. Plaintiff-appellant consequently prayed
(1) that Original Certificate of Title No. 466, as well as all transfer certificates of title
issued and derived therefrom, be nullified; (2) that "plaintiff's members" be declared
as absolute owners in common of said property and that the corresponding
certificate of title be issued to plaintiff; and (3) that defendant-appellee Gregorio
Araneta, Inc. be ordered to pay to plaintiff the damages therein specified.
On September 2, 1966, defendant-appellee Gregorio Araneta, Inc. filed a
motion to dismiss the amended complaint on the grounds that (1) the complaint
states no cause of action; and (2) the cause of action, if any, is barred by
prescription and laches. Paradise Farms, Inc. and Hacienda Caretas, Inc. filed
motions to dismiss based on the same grounds. Appellee National Waterworks
& Sewerage Authority did not file any motion to dismiss. However, it pleaded in
its answer as special and affirmative defenses lack of cause of action by the
plaintiff-appellant and the barring of such action by prescription and laches.
15
During the pendency of the motion to dismiss, plaintiff-appellant filed a motion,
dated October 7, 1966, praying that the case be transferred to another branch of
the Court of First Instance sitting at Malolos, Bulacan, According to defendants-
appellees, they were not furnished a copy of said motion, hence, on October 14,
1966, the lower court issued an Order requiring plaintiff-appellant to furnish the
appellees copy of said motion, hence, on October 14, 1966, defendant-appellant's
motion dated October 7, 1966 and, consequently, prayed that the said motion be
denied for lack of notice and for failure of the plaintiff-appellant to comply with the
Order of October 14, 1966. Similarly, defendant-appellee paradise Farms, Inc.
filed, on December 2, 1966, a manifestation information the court that it also did
not receive a copy of the afore-mentioned of appellant. On January 24, 1967, the
trial court issued an Order dismissing the amended complaint.
On February 14, 1967, appellant filed a motion to reconsider the Order of
dismissal on the grounds that the court had no jurisdiction to issue the Order of
dismissal, because its request for the transfer of the case from the Valenzuela
Branch of the Court of First Instance to the Malolos Branch of the said court has
been approved by the Department of Justice; that the complaint states a sufficient
cause of action because the subject matter of the controversy in one of common
interest to the members of the corporation who are so numerous that the present
complaint should be treated as a class suit; and that the action is not barred by
the statute of limitations because (a) an action for the reconveyance of property
registered through fraud does not prescribe, and (b) an action to impugn a void
judgment may be brought any time. This motion was denied by the trial court in its
Order dated February 22, 1967. From the afore-mentioned Order of dismissal and
the Order denying its motion for reconsideration, plaintiff-appellant appealed to
the Court of Appeals.
On September 3, 1969, the Court of Appeals, upon finding that no question of fact
was involved in the appeal but only questions of law and jurisdiction, certified this
case to this Court for resolution of the legal issues involved in the controversy.
I
Appellant contends, as a first assignment of error, that the trial court acted without
authority and jurisdiction in dismissing the amended complaint when the
Secretary of Justice had already approved the transfer of the case to any one of
the two branches of the Court of First Instance of Malolos, Bulacan.
Appellant confuses the jurisdiction of a court and the venue of cases with the
assignment of cases in the different branches of the same Court of First
Instance. Jurisdiction implies the power of the court to decide a case, while
venue the place of action. There is no question that respondent court has
jurisdiction over the case. The venue of actions in the Court of First Instance is
prescribed in Section 2, Rule 4 of the Revised Rules of Court. The laying of
venue is not left to the caprice of plaintiff, but must be in accordance with the
aforesaid provision of the rules. 2The mere fact that a request for the transfer of a
case to another branch of the same court has been approved by the Secretary of
Justice does not divest the court originally taking cognizance thereof of its
jurisdiction, much less does it change the venue of the action. As correctly
observed by the trial court, the indorsement of the Undersecretary of Justice did
not order the transfer of the case to the Malolos Branch of the Bulacan Court of
First Instance, but only "authorized" it for the reason given by plaintiff's counsel that
the transfer would be convenient for the parties. The trial court is not without power
to either grant or deny the motion, especially in the light of a strong opposition
thereto filed by the defendant. We hold that the court a quo acted within its
authority in denying the motion for the transfer the case to Malolos notwithstanding
the authorization" of the same by the Secretary of Justice.
