G.R. No.

152526             November 25, 2004

RAMON R. JIMENEZ JR. and ANNABELLE L. JIMENEZ, petitioners,

vs.
JUAN JOSE JORDANA, respondent.

Oft-repeated is the doctrine that the cause of action in a civil case is determined by the allegations of the complaint,
never by those of the defendant's answer. However, ambiguities and lapses in the language of these allegations
may be understood or clarified through a recourse to the annexes of the complaint, related pleadings or other
submissions of the plaintiff.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the February 28, 2002 Decision of
1  2 

the Court of Appeals (CA) in CA-GR CV No. 66455. The CA disposed as follows:

"In fine, then, we find and so declare that the [respondent] had a cause of action against the [petitioner
spouses] for 'Specific Performance and Damages.' Hence, the [c]ourt a quo committed a reversible error in
dismissing the 'Supplement to Amended Complaint' of the [respondent] as against the [petitioner spouses].

"Before we write finis to the present recourse, we stress that our resolution of the issue on the nature of the
transaction over the property between the [respondent] and x x x Bunye is merely provisional. The final
resolution of the issue will have to be rendered by the court a quo after the parties shall have adduced their
respective evidence on said issue.

"IN THE LIGHT OF ALL THE FOREGOING, the appeal is GRANTED. The Order of the [c]ourt a quo, dated
February 1, 2000, is SET ASIDE. Let the records be remanded to the [c]ourt a quo for further proceedings." 3

The Facts

The CA narrated the facts as follows:

"Madeliene S. Bunye was the owner of a parcel of residential land, located in Adelfa Street, Ayala Alabang
Village, Alabang, Muntinlupa, Metro Manila, covered by Transfer Certificate of Title No. 17133 issued by the
Register of Deeds. On December 27, 1993, [Respondent] Juan Jose Jordana wrote a letter to x x x Bunye
offering to purchase the said property for the price of P12,300,000.00 payable in cash, on January 31, 1994,
and to remit to her, by way of earnest money, the amount of P500,000.00 within five (5) days from his
receipt of her acceptance of said offer. On December 28, 1993, x x x Bunye wrote a letter to [respondent]
informing the latter that she accepted his offer and requesting him to remit the earnest money within five (5)
days from his receipt of said letter. [Respondent] received the letter, on December 29, 1993, and had until
January 3, 1994 within which to remit the earnest money. [Respondent] did remit the P500,000.00 earnest
money but x x x Bunye refused to receive the money. On January 3, 1994, x x x Bunye wrote a letter to
[respondent] confirming her rejection of the earnest money and that she can no longer accept his offer of
P12,300,000.00 as her property was worth much more. She apologized for any inconvenience caused to
him. However, she added that she would be willing to sell her property to him for P16,000,000.00.

"Unknown to [respondent], x x x Bunye executed a 'Special Power of Attorney' on December 29, 1993, or a
day after [she] accepted [his] offer to purchase the property, authorizing Lourdes Cuerva to sell the said
property and to execute the appropriate contract therefor. The latter did offer to sell the said property to the
[petitioners,] Spouses Ramon R. Jimenez, Jr. and Annabelle L. Jimenez, for the price of P14,350,000.00,
and the couple agreed. On August 5, 1994, x x x Bunye, through her attorney-in-fact, Lourdes Cuerva, as
Seller, and [petitioner-]spouses x x x as Buyers, executed a 'Contract to Sell' over the said property for said
price, of which P4,500,000.00 was payable, upon the execution of said deed, and the balance payable on or
before March 30, 1995 and with the understanding of the Seller that:
 '2. Upon completion of payment, the SELLER agrees to execute a Deed of Absolute Sale over
subject property in favor of the BUYERS free from all liens and encumbrances, and in connection
therewith, the SELLER agrees to submit/surrender to the BUYERS all documents and papers
evidencing their right of ownership over the property subject of this Contract necessary to formalize
BUYERS' title over the same, and undertake to sign all documents that may be necessary for the
purpose.'

"Conformably with the said deed, [petitioner-spouses] remitted to x x x Cuerva, on August 5, 1994, the
amount of P4,500,000.00 as downpayment for the property for which x x x Cuerva issued a 'Receipt.' To
protect their rights over the property, the spouses x x x executed an 'Affidavit of Adverse Claim' over the
property and had the same annotated, on August 15, 1994, at the dorsal portion of Transfer Certificate of
Title [TCT] No. 171333.

"On March 1, 1995, [petitioners] wrote a letter to x x x Cuerva informing her that they will be paying the
balance of the purchase price of the property earlier, on March 3, 199 , at 8:00 o'clock in the morning, x x x.
5 

"On March 7, 1995, [petitioners] received a letter from x x x Cuerva informing [them] that she was no longer
the attorney-in-fact of Bunye, who was then in the United States of America and suggested that [petitioners]
communicate with her at her address in the United States stated in the letter.

"On March 10, 1995, the Register of Deeds cancelled the 'Adverse Claim' of [petitioners] annotated at the
dorsal portion of [TCT] No. 171333.

