Civil Procedure Cases

A. JURISDICTION

1. Partido ng Manggagawa v. COMELEC

FACTS:

The petition at bar involves the formula for computing the additional seats due, if any, for winners in party-list elections.
COMELEC issued Resolution No. 6835, adopting the simplified formula of "one additional seat per additional two
percent of the total party-list votes." Section 11(b) and Section 12 of R.A. 7941 (Party-List System Act) provide that "the
parties, organizations, and coalitions receiving at least two percent (2%) of the total votes cast for the party-list system
shall be entitled to one seat each, provided that those garnering more than two percent (2%) of the votes shall be
entitled to additional seats in proportion to their total number of votes. For failure of the respondent Commission to
resolve the substantive issues raised by petitioners and to cause the re-tabulation of the party-list votes despite the
lapse of time, petitioners PM and BUTIL filed the instant petition on August 18, 2004. They seek the issuance of a writ of
mandamus to compel respondent Commission:

a) to convene as the National Board of Canvassers for the Party-List System;

b) to declare them as entitled to one (1) additional seat each;

c) to immediately proclaim their respective second nominees;

d) to declare other similarly situated party-list organizations as entitled to one (1) additional seat each; and

e) to immediately proclaim similarly situated parties' second nominees as duly elected representatives to the House of
Representatives.

ISSUE:

WHETHER OR NOT RESPONDENT COMELEC EN BANC, AS THE NATIONAL BOARD OF CANVASSERS FOR THE PARTY- LIST
SYSTEM, COULD BE COMPELLED BY THE HONORABLE COURT TO MECHANICALLY APPLY THE SIMPLIFIED FORMULA

HELD:

Respondent Commission, through the Office of the Solicitor General, submits that petitioners' recourse to a petition for
mandamus with this Court is improper. That the proper remedy from the assailed resolution of the respondent
Commission is a petition for certiorari under Rule 65 of the Rules of Court. Respondent Commission relies on Section 7,
Article IX (A) of the 1987 Constitution, which provides that "any decision, order or ruling" of the respondent Commission
"may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy
thereof." Respondent Commission further contends that its duty to proclaim the second nominees of PM and BUTIL is
not ministerial but discretionary, hence, it is not subject to the writ of mandamus. The arguments fail to impress. Under
the Constitution, this Court has original jurisdiction over petitions for certiorari, prohibition and mandamus. We have
consistently ruled that where the duty of the respondent Commission is ministerial, mandamus lies to compel its
performance. A purely ministerial act, as distinguished from a discretionary act, is one which an officer or tribunal
performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, without
regard to or the exercise of his own judgment upon the propriety or impropriety of the act done.

2. GERMELINA TORRES RACAZA and BERNALDITA TORRES PARAS, Petitioners, versus ERNESTO GOZUM,Respondent.

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners Germelina Torres Racaza
and Bernaldita Torres Paras seek the nullification of the decision dated July 12, 2000 as well as the resolution dated June
28, 2001 rendered by the Court of Appeals (CA) in CA-G.R. CV No. 61227 which reversed and set aside the decision dated
September 30, 1998 of the Regional Trial Court (RTC), Branch 158 of Pasig City, consequently dismissing the complaint
for recovery of possession or accion publiciana filed by petitioners against respondent Ernesto Gozum.

The antecedents of this case are as follows:

The plaintiffs are the registered co-owners of a parcel of land that was formerly owned by his father, the late
Carlos Torres.
 In 1981, defendant Ernesto Gozum occupied the back portion of the property on a P3,500.00 monthly rental and
continued to occupy the same even after the death of Carlos Torres on December 26, 1993.

On May 27, 1997, plaintiffs sent a new a formal demand letter to vacate on the ground that the verbal contract
of lease over the property had already expired sometime in July 1995, and when such demand was not heeded, on June
4, 1997, the present complaint for recovery of possession or accion publiciana was initiated before the Regional Trial
Court of Pasig City.

The CA reversed the decision of the RTC and dismissed the case, holding that the lower court had no jurisdiction
over the complaint for accion publiciana considering that it had been filed before the lapse of one (1) year from the date
the last letter of demand to respondent had been made. The CA ruled that the proper remedy of petitioners should have
been an action for unlawful detainer filed with the first level court, or the municipal or metropolitan trial court.

Issue: WON The CA is right in dismissing the case on the ground that the cause of action should have been for unlawful
detainer falling within the jurisdiction of the municipal trial courts.

Ruling:

The allegations of a complaint determine the nature of the action as well as which court will have jurisdiction
over the case. The complaint would be deemed sufficient if, on its face, it shows that the court has jurisdiction without
resorting to parol testimony. Precisely because ejectment proceedings are summary in nature, the complaint should
contain a statement of facts which would bring the party clearly within the class of cases for which the statutes provide
a remedy.

It is also too late for respondent to invoke the defense of lack of jurisdiction on the ground that the action was
filed before the lapse of one year from the date of last demand. Based on the records, respondent never pursued this
line of argument in the proceedings before the trial court and even in his appeal to the CA. While it is true that prior to
the filing of his answer, respondent moved to dismiss the complaint on the theory that the allegations therein merely
constituted an action for unlawful detainer, the motion did not raise any jurisdictional issue relative to the second
demand letter. When his motion to dismiss was denied, respondent no longer challenged the jurisdiction of the trial
court in his subsequent pleadings and instead actively participated in the proceedings held before the RTC by relying
principally on the strength of the written lease contract allegedly executed between him and petitioners’ predecessors-
in-interest. It was only when the CA motu proprio dismissed the complaint that respondent conveniently thought of
adopting the novel theory embodied in the assailed decision of the appellate court. Under these circumstances, estoppel
has already set in.

In Tijam v. Sibonghanoy, this Court held that a party’s active participation in all stages of the case before the trial court,
which includes invoking the court’s authority to grant affirmative relief, effectively estops such party from later
challenging that same court’s jurisdiction. The CA’s conclusion that the doctrine enunciated in Tijam has been
abandoned is erroneous as, in fact, the same has been upheld and reiterated in many succeeding cases. Thus, while an
order or decision rendered without jurisdiction is a total nullity and may be assailed at any stage, a party’s active
participation in the proceedings in the tribunal which rendered the order or decision will bar such party from attacking
its jurisdiction.

WHEREFORE, the petition is GRANTED and the assailed Decision dated July 12, 2000 as well as the Resolution dated June
28, 2001 rendered by the Court of Appeals in CA-G.R. CV No. 61227 are REVERSED and SET ASIDE. Accordingly, the
Decision dated September 30, 1998 of the Regional Trial Court, Branch 158, Pasig City in Civil Case No. 66295 is
REINSTATED.

519 Phil. 1

SECOND DIVISION
[ G.R. NO. 129247, March 03, 2006 ]
SPOUSES ARSENIO AND NIEVES S. REYES, PETITIONERS,
VS. SOLEMAR DEVELOPMENT CORPORATION AND RENATO
 M. TANSECO, RESPONDENTS

G.R. NO. 136270

SPOUSES ARSENIO AND NIEVES S. REYES, PETITIONERS,

VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT

DECISION
SANDOVAL-GUTIERREZ, J.:

These two (2) consolidated petitions involve a parcel of land with an area of 66,787 square
meters, more or less, identified as Lot 1 of subdivision plan Psd-18002, being a portion of land
described in Plan II-483 LRC (GLRO) Record No. 707, situated at Barangay San Dionisio,
Municipality (now City) of Parañaque.

Petitioners in G.R. No. 129247 assail the Decision dated December 10, 1996 of the Court of
Appeals in CA-G.R. SP No. 37467, entitled "Solemar Development Corporation and Renato M.
Tanseco v. Hon. Omar U. Umin."

In G.R. No. 136270, petitioners, in their motion for reconsideration, seek the reversal of our
Resolution dated December 13, 1999 denying the petition on grounds of res judicata and
stability of judgments.

G.R. No. 129247

On January 14, 1992, spouses Arsenio and Nieves Reyes, petitioners, filed with the Regional
Trial Court (RTC), Branch 135, Makati City, a Complaint for "Damages and Preliminary
Injunction with Prayer for a Temporary Restraining Order" (TRO) against respondent Solemar
Development Corporation (Solemar), represented by its president, Renato Tanseco, also a
respondent, docketed as Civil Case No. 92-109.

In their Complaint, petitioners alleged that they are the registered owners of the property in
question as evidenced by Transfer Certificate of Title (TCT) No. 31798 (40312) of the Registry
of Deeds of Parañaque City. Sometime in December 1991, they fenced the property and
posted two (2) security guards to prevent trespassers from entering the premises. On
January 6, 1992, respondent Renato Tanseco, accompanied by police officers, "employing
force and intimidation," entered the premises and demolished its perimeter fence.
Respondent "tried to eject them (petitioners) from their property thru the unlawful and
felonious illegal notice of demolition and permit." They thus prayed for the issuance of a writ
of preliminary injunction to prevent respondents from ejecting them from the property
without any court order.