II
Let us now consider the substantive aspect of the Order of dismissal.
In dismissing the amended complaint, the court a quo said:
The issue of lack of cause of action raised in the motions to dismiss refer to the
lack of personality of plaintiff to file the instant action. Essentially, the term
'cause of action' is composed of two elements: (1) the right of the plaintiff and
(2) the violation of such right by the defendant. (Moran, Vol. 1, p. 111). For
these reasons, the rules require that every action must be prosecuted and
defended in the name of the real party in interest and that all persons having
an interest in the subject of the action and in obtaining the relief demanded
shall be joined as plaintiffs (Sec. 2, Rule 3). In the amended complaint, the
people whose rights were alleged to have been violated by being deprived and
dispossessed of their land are the members of the corporation and not the
corporation itself. The corporation has a separate. and distinct personality from
its members, and this is not a mere technicality but a matter of substantive law.
16
There is no allegation that the members have assigned their rights to the
corporation or any showing that the corporation has in any way or manner
succeeded to such rights. The corporation evidently did not have any rights
violated by the defendants for which it could seek redress. Even if the Court
should find against the defendants, therefore, the plaintiff corporation would not
be entitled to the reliefs prayed for, which are recoveries of ownership and
possession of the land, issuance of the corresponding title in its name, and
payment of damages. Neither can such reliefs be awarded to the members
allegedly deprived of their land, since they are not parties to the suit. It appearing
clearly that the action has not been filed in the names of the real parties in
interest, the complaint must be dismissed on the ground of lack of cause of
action. 3
Viewed in the light of existing law and jurisprudence, We find that the trial court
correctly dismissed the amended complaint.
It is a doctrine well-established and obtains both at law and in equity that a
corporation is a distinct legal entity to be considered as separate and apart from
the individual stockholders or members who compose it, and is not affected by
the personal rights, obligations and transactions of its stockholders or
members. 4 The property of the corporation is its property and not that of the
stockholders, as owners, although they have equities in it. Properties registered in the
name of the corporation are owned by it as an entity separate and distinct from its
members. 5 Conversely, a corporation ordinarily has no interest in the individual
property of its stockholders unless transferred to the corporation, "even in the case of
a one-man corporation. 6 The mere fact that one is president of a corporation does not
render the property which he owns or possesses the property of the corporation,
since the president, as individual, and the corporation are separate
similarities. 7 Similarly, stockholders in a corporation engaged in buying and dealing in
real estate whose certificates of stock entitled the holder thereof to an allotment in the
distribution of the land of the corporation upon surrender of their stock certificates
were considered not to have such legal or equitable title or interest in the land, as
would support a suit for title, especially against parties other than the corporation. 8
It must be noted, however, that the juridical personality of the corporation, as
separate and distinct from the persons composing it, is but a legal fiction
introduced for the purpose of convenience and to subserve the ends of
justice. 9 This separate personality of the corporation may be disregarded, or the
veil of corporate fiction pierced, in cases where it is used as a cloak or cover for
fraud or illegality, or to work -an injustice, or where necessary to achieve equity. 10
Thus, when "the notion of legal entity is used to defeat public convenience,
justify wrong, protect fraud, or defend crime, ... the law will regard the
corporation as an association of persons, or in the case of two corporations,
merge them into one, the one being merely regarded as part or instrumentality
of the other. 11 The same is true where a corporation is a dummy and serves no
business purpose and is intended only as a blind, or an alter ego or business
conduit for the sole benefit of the stockholders. 12 This doctrine of disregarding the
distinct personality of the corporation has been applied by the courts in those
cases when the corporate entity is used for the evasion of taxes 13 or when the veil
of corporate fiction is used to confuse legitimate issue of employer-employee
relationship, 14 or when necessary for the protection of creditors, in which case the
veil of corporate fiction may be pierced and the funds of the corporation may be
garnished to satisfy the debts of a principal stockholder. 15 The aforecited principle
is resorted to by the courts as a measure protection for third parties to prevent
fraud, illegality or injustice. 16
It has not been claimed that the members have assigned or transferred
whatever rights they may have on the land in question to the plaintiff
corporation. Absent any showing of interest, therefore, a corporation, like
plaintiff-appellant herein, has no personality to bring an action for and in behalf
of its stockholders or members for the purpose of recovering property which
belongs to said stockholders or members in their personal capacities.
