PRE-TRIAL

A.M. No. RTJ-07-2060 July 27, 2011

(Formerly OCA IPI No. 06-2498-RTJ)

NATIONAL POWER CORPORATION, represented by its President CYRIL DEL

CALLAR, Complainant,
vs.
JUDGE SANTOS B. ADIONG, RTC, BRANCH 8, MARAWI CITY, Respondent.

DECISION

VILLARAMA, JR., J.:

Before us is an administrative complaint1 filed by the National Power Corporation

(NPC) through its president Cyril C. Del Callar, charging respondent Judge Santos
B. Adiong, Presiding Judge of the Regional Trial Court (RTC), Branch 8, Marawi City,
with gross ignorance of the law, manifest partiality and conduct unbecoming a
member of the Judiciary.

The complaint arose in connection with the following cases:

a. Civil Case No. 1918-03 entitled "Ibrahim Abdo, et al. v. National Power
Corporation" for Damages;

b. Civil Case No. 1322-95 entitled "Pacalna Sanggacala v. National Power

Corporation" for Damages;

c. Civil Case No 1332-95 entitled "Ali Macaraya Mato v. National Power

Corporation" for Damages;

d. Civil Case No. 1367-95 entitled "Camar Dipatuan v. National Power

Corporation" for Damages;

e. Civil Case No. 1361-95 entitled "Casimra Sultan v. National Power

Corporation" for Damages; and

f. Civil Case No. 1355-95 entitled "Mualam Dimatingcal v. National Power

Corporation" for Damages.

In Civil Case No. 1918-03, plaintiffs Ibrahim Abdo, et al. who styled themselves as
a "group of farmers, fishermen, laborers, workers, vendors, household members,
and businessmen", collectively sought to hold NPC liable for damages for
operating seven Hydroelectric Power plants allegedly without due regard to the
health and safety of the plaintiffs and other residents of Marawi City and the
province of Lanao del Sur. The plaintiffs alleged that they and several others
suffered ecological and economic disasters brought about by the operation of
regulatory dams which affected the natural flow of Lake Lanao and destroyed their
farms, properties, businesses and sources of livelihood. In addition to damages,
the plaintiffs also sought the refund of millions of pesos from the Purchase Power
Adjustment (PPA) collected by NPC from its electric consumers through the Lanao
Del Sur Electric Cooperative.2

On October 21, 2003, said plaintiffs filed an ex-parte Motion for the Release of
640,000,000 worth of PPA and other generation charges. Judge Adiong granted
the motion on November 9, 2004, but later set aside his order on November 24,
20053 after NPC filed a motion for reconsideration on the ground of lack of notice
and due process. Judge Adiong then required the parties to present their
respective evidence on December 8, 2005.

Subsequently, Judge Adiong issued a Resolution on February 28, 2006, ordering

NPC to refund the amount of 114,000,000, representing the Fuel Compensating
Cost, Foreign Exchange, and Incremental Cost Charges collected from April 1991
to December 1995; to refund the amount of 176,000,000, representing the Fuel
and Power Cost Adjustment and PPA collected from January 1996 to April 2003;
and to pay the amount of 97,537,000 as attorneys fees.4

NPC sought reconsideration of the order alleging that no pre-trial was conducted
and yet respondent judge already passed upon the merits of the case. NPCs
motion, however, was denied by Judge Adiong. Judge Adiong reasoned that
before issuing the questioned resolution, full-blown hearings were conducted and
NPC was afforded all the opportunities to present its evidence and to participate
actively in the hearings. Having done so, NPC has submitted itself to the courts
jurisdiction and could no longer claim that no pre-trial was conducted. Later,
Judge Adiong also directed Sheriff Otto Gomampong to implement the February
28, 2006 Resolution ratiocinating that the same has already become final.5

Thus, NPC filed the present administrative complaint, asserting that the issuance
of the February 28, 2006 Resolution is contrary to and violative of the Rules of
Court because said resolution was issued by respondent judge without first
conducting the requisite pre-trial conference and despite the fact that no formal
offer of exhibits was made by plaintiffs in support of their allegations. Also, NPC
complains of respondent judges failure to lay down the basis for granting the
plaintiffs ex-parte motion to release the PPA refunds, and in awarding the
exorbitant amount of 97,537,000.00 as attorneys fees.6

NPC further states that while it admits that judges are not to be administratively
charged for acts committed in the exercise of their judicial functions, respondent
judge had acted in violation of elementary rules that was equivalent to intolerable
and inexcusable gross ignorance of the law.

As regards Civil Case Nos. 1322-95, 1332-95, 1367-95, 1361-95, and 1355-95, said
cases involve identical causes of action arising from the same facts and raising
common issues. The plaintiffs in said cases sought to hold NPC liable for damages
for its refusal to open the Agus regulation dams causing perennial flooding on
their rice farmlands in 1979, 1984, 1986, 1989, 1993, 1994, 1995 and 1996. In all of
these cases, respondent judge rendered judgments in favor of the plaintiffs. Later,
respondent judge also issued Joint Special Order7 dated January 25, 2006 granting
the Joint Motion for the Issuance of the Writ of Execution Pending Appeal8 filed by
the plaintiffs in Civil Case Nos. 1367-95, 1361-95, and 1355-95 on January 2,
2006.9

A similar Order10 granting execution pending appeal was likewise issued in the
two other cases, Civil Case Nos. 1322-95 and 1332-95, on January 17, 2006. Nine
days later, on January 26, 2006, a Joint Writ of Execution11 for the two cases was
issued.

NPC alleges that Judge Adiongs act of granting execution pending appeal failed
to conform strictly to the rigid criteria outlined by jurisprudence for executions
pending appeal. There was no special reason for the issuance of the writ, and the
grant of the writ was whimsical and clearly manifested the partiality of respondent
judge. Further, Judge Adiongs evident bias and unexplained interest to execute
the decisions manifested when he immediately set for hearing a motion to cite in
contempt a Land Bank personnel who allegedly refused to comply with the notice
of garnishment despite the fact that the motion lacked the required notice of
hearing and the failure of the plaintiffs to comply with Rule 71 of the Rules of
Court.12

In his Comment13 dated June 1, 2006, respondent judge raised the following in his
defense. With regard to the lack of pre-trial conference, respondent judge asserts
that he has set the case for hearing on December 8 and 15, 2005, and January 12,
13, and 27, 2006. In all these hearings, the parties were allowed to present
whatever evidence they had to support their claims. He also claims that the lack of
pre-trial was never raised by NPC since the time it filed its answer on May 15, 2003
up to the time plaintiffs started presenting their evidence on December 8, 2005. It
was only on February 14, 2006 that NPC belatedly filed a manifestation calling the
courts attention to the lack of pre-trial, without formally asking or praying for the
setting of one. In addition, the records show that the plaintiffs filed their pre-trial
brief while defendant NPC did not. Thus, he argues that NPC is deemed to have
waived the holding of a pre-trial conference. Perforce, Judge Adiong argues that
he should not be held administratively liable for not conducting pre-trial.14

On the charge that he was biased and has unexplained interest to execute the
Decisions in Civil Case Nos. 1322-95, 1332-95, 1367-95, 1361-95 and 1355-95,
respondent judge denied the allegations and explained that he complied with the
requirements for allowing an execution pending appeal. He asserts there was
good reason for its issuance and there was evidence substantiating the need to
issue the writ of execution which were clearly spelled out and stated in the Special
Orders dated January 17, 2006 and January 25, 2006. Further, there is no reason to
complain about the bank personnel being held for contempt, as said bank
personnel was not even adjudged guilty of contempt.15

Respondent judge adds that he should be absolved from the charges against him.
He argues that mere suspicion that a judge is partial to one of the parties to the
case is not enough; there should be evidence to support the charge.16 Also, he
asserts that a judge cannot be held administratively liable for errors in the
appreciation of evidence unless the errors are gross or made in bad faith.17 When
such errors of judgment are committed, complainants may avail themselves of the
remedy of appeal or certiorari and not the filing of administrative charges against
the judge who rendered the challenged decision.

On October 2, 2007, this Court referred the present complaint to the Court of
Appeals, Cagayan De Oro City, for investigation, report and recommendation.
Pursuant to the Rules of Court, now retired Associate Justice Ruben C. Ayson, to
whom this case was assigned, sent notices to the parties informing them of the
schedule of investigation and hearings. The case was heard for five days, from May
25 to 29, 2009, and the parties were required to present oral, as well as
documentary evidence in support of their respective allegations and
counter-allegations.

On July 10, 2009, Justice Ayson submitted his report finding respondent judge
administratively liable. Justice Ayson did not delve into the correctness of the
Resolution dated February 28, 2006, granting the refund of millions of pesos
representing the PPA charges, as the resolution is now the subject of an appeal
with this Court, docketed as G.R. No. 177288 entitled, Ibrahim Abdo, et al. v. Court
of Appeals and National Power Corporation. Neither did he delve into the merits
of all the other cases from which the administrative cases filed by NPC against
Judge Adiong arose, for the reason that the proper venue for their review would
be through the usual judicial process of review by appellate courts.18

The Investigating Justice also noted the well-entrenched rule that a judge may not
be held administratively liable for every erroneous decision he renders, for no
person called upon to determine the facts or interpret the law in the
administration of justice can be infallible. However, he also noted that there is a
prominent exception to the rule, that is, when the law is so elementary that not to
know it constitutes gross ignorance of the law.19 In said cases, a judge committing
such error may face administrative sanctions.

Specifically, Justice Ayson noted that in Civil Case No. 1918-03, Judge Adiong
failed to conduct a pre-trial conference and erred in conducting the series of
hearings in the case without determining the existence of necessary
pre-conditions before the court could take cognizance of the case. Records
revealed that Judge Adiong failed to resolve (1) the issue on the insufficiency of
the complaint as a class suit; (2) the issue of nonpayment of docket fees necessary
to vest the court with jurisdiction over the case; (3) the issue on forum-shopping
allegedly committed by therein plaintiffs; and (4) the question regarding the
alleged failure of therein plaintiffs to state with particularity their respective
residences. Justice Ayson noted that without a proper resolution of these
threshold jurisdictional questions, any decision in the case is premature and
without factual and legal basis. In other words, the court would only be engaged
in a useless exercise and would merely be wasting the time and resources of the
parties.20

Further, the Investigating Justice stressed that the conduct of a pre-trial is

mandatory. He explained that pre-trial is a procedural device whereby the court is
called upon to compel the parties and their lawyers to appear before it and
negotiate an amicable settlement or otherwise make a formal statement and
embody in a single document the issues of fact and law involved in the action.
Respondent judge asserts that NPC only called the attention of the court in
passing in one of its hearings held sometime in December 8, 2005 and January 27,
2006. Judge Adiong alleges that he then advised NPC to file the appropriate
pleading, but it was only after the case was terminated that NPC made a
manifestation on the lack of pre-trial. Judge Adiong adds that the conduct of a
pre-trial conference would have been a mere superfluity, and claims that the
absence of pre-trial did not cause substantial prejudice or injury to the parties as
the purpose of expediting the proceedings has been attained. However, Justice
Ayson opined that under the circumstances, Judge Adiong should have scheduled
the case for pre-trial as he was already aware of the procedural defect. His act of
not minding the setting of pre-trial, when he had every opportunity and
reasonable time to do so, can be characterized as negligent and imprudent,
according to Justice Ayson. Justice Ayson added that respondent judge apparently
failed to comply with the rules and failed to exercise the required initiative to set
the case for pre-trial. Considering Judge Adiongs long years of service, a total of
thirty-nine (39) years in the Judiciary, more than anyone else, he should be
presumed to be conversant with the law and the rules. The law involved in this
case being elementary, failure to consider it or to act as if he does not know it,
constitutes gross ignorance of the law. Justice Ayson said,

x x x Indeed, when the inefficiency springs from a failure to consider so basic and
elemental a rule, a law or a principle in the discharge of his duties, a judge is either
too incompetent and undeserving of the position and the title he holds or is too
vicious that the oversight or omission was deliberately done in bad faith and in
grave abuse of judicial authority.21

As to the granting of the motions for execution pending appeal, Justice Ayson
pointed out that respondent judge gave flimsy and unsupported reasons to
support his order to issue the writ of execution pending appeal.

In Civil Case No. 1367-95, respondent judge granted the execution pending
appeal on the ground that the plaintiff therein suffered a stroke and allegedly
needed to undergo an operation costing millions of pesos. However, said
allegations were based only on the self-serving testimony of the plaintiffs sister
whose testimony was uncorroborated by any other evidence.

In Civil Case Nos. 1361-95 and 1355-95, Judge Adiong granted the motion for
execution pending appeal based on the testimony of the plaintiff who testified on
his medical condition as stated in his medical certificate. Said medical certificate,
however, was never verified by the doctor who allegedly issued it. Hence, it was
unreliable and was merely hearsay evidence.

Meanwhile, in Civil Case No. 1322-95, the motion for execution pending appeal
was granted based on the plaintiffs claim that he is getting old and needed
money to support his family of four wives and twenty-nine (29) children. But the
plaintiffs allegation was not corroborated by any competent evidence.

In all these cases, respondent judge found justification that the financial
conditions of the plaintiffs warranted the issuance of the writ of execution pending
appeal. Justice Ayson, however, opined that while the power to grant or deny
immediate or advance execution is addressed to the sound discretion of the court,
it is required that good reason exists for granting execution pending appeal as
provided under Section 2,22 Rule 39 of the Rules of Court. Absent any such good
reason, the special order of execution must be struck down for having been issued
with grave abuse of discretion.

Standing alone, the alleged dire financial distress of the plaintiffs in Civil Case Nos.
1918-03, 1322-95, 1332-95, 1367-95, 1361-95, 1355-95 cannot be taken as "good
reason" for the immediate execution of respondent judges decisions, according to
Justice Ayson. Justice Ayson opined that indeed, when respondent judge acted
hastily in granting the execution of his Decision pending appeal, his actuation did
not indicate zeal to his duty but a clear disservice to the cause of justice.
Indubitably, respondent judge showed poor judgment and gross ignorance of
basic legal principles, added Justice Ayson.1avvphi1

After careful review of the records of this case, we find the above observations and
findings of the Investigating Justice well taken.

Judge Adiong failed to conduct a pre-trial conference in Civil Case No. 1918-03
contrary to elementary rules of procedure which he should have known all too
well considering his long years of service in the bench. The mandatory character
of pre-trial is embodied in Administrative Circular No. 3-9923 dated January 15,
1999, and found its way in Section 2,24 Rule 18 of the Rules of Court, which
imposes a duty upon the plaintiff to promptly move ex parte that the case be set
for pre-trial. To further implement the pre-trial guidelines, this directive was
reiterated in Administrative Matter No. 03-1-09-SC25 entitled "Guidelines to be
Observed by Trial Court Judges and Clerks of Court in the Conduct of Pre-Trial and
Use of Deposition-Discovery Measures" which recognized the importance of
pre-trial and the deposition-discovery measures as vital components of case
management in trial courts.26

To further show that the Court is serious in implementing the rules on pre-trial, in
Alviola v. Avelino27 the Court imposed the penalty of suspension on a judge who
merely failed to issue a pre-trial order within ten (10) days after the termination of
the pre-trial conference as mandated by Paragraph 8,28 Title I (A) of A.M. No.
03-1-09-SC.

Here, respondent judge failed to conduct the pre-trial conference itself. It is

elementary and plain that the holding of such a pre-trial conference is mandatory
and failure to do so is inexcusable. When the law or procedure is so elementary,
such as the provisions of the Rules of Court, not to know it or to act as if one does
not know it constitutes gross ignorance of the law.29 Such ignorance of a basic rule
in court procedure, as failing to conduct pre-trial, sadly amounts to gross
ignorance and warrants a corresponding penalty.

As to the allegations of poor judgment and gross ignorance of basic legal

principles in granting the motions for execution pending appeal for flimsy and
unsupported reasons, we find that the particular reasons relied upon by
respondent judge for issuing the writ of execution pending appeal are so
unreliably weak and feeble that it highlights the lack of knowledge of respondent
judge with regard to the proper appreciation of arguments.

In Florendo v. Paramount Insurance Corp.,30 the Supreme Court held:

x x x "Good reasons," it has been held, consist of compelling circumstances that

justify immediate execution lest the judgment becomes illusory. The
circumstances must be superior, outweighing the injury or damages that might
result should the losing party secure a reversal of the judgment. Lesser reasons
would make of execution pending appeal, instead of an instrument of solicitude
and justice, a tool of oppression and inequity.

"Good reason" as required by Section 2, Rule 39 of the Rules of Court does not
necessarily mean unassailable and flawless basis but at the very least, it must be
on solid footing. Dire financial conditions of the plaintiffs supported by mere
self-serving statements as "good reason" for the issuance of a writ of execution
pending appeal does not stand on solid footing. It does not even stand on its
own.