In their Answer, respondents raised the defense that they own the disputed property,
asserting that petitioners' title is of doubtful authenticity as found by the Land Registration
Authority (LRA) Verification Committee. Petitioners filed their Reply thereto, after which they
filed a Motion for Leave to File Amended Complaint, impleading Solemar's lessee, AMI
(Philippines) Inc., as additional defendant. They also included additional causes of action,
praying among others, that respondent Solemar's titles be nullified.

Respondents filed an Opposition to petitioners' motion arguing that (1) the amendments will
substantially change petitioners' original cause of action or theory of the case and that (2)
their certificate of title will be subjected to collateral attack.

On May 6, 1992, the RTC admitted petitioners' Amended Complaint.

After their motion for reconsideration was denied on July 11, 1992, respondents filed a
Petition for Certiorari and Prohibition with the Court of Appeals assailing the Order of the RTC
admitting petitioners' Amended Complaint, docketed as CA G.R. SP No. 28364.
On March 11, 1993, the Appellate Court granted the petition and annulled the RTC Order
dated May 6, 1992 admitting petitioners' Amended Complaint. On September 6, 1993,
petitioners filed a Motion for Reconsideration, but it was denied.

Petitioners elevated the matter to this Court in a Petition for Review on Certiorari, docketed
as G.R. No. 111755. On January 26, 1994, we issued a Resolution affirming the March 11,
1993 Decision of the Court of Appeals. Our Resolution became final and executory after we
denied with finality petitioners' motion for reconsideration on March 21, 1994.

Back to the RTC. Respondents filed a Motion to Dismiss the complaint in Civil Case No. 92-
109 on the ground of lack of jurisdiction considering that the allegations therein clearly show
that the action is one for forcible entry, which is under the exclusive jurisdiction of the
Municipal Trial Court (MTC). On March 30, 1995, the RTC denied the motion to dismiss,
holding that it has jurisdiction over the case since it "is for recovery of damages and
recovery of possession of real property and, of necessary consequence, the issue of
ownership thereof is brought to fore."

On June 8, 1995, the RTC denied respondents' motion for reconsideration.

Forthwith, respondents filed a Petition for Certiorari, Prohibition and Mandamus with the
Court of Appeals, docketed therein as CA-G.R. SP No. 37467. In a Decision dated December
10, 1996, the Appellate Court granted the petition and ordered the RTC to dismiss the case
for lack of jurisdiction, finding that "a careful reading of the allegations therein would show
that the complaint for damages, taken in its full context, was meant to restore private
respondents to the peaceful possession of the land and to prevent petitioners from further
depriving the former of the lawful occupation thereof." The Appellate Court further held:
It is thus clear that while private respondents may have valid claims for
indemnity for what they perceived were the result of wrongful or illegal
acts committed by petitioners, it is nevertheless unquestionable that in
filing their complaint, private respondents were asking the court to
determine their right, or the lack of it, to possess the subject property. It
follows, therefore, that the damages allegedly suffered by private
respondents are merely incidental to the issue of possession which is the
very heart of the parties' dispute.
On May 7, 1997, the Court of Appeals denied petitioners' motion for reconsideration.

Hence, this Petition for Review on Certiorari where the issue for our resolution is whether
petitioners' complaint is one for forcible entry falling under the jurisdiction of the MTC or for
the recovery of ownership falling under the jurisdiction of the RTC.

We hold that the Court of Appeals did not err in ordering the RTC, Branch 135, Makati City, to
dismiss petitioners' complaint in Civil Case No. 92-109. Jurisdiction of the court over the
subject matter of the action is determined by the allegations of the complaint, irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein.[1] It cannot be made to depend on the exclusive characterization of the case by one of
the parties.[2] After reviewing carefully the allegations in petitioners' complaint, specifically
paragraphs 4, 10, and 15,[3] we found no reason to deviate from the finding of the Appellate
Court that indeed the complaint is for forcible entry. Significantly, the complaint was filed on
January 14, 1992, or within one (1) year, specifically within eight (8) days, from the alleged
forcible entry to the property by respondent Tanseco on January 6, 1992. [4] While captioned as
a Complaint for Damages with Application for a TRO and Preliminary Injunction, yet the
allegations therein show that petitioners are asserting their right to the peaceful possession
of their property which is proper in an ejectment suit. All ejectment cases are within the
jurisdiction of the MTC.

Accordingly, the denial of the petition in this case is in order.

G.R. No. 136270

On July 29, 1992, the Republic of the Philippines, represented by the Administrator of the
LRA, herein respondent, filed with the RTC, Branch 60, Makati City, a Complaint for
Declaration of Nullity and Cancellation of TCT No. 31798 (40312) in the name of spouses
Arsenio and Nieves Reyes, docketed as Civil Case No. 92-2135. The complaint alleges that
the land title of said spouses, now petitioners, is of doubtful authenticity, having been
obtained through fraud, as found by the LRA Verification Committee. The Republic prayed
that the same be declared void and be cancelled by the Register of Deeds of Parañaque City.

In their Answer, petitioners maintained that their title is valid and that the so called LRA
Verification Committee Report appears to have been irregularly issued. As compulsory
counterclaim, they pleaded that their title to the property be declared valid and their right to
recover from the Assurance Fund be upheld "in the unlikely possibility that the same is
nullified because of the negligence, incompetence, inadvertence, let alone due to the
anomalous practices of those charged with the issuance of land titles." They prayed that the
Republic's complaint be dismissed and that judgment be rendered on their counterclaim.

Solemar filed a Complaint for Quieting of Title against petitioners with the RTC, Branch 61,
Makati City, docketed as Civil Case No. 93-1566. On April 26, 1996, the RTC rendered a
Decision declaring that TCT No. 31798 (40312) in the name of herein petitioners, spouses
Reyes, is spurious and directed the Register of Deeds of Parañaque City to cancel the same.
The RTC found that:
From the evidence presented to prove the validity of SOLEMAR's eight (8)
titles, the Court finds an exhaustive and detailed presentation of evidence
tracing the historical origin of SOLEMAR's titles termed as "TRACE BACK"
(Exhibit "I"), from the original registration proceedings before the Court of
First Instance of Rizal and other administrative matters leading to the
issuance of SOLEMAR's Titles.

Upon the other hand, the evidence consisting of public documents to prove
the nature of the REYES' title, SOLEMAR submitted a detailed origin of
REYES' title as shown in the Verification Committee Report dated
November 7, 1990 of the Land Registration Authority (LRA) tracing the
series of falsification and dubious source of REYES' title and their
predecessors' title which led the LRA to conclude that REYES' title is of
doubtful validity and authenticity and includes its recommendation to the
Office of the Solicitor General for the filing of a case for the cancellation of
REYES' title and requesting the National Bureau of Investigation to
prosecute the parties responsible for the irregularities.

On the above findings on the evidence, the Court concludes that SOLEMAR
has duly established its case through overwhelming preponderance of
evidence on the validity of SOLEMAR's titles. At the same time, the
evidence of SOLEMAR has likewise proven that defendants REYES' titles
are fake and spurious and/or total nullity as found by government agencies.
Petitioners filed a Motion for New Trial and/or Motion for Reconsideration of the Decision. But
the trial court denied the same. On September 16, 1996, petitioners filed a Notice of Appeal,
but it was not given due course. The trial court ruled that the motion filed earlier, which is
pro forma, did not suspend the period to appeal, thus its Decision became final on May 19,
1996. On September 24, 1996, the trial court issued a writ of execution. Thereupon, the
Register of Deeds of Parañaque City cancelled petitioners' TCT No. 31798 (40312).

Petitioners filed with the Court of Appeals a Petition for Certiorari, Prohibition and
Mandamus. In its Decision of July 30, 1997, the Appellate Court denied the petition for having
been filed out of time, prompting petitioners to file with this Court a Petition for Review on
Certiorari, docketed as G.R. No. 130888. In a Resolution dated January 28, 1998, we affirmed
the Decision of the Appellate Court. In a Resolution dated April 13, 1998, we denied with
finality petitioners' motion for reconsideration. Thus, the RTC Decision in Civil Case No. 93-
1566 for quieting of title in favor of respondents has been put to rest.

Since Solemar's titles have been declared valid, the Solicitor General, on April 29, 1997, filed
a Motion to Withdraw the Republic's Complaint in Civil Case No. 92-2135 for declaration of
nullity of petitioners' land title. On June 19, 1997, the RTC denied the motion to withdraw the
complaint on the grounds that (a) a court may not grant plaintiff's motion to dismiss his
complaint if the defendant who pleaded a compulsory counterclaim objected thereto; and
that (b) the Decision of the RTC, Branch 61, Makati City, in Civil Case No. 93-1566 for quieting
of title in favor of Solemar does not constitute res judicata on Civil Case No. 92-2135 wherein
the Solicitor General filed a motion to withdraw the Republic's complaint.