It is fundamental that there cannot be a cause of action 'without an antecedent
primary legal right conferred' by law upon a person. 17 Evidently, there can be no
wrong without a corresponding right, and no breach of duty by one person without
a corresponding right belonging to some other person. 18 Thus, the essential
elements of a cause of action are legal right of the plaintiff, correlative obligation of
the defendant, an act or omission of the defendant in violation of the aforesaid
legal right. 19 Clearly, no right of action exists in favor of plaintiff corporation, for as
shown heretofore it does not have any interest in the subject matter of the case
which is material and, direct so as to entitle it to file the suit as a real party in
interest.
III
17
Appellant maintains, however, that the amended complaint may be treated as a
class suit, pursuant to Section 12 of Rule 3 of the Revised Rules of Court.
In order that a class suit may prosper, the following requisites must be present:
(1) that the subject matter of the controversy is one of common or general interest
to many persons; and (2) that the parties are so numerous that it is impracticable
to bring them all before the court. 20
Under the first requisite, the person who sues must have an interest in the
controversy, common with those for whom he sues, and there must be that unity
of interest between him and all such other persons which would entitle them to
maintain the action if suit was brought by them jointly. 21
As to what constitutes common interest in the subject matter of the controversy, it
has been explained in Scott v. Donald 22 thus:
The interest that will allow parties to join in a bill of complaint, or that will enable
the court to dispense with the presence of all the parties, when numerous, except
a determinate number, is not only an interest in the question, but one in common
in the subject Matter of the suit; ... a community of interest growing out of the
nature and condition of the right in dispute; for, although there may not be any
privity between the numerous parties, there is a common title out of which the
question arises, and which lies at the foundation of the proceedings ... [here] the
only matter in common among the plaintiffs, or between them and the defendants,
is an interest in the Question involved which alone cannot lay a foundation for the
joinder of parties. There is scarcely a suit at law, or in equity which settles a
Principle or applies a principle to a given state of facts, or in which a general
statute is interpreted, that does not involved a Question in which other parties are
interested. ... (Emphasis supplied )
Here, there is only one party plaintiff, and the plaintiff corporation does not even
have an interest in the subject matter of the controversy, and cannot, therefore,
represent its members or stockholders who claim to own in their individual
capacities ownership of the said property. Moreover, as correctly stated by the
appellees, a class suit does not lie in actions for the recovery of property where
several persons claim Partnership of their respective portions of the property, as
each one could alleged and prove his respective right in a different way for each
portion of the land, so that they cannot all be held to have Identical title through
acquisition prescription. 23
Having shown that no cause of action in favor of the plaintiff exists and that the
action in the lower court cannot be considered as a class suit, it would be
unnecessary and an Idle exercise for this Court to resolve the remaining issue
of whether or not the plaintiffs action for reconveyance of real property based
upon constructive or implied trust had already prescribed.
ACCORDINGLY, the instant appeal is hereby DISMISSED with costs against
the plaintiff-appellant.
Fernando, C.J., Barredo, Aquino and Concepcion, Jr., JJ., concur.
SECOND DIVISION
[G.R. No. 119337. June 17, 1997]
BAYVIEW HOTEL, INC., petitioner, vs. COURT OF
APPEALS AND CLUB FILIPINO, INC. DE
CEBU, respondents.
DECISION
PUNO, J.:
This is a petition for review under Rule 45 of the Rules of Court
filed by Bayview Hotel, Inc. to set aside the decision of the Court of
Appeals in CA-G.R. SP. No. 34800 entitled Bayview Hotel, Inc. v.