Section 8, Rule 140 of the Rules of Court, as amended, classifies gross ignorance of
the law as a serious charge and Section 11 thereof penalizes it with any of the
following sanctions:

1. Dismissal from the service, forfeiture of all or part of the benefits as the
Court may determine, and disqualification from reinstatement or appointment
to any public office, including government-owned or controlled corporations.
Provided, however, That the forfeiture of benefits shall in no case include
accrued leave credits;

2. Suspension from office without salary and other benefits for more than
three (3) but not exceeding six (6) months; or
 3. A fine of more than 20,000[.00] but not exceeding 40,000.00.31

Considering, however, that in A.M. No. RTJ-04-1826, this Court has already
dismissed Judge Adiong, the penalties of suspension from office without salary
and dismissal from the service are no longer possible. Hence, the penalty of fine is
more appropriate.

WHEREFORE, the now dismissed respondent Judge Santos B. Adiong of the

Regional Trial Court of Marawi City, Branch 8 is, for gross ignorance of the law,
FINED in the amount of 40,000.00 to be deducted from his retained/withheld
accrued leave credits.

JUDGMENT ON THE PLEADINGS

G.R. No. 172660 August 24, 2011

EUGENIO BASBAS, TEOFILO ARAS, RUFINO ARAS, GERVACIO BASBAS,

ISMAEL ARAS, EUGENIO ARAS, SIMFRONIO ARAS, FELICIANO ARAS, ROSITA
ARAS, EUGENIO BASBAS, JR. and SPOUSES PABLITO BASARTE and
MARCELINA BASBAS BASARTE,
vs.
BEATA SAYSON and ROBERTO SAYSON, JR., Respondents.

DECISION

DEL CASTILLO, J.:

Petitioners seek to prevent the revival of a judgment rendered in favor of the

respondents more than two decades back.

This Petition for Review on Certiorari assails the February 17, 2004 Decision1 of the
Court of Appeals (CA) in CA-G.R. CV No. 72385 which denied the appeal filed
before it and affirmed in toto the May 21, 2001 Order2 of the Regional Trial Court
of Ormoc City, Branch 35. Also assailed is the April 19, 2006 Resolution3 denying
the Motion for Reconsideration thereto.

Factual Antecedents

On September 2, 1976, respondent Beata Sayson (Beata) and her husband

Roberto Sayson, Sr. (Roberto Sr.) filed a Petition for Registration of an agricultural
land located in Cagbatang, Balagtas, Matag-ob, Leyte docketed as Land
Registration Case No. 0-177. The said application was opposed by the Republic of
the Philippines and herein petitioners Eugenio Basbas (Eugenio Sr.), Teofilo Aras
(Teofilo) and Rufino Aras (Rufino). On March 22, 1979, the Court of First Instance
(CFI) of Leyte, Branch V (Ormoc City) rendered a Decision adjudicating to the
spouses Sayson said agricultural land and approving its registration under their
names.4

The oppositors filed their appeal to the CA docketed as CA-G.R. No. 66541. In a
Decision5 dated July 24, 1985, the appellate court affirmed in toto the Decision of
the CFI. This CA Decision became final and executory on August 21, 19856 and,
accordingly, a Writ of Possession was issued on November 21, 1985, which was
never implemented.

The following year or on September 17, 1986, Original Certificate of Title (OCT) No.
24967 was issued to the spouses Sayson pursuant to the March 22, 1979 CFI
Decision. An Alias Writ of Possession was issued on April 6, 1989 but this could
also not be implemented in view of the refusal of Eugenio Sr. and his son Eugenio
Basbas, Jr. (Eugenio Jr.). Claiming that the land they occupied is not the same land
subject of the CFI Decision,8 they demanded that a relocation survey be
conducted. Hence, a relocation survey was conducted by order of the Regional
Trial Court (RTC), Branch 12, Ormoc City.9

In an Order10 dated September 13, 1989, the RTC approved the Commissioners
Report11 on the relocation survey and ordered the original oppositors, petitioners
Eugenio Sr., Teofilo and Rufino, as well as their co-petitioners herein Gervacio
Basbas (Gervacio), Ismael Aras (Ismael), Eugenio Aras (Eugenio), Simfronio Aras
(Simfronio), Feliciano Aras (Feliciano), Rosita Aras (Rosita) and Eugenio Jr. to vacate
the subject property, viz:

[R]espondents are directed to vacate the portion of Lot No. 1, Psu-08-000235

covered by OCT No. 2496 and subject of the final decree of registration which, [up
to the] present, said respondents are still possessing pursuant to the final and
executory judgment of the Court of Appeals and as particularly defined in the
Commissioners report submitted on August 3, 1989 x x x.

Respondents are reminded that under Rule 71 of the New Rules of Court, failure
on their part to so obey this order may make them liable for contempt of this
Court.

SO ORDERED.12
Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita and Eugenio Jr., although
not oppositors in CA-G.R. No. 66541, were likewise ordered to vacate the property
in view of the following pronouncement in the RTCs September 13, 1989 Order:

It appearing from the records that respondents Eugenio Basbas, Teofilo Aras,
Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio Aras, Simfronio Aras,
Feliciano Aras, Rosita Aras and Eugenio Basbas[,] Jr. are parties to the present
case, they having been the principal oppositors to the petition filed by the
applicants as shown in the records, pages 34, 35 and 36, Vol. 1 x x x13
(Emphasis supplied.)

This September 13, 1989 Order was, however, not implemented within the
five-year period from the time it became final.14 Hence, respondent Beata and her
son Roberto Sayson, Jr. (Roberto Jr.), as successor-in-interest of the late Roberto Sr.,
filed on August 18, 1995 a Complaint for Revival of Judgment15 before the RTC of
Ormoc City, Branch 12,16 docketed as Civil Case No. 3312-0. Impleaded as
defendants were Eugenio Sr., Teofilo, Rufino, Gervacio, Ismael, Eugenio, Simfronio,
Feliciano, Rosita, and Eugenio Jr. Petitioner-spouses Pablito Basarte and Marcelina
Basbas-Sabarte17 (spouses Basarte), who, although not identified in the
September 13, 1989 Order as principal oppositors in the land registration case,
were likewise impleaded as defendants since they also allegedly harvested,
processed, and sold the coconuts found in the subject property.

Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and
Eugenio Jr. filed a Motion to Dismiss18 on the ground that the Complaint states no
cause of action. This was, however, denied19 so the same set of petitioners, except
for Feliciano, filed an Answer with Counterclaim.20

In their Answer with counterclaim, said petitioners admitted the allegations in

paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of respondents Complaint which state
that:

xxxx

4. On March 22, 1979, the Honorable Judge Numeriano Estenzo rendered a

decision in the above-mentioned Land Registration [c]ase in favor of the
petitioners x x x and against the oppositors, the dispositive portion of said
decision reads:

WHEREFORE, decision is hereby rendered x x x [and] the land described under

Plan PSU-08-000235 dated September 10, 1973 of Geodetic Engineer
Nestorio Encenzo already APPROVED by the Acting Regional Director on June
27, 1974 is hereby adjudicated and registered in the names of the Spouses
ROBERTO SAYSON and BEATA O. SAYSON, of legal ages, Filipinos, spouses and
residents of Campokpok, Tabango, Leyte, Philippines and as soon as this
decision becomes final, let a decree of registration be issued by the Land
Registration Commission.

SO ORDERED. (x x x)

5. From the above decision the oppositors (defendants herein) appealed;

6. On July 24, 1985, the Honorable Court of Appeals rendered its decision, the
dispositive portion [of which] reads:

WHEREFORE, PREMISES CONSIDERED, finding no merit in this appeal the

decision appealed from is hereby AFFIRMED in toto.

SO ORDERED.

and the said decision has become final and executory on August 21, 1985 per
Entry of Judgment issued by the Court of Appeals x x x.

7. That consequently, on September 17, 1986 an Original Certificate of Title No.

N-2496 was issued in the names of Roberto Sayson and Beata O. Sayson,
pursuant to Decree No. N-191615, by the Register of Deeds for the Province of
Leyte;

8. That on motion, the Honorable Court, on November 21, 1985, issued a Writ
of Possession which for some reason or [another] was not satisfied, so that the
Honorable Court, on April 7, 1989 acting on an ex-parte motion dated April
6, 1989 directed the issuance of an Alias Writ of Possession;

9. That the Deputy Sheriff of this Court, Mr. Placid[o] Cayco tendered the Alias
Writ of Possession to the oppositors, particularly to Mr. Eugenio Basbas, Sr.
and Eugenio Basbas, Jr. who, as the Deputy Sheriff stated in his Progress
Report dated May 18, 1989 did not believe and obey the CFI Decision and the
decision of the Court of Appeals and x x x [t]hey demanded a relocation
survey to determine the exact location of applicants (complainant[s] herein)
property described in the alias writ of possession. x x x;

10. That on June 16, 1989, the Honorable Court, acting on the Progress Report
 of Deputy Sheriff Placido Cayco, issued an Order on even date appointing
Geodetic Engineer Jose A. Tahil as Court Commissioner specifically to relocate
Lot No. 1, Plan Psu-08-000235, LRC No. 0-177, Land Reg. Record No. N51830 x
x x This Order was dictated in open court in the presence of Mr. Eugenio
Basbas, Sr. and Eugenio Basbas, Jr. who had both objected to the Writ of
Possession, and their counsel Atty. Evargisto Escalon, and Attorney Demetrio D.
Sarit, counsel for the applicants. x x x

11. That pursuant to the [O]rder dated June 16, 1989 x x x the Court assigned
Commissioner, Engr. Jose A. Tahil, submitted his report stating that the job
assigned to the commissioner was already fully and peacefully accomplished;
that his findings [show] that all points are existing and intact on the field
except x x x corner 3 of said lot x x x which at present [is] already defined and
indicated on the ground. The commissioner also attached a Sketch Plan of the
land to his report. x x x

12. That, finally, the Honorable Court, on September 13, 1989 issued an Order
approving the Commissioners Report and further stated:

[R]espondents (defendants herein) are directed to vacate the portion of Lot No. 1,
Psu-08-000235 covered by OCT No. 2496 and subject of final decree of
registration which, until [the] present, said respondents are still possessing,
pursuant to the final and executory judgment of the Court of Appeals and as
particularly [defined] in the Commissioners Report submitted on August 3, 1989 x
xx

Respondents are reminded that under Rule 71 of the New Rules of Court, failure
on their part to so obey this Order may make them liable for contempt of this
Court.21

However, petitioners admitted but denied in part:

1) paragraphs 2 and 3, insofar as they alleged that they were all oppositors to
the land registration case when only Eugenio Sr., Teofilo and Rufino were the
oppositors therein; and

2) paragraph 14, with respect to the allegation on the retirement of the

Deputy Sheriff and the heart condition of the Clerk of Court, for lack of
sufficient knowledge and information sufficient to form a belief thereon.

On the other hand, they specifically denied:

1) paragraph 13, on the ground that they have the right of ownership and/or
possession over the subject property; and

2) paragraph 15, on the ground that the property they are cultivating is owned
by them, hence, respondents cannot suffer losses and damages.

Paragraphs 2, 3, 13, 14 and 15 alluded to in the foregoing are as follows:

2. All the defendants named above are x x x of legal age and are residents of
Balagtas, Matag-ob, Leyte where they may be served summons and other
court processes; while defendant-spouses Pablito Basarte and Marcelina
Basbas Basarte were not named as among the oppositors in the land
registration case whose decision is herein sought to be revived, said spouses
are nonetheless participating in the harvest, processing and sale of the
coconuts with the other defendants named above;

3. Plaintiffs Beata Sayson and her late husband, Roberto Sayson are petitioners
in Land Registration Case No. 0-177 for the registration of a parcel of
agricultural land situated in Barrio Balagtas, Matag-ob, Leyte, filed on
September 2, 1976 with the then Court of First Instance of Leyte, Branch V,
Ormoc City. The above-named defendants, namely: Eugenio Basbas, Teofilo
Aras, Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio Aras, Simfronio Aras,
Feliciano Aras, Rosita Aras and Eugenio Basbas, Jr. were oppositors to the
application;22

xxxx

13. That despite this admonition in the [September 13, 1989] [O]rder that they
could be cited for contempt of Court, the respondents, defendants herein, had
continuously defied the same and this notwithstanding the fact that it was
upon their own demands and insistence that a relocation survey be made on
the premises subject of this case before they would obey the alias writ of
possession x x x and that the finding[s] of the Court[-]appointed
Commissioner Engr. Jose A. Tahil show that the oppositors-respondents did
[encroach] on the land of plaintiffs herein;

14. That this [September 13, 1989] Order however was not implemented thru a
Writ of Execution within the five-year period from the time the Order became
final because of the retirement of Deputy Sheriff Placido Cayco and by reason
also of the fact that the then Clerk of Court, Atty. Constantino A. Trias, Jr. who
was also the ex-officio Provincial Sheriff was not physically fit to hike thru the
 mountains and hills of Brgy. Balagtas where the property and the defendants
therein reside due to his heart condition;

15. That despite their knowledge of the Court[s] [September 13, 1989] Order,
the same [having been] dictated in open court, the respondents had
continued to occupy the land of the plaintiffs and for more than five (5) years
since this Order for them to vacate the land in question was issued, they had
harvested the coconuts growing thereon and such other produce of the land
herein involved. And until the decision of the Court of Appeals is executed,
plaintiff will continue to suffer losses and damages by reason of defendants
unlawful occupation and possession and their continued harvesting of the
produce of this land of the herein plaintiffs.23

By way of special and affirmative defenses, said petitioners contended that the
Order sought to be revived is not the "judgment" contemplated under Section 6,
Rule 39 of the Rules of Court, hence the action for revival of judgment is improper.
Also, except for Rufino, petitioners averred that they cannot be made parties to
the complaint for revival of judgment as they were not parties to the land
registration case. They thus believed that the September 13, 1989 Order sought to
be revived is not binding upon them and hence, the complaint states no cause of
action with respect to them. As to the counterclaim, petitioners prayed that
respondents pay them moral and exemplary damages, attorneys fees and
litigation expenses.

Pre-trial conference was thereafter set24 but since not all petitioners were served
with summons, this was reset and alias summons was issued and served upon
Simfronio and the spouses Basarte.25 Upon receipt of summons, Simfronio
adopted the Answer with Counterclaim of Gervacio, Rufino, Ismael, Eugenio,
Feliciano, Rosita and Eugenio Jr.26 while the spouses Basarte filed a Motion to
Dismiss27 on the ground of lack of cause of action. As said motion was also
denied,28 the spouses Basarte later filed a Manifestation29 that they were also
adopting the Answer with Counterclaim filed by Gervacio and the others.

During the pre-trial conference on July 14, 1999, the RTC issued an Order30 which
provides in part, viz:

In todays pre-trial conference, manifestations and counter-manifestations were

exchanged. All the parties and their counsels are present. x x x [P]laintiffs counsel
presented a Special Power of Attorney by Beata Sayson but the Court observed
that same was not duly acknowledged before the Philippine Consulate or Embassy
in Canada. However, this matter is not so important[.] [W]hen the Court tried to
dig and discuss with the parties on their real positions, it turned out that the
plaintiffs are seeking revival of the previous final judgment, the original
parties of which were Eugenio Basbas, Teofilo Aras and Rufino Aras. Eugenio
and Teofilo are all dead, leaving Rufino Aras alive. It is quite complicated
considering that in this action, the plaintiffs relied on the Order of this Court
penned by the previous judge dated September 13, 1989 which was made
after or consequent to the final judgment aforementioned, wherein the
names of the other defendants were mentioned in the body thereof. After
considering the merits of the various contentions, the Court is of the view
that the complaint had to limit itself to the names of the original parties
appearing in the original judgment now being sought for revival. The interest
of the plaintiffs in seeking implementation or execution of the judgment sought to
be revived which would involve the other defendants can be taken when the
judgment shall have been revived.

In this connection therefore and as part of the matters to be made part in the
pre-trial conference, in the exercise of the authority granted to it by law, this
Court directs the plaintiffs to make the necessary amendment and/or to
submit a manifestation first to this Court on the point above raised
regarding amendment of the designation of the parties having in mind the
objection of the defendants who manifested that should there be an amendment,
this counter-claim shall be disregarded since they were brought in unnecessarily in
this kind of action.

Plaintiffs therefore are given a period of ten (10) days from today within which to
submit the requisite manifestation furnishing copy thereof to the defendant who
upon receipt shall also be given a period of ten (10) days within which this Court
will make the necessary resolution before allowing any amendment.

Hold the pre-trial conference in abeyance.

SO ORDERED. 31 (Emphasis supplied.)