The Solicitor General then filed a Motion for Reconsideration but it was denied on January
12, 1998 by the RTC. This prompted the Solicitor General to file with the Court of Appeals a
Petition for Certiorari assailing the Resolution of the RTC denying their motion to withdraw
the complaint. The Appellate Court granted the petition. It ordered the trial court to dismiss
the Republic's Complaint and petitioners' counterclaim, without prejudice for the latter to
pursue their claim against the Assurance Fund. They filed a Motion for Reconsideration, but it
was denied by the Appellate Court.

On January 6, 1999, petitioners filed with this Court the instant Petition for Review on
Certiorari, docketed as G.R. No. 136270, contending that the dismissal of their complaint will
deprive them the opportunity to recover damages from the Assurance Fund.

The Republic filed a Manifestation and Motion (in lieu of Comment) alleging that, "(A)fter a
thorough re-evaluation of the record of this case". it would be to the best interest of the state
that this case be remanded to the court a quo for further proceedings on the following
grounds: (a) that the Decision in Civil Case No. 93-1566 for quieting of title cannot bind the
Republic because it is not a party to the case; and (b) the Republic would in effect be
recognizing the ownership of Solemar over the property.

Solemar filed a Motion for Leave to Intervene as respondent-intervenor. In our Resolution

dated July 14, 1999, we granted the motion. Solemar alleged that "(W)ith the denial with
finality of petitioners" motion for reconsideration and the issuance of the corresponding Entry
of Judgment by this Honorable Court, the Decision of the RTC of Makati, Branch 61, in Civil
Case No. 93-1566 declaring as spurious TCT No. (31798) 40312 issued in the name of Nieves
S. Reyes, married to Arsenio Reyes and declaring as valid Solemar's titles, can now be
considered as final, conclusive and entitled to full faith and credit. The matter cannot be
reopened anymore without violating the principle of res judicata."

On December 13, 1999, we issued a Resolution denying the instant petition on the grounds of
res judicata and stability of judgments, thus:
First, the order of dismissal of the Republic's complaint is proper. The
complaint asserted that TCT No. (31798) 40312 is of doubtful authenticity.
This matter, however, was passed upon in Civil Case No. 93-1566. In said
case, petitioners were initially declared as in default, but were later given
several opportunities to present their evidence, but this notwithstanding,
they still failed to do so (pp. 279-280, Rollo). After due proceedings, the
trial court rendered a decision quieting SOLEMAR�s titles, adjudging the
same as valid and declaring TCT No. (31798) 40312 spurious, and
accordingly directing therein defendant Register of Deeds of Parañaque,
Metro Manila, to cancel the same. Said decision was sustained on appeal in
CA-GR SP No. 44779. The matter was finally disposed of by this Court when
we adversely resolved the petition in G.R. No. 130888 (First Division,
January 28, 1998) filed by petitioners. Petitioners' motion for
reconsideration was denied with finality in our resolution dated April 13,
1998.
In his manifestation and motion in lieu of comment, the Solicitor General
posits that the aforestated decision in Civil Case No. 93-1566 which
became final and executory is conclusive only between the parties therein,
that is, SOLEMAR and petitioners, and cannot bind respondent, considering
that suits to quiet title are not technically suits in rem, nor are they in
personam, but are against the person in respect of the res, or quasi in rem;
and that the dismissal of Civil Case No. 92-2135 on the basis of the
decision in Civil Case No. 93-1566 would in effect require respondent
Republic to recognize the ownership of SOLEMAR over the subject
property. This ratiocination is quite strained. A comparison of the two civil
cases will show that the requisites of res judicata are present, viz: (a) the
former judgment or order must be final; (b) it must be a judgment or order
on the merits; (c) it must have been rendered by a court having jurisdiction
over the subject matter and the parties; and (d) there must be, between the
first and the second actions, identity of parties, of subject matter, and of
cause of action (Ybañez v. Court of Appeals, 253 SCRA 540 [1996]). The
argument that there is no identity of parties since the Republic was not
impleaded in Civil Case No. 93-1566 is also suspect. It has been repeatedly
emphasized by the Court that absolute identity of parties is not required in
order for res judicata to apply because substantial identity is sufficient.
This means that the parties in both cases need not be physically identical
provided there is privity between them. Notably, Civil Case No. 93-1566
was filed not only against petitioners but also against the Register of
Deeds of Parañaque, Metro Manila, an officer of the Republic. Thus, the
Republic cannot be considered a stranger in said case, which clearly
involves rights of ownership of realty.

Another point. To allow the remand of the instant case to the court a quo,
as prayed for by the Solicitor General, will indeed violate the principle of
stability of judgments. To permit the same will necessarily allow Branch 60
of the Regional Trial Court of Makati City to pass upon issues already ruled
upon by a coordinate tribunal or court of law, whose decision and action
were in fact sustained by this Court.

Second, we find the order of dismissal of petitioners' counterclaim likewise

proper. Primarily, it is significant to stress that a compulsory counterclaim
is essentially auxillary or ancillary to the main controversy inasmuch as it
arises out of or is necessarily connected with the transaction or
occurrence that is the subject matter of the complaint (Herrera: Comments
on the 1997 Rules of Civil Procedure, As Amended, Vol. VII, p. 78). Hence,
the ruling on the doubtful authenticity of TCT No. (31798) 40312 already
necessarily dismisses the "principal counterclaim" insisted by petitioners,
that is, a claim that the subject title and its derivative titles be declared
genuine, valid, and authentic, since the counterclaim cannot subsist with
the dismissal of the main case (Moran, Comments on the Rules of Court,
Vol. I, 1995 ed., p. 356). As regards petitioners' "alternative relief" or their
claim to be compensated and/or declared entitled to recover from the
Assurance Fund, we agree with the Court of Appeals when it held that the
dismissal of the complaint and counterclaim in Civil Case No. 92-2135 is
"without prejudice to the defendants pursuing their claim against the
Assurance Fund after impleading the proper parties."

An action for compensation from the Assurance Fund must be filed against
the Register of Deeds of the province or city where the land is situated and
the National Treasurer as defendants when "such action is brought to
recover for loss or damage or for deprivation of land or any estate or
interest therein arising wholly through fraud, negligence, omission, mistake
or misfeasance of the court personnel, Register of Deeds, his deputy, or
other employees of the registry in the performance of their respective
duties." (Section 96, Presidential Decree No. 1529). If "such action is
brought to recover for loss or damage or for deprivation of land or any
interest therein arising through fraud, negligence, mistake or misfeasance
of persons other than court personnel, the Register of Deeds, his deputy or
other employees of the registry," the action must be brought against the
Register of Deeds, the National Treasurer, as well as other persons as co-
defendants.

The parties indispensable in a claim against the Assurance Fund,

particularly the Register of Deeds of Para�aque and the National
Treasurer should have been included in the action so that relief from the
Assurance Fund may be adjudged in the same proceeding. Further, the one-
paragraph counterclaim does not sufficiently allege facts that constitute
conditions justifying payment of damages from the Assurance Fund such as
factual allegations of fraud and negligence. Petitioners may suitably
comply with these requirements by filing a new action specifically to
recover from the fraud.
Petitioners filed a Motion for Reconsideration.

In our Resolution dated February 16, 2000, we found "no cogent reason to reverse or modify
our December 13, 1999 Resolution'"; and held that "the arguments raised in the motion for
reconsideration have been amply discussed and we find no reason to disturb our earlier
ruling." However, we disposed of petitioners' motion for reconsideration as follows:

WHEREFORE, the instant case (G.R. No. 132670) is hereby ordered consolidated with G.R. No.
129247 ("Arsenio Reyes, et al. v. Court of Appeals, et al.") where the motion for
reconsideration filed herein (G.R. No. 136270) may be properly resolved.

SO ORDERED.

In the same dispositive portion, we should have also DENIED petitioners' motion for
reconsideration in light of our ratiocination earlier quoted, instead of merely ordering the
consolidation of this case with G.R. No. 136270.

WHEREFORE, we DENY the petition in G.R. No. 129247.

Petitioners' Motion for Reconsideration of our Resolution dated December 13, 1999 in G.R.
No. 136270 is also DENIED.

Costs against petitioners.

SO ORDERED.

3. SPOUSES ARSENIO AND NIEVES S. REYES, PETITIONERS, VS. SOLEMAR DEVELOPMENT CORPORATION AND RENATO
M. TANSECO, RESPONDENTS G.R. NO. 136270
SPOUSES ARSENIO AND NIEVES S. REYES, PETITIONERS, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT G.R. NO.
129247, March 03, 2006

These two (2) consolidated petitions involve a parcel of land with an area of 66,787 square
meters, more or less, identified as Lot 1 of subdivision plan Psd-18002, being a portion of land
described in Plan II-483 LRC (GLRO) Record No. 707, situated at Barangay San Dionisio,
Municipality (now City) of Parañaque.

Petitioners in G.R. No. 129247 assail the Decision dated December 10, 1996 of the Court of
Appeals in CA-G.R. SP No. 37467, entitled "Solemar Development Corporation and Renato M.
Tanseco v. Hon. Omar U. Umin."

In G.R. No. 136270, petitioners, in their motion for reconsideration, seek the reversal of our
Resolution dated December 13, 1999 denying the petition on grounds of res judicata and
stability of judgments.