"On March 14, 1995, [petitioners] wrote a letter to Bunye, in the United States of America, informing her that
they had already deposited the balance of the purchase price of the property, in her account, with the Asian
Bank, Greenbelt Branch, under Savings Account No. 2006-13-00558-4. [They then] requested Bunye to
execute the appropriate 'Deed of Absolute Sale' over the property in their favor and deliver to them the
owner's duplicate of the title to the property under their names, within five (5) days from her receipt thereof.

"On March 15, 1995, or more than one (1) year from the rejection by Bunye of his proferred earnest money,
[Respondent] Jordana filed a complaint against Bunye, with the Regional Trial Court of Makati City, entitled
and docketed as 'Juan Jose Jordana, Plaintiff versus Madeliene S. Bunye, Defendant, Civil Case No. 95-
443,' for 'Specific Performance and Damages' praying that, after due proceedings, judgment be rendered in
her favor x x x.

[Respondent] alleged, inter alia, in his complaint, that he and x x x Bunye had already entered into a
perfected contract over the property but that, despite his demand, she refused to execute a 'Deed of
Absolute Sale' over the property despite his offer to remit the earnest money and his readiness to pay the
balance of the purchase price of the property.

"On March 15, 1995, [respondent] filed a 'Notice of Lis Pendens' with the Register of Deeds, for annotation
at the dorsal portion of [TCT] No. 171333. However, the Register of Deeds refused claiming that the action
of [respondent] was personal and that no formal deed of sale has been executed between [respondent] and
Bunye over the property.

"On the same day, Bunye wrote a letter to [petitioners] informing them that she will be in the Philippines on
March 23, 1995. [Bunye] requested the spouses to have the 'Deed of Absolute Sale' over the property
prepared for her signature when she arrived in Manila.

"On March 17, 1995, [respondent], through counsel, wrote a letter to x x x Bunye in the United States
informing her of the filing, by [respondent] of his complaint against her, with the Regional Trial Court, for
'Specific Performance.'

"In the meantime, on March 19, 1995, [petitioners] wrote a letter to Madeliene S. Bunye suggesting that she
execute a 'Special Power of Attorney' authorizing Lourdes Cuerva to execute the 'Deed of Absolute Sale'
over the property in their favor even before her arrival in the Philippines. Bunye agreed to the appointment of
an attorney-in-fact, in the person of Ernesto del Rosario.
"When Bunye received the letter of the counsel of [respondent], she wrote a letter to [petitioners], dated
March 23, 1995, informing them of the claim of [respondent] in his complaint and that, as soon as she
received the 'Special Power of Attorney' from the Secretary of the State of Washington, she will return to the
Philippines.

"In the meantime, [respondent] filed, on March 24, 1995, in Civil Case No. 95-443, a 'Very Urgent Ex-Parte
Motion,' praying that an x x x an Order [be] immediately issued directing the Register of Deeds of Makati to
immediately annotate the [Notice of] Lis Pendens on TCT No. 171333.'

"The summons and complaint in Civil Case No. 95-443 were served on Bunye through her security guard,
Joseph Ytac, on March 23, 1995, as she was still in the United States of America.

"On March 28, 1995, [petitioners] filed, in Civil Case No. 95-443, a 'Motion for Leave to Intervene' x x x.
"However, [respondent] opposed the motion x x x.

"[Petitioners, on the other hand,] opposed the motion of [respondent] to compel the Register of Deeds to
annotate the 'Notice of Lis Pendens' at the dorsal portion of [TCT] No. 171333.

"On March 30, 1995, [respondent] executed a 'Notice of Adverse Claim' and had the same annotated on
March 31, 1995 at the dorsal portion of [TCT] No. 171333.

"On April 5, 1995, [TCT] No. 171333 was cancelled on the basis of the 'Deed of Absolute Sale' executed on
March 30, 1995 by Bunye, pendente lite, in favor of [petitioners] and, on the same day, the Register of
Deeds issued [TCT] No. 200308 over the property to and under the name of the said spouses. The 'Adverse
Claim' of [respondent] was carried over in said title, x x x, as Entry No. 18053.

"On June 13, 1995, [petitioners] secured a loan from the Urban Bank in the amount of P12,000,000.00 and
executed a 'Real Estate Mortgage' over the said property, as security therefor which deed was annotated,
on June 14, 1995, at the dorsal portion of [TCT] No. 200308.

"On September 12, 1995, [respondent] filed an 'Amended Complaint' impleading the [petitioners] as Parties-
Defendants x x x.

"[Petitioner] spouses x x x filed a 'Motion to Dismiss' the Amended Complaint on the grounds that the
Amended Complaint did not state a cause of action against them and [for] laches. [Respondent] filed an
'Opposition' to the 'Motion to Dismiss' of [the] spouses.

"In the meantime, the Register of Deeds caused the annotation, on October 24, 1995, of the 'Notice of Lis
Pendens' filed by [respondent] at the dorsal portion of [TCT] No. 200308.