In their Manifestation with Prayer,32 respondents informed the RTC about the
death of Eugenio Sr. and Teofilo who were oppositors in the land registration case
and the substitution by their heirs, namely, Gervacio, Marcelina Basbas Basarte,33
and Eugenio Jr. for Eugenio Sr. and Ismael, Vicente, Ligaya Aras (Ligaya), Rosendo
Aras (Rosendo) and Daina Aras (Daina) for Teofilo. Respondents prayed that their
manifestation be considered for the purpose of determining the proper parties to
the case. Despite petitioners Counter-Manifestation,34 the RTC issued the
following Order35 on May 15, 1999:
The Manifestation of plaintiffs and the Counter-Manifestation of defendants
having already been submitted and duly noted, the Court hereby directs that
henceforth in the denomination of this case, the names of the original parties,
Eugenio Basbas and Teofilo Aras (in Land Registration Case No. 0-177) shall still
remain to be so stated as defendants for purposes of the present case but with
additional names of their respective heirs to be included and stated immediately
after each name as heirs in substitution, namely: for Eugenio Basbas 1) Gervacio
Basbas, 2) Marcelina Basbas Basarte, and 3) Eugenio Basbas, Jr.; and for Teofilo
Aras 1) Ismael Aras, 2) Vicente Aras, 3) Ligaya Aras, 4) Rosendo Aras, and 5)
Daina Aras.

Since from the records, only Gervacio Basbas, Eugenio Basbas, Jr. and Ismael Aras
were duly served with summons, the Branch Clerk of Court is hereby directed to
serve summons on the other heirs, namely: Marcelina Basbas Basarte, Vicente Aras,
Ligaya Aras, Rosendo Aras, and Daina Aras.

x x x x36

After summons were served, Vicente, Rosendo, Ligaya and Daina were, however,
declared in default for not filing any responsive pleading.37 On February 2, 2001,
the RTC issued a Pre-Trial Order38 where the controverted stipulations and issues
to be tried, among others, were enumerated as follows:

Controverted Stipulations:

1. That defendants are not enjoying the produce of the land because there are
period[s] wherein the fruits were subject of theft and the same is now pending
at the Municipal Trial Court of Matag-ob;

2. That [even] before the start of the original case, the original defendants
referring to the late Eugenio Basbas, Sr. and Teofilo Aras, [and] Rufino Aras
were occupying the property and they were succeeded by the respective heirs
of the deceased Eugenio Basbas, Sr. and Teofilo Aras [sic];

3. That plaintiff Teofilo Aras, Sr. has a daughter named Fedeliza Aras;

Issues

1. Whether x x x the plaintiffs are entitled to revival of judgment in the earlier

[land registration] case;
 2. Whether x x x the defendants except for defendant Rufino Aras are the
proper parties in the present action;

3. Whether x x x the complaint states a cause of action;

4. Whether x x x defendants are entitled to their counterclaim, and;

5. Whether judgment on the pleadings is allowed or is tenable.39

Respondents subsequently filed an Omnibus Motion for Judgment on the

Pleadings and/or Summary Judgment.40They contended that since petitioners
Answer failed to tender an issue, they having expressly admitted the material
allegations in the complaint, particularly paragraphs 4 to 12, a judgment on the
pleadings or summary judgment is proper.

Petitioners filed an Opposition Re: Omnibus Motion for Judgment on the

Pleadings and/or Summary Judgment and Memorandum Re: Failure of Plaintiff
Beata Sayson to Appear in the Pre-trial Conference.41 They argued that the case
cannot be decided based on the pleadings nor through summary judgment
considering that the controverted stipulations and issues defined in the Pre-Trial
Order must be proven by evidence. In addition, they questioned the Special Power
of Attorney (SPA) executed by Beata in Canada empowering her son Roberto Jr. to
appear on her behalf in the pre-trial conference. They argued that since said SPA
has not been authenticated by a Philippine Consulate official, it is not sufficient
authorization and hence, Beata cannot be considered to have attended the
pre-trial conference. The case must, therefore, be dismissed insofar as she is
concerned.

Ruling of the Regional Trial Court

In resolving respondents Omnibus Motion for Judgment on the Pleadings and/or

Summary Judgment, the RTC found that petitioners Answer does not essentially
tender an issue since the material allegations of the Complaint were admitted.
Hence, said court issued an Order42 dated May 21, 2001, the dispositive portion of
which reads:

Wherefore, finding merit in the motion, judgment is hereby rendered for and in
favor of the plaintiffs and against the defendants ordering the revival of the
decision of the Court of Appeals promulgated on July 24, 1985 affirming the
decree of registration of this Court in the decision of the Land Registration Case
No. 0-177 dated March 22, 1979, and of the final Order of this Court dated
September 13, 1989 and upon finality of this Order, ordering the issuance of Writ
of Possession for the lot made subject of the decision. Without pronouncement as
to costs.

SO ORDERED.43

Petitioners thus filed a Notice of Appeal44 which was approved in an Order dated
June 06, 2001.45

Ruling of the Court of Appeals

Finding no merit in the appeal, the CA denied the same in a Decision46 dated
February 17, 2004. It noted that petitioners Answer admitted almost all of the
allegations in respondents complaint. Hence, the RTC committed no reversible
error when it granted respondents Motion for Judgment on the Pleadings and/or
Summary Judgment. The appellate court likewise found untenable the issue as
regards the failure of the complaint to state a cause of action. To the appellate
court, petitioners refusal to vacate the subject property despite the final and
executory Decision of the CA in the land registration case and the September 13,
1989 Order of the RTC for them to vacate the same, clearly support respondents
cause of action against them. Also contrary to petitioners posture, the September
13, 1989 Order is a final order as it finally disposed of the controversy between the
parties in the land registration case. The CA likewise found the SPA executed by
Beata in favor of Roberto Jr. as valid, hence, she was duly represented during the
pre-trial conference. The dispositive portion of said CA Decision reads:

WHEREFORE, premises considered, the present appeal is DENIED. The May 21,
2001 Decision of the Regional Trial Court of Ormoc City, Branch 35 is AFFIRMED.

SO ORDERED.47

Their Motion for Reconsideration48 having been denied in a Resolution49 dated

April 19, 2006, petitioners are now before this Court through the present Petition
for Review on Certiorari.

Issues

Petitioners impute upon the CA the following errors:

1. The Honorable Court of Appeals clearly committed serious errors of law in

its decision and Resolution dated February 17, 2004 and April 19, 2006 when it
 affirmed the Order of the Regional Trial Court dated May 21, 2001 and
declared that no reversible error was committed by the Regional Trial Court of
Ormoc City in granting respondents motion for judgment on the pleadings
and/or summary judgment;

2. The Honorable Court of Appeals clearly committed serious errors of law in

its Decision and Resolution dated February 17, 2004 and April 19, 2006 when
it affirmed the Order of the Regional Trial Court of Ormoc City dated May 21,
2001 and declared that petitioners argument that respondents complaint
failed to state a cause of action has no merit.

3. The Honorable Court of Appeals clearly committed serious errors of law

when it affirmed the Order of the Regional Trial Court of Ormoc City which
ordered the revival of the Judgment of this Court of Appeals in CA-G.R. No.
66541 entitled Beata Sayson and Roberto Sayson vs. Eugenio Basbas, et al.,
despite the fact that this was not the judgment sought to be revived in Civil
Case No. 3312-0;

4. The Honorable Court of Appeals clearly committed serious errors of law in

ruling that the duly notarized Special Power of Attorney in favor of Roberto
Sayson[,] Jr. is valid and the latter is authorized to represent his mother, Beata
Sayson[,] which is contrary to the ruling in the case of ANGELITA LOPEZ,
represented by PRISCILLA L. TY vs. COURT OF APPEALS, REGIONAL TRIAL
COURT OF QUEZON CITY x x x (G.R. No. 77008, December 29, 1987).50

The Parties Arguments

Petitioners insist that a judgment on the pleadings or a summary judgment

is not proper in this case since the controverted stipulations and the first three
issues enumerated in the pre-trial order involve facts which must be threshed out
during trial. They also claim that the Complaint for Revival of Judgment states no
cause of action because the September 13, 1989 Order which it sought to revive is
not the "judgment" contemplated under Section 6, Rule 39 of the Rules of Court
and, therefore, cannot be the subject of such an action. Moreover, they argue that
the CA Decision in the land registration case should not have been revived as
same was not prayed for in the Complaint for Revival of Judgment. Lastly,
petitioners assail the SPA which authorized Roberto Jr. to represent his mother,
Beata, during the pre-trial conference, it not having been authenticated by a
Philippine consulate officer in Canada where it was executed. Citing Lopez v. Court
of Appeals,51they contend that said document cannot be admitted in evidence
and hence, Beata was not duly represented during said pre-trial conference. The
case, therefore, should have been dismissed insofar as she is concerned.

For their part, respondents point out that the RTCs basis in granting the Motion
for Judgment on the Pleadings and/or Summary Judgment was petitioners
admission of practically all the material allegations in the complaint. They aver
that Section 1, Rule 34 of the Rules of Court clearly provides that where an answer
fails to tender an issue or otherwise admits the material allegations of the adverse
partys pleading, the court may, on motion of that party, direct judgment on the
pleadings. Also, the test for a motion for summary judgment is whether the
pleadings, affidavits or exhibits in support of the motion are sufficient to
overcome the opposing papers and to justify a finding as a matter of law that
there is no defense to the action or the claim is clearly meritorious. And since, as
found by the CA, petitioners Answer did not tender an issue and that there is no
defense to the action, the grant of the Motion for Judgment on the Pleadings
and/or Summary Judgment was appropriate. Respondents likewise contend that if
their prayer in the Complaint is taken in its proper context, it can be deduced that
what they were really seeking is the implementation of the CA Decision dated July
24, 1985 and the orders ancillary thereto. With respect to the SPA, they submit
that the law does not require that a power of attorney be notarized. Moreover,
Section 4, Rule 18 of the Rules of Court simply requires that a representative
appear fully authorized "in writing". It does not specify a particular form of
authority.

Our Ruling

There is no merit in the petition.

I. The instant case is proper for the rendition of a summary judgment.

Petitioners principally assail the CAs affirmance of the RTCs Order granting
respondents Motion for Judgment on the Pleadings and/or Summary Judgment.

In Tan v. De la Vega,52 citing Narra Integrated Corporation v. Court of Appeals,53

the court distinguished summary judgment from judgment on the pleadings, viz:

The existence or appearance of ostensible issues in the pleadings, on the one

hand, and their sham or fictitious character, on the other, are what distinguish a
proper case for summary judgment from one for a judgment on the pleadings. In
a proper case for judgment on the pleadings, there is no ostensible issue at all
because of the failure of the defending partys answer to raise an issue. On the
other hand, in the case of a summary judgment, issues apparently exist i.e. facts
are asserted in the complaint regarding which there is as yet no admission,
disavowal or qualification; or specific denials or affirmative defenses are in truth
set out in the answer but the issues thus arising from the pleadings are sham,
fictitious or not genuine, as shown by affidavits, depositions, or admissions. x x x.

Simply stated, what distinguishes a judgment on the pleadings from a summary

judgment is the presence of issues in the Answer to the Complaint. When the
Answer fails to tender any issue, that is, if it does not deny the material allegations
in the complaint or admits said material allegations of the adverse partys
pleadings by admitting the truthfulness thereof and/or omitting to deal with them
at all, a judgment on the pleadings is appropriate.54 On the other hand, when the
Answer specifically denies the material averments of the complaint or asserts
affirmative defenses, or in other words raises an issue, a summary judgment is
proper provided that the issue raised is not genuine. "A genuine issue means an
issue of fact which calls for the presentation of evidence, as distinguished from an
issue which is fictitious or contrived or which does not constitute a genuine issue
for trial."55

a) Judgment on the pleadings is not proper because petitioners Answer tendered

issues.

In this case, we note that while petitioners Answer to respondents Complaint

practically admitted all the material allegations therein, it nevertheless asserts the
affirmative defenses that the action for revival of judgment is not the proper
action and that petitioners are not the proper parties. As issues obviously arise
from these affirmative defenses, a judgment on the pleadings is clearly improper
in this case.

However, before we consider this case appropriate for the rendition of summary
judgment, an examination of the issues raised, that is, whether they are genuine
issues or not, should first be made.

b) The issues raised are not genuine issues, hence rendition of summary judgment
is proper.

To resolve the issues of whether a revival of judgment is the proper action and
whether respondents are the proper parties thereto, the RTC merely needed to
examine the following: 1) the RTC Order dated September 13, 1989, to determine
whether same is a judgment or final order contemplated under Section 6, Rule 39
of the Rules of Court; and, 2) the pleadings of the parties and pertinent portions of
the records56 showing, among others, who among the respondents were
oppositors to the land registration case, the heirs of such oppositors and the
present occupants of the property. Plainly, these issues could be readily resolved
based on the facts established by the pleadings. A full-blown trial on these issues
will only entail waste of time and resources as they are clearly not genuine issues
requiring presentation of evidence.

Petitioners aver that the RTC should not have granted respondents Motion for
Judgment on the Pleadings and/or Summary Judgment because of the
controverted stipulations and the first three issues enumerated in the Pre-trial
Order, which, according to them, require the presentation of evidence. These
stipulations and issues, however, when examined, basically boil down to questions
relating to the propriety of the action resorted to by respondents, which is revival
of judgment, and to the proper parties thereto the same questions which we
have earlier declared as not constituting genuine issues.

In sum, this Court holds that the instant case is proper for the rendition of a
summary judgment, hence, the CA committed no error in affirming the May 21,
2001 Order of the RTC granting respondents Motion for Judgment on the
Pleadings and/or Summary Judgment.

II. The Complaint states a cause of action.

Petitioners contend that the complaint states no cause of action since the

September 13, 1989 Order sought to be revived is not the judgment contemplated
under Section 6, Rule 39 of the Rules of Court. They also aver that the RTC erred
when it ordered the revival not only of the September 13, 1989 Order but also of
the July 24, 1985 CA Decision, when what was prayed for in the complaint was
only the revival of the former.

This Court, however, agrees with respondents that these matters have already
been sufficiently addressed by the RTC in its Order of May 9, 199757 and we quote
with approval, viz:

The body of the Complaint as well as the prayer mentioned about the executory
decision of the Court of Appeals promulgated on July 24, 1985 that had to be
finally implemented. So it appears to this Court that the Complaint does not alone
invoke or use as subject thereof the Order of this Court which would implement
the decision or judgment regarding the land in question. The Rules of Court
referring to the execution of judgment, particularly Rule 39, Sec. 6, provides a
mechanism by which the judgment that had not been enforced within five (5)
years from the date of its entry or from the date the said judgment has become
final and executory could be enforced. In fact, the rule states: "judgment may be
enforced by action."

So in this Complaint, what is sought is the enforcement of a judgment and the

Order of this Court dated September 13, 1989 is part of the process to enforce
that judgment. To the mind of the Court, therefore, the Complaint sufficiently
states a cause of action.58 lawphi1

III. Any perceived defect in the SPA would not serve to bar the case from
proceeding.

Anent the SPA, we find that given the particular circumstances in the case at bar,
an SPA is not even necessary such that its efficacy or the lack of it would not in any
way preclude the case from proceeding. This is because upon Roberto Sr.s death,
Roberto Jr., in succession of his father, became a co-owner of the subject property
together with his mother, Beata. As a co-owner, he may, by himself alone, bring an
action for the recovery of the co-owned property pursuant to the well-settled
principle that "in a co-ownership, co-owners may bring actions for the recovery of
co-owned property without the necessity of joining all the other co-owners as
co-plaintiffs because the suit is presumed to have been filed for the benefit of his
co-owners."59

While we note that the present action for revival of judgment is not an action for
recovery, the September 13, 1989 Order sought to be revived herein ordered the
petitioners, among others, to vacate the subject property pursuant to the final and
executory judgment of the CA affirming the CFIs adjudication of the same in favor
of respondents. This Order was issued after the failure to enforce the writ of
execution and alias writ of execution due to petitioners refusal to vacate the
property. To this Courts mind, respondents purpose in instituting the present
action is not only to have the CA Decision in the land registration case finally
implemented but ultimately, to recover possession thereof from petitioners. This
action is therefore one which Roberto Jr., as co-owner, can bring and prosecute
alone, on his own behalf and on behalf of his co-owner, Beata. Hence, a dismissal
of the case with respect to Beata pursuant to Sec. 5,60 Rule 18 of the Rules of Court
will be futile as the case could nevertheless be continued by Roberto Jr. in behalf
of the two of them.

WHEREFORE, the Petition for Review on Certiorari is DENIED and the assailed
Decision of the Court of Appeals dated February 17, 2004 and Resolution dated
April 19, 2006 in CA-G.R. CV No. 72385 are AFFIRMED.

SUMMARY JUDGMENT

G.R. No. 170483 April 19, 2010

MANUEL C. BUNGCAYAO, SR., represented in this case by his Attorney-in-fact

ROMEL R. BUNGCAYAO,Petitioner,
vs.
FORT ILOCANDIA PROPERTY HOLDINGS, AND DEVELOPMENT
CORPORATION, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the 21 November 2005
Decision2 of the Court of Appeals in CA-G.R. CV No. 82415.