G.R. No. 129247

On January 14, 1992, spouses Arsenio and Nieves Reyes, petitioners, filed with the Regional
Trial Court (RTC), Branch 135, Makati City, a Complaint for "Damages and Preliminary
Injunction with Prayer for a Temporary Restraining Order" (TRO) against respondent Solemar
Development Corporation (Solemar), represented by its president, Renato Tanseco, also a
respondent, docketed as Civil Case No. 92-109.

In their Complaint, petitioners alleged that they are the registered owners of the property in
question as evidenced by Transfer Certificate of Title (TCT) No. 31798 (40312) of the Registry
of Deeds of Parañaque City. Sometime in December 1991, they fenced the property and
posted two (2) security guards to prevent trespassers from entering the premises. On
January 6, 1992, respondent Renato Tanseco, accompanied by police officers, "employing
force and intimidation," entered the premises and demolished its perimeter fence.
Respondent "tried to eject them (petitioners) from their property thru the unlawful and
felonious illegal notice of demolition and permit." They thus prayed for the issuance of a writ
of preliminary injunction to prevent respondents from ejecting them from the property
without any court order.

In their Answer, respondents raised the defense that they own the disputed property,
asserting that petitioners' title is of doubtful authenticity as found by the Land Registration
Authority (LRA) Verification Committee. Petitioners filed their Reply thereto, after which they
filed a Motion for Leave to File Amended Complaint, impleading Solemar's lessee, AMI
(Philippines) Inc., as additional defendant. They also included additional causes of action,
praying among others, that respondent Solemar's titles be nullified.

Respondents filed an Opposition to petitioners' motion arguing that (1) the amendments will
substantially change petitioners' original cause of action or theory of the case and that (2)
their certificate of title will be subjected to collateral attack.

On May 6, 1992, the RTC admitted petitioners' Amended Complaint.

After their motion for reconsideration was denied on July 11, 1992, respondents filed a
Petition for Certiorari and Prohibition with the Court of Appeals assailing the Order of the RTC
admitting petitioners' Amended Complaint, docketed as CA G.R. SP No. 28364.

On March 11, 1993, the Appellate Court granted the petition and annulled the RTC Order
dated May 6, 1992 admitting petitioners' Amended Complaint. On September 6, 1993,
petitioners filed a Motion for Reconsideration, but it was denied.

Petitioners elevated the matter to this Court in a Petition for Review on Certiorari, docketed
as G.R. No. 111755. On January 26, 1994, we issued a Resolution affirming the March 11,
1993 Decision of the Court of Appeals. Our Resolution became final and executory after we
denied with finality petitioners' motion for reconsideration on March 21, 1994.
Back to the RTC. Respondents filed a Motion to Dismiss the complaint in Civil Case No. 92-
109 on the ground of lack of jurisdiction considering that the allegations therein clearly show
that the action is one for forcible entry, which is under the exclusive jurisdiction of the
Municipal Trial Court (MTC). On March 30, 1995, the RTC denied the motion to dismiss,
holding that it has jurisdiction over the case since it "is for recovery of damages and
recovery of possession of real property and, of necessary consequence, the issue of
ownership thereof is brought to fore."

On June 8, 1995, the RTC denied respondents' motion for reconsideration.

Forthwith, respondents filed a Petition for Certiorari, Prohibition and Mandamus with the
Court of Appeals, docketed therein as CA-G.R. SP No. 37467. In a Decision dated December
10, 1996, the Appellate Court granted the petition and ordered the RTC to dismiss the case
for lack of jurisdiction, finding that "a careful reading of the allegations therein would show
that the complaint for damages, taken in its full context, was meant to restore private
respondents to the peaceful possession of the land and to prevent petitioners from further
depriving the former of the lawful occupation thereof." The Appellate Court further held:
It is thus clear that while private respondents may have valid claims for
indemnity for what they perceived were the result of wrongful or illegal
acts committed by petitioners, it is nevertheless unquestionable that in
filing their complaint, private respondents were asking the court to
determine their right, or the lack of it, to possess the subject property. It
follows, therefore, that the damages allegedly suffered by private
respondents are merely incidental to the issue of possession which is the
very heart of the parties' dispute.
On May 7, 1997, the Court of Appeals denied petitioners' motion for reconsideration.

Hence, this Petition for Review on Certiorari where the issue for our resolution is whether
petitioners' complaint is one for forcible entry falling under the jurisdiction of the MTC or for
the recovery of ownership falling under the jurisdiction of the RTC.

We hold that the Court of Appeals did not err in ordering the RTC, Branch 135, Makati City, to
dismiss petitioners' complaint in Civil Case No. 92-109. Jurisdiction of the court over the
subject matter of the action is determined by the allegations of the complaint, irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein.[1] It cannot be made to depend on the exclusive characterization of the case by one of
the parties.[2] After reviewing carefully the allegations in petitioners' complaint, specifically
paragraphs 4, 10, and 15,[3] we found no reason to deviate from the finding of the Appellate
Court that indeed the complaint is for forcible entry. Significantly, the complaint was filed on
January 14, 1992, or within one (1) year, specifically within eight (8) days, from the alleged
forcible entry to the property by respondent Tanseco on January 6, 1992. [4] While captioned as
a Complaint for Damages with Application for a TRO and Preliminary Injunction, yet the
allegations therein show that petitioners are asserting their right to the peaceful possession
of their property which is proper in an ejectment suit. All ejectment cases are within the
jurisdiction of the MTC.

Accordingly, the denial of the petition in this case is in order.

G.R. No. 136270

On July 29, 1992, the Republic of the Philippines, represented by the Administrator of the
LRA, herein respondent, filed with the RTC, Branch 60, Makati City, a Complaint for
Declaration of Nullity and Cancellation of TCT No. 31798 (40312) in the name of spouses
Arsenio and Nieves Reyes, docketed as Civil Case No. 92-2135. The complaint alleges that
the land title of said spouses, now petitioners, is of doubtful authenticity, having been
obtained through fraud, as found by the LRA Verification Committee. The Republic prayed
that the same be declared void and be cancelled by the Register of Deeds of Parañaque City.

In their Answer, petitioners maintained that their title is valid and that the so called LRA
Verification Committee Report appears to have been irregularly issued. As compulsory
counterclaim, they pleaded that their title to the property be declared valid and their right to
recover from the Assurance Fund be upheld "in the unlikely possibility that the same is
nullified because of the negligence, incompetence, inadvertence, let alone due to the
anomalous practices of those charged with the issuance of land titles." They prayed that the
Republic's complaint be dismissed and that judgment be rendered on their counterclaim.

Solemar filed a Complaint for Quieting of Title against petitioners with the RTC, Branch 61,
Makati City, docketed as Civil Case No. 93-1566. On April 26, 1996, the RTC rendered a
Decision declaring that TCT No. 31798 (40312) in the name of herein petitioners, spouses
Reyes, is spurious and directed the Register of Deeds of Parañaque City to cancel the same.
The RTC found that:
From the evidence presented to prove the validity of SOLEMAR's eight (8)
titles, the Court finds an exhaustive and detailed presentation of evidence
tracing the historical origin of SOLEMAR's titles termed as "TRACE BACK"
from the original registration proceedings before the Court of First Instance
of Rizal and other administrative matters leading to the issuance of
SOLEMAR's Titles.

Upon the other hand, the evidence consisting of public documents to prove
the nature of the REYES' title, SOLEMAR submitted a detailed origin of
REYES' title as shown in the Verification Committee Report dated
November 7, 1990 of the Land Registration Authority (LRA) tracing the
series of falsification and dubious source of REYES' title and their
predecessors' title which led the LRA to conclude that REYES' title is of
doubtful validity and authenticity and includes its recommendation to the
Office of the Solicitor General for the filing of a case for the cancellation of
REYES' title and requesting the National Bureau of Investigation to
prosecute the parties responsible for the irregularities.

On the above findings on the evidence, the Court concludes that SOLEMAR
has duly established its case through overwhelming preponderance of
evidence on the validity of SOLEMAR's titles. At the same time, the
evidence of SOLEMAR has likewise proven that defendants REYES' titles
are fake and spurious and/or total nullity as found by government agencies.

Petitioners filed a Motion for New Trial and/or Motion for Reconsideration of the Decision. But
the trial court denied the same. On September 16, 1996, petitioners filed a Notice of Appeal,
but it was not given due course. The trial court ruled that the motion filed earlier, which is
pro forma, did not suspend the period to appeal, thus its Decision became final on May 19,
1996. On September 24, 1996, the trial court issued a writ of execution. Thereupon, the
Register of Deeds of Parañaque City cancelled petitioners' TCT No. 31798 (40312).

Petitioners filed with the Court of Appeals a Petition for Certiorari, Prohibition and
Mandamus. In its Decision of July 30, 1997, the Appellate Court denied the petition for having
been filed out of time, prompting petitioners to file with this Court a Petition for Review on
Certiorari, docketed as G.R. No. 130888. In a Resolution dated January 28, 1998, we affirmed
the Decision of the Appellate Court. In a Resolution dated April 13, 1998, we denied with
finality petitioners' motion for reconsideration. Thus, the RTC Decision in Civil Case No. 93-
1566 for quieting of title in favor of respondents has been put to rest.