"Before the Court could resolve the 'Motion to Dismiss' of the [petitioners], [respondent] filed a 'Motion for
Leave to File Supplement to Amended Complaint,' impleading the Urban Bank, as [p]arty-[d]efendant x x x.

"On February 7, 1996, [respondent] filed his 'Supplement to Amended Complaint' x x x.

"[Petitioners] filed an 'Opposition' to [respondent's] motion. On July 2, 1996, the Court issued an Order
granting the motion of [respondent] and admitting [his] 'Supplement to Amended Complaint.' [Petitioners]
filed a 'Motion for Reconsideration' of the aforesaid Order of the Court. [Urban] Bank likewise filed a 'Motion
to Dismiss' the 'Supplement to Amended Complaint' on the ground that it stated no cause of action against
it. [Respondent] filed an 'Opposition' to the 'Motion for Reconsideration' of [petitioners] and the 'Motion to
Dismiss' of the x x x bank. On February 1, 2000, the Court issued an Order granting the 'Motion to Dismiss'
of [Urban] Bank and the 'Motion for Reconsideration' of [petitioners] on the ground that the 'Amended
Complaint' and the 'Supplement to Amended Complaint' did not state causes of action against [them]." 4

Ruling of the Court of Appeals

The CA ruled that the trial court had erred in dismissing the "Supplement to Amended Complaint." The appellate
court held that respondent alleged a sufficient cause of action against petitioners for the recovery of the Adelfa
property. The CA said that such action was "real," not personal.

Moreover, the appellate court held that respondent and Bunye had entered into a Contract of Sale -- not a Contract
to Sell -- which was perfected by their mere consent thereto. Thus, Bunye was deemed to have relinquished
ownership of the property to respondent.

Regarding the double sale of the property, the CA said that the spouses could not have registered the second sale
in good faith because they had prior knowledge of respondent's claim. It noted that even the Deed of Absolute Sale
in favor of petitioners had been executed during the pendency of the Complaint.

Hence, this Petition. Issues

5

In their Memorandum, petitioners raise the following issues:

"1. Has Jordana alleged a sufficient cause of action against the Spouses Jimenez?

"2. Did Jordana and Bunye execute a contract of sale or a contract to sell the subject property?

"3. Did Jordana make a valid tender and consignation of payment to Bunye?

"4. Did the Spouses Jimenez register their title to the subject property in good faith?

"5. Is Jordana guilty of laches?" 6

The foregoing questions point to only one main issue: the nature and the sufficiency of respondent's cause of action,
if any.

The Court's Ruling

The Petition has no merit

Main Issue:

Nature and Sufficiency of Respondent's Cause of Action

The trial court and the CA differed in characterizing the suit of respondent. The RTC opined that he failed to allege
against petitioners a cause of action for specific performance. On the other hand, the appellate court held that the
action was actually for recovery of real property. Clearly then, the crux of the present controversy is the nature and
the sufficiency of respondent's cause of action against petitioner-spouses.

In resolving this issue, we shall begin with some basic rules and guiding principles regarding cause of action,
dismissal of suit, and the law on sales.

Cause of Action

Cause of action is defined as "the act or omission by which a party violates a right of another." It has the following
7 

elements: 1) the legal right of the plaintiff; 2) the correlative obligation of the defendant to respect that legal right;
and 3) an act or omission of the defendant that violates such right. 8

The nature of an action is determined by the material averments in the complaint and the character of the relief
sought, not by the defenses asserted in the answer or motion to dismiss. Thus, the complaint must contain a
9  10 

concise statement of the ultimate or essential facts constituting the plaintiff's cause of action.
11  12
In a motion to dismiss, a defendant hypothetically admits the truth of the material allegations of the plaintiff's
complaint. This hypothetical admission extends to the relevant and material facts pleaded in, and the inferences
fairly deducible from, the complaint. Hence, to determine whether the sufficiency of the facts alleged in the
13 

complaint constitutes a cause of action, the test is as follows: admitting the truth of the facts alleged, can the court
render a valid judgment in accordance with the prayer? 14

To sustain a motion to dismiss, the movant needs to show that the plaintiff's claim for relief does not exist at all. On
the contrary, the complaint is sufficient "if it contains sufficient notice of the cause of action even though the
allegations may be vague or indefinite, in which event, the proper recourse would be, not a motion to dismiss, but a
motion for a bill of particulars." 15

Generally, the court takes into account only the material allegations of the complaint, without considering
extraneous facts and circumstances. In some cases, however, the court may also consider -- in addition to the
complaint -- annexes or documents appended to it, other pleadings of the plaintiff, or admissions in the record. It 16 

must then bear in mind that the facts proving the existence of a cause of action do not have to be established or
alleged by the complaint and/or the other pleadings at the outset but, under exceptional circumstances, even during
the trial on the merits of the case. 17

Contracts of Sale

The elements of a valid contract of sale under Article 1458 of the Civil Code are the following: (1) the parties'
consent or meeting of minds, (2) a determinate subject matter, and (3) a price certain in money or its equivalent.
Being consensual, a contract of sale is perfected upon the meeting of the minds of the buyer and the seller as to the
object of the sale and the cause or consideration. From that moment on, the parties may reciprocally demand
18 

performance; that is, the vendee may compel the transfer of the ownership of the object of the sale, and the vendor
may require the vendee to pay the price of the thing sold.