The Antecedent Facts

Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of the two entrepreneurs

who introduced improvements on the foreshore area of Calayab Beach in 1978
when Fort Ilocandia Hotel started its construction in the area. Thereafter, other
entrepreneurs began setting up their own stalls in the foreshore area. They later
formed themselves into the DSierto Beach Resort Owners Association, Inc.
(DSierto).

In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred,
ceded, and conveyed to the Philippine Tourism Authority (PTA) pursuant to
Presidential Decree No. 1704. Fort Ilocandia Resort Hotel was erected on the area.
In 1992, petitioner and other DSierto members applied for a foreshore lease with
the Community Environment and Natural Resources Office (CENRO) and was
granted a provisional permit. On 31 January 2002, Fort Ilocandia Property
Holdings and Development Corporation (respondent) filed a foreshore application
over a 14-hectare area abutting the Fort Ilocandia Property, including the
5-hectare portion applied for by DSierto members. The foreshore applications
became the subject matter of a conflict case, docketed Department of
Environment and Natural Resources (DENR) Case No. 5473, between respondent
and DSierto members. In an undated Order,3 DENR Regional Executive Director
Victor J. Ancheta denied the foreshore lease applications of the DSierto members,
including petitioner, on the ground that the subject area applied for fell either
within the titled property or within the foreshore areas applied for by respondent.
The DSierto members appealed the denial of their applications. In a Resolution4
dated 21 August 2003, then DENR Secretary Elisea G. Gozun denied the appeal on
the ground that the area applied for encroached on the titled property of
respondent based on the final verification plan.

In a letter dated 18 September 2003,5 respondent, through its Public Relations

Manager Arlene de Guzman, invited the DSierto members to a luncheon meeting
to discuss common details beneficial to all parties concerned. Atty. Liza Marcos
(Atty. Marcos), wife of Governor Bongbong Marcos, was present as she was asked
by Fort Ilocandia hotel officials to mediate over the conflict among the parties.
Atty. Marcos offered 300,000 as financial settlement per claimant in
consideration of the improvements introduced, on the condition that they would
vacate the area identified as respondents property. A DSierto member made a
counter-offer of 400,000, to which the other DSierto members agreed.

Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting,
manifested that he still had to consult his parents about the offer but upon the
undue pressure exerted by Atty. Marcos, he accepted the payment and signed the
Deed of Assignment, Release, Waiver and Quitclaim6 in favor of respondent.

Petitioner then filed an action for declaration of nullity of contract before the
Regional Trial Court of Laoag, City, Branch 13 (trial court), docketed as Civil Case
Nos. 12891-13, against respondent. Petitioner alleged that his son had no
authority to represent him and that the deed was void and not binding upon him.

Respondent countered that the area upon which petitioner and the other DSierto
members constructed their improvements was part of its titled property under
Transfer Certificate of Title No. T-31182. Respondent alleged that petitioners sons,
Manuel, Jr. and Romel, attended the luncheon meeting on their own volition and
they were able to talk to their parents through a cellular phone before they
accepted respondents offer. As a counterclaim, respondent prayed that petitioner
be required to return the amount of 400,000 from respondent, to vacate the
portion of the respondents property he was occupying, and to pay damages
because his continued refusal to vacate the property caused tremendous delay in
the planned implementation of Fort Ilocandias expansion projects.

In an Order7 dated 6 November 2003, the trial court confirmed the agreement of
the parties to cancel the Deed of Assignment, Release, Waiver and Quitclaim and
the return of 400,000 to respondent. Petitioners counsel, however, manifested
that petitioner was still maintaining its claim for damages against respondent.

Petitioner and respondent agreed to consider the case submitted for resolution on
summary judgment. Thus, in its Order8 dated 28 November 2003, the trial court
considered the case submitted for resolution. Petitioner filed a motion for
reconsideration, alleging that he manifested in open court that he was
withdrawing his earlier manifestation submitting the case for resolution.
Respondent filed a Motion for Summary Judgment.

The trial court rendered a Summary Judgment9 dated 13 February 2004.

The Decision of the Trial Court

The trial court ruled that the only issue raised by petitioner was his claim for
damages while respondents issue was only his claim for possession of the
property occupied by petitioner and damages. The trial court noted that the
parties already stipulated on the issues and admissions had been made by both
parties. The trial court ruled that summary judgment could be rendered on the
case.

The trial court ruled that the alleged pressure on petitioners sons could not
constitute force, violence or intimidation that could vitiate consent. As regards
respondents counterclaim, the trial court ruled that based on the pleadings and
admissions made, it was established that the property occupied by petitioner was
within the titled property of respondent. The dispositive portion of the trial courts
decision reads:

WHEREFORE, the Court hereby renders judgment DISMISSING the claim of

plaintiff for damages as it is found to be without legal basis, and finding the
counterclaim of the defendant for recovery of possession of the lot occupied by
the plaintiff to be meritorious as it is hereby GRANTED. Consequently, the plaintiff
is hereby directed to immediately vacate the premises administratively
adjudicated by the executive department of the government in favor of the
defendant and yield its possession unto the defendant. No pronouncement is here
made as yet of the damages claimed by the defendant.

SO ORDERED.10

Petitioner appealed from the trial courts decision.

 The Decision of the Court of Appeals

In its 21 November 2005 Decision, the Court of Appeals affirmed the trial courts
decision in toto.

The Court of Appeals sustained the trial court in resorting to summary judgment
as a valid procedural device for the prompt disposition of actions in which the
pleadings raise only a legal issue and not a genuine issue as to any material fact.
The Court of Appeals ruled that in this case, the facts are not in dispute and the
only issue to be resolved is whether the subject property was within the titled
property of respondent. Hence, summary judgment was properly rendered by the
trial court.

The Court of Appeals ruled that the counterclaims raised by respondent were
compulsory in nature, as they arose out of or were connected with the transaction
or occurrence constituting the subject matter of the opposing partys claim and
did not require for its adjudication the presence of third parties of whom the court
could not acquire jurisdiction. The Court of Appeals ruled that respondent was the
rightful owner of the subject property and as such, it had the right to recover its
possession from any other person to whom the owner has not transmitted the
property, including petitioner.

The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, the assailed decision dated February 13, 2004 of the Regional Trial
Court of Laoag City, Branch 13 is hereby AFFIRMED in toto.

SO ORDERED.11

Thus, the petition before this Court.

The Issues

Petitioner raises the following issues in his Memorandum:12

1. Whether respondents counterclaim is compulsory; and

2. Whether summary judgment is appropriate in this case.

The Ruling of this Court

The petition has merit.

 Compulsory Counterclaim

A compulsory counterclaim is any claim for money or any relief, which a defending
party may have against an opposing party, which at the time of suit arises out of,
or is necessarily connected with, the same transaction or occurrence that is the
subject matter of the plaintiffs complaint.13 It is compulsory in the sense that it is
within the jurisdiction of the court, does not require for its adjudication the
presence of third parties over whom the court cannot acquire jurisdiction, and will
be barred in the future if not set up in the answer to the complaint in the same
case.14Any other counterclaim is permissive.15

The Court has ruled that the compelling test of compulsoriness characterizes a
counterclaim as compulsory if there should exist a logical relationship between
the main claim and the counterclaim.16 The Court further ruled that there exists
such a relationship when conducting separate trials of the respective claims of the
parties would entail substantial duplication of time and effort by the parties and
the court; when the multiple claims involve the same factual and legal issues; or
when the claims are offshoots of the same basic controversy between the
parties.17

The criteria to determine whether the counterclaim is compulsory or permissive

are as follows:

(a) Are issues of fact and law raised by the claim and by the counterclaim
largely the same?

(b) Would res judicata bar a subsequent suit on defendants claim, absent the
compulsory rule?

(c) Will substantially the same evidence support or refute plaintiffs claim as
well as defendants counterclaim?

(d) Is there any logical relations between the claim and the counterclaim?

A positive answer to all four questions would indicate that the counterclaim is
compulsory.18

In this case, the only issue in the complaint is whether Manuel, Jr. is authorized to
sign the Deed of Assignment, Release, Waiver and Quitclaim in favor of
respondent without petitioners express approval and authority. In an Order dated
6 November 2003, the trial court confirmed the agreement of the parties to cancel
the Deed of Assignment, Release, Waiver and Quitclaim and the return of
400,000 to respondent. The only claim that remained was the claim for damages
against respondent. The trial court resolved this issue by holding that any damage
suffered by Manuel, Jr. was personal to him. The trial court ruled that petitioner
could not have suffered any damage even if Manuel, Jr. entered into an agreement
with respondent since the agreement was null and void.

Respondent filed three counterclaims. The first was for recovery of the 400,000
given to Manuel, Jr.; the second was for recovery of possession of the subject
property; and the third was for damages. The first counterclaim was rendered
moot with the issuance of the 6 November 2003 Order confirming the agreement
of the parties to cancel the Deed of Assignment, Release, Waiver and Quitclaim
and to return the 400,000 to respondent. Respondent waived and renounced the
third counterclaim for damages.19 The only counterclaim that remained was for
the recovery of possession of the subject property. While this counterclaim was an
offshoot of the same basic controversy between the parties, it is very clear that it
will not be barred if not set up in the answer to the complaint in the same case.
Respondents second counterclaim, contrary to the findings of the trial court and
the Court of Appeals, is only a permissive counterclaim. It is not a compulsory
counterclaim. It is capable of proceeding independently of the main case.

The rule in permissive counterclaim is that for the trial court to acquire jurisdiction,
the counterclaimant is bound to pay the prescribed docket fees.20 Any decision
rendered without jurisdiction is a total nullity and may be struck down at any time,
even on appeal before this Court.21 In this case, respondent did not dispute the
non-payment of docket fees. Respondent only insisted that its claims were all
compulsory counterclaims. As such, the judgment by the trial court in relation to
the second counterclaim is considered null and void22 without prejudice to a
separate action which respondent may file against petitioner.1avvphi1

Summary Judgment

Section 1, Rule 35 of the 1997 Rules of Civil Procedure provides:

Section 1. Summary Judgment for claimant. - A party seeking to recover upon a

claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any
time after the pleading in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor upon all
or any part thereof.

Summary judgment has been explained as follows:

Summary judgment is a procedural device resorted to in order to avoid long
drawn out litigations and useless delays. When the pleadings on file show that
there are no genuine issues of fact to be tried, the Rules allow a party to obtain
immediate relief by way of summary judgment, that is, when the facts are not in
dispute, the court is allowed to decide the case summarily by applying the law to
the material facts. Conversely, where the pleadings tender a genuine issue,
summary judgment is not proper. A "genuine issue" is such issue of fact which
requires the presentation of evidence as distinguished from a sham, fictitious,
contrived or false claim. Section 3 of the said rule provides two (2) requisites for
summary judgment to be proper: (1) there must be no genuine issue as to any
material fact, except for the amount of damages; and (2) the party presenting the
motion for summary judgment must be entitled to a judgment as a matter of law.
A summary judgment is permitted only if there is no genuine issue as to any
material fact and a moving party is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the pleadings on their face appear to raise
issues, the affidavits, depositions, and admissions presented by the moving party
show that such issues are not genuine.23

Since we have limited the issues to the damages claimed by the parties, summary
judgment has been properly rendered in this case.

WHEREFORE, we MODIFY the 21 November 2005 Decision of the Court of

Appeals in CA-G.R. CV No. 82415 which affirmed the 13 February 2004 Decision of
the Regional Trial Court of Laoag City, Branch 13, insofar as it ruled that
respondents counterclaim for recovery of possession of the subject property is
compulsory in nature. We DISMISS respondents permissive counterclaim without
prejudice to filing a separate action against petitioner.

SO ORDERED.

G.R. No. 173128 February 15, 2012

MARITIMEINDUSTRY AUTHORITY (MARINA) and/or ATTY. OSCAR M.

SEVILLA, Petitioners,
vs.
MARC PROPERTIES CORPORATION, Respondent.

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 which seeks to reverse
the Decision1 dated June 2, 2006 of the Court of Appeals (CA) in CA-G.R. CV No.
80967. The CA dismissed petitioners appeal questioning the summary judgment
rendered by the trial court which ordered petitioner to reimburse the expenses
incurred by the respondent for repair/renovation works on its building.

The factual antecedents:

On October 23, 2001, petitioner Maritime Industry Authority (MARINA), a

government agency represented by then Administrator and concurrently
Vice-Chairman of the Board of Directors Oscar M. Sevilla, entered into a Contract
of Lease2 with respondent Marc Properties Corporation represented by its
Executive Vice-President Ericson M. Marquez. It was agreed that the MARINA
offices will be transferred from PPL Building, Taft Avenue, Manila to an
eight-storey commercial building (MARC Building) and Condominium Unit 5 of
MARC 2000 Tower which are both owned by respondent. The parties fixed the
monthly rental at 1,263,607.74 (plus VAT) from January 1, 2002 up to December
31, 2002 and renewable for the same one-year period. The Contract of Lease also
contained the following provisions:

Article II

xxxx

Section 2.01 - The LESSEE, at its own expense, shall have the right and authority to
alter, renovate and introduce in the leased premises such improvement as it may
deem appropriate to render the place suitable for the purpose intended by the
LESSEE, provided, that such alteration, renovation and construction of additional
improvement will not cause any damage to the buildings and such improvements
shall be in accordance with the LESSORs House Rules & Regulations. The
renovation of existing electrical, sanitary/plumbing works, sprinkler systems,
mechanical works, exhaust and ventilation systems, doors, will be referred to the
Administration Office of the LESSOR and will be done only by the original
contractors of the system and cost will be for the account of the LESSEE.
Alternatively, the LESSEE may be allowed to use its own contractor but subject to
close supervision and approval of all works done by the original contractors of the
system and/or the Building Administration. This is to safeguard the original design
intent of the Buildings.

Article IX
Section 9.00 - The LESSEE may pre-terminate the term of this Contract of Lease by
notifying the LESSOR in writing at least ninety (90) days prior to LESSEES vacating
the premises, provided further that the LESSEE shall pay to the LESSOR a penalty
equivalent to two (2) months rental.

Article XI

xxxx

Section 11.13 - This Contract of Lease is subject to the approval of the Board of
Directors of the Maritime Industry Authority and the Office of the President and
shall become binding on both parties only after its approval by the
above-mentioned government offices. The LESSEE shall provide the LESSOR the
written approval of both offices.3

On December 14, 2001, respondent received a letter from Administrator Sevilla

requesting for rescission of their Contract of Lease for the reason that the MARINA
Board of Directors during its 158th Regular Meeting resolved to deny the
proposed transfer of the MARINA office from its present address to respondents
building.4 In its letter-reply dated December 17, 2001, respondent expressed
disappointment and enumerated those facts and circumstances for which
respondent believes that the Boards decision was unreasonable. Respondent
asserted that if the Board will not reconsider its decision, MARINA must take
responsibility for the cost already incurred by respondent as damages and lost
rental opportunity. Thus, respondent said it can only accept the request for
rescission upon reimbursement of 1,055,000.00 representing the amount
advanced by respondent and paid to its Contractors and payment of penalty
equivalent to 2 months rental or 2,527,215.48 in accordance with Art. IX, Sec.
9.00 of the Contract of Lease. With no immediate response from petitioners,
respondent again wrote Administrator Sevilla reiterating its position on the
matter.5

In their letter-reply dated January 23, 2002, petitioners asserted that MARINA is
not liable to pay the penalty considering that the Contract of Lease clearly
provides that it is subject to the approval of the Board and the Office of the
President (OP) to become binding on the parties. As to the actual amount
expended for "carpentry and electrical works" done on the building, petitioners
requested to "be furnished with copies of the official receipts" so that it may be
"properly guided in the disposition thereof." In compliance, respondent furnished
petitioners with copies of the letter and accomplishment reports/official receipts
submitted by its contractors. Respondents counsel faulted Administrator Sevilla
for not submitting the Contract of Lease to the Board of Directors notwithstanding
the fact that respondent had filed a motion for reconsideration of the Boards
decision, a clear breach of petitioners contractual obligation which entitles
respondent to the penalty and damages sought. Petitioners asserted that MARINA
is not liable for penalty and damages since the Contract of Lease was not
perfected; however, Administrator Sevilla reiterated MARINAs commitment "to
pay actual expenses incurred for the works done on the premises based on
[MARINAs] request." Petitioners likewise furnished respondent with copies of the
Agenda of the 160th Regular Meeting of the MARINA Board of Directors held on
June 28, 2002 and Secretarys Certificate dated July 1, 2002 stating the resolution
of the MARINA Board not to approve/ratify the Contract of Lease.6

On July 10, 2002, respondent instituted Civil Case No. 02-104015 in the Regional
Trial Court of Manila (Branch 42) against petitioners MARINA and/or Atty. Oscar M.
Sevilla. The Complaint alleged the following:

xxxx

2. In or about the first week of August 2001 the herein [defendant] Atty. Oscar
M. Sevilla, as MARINA Administrator, represented to Mr. Ericson M. Marquez,
Executive Vice-President of herein [plaintiff] MARC, that the MARINA has
decided to terminate its lease on the 4th, 5th and 6th floors of the PPL
Building and to transfer said principal office to a new location; to this end, he
negotiated for the lease to MARINA of the entire 8-storey Marc Building,
located at 1971 Taft Avenue, Malate, Manila, and Unit #5 of the adjacent Marc
2000 Tower, both of which belong to herein plaintiff MARC.