Since Solemar's titles have been declared valid, the Solicitor General, on April 29, 1997, filed
a Motion to Withdraw the Republic's Complaint in Civil Case No. 92-2135 for declaration of
nullity of petitioners' land title. On June 19, 1997, the RTC denied the motion to withdraw the
complaint on the grounds that (a) a court may not grant plaintiff's motion to dismiss his
complaint if the defendant who pleaded a compulsory counterclaim objected thereto; and
that (b) the Decision of the RTC, Branch 61, Makati City, in Civil Case No. 93-1566 for quieting
of title in favor of Solemar does not constitute res judicata on Civil Case No. 92-2135 wherein
the Solicitor General filed a motion to withdraw the Republic's complaint.

The Solicitor General then filed a Motion for Reconsideration but it was denied on January
12, 1998 by the RTC. This prompted the Solicitor General to file with the Court of Appeals a
Petition for Certiorari assailing the Resolution of the RTC denying their motion to withdraw
the complaint. The Appellate Court granted the petition. It ordered the trial court to dismiss
the Republic's Complaint and petitioners' counterclaim, without prejudice for the latter to
pursue their claim against the Assurance Fund. They filed a Motion for Reconsideration, but it
was denied by the Appellate Court.

On January 6, 1999, petitioners filed with this Court the instant Petition for Review on
Certiorari, docketed as G.R. No. 136270, contending that the dismissal of their complaint will
deprive them the opportunity to recover damages from the Assurance Fund.

The Republic filed a Manifestation and Motion (in lieu of Comment) alleging that, After a
thorough re-evaluation of the record of this case". it would be to the best interest of the state
that this case be remanded to the court a quo for further proceedings on the following
grounds: (a) that the Decision in Civil Case No. 93-1566 for quieting of title cannot bind the
Republic because it is not a party to the case; and (b) the Republic would in effect be
recognizing the ownership of Solemar over the property.

Solemar filed a Motion for Leave to Intervene as respondent-intervenor. In our Resolution

dated July 14, 1999, we granted the motion. Solemar alleged that "(W)ith the denial with
finality of petitioners" motion for reconsideration and the issuance of the corresponding Entry
of Judgment by this Honorable Court, the Decision of the RTC of Makati, Branch 61, in Civil
Case No. 93-1566 declaring as spurious TCT No. (31798) 40312 issued in the name of Nieves
S. Reyes, married to Arsenio Reyes and declaring as valid Solemar's titles, can now be
considered as final, conclusive and entitled to full faith and credit. The matter cannot be
reopened anymore without violating the principle of res judicata."

On December 13, 1999, we issued a Resolution denying the instant petition on the grounds of
res judicata and stability of judgments, thus:
First, the order of dismissal of the Republic's complaint is proper. The
complaint asserted that TCT No. (31798) 40312 is of doubtful authenticity.
This matter, however, was passed upon in Civil Case No. 93-1566. In said
case, petitioners were initially declared as in default, but were later given
several opportunities to present their evidence, but this notwithstanding,
they still failed to do so (pp. 279-280, Rollo). After due proceedings, the
trial court rendered a decision quieting SOLEMARs titles, adjudging the
same as valid and declaring TCT No. (31798) 40312 spurious, and
accordingly directing therein defendant Register of Deeds of Parañaque,
Metro Manila, to cancel the same. Said decision was sustained on appeal in
CA-GR SP No. 44779. The matter was finally disposed of by this Court when
we adversely resolved the petition in G.R. No. 130888 (First Division,
January 28, 1998) filed by petitioners. Petitioners' motion for
reconsideration was denied with finality in our resolution dated April 13,
1998.

In his manifestation and motion in lieu of comment, the Solicitor General

posits that the aforestated decision in Civil Case No. 93-1566 which
became final and executory is conclusive only between the parties therein,
that is, SOLEMAR and petitioners, and cannot bind respondent, considering
that suits to quiet title are not technically suits in rem, nor are they in
personam, but are against the person in respect of the res, or quasi in rem;
and that the dismissal of Civil Case No. 92-2135 on the basis of the
decision in Civil Case No. 93-1566 would in effect require respondent
Republic to recognize the ownership of SOLEMAR over the subject
property. This ratiocination is quite strained. A comparison of the two civil
cases will show that the requisites of res judicata are present, viz: (a) the
former judgment or order must be final; (b) it must be a judgment or order
on the merits; (c) it must have been rendered by a court having jurisdiction
over the subject matter and the parties; and (d) there must be, between the
first and the second actions, identity of parties, of subject matter, and of
cause of action (Ybañez v. Court of Appeals, 253 SCRA 540 [1996]). The
argument that there is no identity of parties since the Republic was not
impleaded in Civil Case No. 93-1566 is also suspect. It has been repeatedly
emphasized by the Court that absolute identity of parties is not required in
order for res judicata to apply because substantial identity is sufficient.
This means that the parties in both cases need not be physically identical
provided there is privity between them. Notably, Civil Case No. 93-1566
was filed not only against petitioners but also against the Register of
Deeds of Parañaque, Metro Manila, an officer of the Republic. Thus, the
Republic cannot be considered a stranger in said case, which clearly
involves rights of ownership of realty.

Another point. To allow the remand of the instant case to the court a quo,
as prayed for by the Solicitor General, will indeed violate the principle of
stability of judgments. To permit the same will necessarily allow Branch 60
of the Regional Trial Court of Makati City to pass upon issues already ruled
upon by a coordinate tribunal or court of law, whose decision and action
were in fact sustained by this Court.

Second, we find the order of dismissal of petitioners' counterclaim likewise

proper. Primarily, it is significant to stress that a compulsory counterclaim
is essentially auxillary or ancillary to the main controversy inasmuch as it
arises out of or is necessarily connected with the transaction or
occurrence that is the subject matter of the complaint (Herrera: Comments
on the 1997 Rules of Civil Procedure, As Amended, Vol. VII, p. 78). Hence,
the ruling on the doubtful authenticity of TCT No. (31798) 40312 already
necessarily dismisses the "principal counterclaim" insisted by petitioners,
that is, a claim that the subject title and its derivative titles be declared
genuine, valid, and authentic, since the counterclaim cannot subsist with
the dismissal of the main case (Moran, Comments on the Rules of Court,
Vol. I, 1995 ed., p. 356). As regards petitioners' "alternative relief" or their
claim to be compensated and/or declared entitled to recover from the
Assurance Fund, we agree with the Court of Appeals when it held that the
dismissal of the complaint and counterclaim in Civil Case No. 92-2135 is
"without prejudice to the defendants pursuing their claim against the
Assurance Fund after impleading the proper parties."

An action for compensation from the Assurance Fund must be filed against
the Register of Deeds of the province or city where the land is situated and
the National Treasurer as defendants when "such action is brought to
recover for loss or damage or for deprivation of land or any estate or
interest therein arising wholly through fraud, negligence, omission, mistake
or misfeasance of the court personnel, Register of Deeds, his deputy, or
other employees of the registry in the performance of their respective
duties." (Section 96, Presidential Decree No. 1529). If "such action is
brought to recover for loss or damage or for deprivation of land or any
interest therein arising through fraud, negligence, mistake or misfeasance
of persons other than court personnel, the Register of Deeds, his deputy or
other employees of the registry," the action must be brought against the
Register of Deeds, the National Treasurer, as well as other persons as co-
defendants.

The parties indispensable in a claim against the Assurance Fund,

particularly the Register of Deeds of Para�aque and the National
Treasurer should have been included in the action so that relief from the
Assurance Fund may be adjudged in the same proceeding. Further, the one-
paragraph counterclaim does not sufficiently allege facts that constitute
conditions justifying payment of damages from the Assurance Fund such as
factual allegations of fraud and negligence. Petitioners may suitably
comply with these requirements by filing a new action specifically to
recover from the fraud.
Petitioners filed a Motion for Reconsideration.

In our Resolution dated February 16, 2000, we found "no cogent reason to reverse or modify
our December 13, 1999 Resolution'"; and held that "the arguments raised in the motion for
reconsideration have been amply discussed and we find no reason to disturb our earlier
ruling." However, we disposed of petitioners' motion for reconsideration as follows:

WHEREFORE, the instant case (G.R. No. 132670) is hereby ordered consolidated with G.R. No.
129247 ("Arsenio Reyes, et al. v. Court of Appeals, et al.") where the motion for
reconsideration filed herein (G.R. No. 136270) may be properly resolved.

SO ORDERED.

In the same dispositive portion, we should have also DENIED petitioners' motion for
reconsideration in light of our ratiocination earlier quoted, instead of merely ordering the
consolidation of this case with G.R. No. 136270.

WHEREFORE, we DENY the petition in G.R. No. 129247.

Petitioners' Motion for Reconsideration of our Resolution dated December 13, 1999 in G.R.
No. 136270 is also DENIED.