We shall now apply the foregoing discussion to the issues at hand.

In the present case, the cause of action of respondent against petitioners was premised on the material averments
in the Complaint as follows:

1. He offered to buy, and Bunye agreed to sell to him, the Adelfa property for P12,300,000.
19  20 

2. As agreed, he tendered to her the sum of P500,000 on January 3, 1994, but she refused to accept it. 21

3. She informed him by letter, which he received on January 4, 1994, that she could no longer accept the
offer of P12,300,000, but that she was willing to sell it for P16,000,000; thus, she was declining to receive
the P500,000 earnest money he had sent. 22

4. There was a perfected contract of sale, which Bunye breached by her unreasonable refusal to complete
the sale.23

5. She unreasonably refused to heed his demand for compliance with the contract, which she "should be
compelled to specifically perform." 24

6. On or about March 30, 1995, she sold the same property to petitioners, pursuant to which TCT No.
171333 was cancelled and TCT No. 200308 issued to the latter on April 3, 1995. 25

7. "Bunye and [the] Jimenezes should be compelled to execute a contract or deed of sale over the subject
property in [his] favor x x x which complies with the requirements of Article 1358 of the Civil Code" that a
26 

contract involving real rights over immovable property must appear in a public document. 27

8. As a result of Bunye's and the spouses' "unreasonable breach and circumvention of the contract," he
suffered actual damages. 28
 9. Having acted in a "wanton, fraudulent, reckless, oppressive, or malevolent manner," Bunye and
petitioners should be ordered to pay exemplary damages. 29

10. Their acts or omissions have compelled him to litigate, for which they must be ordered to reimburse
attorney's fees and litigation expenses.30

Specifically, respondent expressly prayed for a judgment ordering Bunye and petitioners "to immediately and
specifically perform on the contract to sell the subject property to [him] for P12,300,000.00;" "to execute a contract
31 

or deed of sale in [his] favor x x x over the subject property;" and to pay him actual and exemplary damages plus
32 

attorney's fees and litigation expenses. 33

What appears from all these contentions is that the action rests upon the basic hypothesis that, prior to the second
sale and delivery to petitioners, there was already a perfected sale of the Adelfa property to respondent. Hence,
Bunye was duty-bound to execute a deed of sale; and petitioners, to reconvey the property to him. From this
hypothesis sprang the CA's conclusion that the suit against petitioners was for recovery of property.

We agree with the appellate court. Indeed, what respondent instituted against petitioners was a real action for the
recovery of property. It has been held that where a party makes a claim contrary to ownership, and the relief prayed
for cannot be granted without the court deciding on who has a better right to the property, the suit is a real action.34

The correctness of the ruling as to the nature of the case, however, answers only half of the issue. The other half is
whether respondent has alleged a sufficient cause of action for recovery of property against petitioners. Like the CA,
we find that he indeed has. There are at least three reasons for this conclusion.

First, it is readily apparent that respondent has stated a demandable right over the subject property. Assaying the
allegations of the Supplement to Amended Complaint -- allegations that were hypothetically admitted to be correct
for the purpose of the Motion to Dismiss -- he averred that through an exchange of letters, a definite offer and an
35 

unqualified acceptance as to the object of the sale and the cause or consideration therefor transpired between him
and Bunye. Upon these allegations, a contract of sale was deemed perfected as of December 29, 1993, the day he
received Bunye's letter of unqualified acceptance. From that moment, respondent acquired the legal right to compel
36 

the transfer of ownership of the property to him.

Second, respondent has the right to compel petitioners to respect, not violate, his rights as a prior buyer. His
reference to the second sale to petitioners -- in paragraphs 8 and 10 of the Supplement to Amended Complaint, in
which he had alleged that they did not have any "rightful or valid title to the subject property" -- was only for the
37 

purpose of underscoring that fact.

Third, despite the discrepancies and the linguistic lapses in the material averments of the Supplement, the acts
and/or the omissions that violated respondent's rights are fairly discernible from the records and the pleadings of the
plaintiff. They more than compensate for such shortcomings.

By intervening in Civil Case No. 95-443, petitioners made of record -- long before the Amended Complaint and the
38  39 

Supplement to Amended Complaint -- the essential factual allegation that they had actual notice and knowledge of
40 

the claim of respondent against Bunye; but that, just the same, they proceeded to purchase the subject property.
Also, upon such intervention, the faxed messages between them and Bunye regarding respondent's Complaint were
inscribed in the record of the case.