3. After about three (3) months of negotiations and after the terms and
conditions of the lease of said properties of herein plaintiff were ironed out
with the understanding that these were with the prior knowledge and consent
of the MARINA, a Contract of Lease on said 8-storey MARC Building and Unit
#5 of the Marc 2000 Tower was executed and signed x x x.

3.a. As a corollary to said contract, herein defendant Atty. Oscar M. Sevilla

wrote a letter, dated October 30, 2001, addressed to Mr. Emilio C. Yap,
informing the latter that "Pursuant to Section 4 of the Contract of Lease for
the Fourth, Fifth and Sixth floors of the PPL Bldg., which floors we are
presently occupying, we regret to inform you that MARINA is not renewing
said Lease Contract beginning January 2002.

4. To prepare for the occupancy on January 1, 2002 of the leased properties,

herein defendants requested that alterations/renovations be made on
plaintiffs MARC Building for the account and at the expense of the MARINA,
in accordance with plans prepared and provided by Mr. Roberto C. Arceo,
Administrative and Finance Director of MARINA; and, pursuant to said request
alterations/renovations started on December 5, 2001 and was done by the
lowest bidders, JTV Construction Group, Inc., for civil works/renovations, and
NCC Communication Networks, for wiring and cable installation, for which
MARC advanced/paid the sum of P1,555,170.40.

5. The said Contract of Lease of the MARINA with MARC stipulated in Sec.
11.13 of Article XI thereof that said contract "is subject to the approval of the
Board of Directors of the MARINA and the Office of the President of the
Philippines and shall become binding on both parties after its approval by the
afore-mentioned government offices", which stipulation, therefore, carries
with it the obligation on the part of the MARINA Administrator, Atty. Oscar M.
Sevilla, to submit the said contract to the said Board for approval or
disapproval; however, in breach of said stipulation, he did not do so.

5.a. On the contrary, in a letter addressed to Mr. Ericson Marquez, dated

December 14, 2001, the MARINA Administrator, Atty. Oscar M. Sevilla,
requested the rescission of the said Contract of Lease and, as justification,
he falsely asserted, that "during yesterdays 158th Regular Meeting of the
MARINA Board held at the MARINA Conference Room, the Board resolved
to DENY the proposed transfer of the MARINA from its present address to
your owned building," when in truth and in fact, neither the said transfer
nor the said Contract of Lease was included in the agenda or taken up
during the said 158th Regular Meeting held on December 13, 2001.

5.b. Neither was said Contract of Lease taken up in said Boards next
regular meeting held on February 21, 2002 notwithstanding the fact that
MARC filed a Motion for Reconsideration, dated February 14, 2002, which
provided the MARINA Administrator with another opportunity to submit
the said contract to the MARINA Board for its consideration; yet, he again
did not do so.

6. The breach on the part of the defendants of the stipulation clearly provided
in the said Contract of Lease, alleged in paragraph 5 hereof, resulted in
damages to the plaintiff which may be compensated with the sum of
P2,527,215.48 equivalent to two (2) months rental, - the measure of damages
provided for in said contract.
 x x x x7 (Italics supplied.)

Petitioners through the Solicitor General filed their Answer8 specifically denying
the foregoing allegations. Petitioners argued that respondents demand for
2,527,215.48 is based solely on Art. V, Sec. 5.0 of the Contract of Lease, which
provision presupposes the approval of the contract which is subject to the
suspensive condition provided in Art. XI, Sec. 11.13. Petitioners contended that by
claiming that there was no reason to reject the Contract of Lease considering the
"clear advantages" of approving the same, respondent is effectively imposing its
judgment on the Board of Directors and the OP; this simply cannot be done.
Petitioners pointed out that the approval or rejection of the contract is a
prerogative lodged solely on the said authorities and respondent is devoid of any
authority to question the wisdom of the Boards rejection of the contract as
obviously there were other considerations -- to which respondent is not privy --
factored in by the Board in its decision. Lastly, petitioners asserted that this being
a suit against the State, it must be dismissed outright as there was no allegation in
the complaint that the State had given its consent to be sued in this case.

Respondent filed a motion for summary judgment in its favor contending that
there is no genuine issue in this case as to any material fact even as to the amount
of damages. Petitioners filed their opposition alleging the existence of genuine
factual issues which can only be resolved in a full-blown trial on the merits.

On March 5, 2003, the trial court issued an Order9 granting in part the motion for
summary judgment. Citing petitioners admission in the Answer that
Administrator Sevilla, "as an act of good faith", offered in behalf of MARINA to
shoulder the actual expenses incurred for the works done on the premises based
on their request, as well as the other proofs/official receipts submitted by
respondent and the January 23, 2002, May 13, 2002 and July 1, 2002 letters of
Administrator Sevilla who promised or at least gave the impression that
respondent will be reimbursed by MARINA of the amount of 1,555,170.40, the
trial court ruled that summary judgment for the said claim is proper. Accordingly,
the trial court ordered:

WHEREFORE, in view of all the foregoing, the motion for summary judgment is
partly granted. The defendants are directed to jointly and severally pay the
plaintiff the sum of P1,555,170.40 as reimbursement of the expenses it incurred in
the repairs/renovations of the MARC Building with legal interest from the filing
(July 10, 2002) of the complaint. In so far as the other claims of plaintiff, the
motion for summary judgment is denied.
SO ORDERED.10

Respondent then moved to set the case for pre-trial, which was granted.
Meanwhile, petitioners filed a motion for reconsideration11 of the March 5, 2003
Order arguing that while admittedly they had offered to pay the respondent
reimbursement for the alterations/renovations made on its building as shown by
the afore-mentioned letters of Administrator Sevilla, petitioners did not admit that
such alterations/renovations which respondent claims to have been prosecuted on
the MARC Building were actually made thereon and that such changes were in fact
in accordance with the plans prepared and provided for by MARINA. Petitioners
stressed that these factual matters are still to be determined which can only be
done through a full-blown trial; the reimbursable amount being also subject to
verification since petitioners have not yet been given the opportunity to
independently confirm such amount. Further, it was contended that respondents
submission of accomplishment reports on the alterations/renovation works it
claims to have been done and the amount it allegedly expended do not
automatically establish petitioners liability for the same. Petitioners subsequently
requested that the scheduled pre-trial be cancelled pending resolution of their
motion for reconsideration of the March 5, 2003 Order.12

In its Order13 dated June 30, 2003, the trial court denied petitioners motion for
reconsideration, as follows:

As correctly observed by the plaintiff the answer raises issues which are sham or
not genuine. In their answer[,] defendants did not specifically allege what were not
done in plaintiffs MARC Building or what were done therein which were not in
accordance with the plan. Neither did defendants specifically alleged in their
answer what amount covered by the receipts of the contractors is not
reimbursable.

xxxx

The defendants opted not to file opposing or counter affidavits. Thus, there is no
proof what works were done in the MARC Building which was not in accordance
with the plan submitted by MARINA. Neither is there proof that the amounts
covered by the receipts of the contracts include amounts which were not for works
done in said MARC Building.

Anent the alleged lack of opportunity for defendants to confirm the amount
demanded by the plaintiff. From May 31, 2002 when defendants received copies
of the receipts issued by the contractors up to the time they filed their Answer
dated October 14, 2002, four and a half (4 ) months elapsed, during which
defendants have had full opportunity to verify the correctness of said receipts.
Thereafter, another four (4) months elapsed up to the time plaintiffs motion for
summary judgment was set for hearing on January 10, 2003. There were, therefore,
a total of 8 months during which defendants could have verified the correctness
of the amounts covered by said receipts.

WHEREFORE, in view of all the foregoing, the motion for reconsideration is denied.

SO ORDERED.14

The Office of the Solicitor General received a copy of the above order on July 14,
2003. On July 18, 2003, the Solicitor General filed a notice of appeal. Said notice of
appeal was later withdrawn upon manifestation by the Solicitor General that since
the March 5, 2003 Order is a partial summary judgment, the same is interlocutory
and not appealable, without prejudice to petitioners availment of the appropriate
remedy from the said ruling.15

On the scheduled pre-trial hearing on July 3, 2003, counsel for petitioners

appeared but without a special power of attorney as directed in the Notice of
Pre-Trial. On motion of the respondent, the trial court declared petitioners as in
default and allowed the respondent to present its evidence ex-parte.16 Petitioners
filed a motion for reconsideration claiming that the scheduled pre-trial was
premature considering the pendency of their motion for reconsideration of the
March 5, 2003 Order, and invoking the liberal policy on setting aside default
orders. The trial court, however denied said motion for reconsideration.17

Petitioners sought relief from the CA by filing a petition for certiorari with prayer
for issuance of TRO and/or writ of preliminary injunction (CA-G.R. SP No. 79343).
Petitioners asked the appellate court to hold in abeyance the proceedings in Civil
Case No. 02-104015. Apparently, however, petitioners urgent motion for the
issuance of TRO was not acted upon by the CA. After admission of the
documentary exhibits identified by Ericson Marquez and formally offered in
evidence, and there being no restraining order issued by the appellate court, the
case was deemed submitted for decision.18

On December 1, 2003, the trial court rendered its Decision19 upholding the March
5, 2003 order granting the prayer for reimbursement but denying the rest of
respondents claims. The dispositive portion thereof reads:

WHEREFORE, premises considered, except for the amount of Php1,555,170.40

representing reimbursement of the renovations advanced by the plaintiff which
this Court had already awarded in the Order dated March 5, 2003, the rest of the
plaintiffs claims vis--vis unpaid rentals of Php 2,527,215.48 together with interest
thereon at the legal rate as well as attorneys fees are hereby dismissed for lack of
factual and legal basis.

No pronouncement as to costs.

SO ORDERED.20

Both parties appealed the trial courts decision (CA-G.R. CV No. 80967).21 However,
respondents appeal was dismissed for non-payment of appellate docket and
other legal fees. Respondent challenged the said dismissal before this Court in a
petition for certiorari and mandamus (G.R. No. 165110). G.R. No. 165110 was
likewise dismissed under Resolution dated October 6, 2004 of this Courts Third
Division.22

By Decision dated June 2, 2006, the CA dismissed petitioners appeal holding that
the trial courts rendition of partial summary judgment was inaccord with Section
1, Rule 35 of the 1997 Rules of Civil Procedure, as amended, as it was based on
petitioners admission in their Answer. In rejecting petitioners argument that they
raised a genuine factual issue as to the reimbursable amount for the renovation
works, the CA stated:

As to the contention that defendant-appellant is entitled to verify first the

authenticity, genuineness and due execution of the documents (e.g., receipts)
relative to the renovation, suffice it to note that plaintiff-appellee had offered its
evidence on 13 December 2002 or three (3) months prior to the issuance of the
contested order. Yet, defendant-appellant has never lift its finger to challenge the
authenticity, genuineness, and due execution of the said documents. For this
failure, it is established beyond cavil that there is no genuine issue as to any
material fact warranting thereby the issuance of a summary judgment.23

Hence, this petition raising the sole issue of whether the CA was correct in
sustaining the trial courts order granting the motion for partial summary
judgment thereby dispensing with a full trial on respondents claim for
reimbursement of 1,555,170.40, the amount allegedly advanced by respondent
for the repair/renovation works on its building. With the previous dismissal by the
CA of respondents appeal and its petition for certiorari in this Court, the present
petition is thus confined to the propriety of the trial courts partial summary
judgment insofar as the aforesaid claim for reimbursement.
We find the petition meritorious.

Sections 1 and 3, Rule 35 of the 1997 Rules of Civil Procedure, as amended,

provide:

SECTION 1. Summary judgment for claimant. A party seeking to recover upon a

claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any
time after the pleading in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor upon all
or any part thereof.

SECTION 3. Motion and proceedings thereon. The motion shall be served at least
ten (10) days before the time specified for the hearing. The adverse party may
serve opposing affidavits, depositions or admissions at least three (3) days before
the hearing. After the hearing, the judgment sought shall be rendered forthwith if
the pleadings, supporting affidavits, depositions, and admissions on file, show
that, except as to the amount of damages, there is no genuine issue as to
anymaterial fact and that the moving party is entitled to a judgment as a matter of
law. (Emphasis supplied.)

Summary judgment is a procedural device resorted to in order to avoid long

drawn out litigations and useless delays where the pleadings on file show that
there are no genuine issues of fact to be tried.24 A "genuine issue" is such issue of
fact which require the presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim.25 There can be no summary judgment where
questions of fact are in issue or where material allegations of the pleadings are in
dispute.26 A party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, or that the issue
posed in the complaint is so patently unsubstantial as not to constitute a genuine
issue for trial, and any doubt as to the existence of such an issue is resolved
against the movant.27

Contrary to the findings of the trial court and CA, the Answer filed by petitioners
contained a specific denial of absolute liability for the amount being claimed as
actual expenses for repairs/renovations works done on repondents building after
the execution of the Contract of Lease.

5. SPECIFICALLY DENY the allegation in paragraph 4 of the complaint that

MARINA requested for alterations/renovations in accordance with the plans
prepared by MARINA on the MARC building for the account of and at the expense
of MARINA, the truth being those stated in the Special and Affirmative Defenses
hereof. They likewise SPECIFICALLY DENY the rest of the allegations therein that
said request alterations/renovations started on December 5, 2001 and was done
by the lowest bidders, JTV Construction Group, Inc., for civil works/renovations
and NCC Communication Networks, for wiring and cable installation, for whcih
plaintiff allegedly advanced/paid the sum of P1,555,170.40 for lack of knowledge
or information sufficient to form a belief as to the truth thereof.

xxxx

13. As an act of good faith, Atty. Sevilla, in behalf of MARINA, has offered to
shoulder and pay the actual expenses incurred for the works done on the premises
based on MARINAs request. Moreover, defendants cannot allow plaintiff to collect
from them the additional sum of P2,527,215.48 which is equivalent to two (2)
months rental as penalty simply because there is no justification therefor.

x x x x28

Furthermore, petitioners averred in their Opposition to Plaintiffs Motion for

Summary Judgment in Favor of Plaintiff:

With regard to the claim for reimbursement, plaintiff has yet to conclusively prove
that the alterations/renovations it claims to have been made in its building were
actually made and that the same were actually in accordance with the alleged
request made by MARINA.

The reply-letter dated January 23, 2002 of defendant Sevilla in response to the
letters of Ericson Marquez dated December 17, 2001 and January 18, 2002,
demanding reimbursements of the alterations/renovation allegedly made upon its
building, shows that it merely required Marquez to show proof or receipt of the
expenses plaintiff alleges it had incurred.

Likewise, the letter of defendant Sevilla dated July 1, 2002, this time in response to
a similar demand letter made by plaintiffs counsel, Atty. Antonio Atienza, simply
stated that defendants have committed themselves to pay the actual expenses
incurred by plaintiff as based on MARINAs request. The same offer was reiterated
by defendants in paragraph 13 of their answer to plaintiffs complaint. It must be
noted, however, that said offer specifically pertains only to alterations/renovations
which were actually made on plaintiffs properties in accordance with MARINAs
request.1wphi1

Verily, defendants have yet to actually acquiesce to the veracity of the

accomplishment reports, receipt, etc. submitted by plaintiff since the same are still
subject to verification which can only be achieved through a full-blown trial.29
(Emphasis and underscoring in the original.)

As can be gleaned, the fact that Administrator Sevilla sent respondent letters
wherein MARINA offered to shoulder actual expenses for works done on the
premises based on MARINAs request does not necessarily mean that petitioners
had waived their right to question the amountbeing claimed by the respondent.30
Since the factual basis of the claim for reimbursement was not admitted by the
petitioners, it is clear that the resolution of the question of actual works done
based on MARINAs request, as well as the correctness of the amount actually
spent by respondent for the purpose, required a trial for the presentation of
testimonial and documentary evidence to support such claim. The trial court
therefore erred in granting summary judgment for the respondent. The averments
in the answer and opposition clearly pose factual issues and hence rendition of
summary judgment would be improper.