Costs against petitioners.

SO ORDERED.

B. LACK OF LEGAL CAPACITY TO SUE AND LACK OF PERSONALITY TO SUE

1. Evangelista vs Santiago

G.R. No. 1574471 | April 29, 2005 | Chico-Nazario, J. | AKGL | Motion to Dismiss > Want of Legal Capacity to
Sue

CASE SUMMARY: Alleging that they have claims over the subject property by virtue of the Spanish title and
the open, continuous possession, Evangelista, et al. filed an action to declare Santos’s TCT void. But, Santos
questioned the personality of Evangelista, et al. to sue. TC and CA held that Evangelista, et al. did not have

1
personality to sue. It should have been the OSG. SC agreed with the conclustion, but based on different
reasons.

DOCTRINE: Without legal or equitable title to the Subject Property, Evangelista, et al. lacked the personality to
file an action for removal of a cloud on, or quieting of, title and their Complaint was properly dismissed for
failing to state a cause of action.

NATURE: PETITION for review on certiorari of a decision of the Court of Appeals

FACTS:

 Evangelista, et al. alleged that they occupied and possessed parcels of land in Motalban, Rizal, by
virtue of Deeds of Assignment by Ismael Favila.
 Based on the Deeds, the subject properties formed part of Hacienta Quibiga, which was awarded by
the Queen of Spain in favor of Don Hermogenes Rodriguez. It was further claimed that Favila is one of
the heirs and successors-in-interest of Rodriguez. Also, by virtue of SPAs executed by his “mga
kapatid,” Favila assigned the properties to Evangelista, et al. in exchange for the labor and work done
on the property.
 Evangelista, et al. came by information that Santiago was planning to evict them from the property.
 Their investigations revealed that the Subject Property was included in TCTs, which originated from
OCT 670, which was issued to Isabel Manahan and 3 others. The whole property was then transferred
to Manahan, then to her son respondent Carmelino Santiago by Deed of Donation.
 Evangelista, et al. filed with the trial court an action for declaration of nullity of Santiago’s certificates of
title on the basis that OCT 670 was fake and spurious. Among the defects were:
o OCT 670 was not signed by a duly authorized officer
o Material data therein were merely handwritten
o OCT 670 was not printed on the Official Form used in 1913
o It failed to indicate the Survey Plan, etc.
 Santiago filed his Answer with Prayer.
o He claimed that Evangelista, et al. had no legal capacity to file the Complaint; thus, the
Complaint stated no cause of action. (AKGL: He meant lack of personality. Will be discussed
in the ruling)
o PD 892 required all holders of Spanish titles or grants to apply for registration.
o He also raised prescription.
o Santiago denied knowing Evangelista, et al., much less, threatening to evict them.
 During said hearing, Evangelista, et al. presented their lone witness, Engineer Placido Naval, a
supposed expert on land registration laws.
o Engineer Naval answered that a parcel of land titled illegally would revert to the State if the
Torrens title was cancelled, and that it was the State, through the Office of the Solicitor General,
that should file for the annulment or cancellation of the title.
 Santiago, on the other hand, did not present any evidence but relied on all the pleadings and
documents he had so far submitted

[RTC] Dismissed the petitioner’s complaint

 TC gave credence to the testimony of Evangelista, et al.’ witness – the State through the Office of the
Solicitor General who must initiate and file a case of this nature.
 the said “Deed of Assignment/s” which were based on Spanish title have lost their evidentiary value
pursuant to PD 892.
 Principal issue in this case is for the declaration of nullity of defendant’s title, which has nothing to do
with Evangelista, et al.’ claim of ownership and possession.
[CA] Affirmed TC’s decision.

ISSUE: W/N Evangelista, et al. have the legal personality to file the complaint against Santiago? NO! They
were not able to prove their claim of ownership.

RULING:

1. Legal capacity vs. legal personality

 It should be clarified that “the plaintiff has no legal capacity to sue” and “the pleading asserting the
claim states no cause of action” are two different grounds for a motion to dismiss or are two different
affirmative defenses.
 Lack of legal capacity to sue
The plaintiff is not in the exercise of his civil rights, or
does not have the necessary qualification to appear in
the case, or does not have the character or
representation he claims.
Refers to a plaintiff’s general disability to sue, such as
on account of minority, insanity, incompetence, lack of
juridical personality or any other general
disqualifications of a party
A ground for a motion to dismiss based on the ground
of lack of legal capacity to sue
In this case
Lack of personality to sue
A case is dismissible for lack of personality to sue
upon proof that the plaintiff is not the real party-in-
interest, hence grounded on failure to state a cause of
action.
Refers to the fact that the plaintiff is not the real party-
in-interest
The second can be used as a ground for a motion to
dismiss based on the fact that the complaint, on the
face thereof, evidently states no cause of action.

 Santiago is raising the affirmative defense that the Complaint filed by Evangelista, et al. stated no
cause of action because Evangelista, et al. lacked the personality to sue, not being the real party-in-
interest. It is Santiago’s contention that only the State can file an action for annulment of his certificates
of title, since such an action will result in the reversion of the ownership of the Subject Property to the
State.

2. The affirmative defense that the Complaint stated no cause of action, similar to a motion to dismiss
based on the same ground, requires a hypothetical admission of the facts.
 The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts
alleged, the court could render a valid judgment upon the same in accordance with the prayer of said
complaint.
 The insufficiency of the cause of action must appear in the face of the complaint in order to sustain a
dismissal on this ground, for in the determination of whether or not a complaint states a cause of action,
only the facts alleged therein and no other matter may be considered, and the court may not inquire
into the truth of the allegations, and find them to be false before a hearing is had on the merits of the
case.
In this case

 The trial court should have limited itself to examining the sufficiency of the allegations in the Complaint.
It was proscribed from inquiring into the truth of the allegations in the Complaint or the authenticity of
any of the documents.
 The trial court evidently erred in making findings as to the authenticity of the Deeds of Assignment
executed by Ismael Favila and questioning the existence and execution of the Special Power of
Attorney.

3. It is important for this Court to establish first the nature of Evangelista, et al.’ action.
 Evangelista, et al.’ Complaint filed before the trial court was captioned as an action for declaration of
nullity of Santiago’s certificates of title.
 The trial court believed that Evangelista, et al.’ action was ultimately one for reversion of the Subject
Property to the public domain. But, the Court disagrees.
 The difference between an action for declaration of nullity of land titles from an action for reversion was
more thoroughly discussed as follows:
o The difference between them lies in the allegations as to the character of ownership of the realty
whose title is sought to be nullified. In an action for reversion, the pertinent allegations in the
complaint would admit State ownership of the disputed land.
o A cause of action for declaration of nullity of free patent and certificate of title would require
allegations of the plaintiff’s ownership of the contested lot prior to the issuance of such free
patent and certificate of title as well as the defendant’s fraud or mistake, as the case may be, in
successfully obtaining these documents of title over the parcel of land claimed by plaintiff. The
real party-in-interest is not the State but the plaintiff who alleges a pre-existing right of
ownership over the parcel of land in question
In this case

 Evangelista, et al. never alleged that the Subject Property was part of the public domain. On the
contrary, Evangelista, et al. asserted title over the Subject Property.
 Clearly, Evangelista, et al. are asserting private title over the Subject Property, and consequently, their
action could not be one for reversion.
 4. Even as this Court agrees with Evangelista, et al. that their action was one for removal of a cloud on or
quieting of title, it does arrive at the same conclusion as the trial court and the Court of Appeals that
Evangelista, et al. had no personality to file.
 Evangelista, et al. failed to establish in their Complaint that they had any legal or equitable title to, or
legitimate interest in, the Subject Property so as to justify their right to file an action to remove a cloud
on or to quiet title.

5. There existed a contradiction when Evangelista, et al. based their claim of title to the Subject Property
on their possession thereof since time immemorial, and at the same time, on the Spanish title.
 Possession since time immemorial carried the presumption that the land had never been part of the
public domain or that it had been private property even before the Spanish conquest.
 PD 892 provides that within six months from its effectivity, all holders of Spanish titles or grants should
apply for registration. Thereafter, Spanish titles can no longer be used as evidence of land ownership in
any registration proceedings under the Torrens system.
In this case

 The successors of Don Hermogenes Rodriguez had only until 14 August 1976 to apply for a Torrens
title in their name covering the Subject Property.

6. Actual proof of possession only becomes necessary because, as the same whereas clause points out,
Spanish titles are subject to prescription.
 A holder of a Spanish title may still lose his ownership of the real property to the occupant who actually
possesses the same for the required prescriptive period.
In this case

 The fact that Evangelista, et al. were in actual possession of the Subject Property when they filed the
Complaint with the trial court on 29 April 1996 does not exclude them from the application of PD 892.

7. Evangelista, et al. though failed to allege any other basis for their titles in their Complaint aside
from possession of the Subject Property from time immemorial, which this Court has already
controverted; and the Spanish title, which is already ineffective to prove ownership over the
Subject Property.
 Therefore, without legal or equitable title to the Subject Property, Evangelista, et al. lacked the
personality to file an action for removal of a cloud on, or quieting of, title and their Complaint was
properly dismissed for failing to state a cause of action.