Likewise, the Oppositions of respondent to the Motion for Leave to Intervene and Motion to Dismiss filed by
41 

petitioners are heavy with allegations of the latter's actual notice and knowledge of the previous sale. He averred
thus:

"4. In fact, Intervenors were officially notified on March 24, 1995 about plaintiff's earlier contract with
Madeliene E. Bunye on December 29, 1993 to purchase the same property. The seller's refusal to honor the
contract was highlighted in said letter which prompted [respondent] to file this suit to enforce his contract
against [Bunye], docketed as Civil Case No. 94-443.
 "5. Earlier on March 15, 1995, a Notice of Lis Pendens was filed by plaintiff before the Register of Deeds,
Makati, Metro Manila informing the Honorable Office of the pendency of a case docketed as Civil Case No.
94-443 involving the property covered by TCT No. 17133.

"6. Based on these factual setting, it would readily reveal that Intervenors are no longer buyers in good faith
and as such has no interest whatsoever against both [respondent] and [Bunye] much more on the property
in question covered by TCT No. 171333 x x x." 42

Clearly then, he has successfully shown their knowledge of his claim prior to the actual sale of the property on
March 30, 1995, before the registration of the property in their names on April 3, 1995. In Voluntad v. Spouses
Dizon, we explained as follows:
43 

"x x x. It is a settled rule that a purchaser of real estate with knowledge of any defect or lack of title of the
vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or
interest therein. The same rule applies to one with knowledge of facts which should have put him on inquiry
and investigation as might be necessary to acquaint him with the defects in the title of his vendor. If
circumstances exist that require a prudent man to investigate and he does not, he is deemed to have acted
in mala fide. A party's mere refusal to believe that a defect exists or his willful closing of his eyes to the
possibility of the existence of a defect in his vendor's title will not make him an innocent purchaser for value
if it afterwards develops that the title was in fact defective. x x x."
44

Taken together, the allegations in the Complaint, the pleadings of the plaintiff and the record of the case sufficiently
support a cause of action for recovery of property against petitioners. It is generally accepted that when property
belonging to a person is unlawfully or fraudulently taken by another, the former has the right of action against the
latter for the recovery of the property. 45

Respondent himself recognizes that his causes of action against Bunye and petitioners, which are subject to joinder
under Section 5 of Rule 2 of the Rules of Court, are entirely different. Notably, he stated in his Opposition to Urban
46  47 

Bank's Motion to Dismiss that his case was "one for specific performance by Bunye and reconveyance by the
Jimenezes." Certainly, as he seeks the consummation of the Contract of Sale by Bunye, so also must he ensure the
recovery of the property, which was allegedly wrongfully registered in petitioners' name.

His averments as to Bunye are inclined to support the conclusion that there was a breach of contract. Such breach
gives rise to a cause of action for specific performance, the remedy he has chosen as against rescission. To this 48 

effect, he contends that Bunye must be compelled to complete the sale, to execute the Deed of Sale in accordance
with the requirements of Article 1358 of the Civil Code, and to pay him actual damages for the breach and the
circumvention of the contract. Article 1475 of the Civil Code gives the parties to a perfected contract of sale the right
to reciprocally demand performance and to observe a particular form, if warranted.

On the other hand, respondent is not suing petitioners for contractual breach but for a recovery of property. It is not
relevant, therefore, even to argue that the parties have no privity of contract. We stress that participation in a
contract is not necessarily an element that determines the existence of a cause of action. 49

Having decided that the CA correctly ruled that respondent had a cause of action against petitioners, we deem it no
longer necessary to take up the other issues. These questions deal with evidentiary facts that need to be finally
resolved by the trial court after trial on the merits.

The Court must, however, emphasize the provisional nature of any ruling herein on the nature of the contract
between respondent and Bunye, as we have premised such ruling only on the hypothetical admissions of
petitioners' averments. Additionally, in determining that a cause of action exists against petitioners, the Court has
necessarily inquired only into the sufficiency, not the veracity, of the material allegations. The truth of those
50 

allegations, as well as petitioners' defenses, can be determined only after the parties have adduced their respective
sets of evidence.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

SO ORDERED.
G.R. No. 154554 November 9, 2005

GOODYEAR PHILIPPINES, INC., Petitioner,

vs.
ANTHONY SY and JOSE L. LEE, Respondents.

DECISION

complaint must contain a concise statement of the ultimate facts constituting the plaintiff’s cause of action. To
determine whether a cause of action is stated, the test is as follows: admitting arguendo the truth of the facts
alleged, can the court render a

_____________________

valid judgment in accordance with the prayer? If the answer is "no," the complaint does not state a cause of action
and should be dismissed forthwith. If "yes," then it does and must be given due course.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the June 5, 2002 Decision2 and the
August 8, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 61229. The dispositive portion of the
challenged Decision reads as follows:

"WHEREFORE, the instant appeal is GRANTED. The Order dated May 27, 1998 of the Regional Trial Court of
Legazpi City, Branch 9, is hereby REVERSED and the case is remanded to the court a quo for the appropriate
further proceedings."4

The assailed Resolution denied petitioner’s Motion for Reconsideration.