It must be stressed that trial courts have limited authority to render summary
judgments and may do so only when there is clearly no genuine issue as to any
material fact. When the facts as pleaded by the parties are disputed or contested,
proceedings for summary judgment cannot take the place of trial.31 As already
stated, the burden of demonstrating clearly the absence of genuine issues of fact
rests upon the movant, in this case the respondent, and not upon petitioners who
opposed the motion for summary judgment. Any doubt as to the propriety of the
rendition of a summary judgment must thus be resolved against the respondent.
But here, the partial summary judgment was premised merely on the trial courts
hasty conclusion that respondent is entitled to the reimbursement sought simply
because petitioners failed to point out what particular works were not done or
implemented not in accordance with MARINAs specifications after demands were
made by respondent and the filing of the complaint in court. Precisely, a trial is
conducted after the issues have been joined to enable herein respondent to prove,
first, that repair/renovation works were actually done and such were in accordance
with MARINAs request, and second, that it actually advanced the cost thereof by
paying the contractors; and more importantly, to provide opportunity for the
petitioners to scrutinize respondents evidence, cross-examine its witnesses and
present rebuttal evidence. Moreover, the trial court should have been more
circumspect in ruling on the motion for summary judgment, taking into account
petitioners concern for judicious expenditure of public funds in settling its
liabilities to respondent.
The partial summary judgment rendered under the trial courts Order dated March
5, 2003 being a nullity, the case should be remanded to saidcourt for the conduct
of trial on the issue of the reimbursement of expenses for repair/renovation works
being claimed by the respondent. For this purpose, petitioners shall be afforded
fair opportunity to scrutinize the respondents evidence, cross-examine its
witnesses and present controverting evidence. It is to be noted that the partial
summary judgment was rendered before petitioners were declared non-suited.
Petitioners had promptly challenged the validity of the default order and even
sought an injunction against the ex-parte presentation of evidence by the
respondent; however, the CA did not act on the matter until the rendition of the
trial courts December 1, 2003 Decision. Substantial justice in this instance can
best be served if a full opportunity is given to both parties to litigate their dispute
and submit the merits of their respective positions.32

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated
June 2, 2006 of the Court of Appeals in CA-G.R. CV No. 80967 is REVERSED and
SET ASIDE. The Decision dated December 1, 2003 insofar only as it upheld the
Order dated March 5, 2003 of the Regional Trial Court of Manila, Branch 42, is SET
ASIDE. The case is hereby REMANDED to the said court for further proceedings.

No costs.

SO ORDERED.

G.R. No. 175291 July 27, 2011

THE HEIRS OF NICOLAS S. CABIGAS, NAMELY: LOLITA ZABATE CABIGAS,

ANECITA C. CANQUE, DIOSCORO CABIGAS, FIDEL CABIGAS, and RUFINO
CABIGAS, Petitioners,
vs.
MELBA L. LIMBACO, LINDA L. LOGARTA, RAMON C. LOGARTA, HENRY D. SEE,
FREDDIE S. GO, BENEDICT Y. QUE, AWG DEVELOPMENT CORPORATION,
PETROSA DEVELOPMENT CORPORATION, and UNIVERSITY OF CEBU
BANILAD, INC.,

DECISION

BRION, J.:

We resolve the petition for review on certiorari1 filed by Lolita Cabigas, Anecita
Canque, Dioscoro Cabigas, Fidel Cabigas, and Rufino Cabigas (petitioners), heirs of
Nicolas S. Cabigas, to reverse and set aside the resolutions of the Court of Appeals
(CA) in CA-G.R. CV No. 01144 dated May 31, 20062 and October 4, 2006,3
dismissing their ordinary appeal for being the wrong recourse.

THE FACTS

On February 4, 2003, the petitioners filed a complaint for the annulment of titles
of various parcels of land registered in the names of Melba Limbaco, Linda Logarta,
Ramon Logarta, Eugenio Amores, New Ventures Realty Corporation, Henry See,
Freddie Go, Benedict Que, AWG Development Corporation (AWG), Petrosa
Development Corporation (Petrosa), and University of Cebu Banilad, Inc. (UCB)
with the Regional Trial Court (RTC) of Cebu City, docketed as Civil Case No. 28585.

The complaint alleged that petitioner Lolita Cabigas and her late husband, Nicolas
Cabigas, purchased two lots (Lot No. 7424 and Lot No. 9535) from Salvador
Cobarde on January 15, 1980. Cobarde in turn had purchased these lots from Ines
Ouano6 on February 5, 1948.

Notwithstanding the sale between Ouano and Cobarde, and because the two lots
remained registered in her name,7Ouano was able to sell these same lots to the
National Airports Corporation on November 25, 1952 for its airport expansion
project. The National Airports Corporation promptly had the titles of these
properties registered in its name.

When the airport expansion project fell through, respondents Melba Limbaco,
Ramon Logarta, and Linda Logarta, the legal heirs of Ouano, succeeded in
reclaiming title to the two lots through an action for reconveyance filed with the
lower court;8 the titles over these lots were thereafter registered in their names.9
They then subdivided the two lots10 and sold them to New Ventures Realty
Corporation, Eugenio Amores, Henry See, Freddie Go, Benedict Que, Petrosa, and
AWG. AWG, in turn, sold one of the parcels of land to UCB. All the buyers
registered the titles over their respective lots in their names.

After the respondents had filed their individual Answers, respondents Henry See,
Freddie Go and Benedict Que filed a motion to set the case for hearing on special
affirmative defenses on July 8, 2004. On the other hand, respondents AWG,
Petrosa, and UCB filed a motion for summary judgment on April 13, 2005,
admitting as true the facts stated in the petitioners complaint, but claiming that
the petitioners had no legal right to the properties in question.

THE RTC RESOLUTION

On August 23, 2005, the RTC issued a resolution,11 granting the motion for
summary judgment filed by AWG, Petrosa and UCB, and dismissing the
petitioners complaint. According to the RTC, while the petitioners alleged bad
faith and malice on the part of Ouano when she sold the same properties to the
National Airports Corporation, they never alleged bad faith on the part of the
buyer, the National Airports Corporation. Since good faith is always presumed, the
RTC concluded that the National Airports Corporation was a buyer in good faith
and its registration of the properties in its name effectively transferred ownership
over the two lots, free from all the unrecorded prior transactions involving these
properties, including the prior sale of the lots to Cobarde.

As the RTC explained, the unregistered sale of the lots by Ouano to Cobarde was
merely an in personam transaction, which bound only the parties. On the other
hand, the registered sale between Ouano and the National Airports Corporation, a
buyer in good faith, was an in rem transaction that bound the whole world. Since
Cobardes rights to the properties had already been cut off with their registration
in the name of the National Airports Corporation, he could not sell any legal
interest in these properties to the Cabigas spouses. Hence, under the Torrens
system, the petitioners are strangers to the lots and they had no legally
recognized interest binding it in rem that the courts could protect and enforce
against the world.12

The petitioners filed a notice of appeal to question the RTC resolution. In response,
respondents AWG, Petrosa, and UCB filed a motion to dismiss the appeal, claiming
that the petitioners raised only questions of law in their appeal; thus, they should
have filed an appeal by certiorari with the Supreme Court, and not an ordinary
appeal with the appellate court.

THE COURT OF APPEALS RESOLUTIONS

In its May 31, 2006 resolution, the CA ruled that the petitioners should have filed a
petition for review on certiorari under Rule 45 of the Rules of Court with the
Supreme Court instead of an ordinary appeal since they only raised a question of
law, i.e., the propriety of the summary judgment. Accordingly, insofar as the
respondents who filed the motion for summary judgment are concerned, namely,
AWG, Petrosa, and UCB, the CA dismissed the petitioners appeal.

However, the CA remanded the case to the RTC for further proceedings on the
Motion to Set Case for Hearing on Special and Affirmative Defenses filed by
respondents Henry See, Freddie Go, and Benedict Que.
In its October 4, 2006 resolution, the CA resolved the petitioners motion for
reconsideration, as well as the Partial Motion for Reconsideration filed by
respondents Henry See, Freddie Go, and Benedict Que. The CA observed that it
did not have jurisdiction to entertain the appeal since it raised a pure question of
law. Since it dismissed the appeal based on a technicality, it did not have the
jurisdiction to order that the case be remanded to the RTC.

Furthermore, the trial court had already dismissed the case in its entirety when it
held that the petitioners had no enforceable right as against the respondents,
since they had no registered legal interest in the properties. There was thus no
need to remand the case to the RTC.

Hence, the petitioners seek recourse with this Court via the present petition,
raising the following grounds:

(1) The Court of Appeals committed grave and serious error in dismissing the
appeal and in holding that a summary judgment is appealable only through a
petition for review on certiorari under Rule 45 to the Supreme Court.

(2) The paramount and overriding considerations of substantial justice and

equity justify the reversal and setting aside of the questioned resolutions.

THE RULING

We AFFIRM the assailed CA resolutions.

Petitioners availed of the wrong mode of appeal

Section 2, Rule 41 of the Rules of Court provides the three modes of appeal, which
are as follows:

Section 2. Modes of appeal.

(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its original jurisdiction shall be taken
by filing a notice of appeal with the court which rendered the judgment or
final order appealed from and serving a copy thereof upon the adverse party.
No record on appeal shall be required except in special proceedings and other
cases of multiple or separate appeals where the law or these Rules so require.
In such cases, the record on appeal shall be filed and served in like manner.
 (b) Petition for review. The appeal to the Court of Appeals in cases decided
by the Regional Trial Court in the exercise of its appellate jurisdiction shall be
by petition for review in accordance with Rule 42.

(c) Appeal by certiorari. In all cases where only questions of law are raised
or involved, the appeal shall be to the Supreme Court by petition for review on
certiorari in accordance with Rule 45.

The first mode of appeal, the ordinary appeal under Rule 41 of the Rules of Court,
is brought to the CA from the RTC, in the exercise of its original jurisdiction, and
resolves questions of fact or mixed questions of fact and law. The second mode of
appeal, the petition for review under Rule 42 of the Rules of Court, is brought to
the CA from the RTC, acting in the exercise of its appellate jurisdiction, and
resolves questions of fact or mixed questions of fact and law. The third mode of
appeal, the appeal by certiorari under Rule 45 of the Rules of Court, is brought to
the Supreme Court and resolves only questions of law.

Where a litigant files an appeal that raises only questions of law with the CA,
Section 2, Rule 50 of the Rules of Court expressly mandates that the CA should
dismiss the appeal outright as the appeal is not reviewable by that court.

There is a question of law when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being
admitted, and the doubt concerns the correct application of law and jurisprudence
on the matter.13 On the other hand, there is a question of fact when the doubt or
controversy arises as to the truth or falsity of the alleged facts.

While the petitioners never filed their appellants brief, we discern from the
petitioners submissions to the CA,14 as well as from their petition with this Court,
their perceived issues with respect to the RTCs summary judgment, and they are
as follows:

a) Whether or not the National Airports Corporation acted with good faith
when it purchased the properties from Ouano;

b) Whether the heirs of Ouano acted with good faith in recovering the
properties from the National Airports Corporation; and

c) Whether the subsequent buyers of the properties acted with good faith in
purchasing the properties from the heirs of Ouano.
Given that the question of whether a person acted with good faith or bad faith in
purchasing and registering real property is a question of fact,15 it appears, at first
glance, that the petitioners raised factual issues in their appeal and, thus, correctly
filed an ordinary appeal with the CA. After reviewing the RTC resolution being
assailed, however, we find that the petitioners actually raised only questions of law
in their appeal.

We quote the pertinent portions of the RTC decision:

The main issue to be resolved is who between [the] plaintiffs and the defendants
have a better right to the subject lots.

In selling the land in favor of the National Airports Corporation[,] plaintiffs alleged
bad faith and malice on the part of the seller Ine[s] Ouano but have not pleaded
bad faith on the part of the buyer. Since good faith is always presumed under
Article 427 of the Civil Code, the National Airports Corporation was therefore a
buyer in good faith. Being [a] purchaser in good faith and for value, it is axiomatic
that the right of [the] National Airports Corporation must be upheld and its titles
protected over the claim of the plaintiffs. In the case of Flordeliza Cabuhat vs. The
Honorable Court of Appeals, G.R. No. 122425, September 28, 2001, the Supreme
Court upheld the validity of the title of an innocent purchaser in good faith and for
value and at the same time invoked the principle of stability of our Torrens system
and indefeasibility of title guaranteeing the integrity of land titles once the claim
of ownership is established and recognized.

"However, it is well-settled that even if the procurement of a certificate of title was

tainted with fraud and misrepresentation, such defective title may be the source of
a completely legal and valid title in the hands of an innocent purchaser for value.
Thus: where innocent third persons, relying on the correctness of the certificate of
title thus issued, acquire rights over the property the court cannot disregard such
rights and order the total cancellation of the certificate. The effect of such an
outright cancellation would be to impair public confidence in the certificate of title,
for everyone dealing with property registered under [the] Torrens system would
have to inquire in every instance whether the title has been regularly or irregularly
issued. This is contrary to the evident purpose of the law. Every person dealing
with the registered land may safely rely on the correctness of the certificate of title
issued therefore and the law will in no way oblige him to go behind the certificate
to determine the condition of the property."

The subject lots being registered land under the Torrens [s]ystem the recordation
of the sale by the National Airports Corporation, a buyer in good faith gave
National Airports Corporation a title free of all unrecorded prior transactions,
deeds, liens and encumbrances, and conversely forever erased or cut off the
unrecorded interest of Salvador Cobarde. Section 50 of Article 496 of the Land
Registration Act (now sec. 51 of PD 1529) reads: "No deed, mortgage, lease or
other voluntary instrument, except a will, purporting to convey or affect registered
land shall take effect as a conveyance or bind the land xxx. The act of registration
shall be the operative act to convey and affect [the] land." In the case of National
Grains Authority v. IAC, 157 SCRA 380, the Supreme Court ruled, thus, the
possession by plaintiffs and their predecessors-in-interest is irrelevant to this case
because possession of registered land can never ripen into ownership. "No title to
registered land in derogation of the title of the registered owner shall be acquired
by prescription or adverse possession." (Sec. 46 of Act 496, now Sec. 47 of PD
1529).

In the eyes of the Torrens system, the unregistered sale of the property by Ine[s]
Ouano to Salvador Cobarde did not bind the land or the whole world in rem; it
bound, in personam, only the parties. On the other hand, the registered sale by
Ine[s] Ouano to National Airports Corporation, a buyer in good faith, bound the
land in rem, meaning that the whole world was put on constructive notice that
thenceforth the land belonged to National Airports Corporation free of all prior
transactions, deeds and encumbrances, such as the claim of Salvador Cobarde,
which were at the very moment National Airports Corporation registered its title
free of prior claims forever erased or cut off by operation of law.

xxxx

Salvador Cobarde, whose rights to the property had been erased or cut off by
operation of law, had nothing or had no legally recognized interest in the property
that he could sell when he "sold" the property to Nicolas and Lolita Cabigas.
Nicolas and Lolita Cabigas having bought nothing could transmit nothing to their
successors-in-interest, the plaintiffs herein. Under the Torrens system, herein
plaintiffs are strangers to the property; they possess no legally recognized interest
binding the property in rem that courts could protect and enforce against the
world.16

As astutely observed by the CA, the RTC resolution merely collated from the
pleadings the facts that were undisputed, admitted, and stipulated upon by the
parties, and thereafter ruled on the legal issues raised by applying the pertinent
laws and jurisprudence on the matter. In other words, the RTC did not resolve any
factual issues, only legal ones.
When there is no dispute as to the facts, the question of whether or not the
conclusion drawn from these facts is correct is a question of law.17 When the
petitioners assailed the summary judgment, they were in fact questioning the
conclusions drawn by the RTC from the undisputed facts, and raising a question of
law.

In light of the foregoing, jurisdiction over the petitioners appeal properly lay with
this Court via an appeal by certiorari, and the CA was correct in dismissing the
appeal for lack of jurisdiction.

Rendition of summary judgment was proper

Even if we overlook the procedural lapse and resolve the case on the merits, we
still affirm the assailed CA resolutions.

Under the Rules of Court, a summary judgment may be rendered where, on

motion of a party and after hearing, the pleadings, supporting affidavits,
depositions and admissions on file show that, "except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law."18 The Court explained the
concept of summary judgment in Asian Construction and Development
Corporation v. Philippine Commercial International Bank:19

Summary or accelerated judgment is a procedural technique aimed at weeding

out sham claims or defenses at an early stage of litigation thereby avoiding the
expense and loss of time involved in a trial.

Under the Rules, summary judgment is appropriate when there are no genuine
issues of fact which call for the presentation of evidence in a full-blown trial. Even
if on their face the pleadings appear to raise issues, when the affidavits,
depositions and admissions show that such issues are not genuine, then summary
judgment as prescribed by the Rules must ensue as a matter of law. The
determinative factor, therefore, in a motion for summary judgment, is the
presence or absence of a genuine issue as to any material fact. [Emphasis
supplied.]