DISPOSITION: WHEREFORE, this Court DENIES the instant petition and AFFIRMS the Decision of CA, and
the Order of RTC dismissing petitioners’ Complaint for failure to state a cause of action.

2. Domingo vs Carague

FACTS:
This case was a petition for　certiorari　is the legality of a resolution No. of the Commission on Audit (COA) providing
for Organizational Restructuring Plan. The petitioners alleged therein that this Plan is intrinsically void for want of an
enabling law which gives that COA to undertake the same and providing for the necessary standards, conditions,
restrictions, limitations, guidelines, and parameters. Petitioners further alleged COA committed grave abuse of discretion
amounting to lack or excess of jurisdiction. Respondents, through the Office of the Solicitor General (OSG), countered
that petitioners have no legal standing to file the present petition since they have not shown "a personal stake in the
outcome of the case" or an actual or potential injury that can be redressed by our favorable decision. In essence, it is
alleged that the petitioners are not a party in interest, but the petitioners claim otherwise by reason that the matter is of
public concern. The said Organizational Restructuring Plan is not just a mere reorganization but a revamp or overhaul of
the COA, with a "spillover effect" upon its audit performance. This will have an impact upon the rest of the government
bodies subject to its audit supervision, thus, should be treated as a matter of transcendental importance.

ISSUE: Whether petitioners have the legal standing to institute the instant petition.

HELD: The Supreme Court decided, NO.It stated that:

(Locus Standi)
There was no showing that they had any 　direct and personal interest 　in the COA Organizational Restructuring Plan.
There was also of an admission that "they do not seek any affirmative relief nor impute any improper or improvident act
against the respondents" and "are not motivated by any desire to seek affirmative relief from COA or from respondents
that would redound to their personal benefit or gain." Hence, the petitioners do not have any legal standing to file the
instant suit. This case was decided by the Supreme Court En Banc.He who is directly affected and whose interest is
immediate and substantial has the standing to sue.  A party must show a personal stake in the outcome of the case or an
injury to himself that can be redressed by a favorable decision in order to warrant an invocation of the court

DOMINGO v CARAGUE 456 SCRA 450 July 18, 1991

FACTS

- Petitioners Eufemio C. Domingo, Celso C. Gangan, Pascasio S. Banaria are retired Chairmen, while Sofronio B. Ursal, and
Alberto P. Cruz are retired Commissioners of COA.  All claim “to maintain a deep-seated abiding interest in the affairs of
COA,” especially in its Organizational Restructuring Plan, as concerned taxpayers.

- The other petitioners are incumbent officers or employees of COA. These petitioners claim that they were
unceremoniously divested of their designations/ranks upon implementation of the COA Organizational Restructuring
Plan without just cause and without due process, in violation of Civil Service Law.   Moreover, they were deprived of their
respective Representation and Transportation Allowances (RATA), thus causing them undue financial prejudice.

- Petitioners now invoke this Court’s judicial power to strike down the COA Organizational Restructuring Plan for being
unconstitutional or illegal.

- Petitioners invoke our ruling in Chavez v. Public Estates Authority, Agan, Jr. v. Philippine International Air Terminals Co.,
Inc., and Information Technology Foundation of the Philippines v. Commission on Elections that where the subject matter
of a case is a matter of public concern and imbued with public interest, then this fact alone gives them legal standing to
institute the instant petition.  Petitioners contend that the COA Organizational Restructuring Plan is not just a mere
reorganization but a revamp or overhaul of the COA, with a “spillover effect” upon its audit performance.  This will have
an impact upon the rest of the government bodies subject to its audit supervision, thus, should be treated as a matter of
transcendental importance.  Consequently, petitioners’ legal standing should be recognized and upheld.

- Respondents, through the Office of the Solicitor General (OSG), counter that petitioners have no legal standing to file
the present petition since following our ruling in Kilusang Mayo Uno Labor Center v. Garcia, Jr., they have not shown “a
personal stake in the outcome of the case” or an actual or potential injury that can be redressed by our favorable
decision.  Petitioners themselves admitted that “they do not seek any affirmative relief nor impute any improper or
improvident act against the said respondents” and “are not motivated by any desire to seek affirmative relief from COA
or from respondents that would redound to their personal benefit or gain.” It is clear then that petitioners failed to show
any “present substantial interest” in the outcome of this case, citing Kilosbayan v. Morato. Nor may petitioners claim
that as taxpayers, they have legal standing since nowhere in their petition do they claim that public funds are being
spent in violation of law or that there is a misapplication of the taxpayers’ money, as we ruled in Dumlao v. Comelec.

ISSUE

WON petitioners have standing to sue

HELD

Ratio Judicial power is the power to hear and decide cases pending between parties who have the right to sue in courts
of law and equity. Corollary to this dictum is the principle of locus standi of a litigant.  He who is directly affected and
whose interest is immediate and substantial has the standing to sue.  Thus, a party must show a personal stake in the
outcome of the case or an injury to himself that can be redressed by a favorable decision in order to warrant an
invocation of the court’s jurisdiction and justify the exercise of judicial power on his behalf.

Reasoning Petitioners have not shown any direct and personal interest in the COA Organizational Restructuring Plan. 
There is no indication that they have sustained or are in imminent danger of sustaining some direct injury as a result of
its implementation.  In fact, they admitted that “they do not seek any affirmative relief nor impute any improper or
improvident act against the respondents” and “are not motivated by any desire to seek affirmative relief from COA or
from respondents that would redound to their personal benefit or gain.” Clearly, they do not have any legal standing to
file the instant suit.

- In Chavez, we ruled that the petitioner has legal standing since he is a taxpayer and his purpose in filing the petition is
to compel the Public Estate Authority (PEA) to perform its constitutional duties with respect to: (a) the right of the
citizens to information on matters of public concern; and (b) the application of a constitutional provision intended to
insure the equitable distribution of alienable lands of the public domain among Filipino citizens.   The thrust of the first is
to compel PEA to disclose publicly information on the sale of Government lands worth billions of pesos, as mandated by
the Constitution and statutory law.  The thrust of the second is to prevent PEA from alienating hundreds of hectares of
alienable lands of the public domain, thereby compelling it to comply with a constitutional duty to the nation.   We held
that these matters are of transcendental public importance.

- In Agan, Jr., we held that petitioners have legal standing as they have a direct and substantial interest to protect.  By
the implementation of the PIATCO contracts, they stand to lose their source of livelihood, a property right zealously
protected by the Constitution.  Such financial prejudice on their part is sufficient to confer upon them the requisite locus
standi.

- In Information Technology Foundation, there were two reasons why petitioners’ standing was recognized.  First, the
nation’s political and economic future virtually hangs in the balance, pending the outcome of the 2004 elections.  
Accordingly, the award for the automation of the electoral process was a matter of public concern, imbued with public
interest.  Second, the individual petitioners, as taxpayers, asserted a material interest in seeing to it that public funds are
properly used.

- There was also no demotion to speak of. Under Section 11, Rule VII of the Omnibus Rules Implementing Book V of the
Administrative Code of 1987, a demotion is the movement from one position to another involving the issuance of an
appointment with diminution in duties, responsibilities, status, or rank which may or may not involve reduction in salary.
A demotion by assigning an employee to a lower position in the same service which has a lower rate of compensation is
tantamount to removal, if no cause is shown for it. Here, there have been no new appointments issued to Matib,
Pacpaco, Sanchez, and Sipi-An under the COA Organizational Restructuring Plan.   Thus, their contention that they have
been demoted is baseless.

- Moreover, the change in their status from COA auditors (receiving monthly RATA) to COA auditors (receiving only
reimbursable RATA) cannot be attributed to the COA Organizational Restructuring Plan but to the implementation of the
Audit Team Approach (ATAP).

Disposition Petition dismissed.

c. INTERPLEADER

1. COMMISIONER ANDREA D. DOMINGO vs. HERBERT MARKUS EMIL SCHEER GR No. 154745 January 29, 2004

FACTS:
Respondent was granted a permanent residence status card by the Bureau of Immigration and deportation. The
BID received information that Scheer was wanted by the German Federal Police that a warrant of arrest had been issued
against him. The BID obtained custody of Scheer for deportation proceeding. Scheer has filed a petition for certiorari,
questioning the legal standing of the immigration commissioner. He contends that the commissioner has no authority to
decide whether an alien may stay or not. The Regional Trial Court rendered a judgment annulling the summary
deportation proceedings period. Domingo, the commissioner of the immigration contends that the judgment is void
because the board of commissioners were not impleaded in the complaint filed.

ISSUE: Whether or not the Board of Commissioners is an indispensable party.

HELD: The respondent was arrested and detained on the basis of the Summary Deportation Order of the BOC. The
petitioner caused the arrest of the respondent in obedience to the said Deportation Order. Thus, the BOC is an
indispensable party. Section 7 of Rule 3 requires indispensable parties to be joined as plaintiffs and defendants. The
joinder of indispensable parties is mandatory. Without the presence of indispensable parties to the suit, the judgment of
the court cannot attain real finality. However, the non joinder of indispensable parties is not a ground for the dismissal
of an action. Parties may be added by order of the court on motion of the party or on its own initiative at any stage of
the action and or such times as are just.