Hon. Teodoro Lim and Club Filipino, Inc. de Cebu. [1]
The facts are well established. On May 27, 1959, petitioner
Bayview Hotel, Inc. entered into a contract of lease over a parcel of
land located in Cebu City with its registered owner, private
respondent Club Filipino, Inc. De Cebu. The lease agreement gave
petitioner the right to construct and operate a hotel complex known
as the Magellan International Hotel for a period of thirty (30) years. It
also stipulated that ownership of the building and other permanent
improvements on the land built by petitioner will transfer to private
respondent upon the expiration of the lease. Under the agreement,
petitioner was given the option to renew the lease for ten (10) more
18
years, the amount of rent to be computed at five percent (5%) of the
approved value of the land and improvements. Before the expiration of
the lease contract on December 31, 1992, petitioner notified private
respondent of its intention to extend the lease contract for a longer
period and at a rate of rent different from the terms as originally agreed
upon. There was no meeting of the minds between the parties as
private respondent's Board of Directors insisted on adhering to the
provisions of the original lease contract. Private respondent then sent
to petitioner a notice to vacate the premises and to pay accrued
rentals. Private respondent claimed ownership of the building and the
improvements pursuant to the provisions of the original contract. [2]
When petitioner failed to vacate the premises, private respondent,
on May 18, 1993, filed with the Metropolitan Trial Court of Cebu a
complaint for ejectment and recovery of accrued rentals amounting
to P2,850,000.00 as of April 30, 1993 and P712,500.00 for every month
thereafter. Before petitioner could be served with a copy of the
[3]
complaint and summons, the building was destroyed by a fire of
undetermined origin.
On June 1, 1993, petitioner filed its answer to the complaint for
ejectment interposing the following affirmative defenses:
"(a) Summons having been improperly and defectively served,
the Honorable Court has no jurisdiction over the person of the
defendant.
"(b) Plaintiff has no cause of action against the defendant.
"(c) Plaintiff's claim has been extinguished by the loss of the
premises, from which defendant has been sought to be ejected,
in a fire on 21 May, 1993.
"(d) The fire has effectively ejected the defendant from the
premises rendering the action for ejectment moot and
academic.
"(e) Since the defendant has been effectively ejected from
the premises by the fire, defendant cannot be said to have
deprived plaintiff of its possession of the same, therefore, the
complaint for ejectment should be dismissed and the case be
considered as an ordinary claim for a sum of money.
"(f) Consequently, since the amount being claimed is beyond
the jurisdiction of the Honorable Court, the suit should be
dismissed for lack of jurisdiction.
"(g) Plaintiff's claim for a sum of money has been
extinguished by compensation since under the lease contract
with the defendant, plaintiff was bound to pay the latter the
value of all its furnishings and equipment in the leased
premises upon the termination of the lease."
Petitioner then moved for a preliminary hearing on its affirmative
defenses which was denied by the trial judge on the ground that the
Revised Rules on Summary Procedure prohibits the
motion. Aggrieved by this Order, petitioner, on June 24, 1993, filed
with the Regional Trial Court of Cebu, a petition for certiorari with a
prayer for preliminary injunction against private respondent and
Metropolitan Trial Court Judge Teodoro Lim. Allegedly, Judge
[4]
Lim abused his discretion when he refused to dismiss the complaint
for ejectment. In its answer to the petition for certiorari, private
respondent admitted the destruction of the building but alleged
that petitioner has not completely vacated the premises since its
guards continue to remain in the premises and its cars are still
19
parked thereat. As to the jurisdiction of the court, private respondent
argued that jurisdiction once acquired by the court remains with it until
the termination of the case. Private respondent also sought the
dismissal of the petition on the ground that it is a prohibited pleading
under the Revised Rules on Summary Procedure. On November 26,
1993, the Regional Trial Court of Cebu granted the petition
for certiorari and ordered the Metropolitan Trial Court to dismiss the
ejectment case.
Private respondent appealed to the public respondent Court of
Appeals. On February 16, 1995, the appellate court reversed the
decision of the RTC of Cebu. It ruled: (1) that petitioner submitted to the
jurisdiction of the Metropolitan Court when it sought affirmative relief
from the same court; (2) that despite the burning of the building, the
trial court retained its jurisdiction to try the case for the nature of the
action remained to be an ejectment case; (3) whether petitioner has
vacated the premises and transferred its possession to Club Filipino is
a question of fact that should be threshed out in the trial court; and (4)
that the petition for certiorari should not have been given due course by
the Regional Trial Court for its filing is proscribed by the Rules on
Summary Procedure.
Hence, this appeal by petitioner where it contends: [5]
"THE RESPONDENT COURT GRAVELY ERRED AND
ABUSED ITS DISCRETION IN HOLDING THAT THE
METROPOLITAN TRIAL COURT DID NOT LOSE ITS
JURISDICTION OVER THE CASE FOR EJECTMENT
DESPITE THE FACT THAT THE BUILDING FROM WHICH
PETITIONER WAS SOUGHT TO BE EJECTED HAD BEEN
TOTALLY DESTROYED BEFORE AN ANSWER TO THE
COMPLAINT WAS FILED.