The petitioners assert that the RTC erred in rendering a summary judgment since
there were factual issues that required the presentation of evidence at a trial.

We disagree with the petitioners.

At the outset, we note from the respondents pleadings that several respondents20
denied that the sale between anwhile, missed the information against all the
accused. on in Court, claiming that cutors, who are his subordinates. Ouano and
Cobarde ever occurred. It would, therefore, appear that a factual issue existed that
required resolution through a formal trial, and the RTC erred in rendering
summary judgment.

A closer examination of the parties submissions, however, makes it apparent that

this is not a genuine issue of fact because, as will be discussed below, the
petitioners do not have any legally enforceable right to the properties in question,
as their predecessors-in-interest are not buyers in good faith.

i. Cabigas spouses are not buyers in good faith

A purchaser in good faith is one who buys the property of another without notice
that some other person has a right to or interest in such property, and pays a full
and fair price for the same at the time of such purchase or before he has notice of
the claim of another person.21 It is a well-settled rule that a purchaser cannot close
his eyes to facts which should put a reasonable man upon his guard, and then
claim that he acted in good faith under the belief that there was no defect in the
title of the vendor. His mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in his vendors title,
will not make him an innocent purchaser for value, if it afterwards develops that
the title was in fact defective, and it appears that he had such notice of the defect
as would have led to its discovery had he acted with that measure of precaution
which may reasonably be required of a prudent man in a like situation.22

We are dealing with registered land, a fact known to the Cabigas spouses since
they received the duplicate owners certificate of title from Cobarde when they
purchased the land. At the time of the sale to the Cabigas spouses, however, the
land was registered not in Cobardes name, but in Ouanos name. By itself, this fact
should have put the Cabigas spouses on guard and prompted them to check with
the Registry of Deeds as to the most recent certificates of title to discover if there
were any liens, encumbrances, or other attachments covering the lots in question.
As the Court pronounced in Abad v. Sps. Guimba:23

[The law protects to a greater degree a purchaser who buys from the registered
owner himself. Corollarily, it] requires a higher degree of prudence from one who
buys from a person who is not the registered owner, although the land object of
the transaction is registered. While one who buys from the registered owner does
not need to look behind the certificate of title, one who buys from one who is not
the registered owner is expected to examine not only the certificate of title but all
factual circumstances necessary for [one] to determine if there are any flaws in the
title of the transferor, or in [the] capacity to transfer the land. (emphasis supplied)

Instead, the Cabigas spouses relied completely on Cobardes representation that

he owned the properties in question, and did not even bother to perform the
most perfunctory of investigations by checking the properties titles with the
Registry of Deeds. Had the Cabigas spouses only done so, they would easily have
learned that Cobarde had no legal right to the properties they were acquiring
since the lots had already been registered in the name of the National Airports
Corporation in 1952. Their failure to exercise the plain common sense expected of
real estate buyers bound them to the consequences of their own inaction.

ii. No allegation that the National Airports Corporation registered the lots in bad
faith

All the parties to this case trace their ownership to either of the two persons that
Ouano sold the properties to either to Cobarde, who allegedly purchased the
land in 1948, or to the National Airports Corporation, which bought the land in
1952. Undoubtedly, the National Airports Corporation was the only party that
registered the sale with the Registry of Deeds. For this registration to be binding,
we now have to determine whether the National Airports Corporation acted with
good faith when it registered the properties, in accordance with Article 1544 of
the Civil Code, which provides:

Article 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person

acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in
good faith was first in the possession; and, in the absence thereof, to the person
who presents the oldest title, provided there is good faith.1avvphi1

Based on this provision, the overriding consideration to determine ownership of

an immovable property is the good or bad faith not of the seller, but of the buyer;
specifically, we are tasked to determine who first registered the sale with the
Registry of Property (Registry of Deeds) in good faith.
As accurately observed by the RTC, the petitioners, in their submissions to the
lower court, never imputed bad faith on the part of the National Airports
Corporation in registering the lots in its name. This oversight proves fatal to their
cause, as we explained in Spouses Chu, Sr. v. Benelda Estate Development
Corporation:

In a case for annulment of title, therefore, the complaint must allege that the
purchaser was aware of the defect in the title so that the cause of action against
him will be sufficient. Failure to do so, as in the case at bar, is fatal for the reason
that the court cannot render a valid judgment against the purchaser who is
presumed to be in good faith in acquiring the said property. Failure to prove,
much less impute, bad faith on said purchaser who has acquired a title in his favor
would make it impossible for the court to render a valid judgment thereon due to
the indefeasibility and conclusiveness of his title.24

Since the petitioners never alleged that the National Airports Corporation acted
with bad faith when it registered the lots in its name, the presumption of good
faith prevails. Consequently, the National Airports Corporation, being a registrant
in good faith, is recognized as the rightful owner of the lots in question, and the
registration of the properties in its name cut off any and all prior liens, interests
and encumbrances, including the alleged prior sale to Cobarde, that were not
recorded on the titles. Cobarde, thus, had no legal rights over the property that he
could have transferred to the Cabigas spouses.

Since the Cabigas spouses have no legally recognizable interest in the lots in
question, it follows that the petitioners, who are subrogated to the rights of the
former by virtue of succession, also have no legally recognizable rights to the
properties that could be enforced by law. The petitioners clearly have no cause of
action against the respondents, and the RTC correctly dismissed their complaint
for annulment of title.

WHEREFORE, premises considered, we DENY the petition for lack of merit, and
AFFIRM the Resolutions, dated May 31, 2006 and October 4, 2006, of the Court of
Appeals in CA-G.R. CV No. 01144. No costs.

SO ORDERED.

POST JUDGMENT REMEDIES

G.R. No. 156375 May 30, 2011

DOLORES ADORA MACASLANG, Petitioner,
vs.
RENATO AND MELBA ZAMORA, Respondents.

DECISION

BERSAMIN, J.:

The Regional Trial Court (RTC) is not limited in its review of the decision of the
Municipal Trial Court (MTC) to the issues assigned by the appellant, but can decide
on the basis of the entire records of the proceedings of the trial court and such
memoranda or briefs as may be submitted by the parties or required by the RTC.

The petitioner appeals the decision promulgated on July 3, 2002,1 whereby the
Court of Appeals (CA) reversed"for having no basis in fact and in law" the decision
rendered on May 18, 20002 by the Regional Trial Court, Branch 25, in Danao City
(RTC) thathad dismissed the respondents action

for ejectment against the petitioner, andreinstated the decision dated September
13, 1999 of the Municipal Trial Court in Cities (MTCC) of DanaoCity (ordering the
petitioner as defendant to vacate the premises and to pay attorneys fees of
10,000.00 and monthly rental of 5,000.00 starting December 1997 until they
vacated the premises).3

We grant the petition for review and rule that contrary to the CAs conclusion, the
RTCas an appellate court properly considered and resolved issues even if not
raised in the appeal from the decisionrendered in an ejectment case by the MTCC.

ANTECEDENTS

On March 10, 1999, the respondents filed a complaint for unlawful detainer in the
MTCC, alleging that "the [petitioner] sold to [respondents] a residential land
located in Sabang, DanaoCity" and that "the [petitioner] requested to be allowed
to live in the house" with a "promise to vacate as soon as she would be able to find
a new residence." They further alleged thatdespitetheir demand after a year, the
petitioner failed or refused to vacate the premises.

Despite the due service of the summons and copy of the complaint, the petitioner
did not file heranswer. The MTCC declared her in defaultupon the respondents
motion to declare her in default, and proceeded to receivethe respondentsoral
testimony and documentary evidence. Thereafter, on September 13, 1999, the
MTCC rendered judgment against her, disposing:

WHEREFORE, considering the foregoing, Judgment is hereby rendered in favor [of]

plaintiffs (sic) spouses Renato Zamora and Melba Zamora and against defendant
Dolores AdoraMacaslang, ordering defendant to vacate the properties in question,
to pay to plaintiffs Attorneys Fees in the sum of 10,000.00 and monthly rental of
5,000.00 starting December, 1997 until the time the defendant shall have vacated
the properties in question.

SO ORDERED.4

The petitioner appealed to the RTC, averring the following as reversible errors,
namely:

1. Extrinsic Fraud was practiced upon defendant-appellant which ordinary

prudence could not have guarded against and by reason of which she has
been impaired of her rights.

2. Defendant-Appellant has a meritorious defense in that there was no actual

sale considering that the absolute deed of sale relied upon by the
plaintiff-appell[ees] is a patent-nullity as her signature therein was procured
through fraud and trickery.5

and praying through her appeal memorandum as follows:

Wherefore, in view of the foregoing, it is most respectfully prayed for that

judgment be rendered in favor of defendant-appellant ordering that this case be
remanded back to the Court of Origin, Municipal Trial Court of Danao City, for
further proceedings to allow the defendant to present her evidence, and
thereafter, to render a judgment anew.6

On May 18, 2000, the RTC resolved the appeal, to wit:7

WHEREFORE,judgment is hereby rendered dismissing the complaint for failure to

state a cause of action.

The same may, however, be refiled in the same Court, by alleging plaintiffs cause
of action, if any.

Plaintiffs Motion for Execution of Judgment of the lower court is rendered moot
by this judgment.
SO ORDERED.

The respondents appealed to the CA, assailing the RTCs decision for "disregarding
the allegations in the complaint" in determining the existence or non-existence of
a cause of action.

On July 3, 2002, the CA reversed and set aside the RTCs decision and reinstated
the MTCCs decision in favor of the respondents, disposing:

WHEREFORE,foregoing premises considered, the Petition is hereby GIVEN DUE

COURSE. Resultantly, the impugned decision of the Regional Trial Court is hereby
REVERSED and SET ASIDE for having no basis in fact and in law, and the Decision
of the Municipal Trial Court in Cities REINSTATED and AFFIRMED. No costs.

SO ORDERED.8

The petitionersmotion for reconsideration was denied onNovember 19, 2002.

ISSUES

Hence, the petitioner appeals the CAs adverse decision, submitting legal issues, as
follows:

1. Whether or not the Regional Trial Court in the exercise of its Appellate
Jurisdiction is limited to the assigned errors in the Memorandum or brief filed
before it or whether it can decide the case based on the entire records of the
case, as provided for in Rule 40, Sec. 7. This is a novel issue which, we
respectfully submit, deserves a definitive ruling by this Honorable Supreme
Court since it involves the application of a new provision, specifically
underlined now under the 1997 Revised Rules on Civil procedure.

2. Whether or not in an action for unlawful detainer, where there was no prior
demand to vacate and comply with the conditions of the lease made, a valid
cause of action exists?

3. Whether or not in reversing the Regional Trial Court Decision and

reinstating and affirming the decision of the Municipal Circuit Trial Court,
which was tried and decided by the MCTC in violation of the Rules on
Summary Procedure, the Court of Appeals sanctioned a gross departure from
the usual course of judicial proceedings?9
The issues that this Court has to resolve are stated thuswise:

1. Whether or not the CA correctly found that the RTC committed reversible
error in ruling on issues not raised by the petitioner in her appeal;

2. Whether or not the CA correctly found that the complaint stated a valid
cause of action;

3. Whether or not the CA erred in finding that there was a valid demand to
vacate made by the respondents on the petitioner; and

4. Whether or not the petitioners defense of ownership was meritorious.

RULING

We grant the petition for review.

A.
As an appellate court, RTC may rule
upon an issue notraised on appeal

In its decision, the CA ruled that the RTC could not resolve issues that were not
assigned by the petitioner in her appeal memorandum, explaining:

Indeed(,) We are rather perplexed why the Regional Trial Court, in arriving at its
decision, discussed and ruled on issues or grounds which were never raised,
assigned, or argued on by the Defendant-appellee in her appeal to the former. A
careful reading of the Defendant-appellees appeal memorandum clearly shows
that it only raised two (2) grounds, namely (a) alleged extrinsic fraud, (b)
meritorious defenses based on nullity of the Deed of Sale Instrument. And yet the
Trial Court, in its decision, ruled on issues not raised such as lack of cause of action
and no prior demand to vacate having been made.

Only errors assigned and properly argued on the brief and those necessarily
related thereto, may be considered by the appellate court in resolving an appeal in
a civil case. Based on said clear jurisprudence, the court a quo committed grave
abuse of discretion amounting to lack of jurisdiction when it resolved
Defendant-appellees appeal based on grounds or issues not raised before it,
much less assigned by Defendant-appellee as an error.

Not only that. It is settled that an issue which was not raised during the Trial in the
court below would not be raised for the first time on appeal as to do so would be
offensive to the basic rules of fair play, justice and due process (Victorias Milling
Co., Inc. vs. CA, 333 SCRA 663). We can therefore appreciate Plaintiffs-appellants
dismay caused by the Regional Trial Courts blatant disregard of a basic and
fundamental right to due process.10

The petitioner disagrees with the CA and contends that the RTC as an appellate
courtcould rule on the failure of the complaint to state a cause of action and the
lack of demand to vacate even if not assigned in the appeal.

We concur with the petitioners contention.

The CA might have been correct had the appeal been a first appeal from the RTC
to the CA or another proper superior court, in which instance Section 8 of Rule 51,
which applies to appeals from the RTC to the CA,imposesthe express limitation of
the review to only those specified in the assignment of errorsor closely related to
or dependent on an assigned error and properly argued in the appellants brief,
viz:

Section 8. Questions that may be decided. No error which does not affect the
jurisdiction over the subject matter or the validity of the judgment appealed from
or the proceeding therein will be considered unless stated in the assignment of
errors, or closely related to or dependent on an assigned error and properly
argued in the brief, save as the court may pass upon plain errors and clerical
errors.

Butthe petitioners appeal herein,being taken from the decision of the MTCC to
the RTC, was governed by a different rule, specifically Section 18 of Rule 70 of the
Rules of Court, to wit:

Section 18. xxx

xxx

The judgment or final order shall be appealable to the appropriate Regional Trial
Court which shall decide the same on the basis of the entire record of the
proceedings had in the court of origin and such memoranda and/or briefs as may
be submitted by the parties or required by the Regional Trial Court. (7a)

As such,the RTC, in exercising appellate jurisdiction,was not limited to the errors

assigned in the petitioners appeal memorandum, but coulddecide on the basis of
the entire record of the proceedingshad in the trial court and such memoranda
and/or briefs as may be submitted by the parties or required by the RTC.

The difference between the procedures for deciding on review is traceable to

Section 22 of Batas PambansaBlg. 129,11which provides:

Section 22. Appellate Jurisdiction. Regional Trial Courts shall exercise appellate
jurisdiction over all cases decided by Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts in their respective territorial
jurisdictions.Such cases shall be decided on the basis of the entire record of
the proceedings had in the court of origin [and] such memoranda and/or
briefs as may be submitted by the parties or required by the Regional Trial
Courts. The decision of the Regional Trial Courts in such cases shall be appealable
by petition for review to the Court of Appeals which may give it due course only
when the petition shows prima facie that the lower court has committed an error
of fact or law that will warrant a reversal or modification of the decision or
judgment sought to be reviewed.12

As its compliance with the requirement of Section 36 of Batas PambansaBlg. 129to

"adopt special rules or procedures applicable to such cases in order to achieve an
expeditious and inexpensive determination thereof without regard to technical
rules," the Court promulgated the 1991 Revised Rules on Summary Procedure,
whereby it institutionalized the summary procedure for all the first level courts.
Section 21 of the 1991 Revised Rules on Summary Procedurespecifically stated:

Section 21. Appeal. Thejudgment or final order shall be appealable to the

appropriate Regional Trial Court which shall decide the same in accordance with
Section 22 of Batas PambansaBlg. 129. The decision of the Regional Trial Court in
civil cases governed by this Rule, including forcible entry and unlawful detainer
shall be immediately executory, without prejudice to a further appeal that may be
taken therefrom. Section 10 of Rule 70 shall be deemed repealed.

Later on, the Court promulgated the 1997 Rules of Civil Procedure, effective on
July 1, 1997, and incorporated in Section 7 of Rule 40 thereof the directive to the
RTC to decide appealed cases"on the basis of the entire record of the proceedings
had in the court of origin and such memoranda as are filed,"viz:

Section 7. Procedure in the Regional Trial Court.

(a) Upon receipt of the complete record or the record on appeal, the clerk of
court of the Regional Trial Court shall notify the parties of such fact.
 (b) Within fifteen (15) days from such notice, it shall be the duty of the
appellant to submit a memorandum which shall briefly discuss the errors
imputed to the lower court, a copy of which shall be furnished by him to the
adverse party. Within fifteen (15) days from receipt of the appellants
memorandum, the appellee may file his memorandum. Failure of the
appellant to file a memorandum shall be a ground for dismissal of the appeal.