The Antecedents

The CA narrated the antecedents of the case as follows:

"The subject of this case involves a motor vehicle, particularly described as:

MAKE: 1984 Isuzu JCR 6-Wheeler

PLATE NUMBER: PEL 685

MOTOR NO.: 6BD1-371305

SERIAL NO.: JCR500BOF-21184

"The vehicle was originally owned by Goodyear Philippines, Inc. ([Goodyear]) which it purchased from Industrial and
Transport Equipment, Inc. in 1983. It had since been in the service of [Goodyear] until April 30, 1986 when it was
hijacked. This hijacking was reported to the Philippine National Police (PNP) which issued out an alert alarm on the
said vehicle as a stolen one. It was later on recovered also in 1986.

"The vehicle was used by [Goodyear] until 1996, when it sold it to Anthony Sy on September 12, 1996.

"Sy, in turn, sold it to Jose L. Lee on January 29, 1997. But the latter on December 4, 1997, filed an action for
rescission of contract with damages against Sy[,] because he could not register the vehicle in his name due to the
certification from the PNP Regional Traffic Management Office in Legazpi City that it was a stolen vehicle and the
alarm covering the same was not lifted. Instead, the PNP in Legazpi City impounded the vehicle and charged Lee
criminally.
"Upon being informed by Sy of the denial of the registration of the vehicle in Lee’s name, [Goodyear] requested on
July 10, 1997 the PNP to lift the stolen vehicle alarm status. This notwithstanding, [Goodyear] was impleaded as
third-party defendant in the third-party complaint filed by Sy on January 9, 1998.

"A motion to dismiss was filed by [Goodyear] on March 24, 1998 on the twin grounds that the third-party complaint
failed to state a cause of action and even if it did, such cause of action was already extinguished. An opposition
thereto was interposed by Sy on April 17, 1998.

"The Regional Trial Court [(RTC)] resolved to dismiss the third-party complaint on the basis of the first proffered
ground in its challenged Order dated May 27, 1998. It ratiocinated:

‘A perusal of the third party complaint does not expressly show any act or omission committed by the third party
defendant which violates a right of the third party complainant. The third party complaint failed to show that the
vehicle in question belongs to a person other than the third party defendant at the time the said motor vehicle was
sold by the third party defendant to the third party plaintiff. On the contrary[,] the third party defendant has not
denied having sold to the third party plaintiff the said motor vehicle which had been in its possession as owner from
1986 to 1996. The fact that the said motor vehicle was included by the PNP in its alert status as stolen vehicle[,]
resulted only following the report by the third party defendant that it was hijacked in 1986. But when the said motor
vehicle was recovered, the third party defendant informed the PNP about the said recovery and requested the lifting
of the alert status on it as stolen vehicle.

‘If the PNP has not removed the said vehicle from its alert status as a stolen vehicle, [then] that does not make
[Goodyear] not the owner thereof. Hence, [Goodyear], the third party defendant, is not guilty of any breach resulting
from any flaw in the title over the said vehicle. This is confirmed by the allegation of the third party plaintiff as
answering defendant in paragraph 6 of its Answer with Counterclaim and Affirmative Defenses dated January 9,
1998, hereunder quoted as follows:

"6. Defendant specifically denies the allegations contained in paragraph 9 of [p]laintiff’s complaint, the truth of the
matter is that [d]efendant help[ed] plaintiff in removing the impediments in the registration and transfer of ownership
and that defendant ha[d] no knowledge of any flaw [in] the title of Goodyear Philippines, Inc."

‘Under Rules 16, a motion to dismiss may be made on any of the following grounds:

"g) That the pleading asserting the claim states no cause of action."

‘WHEREFORE, for failure of the third party complaint to state a cause of action, the same is hereby ordered
DISMISSED.’"5

Ruling of the Court of Appeals

In granting the appeal, the CA reasoned that the Third-Party Complaint had stated a cause of action. First, petitioner
did not make good its warranty in the Deed of Sale: to convey the vehicle to Respondent Anthony Sy free from all
liens, encumbrances and legal impediments. The reported hijacking of the vehicle was a legal impediment that
prevented its subsequent sale.

Second, Respondent Sy had a right to protect and a warranty to enforce, while petitioner had the corresponding
obligation to honor that warranty. The latter caused the impairment of that right, though, when the vehicle it had sold
to him was refused registration, because of the non-lifting of the alert status issued at its instance. That petitioner
had to execute all documents necessary to confer a perfect title to him before he could seek recourse to the courts
was deemed a ludicrous condition precedent, because it could easily refuse to fulfill that condition in order to obviate
the filing of a case against it.

Hence, this Petition.6

The Issues

Petitioner raises the following issues for the Court’s consideration:

 "I.

Whether or not the Court of Appeals erred in reversing and setting aside the decision of the Regional Trial Court,
dismissing the complaint against petitioner for lack of a cause of action.

"II.

Whether or not the Court of Appeals erred in failing to find that petitioner did not breach any warranty in the absence
of proof that at the time it sold the subject vehicle to Sy, petitioner was not the owner thereof.

"III.