DISPOSITION: In light of all the foregoing the petition is denied. The decision of the Court of Appeals is affirmed.

2. Uy vs. CA G.R. No. 109557 November 29, 2000 

Facts: Teodoro Jardeleza, petitioner, filed a petition in the matter of the guardianship of Dr. Ernesto Jardeleza, Sr., upon
learning that one piece of real property belonging to the latter spouses was about to be sold. The petitioner averred
therein that the present physical and mental incapacity of Dr. Ernesto Jardeleza Sr. prevent him from competently
administering his properties, in order to prevent the loss and dissipation of the Jardeleza’s real and personal assets, there
was a need for a court-appointed guardian to administer said properties. 

Gilda Jardeleza, respondent, filed a petition regarding the declaration of incapacity of Dr. Ernesto Jardeleza Sr.,
assumption of sole powers of administration of conjugal properties and authorization to sell the property. She alleged that
her husband’s medical treatment and hospitalization expenses were piling up and that she need to sell one piece of real
property and its improvements. She prayed for authorization from the court to sell said property. 

RTC of Iloilo City rendered its decision, finding that it was convinced that Dr. Ernesto Jardeleza Sr. was truly incapacitated
to participate in the administration of the conjugal properties. However, Teodoro filed his opposition to the proceedings
being unaware and not knowing that a decision has already been rendered on the case. He also questioned the propriety
of the sale of the lot and its improvements thereon supposedly to pay the accumulated financial obligations and
hospitalization. 

Issue: Whether or not Gilda Jardeleza may assume sole powers of administration of the conjugal property. 

Ruling: The CA, which the SC affirmed, ruled that in the condition of Dr. Ernesto Jardeleza Sr., the procedural rules on
summary proceedings in relation to Article 124 of the Family Code are not applicable. Because he was unable to take
care of himself and manage the conjugal property due to illness that had rendered him comatose. In such case, the
proper remedy is a judicial guardianship proceeding under Rule 93 of the 1964 Revised Rules of Court.

3. Alfelor vs Halasan

A party who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof;
production of evidence is dispensed with. A judicial admission also removes an admitted fact from the field of
controversy. Consequently, an admission made in the pleadings cannot be controverted by the party making such
admission and are conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be
ignored, whether objection is interposed by the party or not.

● The allegations, statements or admissions contained in a pleading are conclusive as against the pleader. A party
cannot subsequently take a position contrary of or inconsistent with what was pleaded. 

Facts:

The children and heirs of the late spouses Telesforo and Cecilia Alfelor filed a Complaint for Partition. Among the
plaintiffs were Teresita Sorongon and her two children, Joshua and Maria Katrina, who claimed to be the surviving
spouse of Jose Alfelor, one of the children of the deceased Alfelor Spouses.

Josefina H. Halasan filed a Motion for Intervention alleging that she has legal interest in the matter of litigation for
partition, she being the surviving spouse and primary compulsory heir of Jose. Josefina attached to said motion her
Complaint-in-Intervention wherein she alleged that the second marriage to Teresita was void ab initio for having been
contracted during the subsistence of a previous marriage. Josefina further alleged that Joshua and Maria Katrina were
not her husband’s children. Josefina attached to her pleading a copy of the marriage contract which indicated that she
and Jose were married.

Since petitioners opposed the motion, the judge set the motion for hearing. Josefina presented the marriage contract as
well as the Reply-in-Intervention filed by the heirs of the deceased, where Teresita declared that she knew of the
previous marriage of the late Jose with that Josefina. However, Josefina did not appear in court.

Teresita testified that she and Jose were married. While she did not know Josefina personally, she knew that her
husband had been previously married to Josefina and that the two did not live together as husband and wife. She knew
that Josefina left Jose in 1959. Jose’s relatives consented to her (Teresita’s) marriage with Jose because there had been
no news of Josefina for almost ten years.

Judge denied the motion and dismissed intervenor’s complaint, ruling that respondent was not able to prove her claim.
The trial court pointed out that the intervenor failed to appear to testify in court to substantiate her claim. Moreover, no
witness was presented to identify the marriage contract as to the existence of an original copy of the document or any
public officer who had custody thereof. Teresita and her children, Joshua and Maria Katrina, were the legal and
legitimate heirs of the late Jose, considering that the latter referred to them as his children in his Statement of Assets
and Liabilities, among others.

Josefina filed a Motion for Reconsideration which was denied. CA reversed the ruling of the trial court. It held that
Teresita had already admitted (both verbally and in writing) that Josefina had been married to the deceased, and under
Section 4, Rule 129 of the Revised Rules of Evidence, a judicial admission no longer requires proof. Consequently, there
was no need to prove and establish the fact that Josefa was married to the decedent.

Issues:

1. Was there need to prove the existence of Josefina's marriage to Jose?

2. Should Josefina be allowed to intervene in the action for partition?

Held:

1. No. The fact of the matter is that Teresita Alfelor and her co-heirs, petitioners herein, admitted the existence of the
first marriage in their Reply- in-Intervention filed in the RTC. Teresita admitted several times that she knew that her late
husband had been previously married to another. This admission constitutes a “deliberate, clear and unequivocal”
statement; made as it was in the course of judicial proceedings, such statement qualifies as a judicial admission. A party
who judicially admits a fact cannot later challenge that fact as judicial admissions are a waiver of proof; production of
evidence is dispensed with. A judicial admission also removes an admitted fact from the field of controversy.
Consequently, an admission made in the pleadings cannot be controverted by the party making such admission and are
conclusive as to such party, and all proofs to the contrary or inconsistent therewith should be ignored, whether
objection is interposed by the party or not. The allegations, statements or admissions contained in a pleading are
conclusive as against the pleader. A party cannot subsequently take a position contrary of or inconsistent with what was
pleaded.

2.  Yes. Intervention shall be allowed when a person has (1) a legal interest in the matter in litigation; (2) or in the
success of any of the parties; (3) or an interest against the parties; (4) or when he is so situated as to be adversely
affected by a distribution or disposition of property in the custody of the court or an officer thereof.

Considering this admission of Teresita, petitioners’ mother, the Court rules that respondent Josefina Halasan sufficiently
established her right to intervene in the partition case. She has shown that she has legal interest in the matter in
litigation. (Alfelor vs. Halasan, G.R. No. 165987, March 31, 2006)

4. VIRGINIA A. PEREZ, petitioner, vs. COURT OF APPEALS and BF LIFEMAN INSURANCE

CORPORATION, respondents.G.R. No. 112329 January 28, 2000

Facts: Primitivo Perez has been isured with the BF Lifeman Insurance Corporation since 1980 for P20,000. Sometime in
1987, Rodolfo Lalog, an agent of BF, convinced him to apply for additional insurance coverage of P50, 000. Perez
accomplished the application form and passed the required medical exam. He also paid P2,075 to Lalog for premium.

On Nov. 25, 1987, perez died while riding a banca which capsized during a storm. During this time his application papers
for the additional insurance coverage was still in the office of BF.

Without knowing that Perez died, BF approved Perez’s application and issued the corresponding policy for P50,000.

Virginia Perez, his wife, claimed the benefits of the insurance policy for her deceased husband but she was only able to
obtain P40,000 under the first insurance policy. BF refused to pay the proceeds amounting to P150,000 under the
additional policy coverage of P50,000 because they maintain that such policy had not been perfected.

On Sept. 21, 1990, BF filed a complaint against Mrs. Perez seeking recission and declaration of nullity of the insurance
contract in question. Mrs. Perez file a counterclaim for the collection of P150,000 plus damages.

Issue: Whether or not there was a consummated contract of insurance between Perez and BF.

Held: No. An essential requisite of a valid contract is consent. Consent must be manifested by the meeting of the offer
and acceptance upon the thing and the cause which are to constitute the contract.

The offer must be certain and the acceptance absolute. When Perez filed the application , it was subject to the
acceptance of BF. The perfection was also further conditioned upon 1) issuance of the policy; 2) payment of the premium
and; 3) the delivery to and acceptance by the applicant in good health.

The delivery and acceptance by the applicant was a suspensive condition which was not fulfilled inasmuch as the
applicant was already dead at the time the policy was issued. The non-fulfillment of the condition resulted in the non-
perfection of the contract.

An application for insurance is merely an offer which requires the overt act of the insurer for it to ripen to a contract. Delay
in acting on the application does not constitute acceptance even though the insured has forwarded his first premium with
his application. Delay, in this case, does not constitute gross negligence because the application was granted within the
normal processing time.
WHEREFORE, the decision rendered by the Court of Appeals in CA-G.R. CV No. 35529 is AFFIRMED insofar as it
declared Insurance Policy No. 056300 for P50,000.00 issued by BF Lifeman Insurance Corporation of no force and effect
and hence null and void. No costs.

5.