THE RESPONDENT COURT GRAVELY ABUSED ITS
DISCRETION IN HOLDING THAT THE PETITIONER'S
ANSWER WHICH EMBODIED AFFIRMATIVE DEFENSES
IS TANTAMOUNT TO A MOTION TO DISMISS AND
THEREFORE PROSCRIBED BY THE RULES ON
SUMMARY PROCEDURE.
RESPONDENT COURT GRAVELY ABUSED ITS
DISCRETION IN HOLDING THAT THE REGIONAL TRIAL
COURT CANNOT ENTERTAIN A PETITION
FOR CERTIORARI AS IT IS PROHIBITED UNDER THE
REVISED RULES ON SUMMARY PROCEDURE."
We reject petitioner's submissions.
Petitioner's contention of lack of jurisdiction of the Metropolitan
Trial Court is premised on its allegation that the building it leased
from the private respondent was completely burned down before it
could be served with summons in Civil Case No. R-32189. It
maintains that it does not have anymore a lessor-lessee relationship
with private respondent citing Article 1655 of the Civil Code which
provides that "if the thing is totally destroyed by a fortuitous event,
the lease is extinguished x x x."
Petitioner has overlooked that the case at bar involves land
lease. Private respondent insists that petitioner is still occupying the
subject land although the building on it has been burned down. If the
allegation is true, then the jurisdiction of the MTC cannot be
assailed. We have held in Commander Realty Inc. v. Court of
apppeals, that "an unlawful detainer is the act of unlawfully
[6]
withholding the possession of the land or building against or from
the landlord, vendor or vendee or other person after the expiration or
20
the termination of the detainer's right to hold possession by virtue of a
contract, express or implied." We also ruled in the same case that "the
right of a lessee to occupy the land leased as against the demand of
the lessor to regain possession should be decided in a case of
Ejectment or Detainer under Rule 70 of the Rules of Court." To be [7]
sure, petitioner makes the contrary claim that private respondent is
already in full and complete possession of the premises. This is,
however, a factual question that should be decided by the Metropolitan
Trial Court.
We likewise find no reason to fault respondent court when it
rejected petitioner's contention that the Metropolitan Trial Court should
have granted its motion for a preliminary hearing on its affirmative
defenses which raised the issue of jurisdiction. Under the law, parties
are not prohibited from filing an answer with affirmative defenses in
cases falling under summary procedure. However, the trial courts are
enjoined from conducting a preliminary hearing on such affirmative
defenses to prevent unnecessary delay in disposing the case on its
merits. Thus,time and again, we have ruled that under summary
procedure "x x x adjudication of cases can be done on the basis of
affidavits or other evidence. The proceeding must be as summary as
possible in order not to defeat the need to dispose ejectment cases in
as fast a time as possible. The reason is because cases involving
possession of properties usually pose a threat to the peace of
society."[8]
Finally, we agree with the respondent court that the claim of the
petitioner that the petition for certiorari it filed with the Regional Trial
Court is permissible is not in accord with Section 19 of the Revised
Rules on Summary Procedure which provides. -
"SEC. 19. Prohibited pleadings and motions.- The following
pleadings, motions, or petitions shall not be allowed in the
cases covered by this Rule:
"(a) Motion to dismiss the complaint or to quash the
complaint or information except on the ground of lack of
jurisdiction over the subject matter, or failure to comply with
the preceding section;
"(b) Motion for a bill of particulars;
"(c) Motion for new trial, or for reconsideration of a judgment,
or for reopening of trial;
"(d) Petition for relief from judgment;
"(e) Motion for extension of time to file pleadings, affidavits or
any other paper;
"(f) Memoranda;
"(g) Petition for certiorari, mandamus, or prohibition
against any interlocutory order issued by the court;
"(h) Motion to declare the defendant in default;
"(i) Dilatory motions for postponement;
"(j) Reply;
"(k) Third party complaints;
"(l) Interventions." (Emphasis supplied.)
The prohibition is plain enough. Its further exposition is unnecessary
verbiage.
IN VIEW WHEREOF, the petition is dismissed. Costs against
petitioner.
SO ORDERED.

21