Whether or not the Court of Appeals erred in failing to find that the cause of action, if ever it existed, was already
extinguished."7

The foregoing issues actually point to one main question: did the Third-Party Complaint state a cause of action
against petitioner?

The Court’s Ruling

The Petition has merit.

Main Issue:

Whether a Cause of Action

Was Stated in the Third-Party Complaint

A cause of action is a formal statement of the operative facts that give rise to a remedial right.8 The question of
whether the complaint states a cause of action is determined by its averments regarding the acts committed by the
defendant.9 Thus, it "must contain a concise statement of the ultimate or essential facts constituting the plaintiff’s
cause of action."10 Failure to make a
sufficient allegation of a cause of action in the complaint "warrants its dismissal."11

Elements of a

Cause of Action

A cause of action, which is an act or omission by which a party violates the right of another,12 has these elements:

"1) the legal right of the plaintiff;

"2) the correlative obligation of the defendant to respect that legal right; and

"3) an act or omission of the defendant that violates such right."13

In determining whether an initiatory pleading states a cause of action, "the test is as follows: admitting the truth of
the facts alleged, can the court render a valid judgment in accordance with the prayer?"14 To be taken into account
are only the material allegations in the complaint; extraneous facts and circumstances or other matters aliunde are
not considered.15 The court may consider -- in addition to the complaint -- the appended annexes or documents,
other pleadings of the plaintiff, or admissions in the records.16

No Cause of Action
Against Petitioner

In the present case, the third element is missing. The Third-Party Complaint filed by Sy is inadequate, because it did
not allege any act or omission that petitioner had committed in violation of his right to the subject vehicle. The
Complaint capitalized merely on the fact that the vehicle -- according to the records of the PNP, which was a
stranger to the case -- was "a stolen vehicle." The pleading did not contain "sufficient notice of the cause of
action"17 against petitioner.

Without even going into the veracity of its material allegations, the Complaint is insufficient on its face.18 No
connection was laid out between the owner’s sale of the vehicle and its impounding by the PNP. That the police did
not lift the alert status did not make petitioner less of an owner.

The Deed of Sale between petitioner and Respondent Sy was attached as Annex A19 to the Third-Party Complaint
filed by the latter against the former. The Deed stated that petitioner was the absolute owner of the subject vehicle.
No contrary assertion was made in the Complaint. Hence, the trial court correctly observed that the Complaint had
failed to show that, at the time of its sale to Respondent Sy, the vehicle belonged to a person other than petitioner.20

To reiterate, the Third-Party Complaint absolutely failed to state an act or omission of petitioner that had proximately
caused injury or prejudice to Sy. Indeed, based on that pleading alone, the latter’s claim for relief against petitioner
does not appear to exist.

Warranties Passed On

By the Vendor to the Vendee

In a contract of sale, the vendor is bound to transfer the ownership of and to deliver the thing that is the object of the
sale.21 Moreover, the implied warranties are as follows: first, the vendor has a right to sell the thing at the time that its
ownership is to pass to the vendee, as a result of which the latter shall from then on have and enjoy the legal and
peaceful possession of the thing;22 and, second, the thing shall be free from any charge or encumbrance not
declared or known to the vendee.23

Upon the execution of the Deed of Sale, petitioner did transfer ownership of and deliver the vehicle to Respondent
Sy.24 No other owner or possessor of the vehicle had been alleged, and the ownership and possession rights of
petitioner over it had never been contested. The Deed of Sale executed on September 12, 1996 showed that
petitioner was the absolute owner. Therefore, at the time that ownership passed to Sy, petitioner alone had the right
to sell the vehicle.

In the same manner, when he sold the same truck to Jose L. Lee,25 Respondent Sy was exercising his right as
absolute owner. Unfortunately, though, from the time Respondent Lee attempted to register the truck in his name,
he could not have or enjoy the legal and peaceful possession of the vehicle, because it had been impounded by the
PNP, which also opposed its registration.

The impoundment of the vehicle and the failure to register it were clearly acts that were not deliberately caused by
petitioner, but that resulted solely from the failure of the PNP to lift the latter’s own alarm over the vehicle. Pursuant
to Republic Act 6975,26 these matters were purely administrative and governmental in nature. Petitioner had no
authority, much less power, over the PNP. Hence, the former did not breach its obligation as a vendor to
Respondent Sy; neither did it violate his right for which he could maintain an action for the recovery of damages.
Without this crucial allegation of a breach or violation, no cause of action exists.27

A warranty is an affirmation of fact or any promise made by a vendor in relation to the thing sold. As such, a
warranty has a natural tendency to induce the vendee -- relying on that affirmation or promise -- to purchase the
thing.28 The vendor impliedly warrants that that which is being sold is free from any charge or encumbrance not
declared or known to the vendee. The decisive test is whether the vendor assumes to assert a fact of which the
vendee is ignorant.29

No Lien or Breach
of Warranty

In the present case, petitioner did not breach the implied warranty against hidden encumbrances. The subject
vehicle that had earlier been stolen by a third party was subsequently recovered by the authorities and restored to
petitioner, its rightful owner. Whether Sy had knowledge of the loss and subsequent recovery, the fact remained that
the vehicle continued to be owned by petitioner, free from any charge or encumbrance whatsoever.