(c) Upon the filing of the memorandum of the appellee, or the expiration of
the period to do so, the case shall be considered submitted for decision. The
Regional Trial Court shall decide the case on the basis of the entire record of
the proceedings had in the court of origin and such memoranda as are filed.
(n)

As a result, the RTC presently decides all appeals from the MTC based on the
entire record of the proceedings had in the court of origin and such memoranda
or briefs as are filed in the RTC.

Yet, even withoutthe differentiation in the procedures of deciding appeals,

thelimitation of the review to onlythe errors assigned and properly argued in the
appeal brief or memorandum and the errors necessarily related to such assigned
errorsought not to have obstructed the CA from resolving the unassigned issues
by virtue of their coming under one or several of the following recognized
exceptions to the limitation, namely:

(a) When the question affectsjurisdiction over the subject matter;

(b) Matters that are evidently plain or clerical errors within contemplation of
law;

(c) Matters whose consideration is necessary in arriving at a just decision and

complete resolution of the case or in serving the interests of justice or
avoiding dispensing piecemeal justice;

(d) Matters raised in the trial court and are of record having some bearing on
the issue submitted that the parties failed to raise or that the lower court
ignored;

(e) Matters closely related to an error assigned; and

(f) Matters upon which the determination of a question properly assigned is

dependent.13
Consequently, the CA improperly disallowed the consideration and resolution of
the two errors despite their being: (a)necessary in arriving at a just decision and
acomplete resolution of the case; and (b) matters of record having some bearing
on the issues submitted that the lower court ignored.

B.
CA correctly delved into and determined
whether or not complaint stateda cause of action

The RTC opined that the complaint failed to state a cause of action because the
evidence showed that there was no demand to vacate made upon the petitioner.

The CA disagreed, observingin its appealed decision:

But what is worse is that a careful reading of Plaintiffs-appellants Complaint

would readily reveal that they have sufficiently established (sic) a cause of action
against Defendant-appellee. It is undisputed that as alleged in the complaint and
testified to by Plaintiffs-appellants, a demand to vacate was made before the
action for unlawful detainer was instituted.

A complaint for unlawful detainer is sufficient if it alleges that the withholding of

possession or the refusal is unlawful without necessarily employing the
terminology of the law (Jimenez vs. Patricia, Inc., 340 SCRA 525). In the case at
bench, par. 4 of the Complaint alleges, thus:

"4. After a period of one (1) year living in the aforementioned house, Plaintiff
demanded upon defendant to vacate but she failed and refused;"

From the foregoing allegation, it cannot be disputed that a demand to vacate has
not only been made but that the same was alleged in the complaint. How the
Regional Trial Court came to the questionable conclusion that Plaintiffs-appellants
had no cause of action is beyond Us.14

We concur with the CA.

A complaint sufficiently alleges a cause of action for unlawful detainer if it states

the following:

(a)Initially, the possession of the property by the defendant was by contract

with or by tolerance of the plaintiff;
 (b)Eventually, such possession became illegal upon notice by the plaintiff to
the defendant about the termination of the latters right of possession;

(c)Thereafter, the defendant remained in possession of the property and

deprived the plaintiff of its enjoyment; and

(d)Within one year from the making of the last demand to vacate the
propertyon the defendant, the plaintiff instituted the complaint for
ejectment.15

In resolving whether the complaint states a cause of actionor not, only the facts
alleged in the complaint are considered. The test is whether the court can render a
valid judgment on the complaint based on the facts alleged and the prayer asked
for.16 Only ultimate facts, not legal conclusions or evidentiary facts, are considered
for purposes of applying the test.17

To resolve the issue, therefore, a look at the respondents complaint is helpful:

2. On September 10, 1997, defendant sold to plaintiffs a residential land

located in Sabang, Danao City, covered by Tax Dec.0312417 RB with an area of
400 square meters, including a residential house where defendant was then
living covered by Tax Dec. 0312417 RB, a copy of the deed of absolute [sale] of
these properties is hereto attached as Annex "A";

3. After the sale, defendant requested to be allowed to live in the house which
plaintiff granted on reliance of defendants promise to vacate as soon as she
would be able to find a new residence;

4. After a period of one (1) year living in the aforementioned house, plaintiffs
demanded upon defendant to vacate but she failed or refused.

5. Plaintiffs sought the aid of the barangay Lupon of Sabang, Danao City for
arbitration but no settlement was reached as shown by a certification to file
action hereto attached as Annex "B";

6. Plaintiffs were compelled to file this action and hire counsel for 10,000 by
way of attorneys fee;

7. Defendant agreed to pay plaintiffs a monthly rental of 5,000 for the period
of time that the former continued to live in the said house in question.
WHEREFORE, it is respectfully prayed of this Honorable Court to render judgment
ordering the defendant to vacate the properties in question, ordering the
defendant to pay plaintiffs attorneys fees in the sum of 10,000, ordering the
defendant to pay the plaintiffs a monthly rental of 5,000 starting in October 1997,
until the time that defendant vacates the properties in question. Plaintiffs pray for
such other refiefs consistent with justice and equity.18

Based on its allegations, the complaintsufficiently stated a cause of action for

unlawful detainer. Firstly, it averred that the petitioner possessed the property by
the mere tolerance of the respondents. Secondly, the respondents demanded that
the petitioner vacate the property, thereby rendering her possession illegal.
Thirdly,she remained in possession of the property despite the demand to vacate.
And, fourthly, the respondents instituted the complaint on March 10, 1999,which
was well within a year after the demand to vacate was made around September of
1998 or later.

Yet, even as we rule that the respondents complaint stated a cause of action, we
must find and hold that both the RTC and the CA erroneously appreciatedthe real
issue to be about the complaints failure to state a cause of action. It certainly was
not so, butthe respondents lack of cause of action. Their erroneous
appreciationexpectedly prevented the correct resolution of the action.

Failure to state a cause of action and lack of cause of action are really different
from each other.On the one hand, failure to state a cause of actionrefers to the
insufficiency of the pleading, and is a ground for dismissal under Rule 16 of the
Rules of Court. On the other hand, lack of cause action refers to a situation where
the evidence does not prove the cause of action alleged in the pleading. Justice
Regalado, a recognized commentator on remedial law, has explained the
distinction:19

xxx What is contemplated, therefore, is a failure to state a cause of action which is

provided in Sec. 1(g) of Rule 16. This is a matter of insufficiency of the pleading.
Sec. 5 of Rule 10, which was also included as the last mode for raising the issue to
the court, refers to the situation where the evidence does not prove a cause of
action. This is, therefore, a matter of insufficiency of evidence. Failure to state a
cause of action is different from failure to prove a cause of action. The remedy in
the first is to move for dismissal of the pleading, while the remedy in the second is
to demur to the evidence, hence reference to Sec. 5 of Rule 10 has been
eliminated in this section. The procedure would consequently be to require the
pleading to state a cause of action, by timely objection to its deficiency; or, at the
trial, to file a demurrer to evidence, if such motion is warranted.
A complaint states a cause of action if it avers the existence of the three essential
elements of a cause of action, namely:

(a) The legal right of the plaintiff;

(b) The correlative obligation of the defendant; and

(c) The act or omission of the defendant in violation of said legal right.

If the allegations of the complaint do not aver the concurrence of these elements,
the complaint becomes vulnerable to a motion to dismiss on the ground of failure
to state a cause of action.Evidently, it is not the lack or absence of a cause of
action that is a ground for the dismissal of the complaint but the fact that the
complaint states no cause of action.Failure to state a cause of action may be raised
at the earliest stages of an action through a motion to dismiss, but lack of cause of
action may be raised at any time after the questions of fact have been resolved on
the basis of the stipulations, admissions, or evidence presented.20

Having found that neither Exhibit C nor Exhibit E was a proper demand to vacate,21
considering that Exhibit C (the respondents letter dated February 11,
1998)demanded the payment of 1,101,089.90, and Exhibit E (theirletter dated
January 21, 1999) demandedthe payment of 1,600,000.00, the RTC concluded
that the demand alleged in the complaint did not constitute a demand to pay rent
and to vacate the premises necessary in an action for unlawful detainer. It was this
conclusion that caused the RTC to confuse the defect as failure of the complaint to
state a cause of action for unlawful detainer.

The RTCerred even in that regard.

To begin with, it was undeniable that Exhibit D (the respondents letter dated April
28, 1998) constitutedthedemand to vacate that validly supported their action for
unlawful detainer, because of its unmistakable tenor as a demand to vacate, which
the following portion indicates:22

This is to give notice that since the mortgage to your property has long expired
and that since the property is already in my name, I will be taking over the
occupancy of said property two (2) months from date of this letter.

Exhibit D, despite not explicitly using the wordvacate, relayed to the petitionerthe
respondents desire to take over the possession of the property by givingher no
alternative exceptto vacate.The word vacate,according toGolden Gate Realty
Corporation v. Intermediate Appellate Court,23is not a talismanic word that must
be employed in all notices to vacate.The tenantsin Golden Gate Realty
Corporationhad defaulted in the payment of rents, leading theirlessorto notify
them to pay with a warning that a case of ejectment would be filed against
themshould they not do so. The Court held that the lessor had thereby given
strong notice that "you either pay your unpaid rentals or I will file a court case to
have you thrown out of my property,"for therewas no other interpretation of the
import of the notice due to the alternatives being clear cut, in that the tenants
must pay rentals that had been fixed and had become payable in the past, failing
in which they must move out.24

Also, the demand not being to pay rent and to vacate did not render the cause of
action deficient. Based on the complaint, the petitioners possession was allegedly
based on the respondents tolerance, not on any contract between them. Hence,
thedemand to vacate sufficed.

C.
Ejectment was not proper due
to defense of ownership being established

The respondents cause of action for unlawful detainer was based on their
supposed right to possession resulting from their having acquired it through sale.

The RTCdismissed the complaint based on its following findings, to wit:

In the case at bench, there is conflict between the allegation of the complaint and
the document attached thereto.

Simply stated, plaintiff alleged that she bought the house of the defendant for
100,000.00 on September 10, 1997 as stated in an alleged Deed of Absolute Sale
marked as Exhibit "A" to the complaint. Insofar as plaintiff is concerned, the best
evidence is the said Deed of Absolute Sale.

The Court is surprised why in plaintiffs letter dated February 11, 1998, marked as
Exhibit "C" and attached to the same complaint, she demanded from the
defendant the whooping sum of 1,101,089.90. It must be remembered that this
letter was written five (5) months after the deed of absolute sale was executed.

The same letter (Exhibit "C") is not a letter of demand as contemplated by law and
jurisprudence. The plaintiff simply said that she will appreciate payment per
notarized document. There is no explanation what this document is.
Plaintiffs letter dated April 28, 1998 (Exhibit "D") contradicts her allegation that
she purchased the house and lot mentioned in the complaint. Exhibit "D", which is
part of the pleading and a judicial admission clearly shows that the house and lot
of the defendant was not sold but mortgaged.

Again, for purposes of emphasis and clarity, a portion of the letter (Exhibit "D")
reads:

This is to give notice that since the mortgage to your property has long expired
and that since the property is already in my name, I will be taking over the
occupancy of said property two (2) months from date of this letter.

x xxx

Exhibit "E", which is a letter dated January 21, 1999, shows the real transaction
between the parties in their case. To reiterate, the consideration in the deed of sale
(Exhibit "A") is 100,000.00 but in their letter (Exhibit "E") she is already
demanding the sum of 1,600,000.00 because somebody was going to buy it for
2,000,000.00.

There are indications that point out that the real transaction between the parties is
one of equitable mortgage and not sale.25

Despite holding herein that the respondents demand to vacate sufficed, we

uphold the result of the RTC decision in favor of the petitioner. This we do,because
therespondents Exhibit Cand Exhibit E, by demandingpayment from the petitioner,
respectively,of 1,101,089.90 and 1,600,000.00, revealedthe true nature of the
transaction involving the property in question as one of equitable mortgage, not a
sale.

Our upholding of the result reached by the RTC rests on the following
circumstancesthat tended to show that the petitioner had not really sold the
property to the respondents, contrary to the latters averments, namely:

(a)The petitioner, as the vendor, was paid the amount of only 100,000.00,26 a
price too inadequate in comparison with the sum of 1,600,000.00 demanded
in Exhibit E;27

(b) The petitioner retained possession of the property despite the supposed
sale; and
 (c) The deed of sale wasexecuted as a result or by reason of the loan the
respondents extended to the petitioner,because they still allowed the
petitioner to "redeem" the property by paying her obligation under the loan.28

Submissions of the petitioner further supported the findings of the RTCon the
equitable mortgage. Firstly, there was the earlier dated instrument (deed of
pactode retro)involving the same property, albeit the consideration was only
480,000.00, executed between the petitioner as vendor a retro and the
respondent Renato Zamora as vendee a retro.29 Secondly, there were two receipts
for the payments the petitioner had made to the respondentstotaling
300,000.00.30 And, thirdly, the former secretary of respondent Melba Zamora
executed an affidavit acknowledging that the petitioner had already paid a total of
500,000.00 to the respondents.31 All these confirmed the petitioners claim that
she remained the owner of the property and was still entitled to its possession.

Article 1602 of the Civil Codeenumerates the instances when a contract, regardless
of its nomenclature, may be presumed to be an equitable mortgage, namely:

(a) When the price of a sale with right to repurchase is unusually inadequate;

(b) When the vendor remains in possession as lessee or otherwise;

(c) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;

(d)When the purchaser retains for himself a part of the purchase price;

(e)When the vendor binds himself to pay the taxes on the thing sold; and,

(f) In any other case where it may be fairly inferred that the real intention of
the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.

The circumstances earlier mentioned were, indeed, badges of an equitable

mortgage within the context ofArticle 1602 of the Civil Code.

Nonetheless, the findingsfavorable to the petitioners ownership are neitherfinally

determinative of the title in the property, nor conclusive in any other proceeding
where ownership of the property involved herein may be more fittingly
adjudicated.Verily, where the cause of action in an ejectment suit is based on
ownership of the property, the defense that the defendantretainedtitle or
ownership is a proper subject for determination by the MTC but only for the
purpose of adjudicating the rightful possessor of the property.32This is based on
Rule 70 of the Rules of Court, viz:

Section 16. Resolving defense of ownership. When the defendant raises the
defense of ownership in his pleadings and the question of possession cannot be
resolved without deciding the issue of ownership, the issue of ownership shall be
resolved only to determine the issue of possession.(4a)1avvphi1

D.
MTC committed procedural lapses
that must be noted and corrected

The Court seizes theopportunity to note and to correctseveralnoticeable

procedural lapses on the part of the MTCC, to avoid the impression that the Court
condones or tolerates the lapses.

The first lapse wasthe MTCCs granting of the respondents motion to declare the
petitioner in default following her failure to file an answer. The proper
procedurewas not for the plaintiffs to move for the declaration in default of the
defendant who failed to file the answer. Such a motion to declare in default has
been expressly prohibited under Section 13, Rule 70 of

theRules of Court.33Instead, the trial court, either motuproprio or on motion of the

plaintiff, should render judgment as the facts alleged in the complaint might
warrant.34In other words, the defendants failure to file an answer under Rule 70 of
the Rules of Courtmight result to a judgment by default, not to a declaration of
default.

The second lapse wasthe MTCCsreception of the oral testimony of respondent

Melba Zamora. Rule 70 of the Rules of Courthas envisioned the submission only of
affidavits of the witnesses (not oral testimony) and other proofs on the factual
issues defined in the order issued within five days from the termination of the
preliminary conference;35and has permittedthe trial court, should it find the need
to clarify material facts, to thereafterissue an order during the 30-day period from
submission of the affidavits and other proofs specifying the matters to be clarified,
and requiring the parties to submit affidavits or other evidence upon such matters
within ten days from receipt of the order.361avvphi1

The procedural lapses committed in this case are beyond comprehension.The

MTCC judge could not have been unfamiliar with the prevailing procedure,
considering that therevised version of Rule 70, although taking effect only on July
1, 1997,was derived from the 1991 Revised Rule on Summary Procedure, in effect
since November 15, 1991. It was not likely, therefore, that the MTCC judge
committed the lapses out of his unfamiliarity with the relevant rule. We discern
thatthe cause of the lapses was his lack of enthusiasm in implementingcorrect
procedures in this case. If that was the true reason, the Court can only be alarmed
and concerned, for a judge should not lack enthusiasm in applying the rules of
procedure lest the worthy objectives of their promulgation be unwarrantedly
sacrificed and brushed aside. The MTCC judge should not forget that the rules of
procedure were always meant to be implemented deliberately, not casually, and
their non-compliance should only be excused in the higher interest of the
administration of justice.

It is timely, therefore, to remind all MTC judges to display full and enthusiastic
compliance with all the rules of procedure, especially those intended for
expediting proceedings.

WHEREFORE,we grant the petition for review on certiorari; set aside the decision
promulgated on July 3, 2002 by the Court of Appeals; and dismiss the complaint
for unlawful detainer for lack of a cause of action.

The respondents shall pay the costs of suit.

SO ORDERED.