A lien is "a legal right or interest that a creditor has in another’s property, lasting usually until a debt or duty that it
secures is satisfied."30 An encumbrance is "a claim or liability that is attached to property or some other right and that
may lessen its value, such as a lien or mortgage."31 A legal impediment is a legal "hindrance or obstruction."32

The Third-Party Complaint did not allege that petitioner had a creditor with a legal right to or interest in the subject
vehicle. There was no indication either of any debt that was secured by the vehicle. In fact, there was not even any
claim, liability or some other right attached to the vehicle that would lessen its value. Its impoundment, as well as the
refusal of its registration, was not the hindrance or obstruction in the contemplation of law that the vendor warranted
against. Neither of those instances arose from any liability or obligation that could be satisfied by a legal claim or
charge on, or property right to -- other than an ownership interest in -- the subject vehicle.33

No Notice of Any

Breach of Warranty

Gratia argumenti that there was a breach of the implied warranty against hidden encumbrances, notice of the
breach was not given to petitioner within a reasonable time. Article 1586 of the Civil Code requires that notice be
given after the breach, of which Sy ought to have known. In his Third-Party Complaint against petitioner, there was
no allegation at all that respondent had given petitioner the requisite notice.34

More important, an action for damages for a breach of implied warranties must be brought within six months from
the delivery of the thing sold.35 The vehicle was understood to have been delivered to Sy when it was placed in his
control or possession.36 Upon execution of the Deed of Sale on September 12, 1996, control and possession of the
vehicle was transferred to respondent. That the vehicle had been delivered is bolstered by the fact that no contrary
allegation was raised in the Third-Party Complaint. Whether the period should be reckoned from the actual or from
the constructive delivery through a public instrument, more than six months had lapsed before the filing of the Third-
Party Complaint.

Finally, the argument that there was a breach of the implied warranty against eviction does not hold water, for there
was never any final judgment based on either a right prior to the sale; or an act that could be imputed37 to petitioner
and deprive Sy of ownership or possession of the vehicle purchased.

WHEREFORE, the Petition is hereby GRANTED, and the assailed Decision and Resolution are REVERSED. The
May 27, 1998 Order of the Regional Trial Court is REINSTATED. No costs.

SO ORDERED.

G.R. No. 161756 December 16, 2005

VICTORIA J. ILANO represented by her Attorney-in-fact, MILO ANTONIO C. ILANO, Petitioners,

vs.
HON. DOLORES L. ESPAÑOL, in her capacity as Executive Judge, RTC of Imus, Cavite, Br. 90, and, AMELIA
ALONZO, EDITH CALILAP, DANILO CAMACLANG, ESTELA CAMACLANG, ALLAN CAMACLANG, LENIZA
REYES, EDWIN REYES, JANE BACAREL, CHERRY CAMACLANG, FLORA CABRERA, ESTELITA LEGASPI,
CARMENCITA GONZALES, NEMIA CASTRO, GLORIA DOMINGUEZ, ANNILYN C. SABALE and several JOHN
DOES, Respondents.

DECISION
The Court of Appeals having affirmed the dismissal by Branch 20 of the Regional Trial Court (RTC) of Cavite at
Imus, for lack of cause of action, Civil Case No. 2079-00, the complaint filed by herein petitioner Victoria J. Ilano
for Revocation/Cancellation of Promissory Notes and Bills of Exchange (Checks) with Damages and Prayer for
Preliminary Injunction or Temporary Restraining Order (TRO), against herein respondents 15 named defendants
1 

(and several John Does), a recital of the pertinent allegations in the complaint, quoted verbatim as follows, is in
order:

xxx

3. That defendant AMELIA O. ALONZO, is a trusted employee of [petitioner]. She has been with them for several
years already, and through the years, defendant ALONZO was able to gain the trust and confidence of [petitioner]
and her family;

4. That due to these trust and confidence reposed upon defendant ALONZO by [petitioner], there were occasions
when defendant ALONZO was entrusted with [petitioner’s] METROBANK Check Book containing either signed or
unsigned blank checks, especially in those times when [petitioner] left for the United States for medical check-up;

5. Sometime during the second week of December 1999, or thereabouts, defendant ALONZO by means of deceit
and abuse of confidence succeeded in procuring Promissory Notes and signed blank checks from
[petitioner] who was then recuperating from illness;

6. That as stated, aside from the said blank checks, defendant ALONZO likewise succeeded
in inducing [petitioner] to sign the Promissory Notes antedated June 8, 1999 in the amount of PESOS: ONE
MILLION FOUR HUNDRED TWENTY EIGHT THOUSAND TWO HUNDRED SEVENTY TWO (Php 1,428,272.00)
payable to defendants EDITH CALILAP and DANILO CALILAP, and another Promissory Noted dated March
1999 in the amount of PESOS: ONE MILLION (Php 1,000,000.00) payable to the same defendants EDITH
CALILAP and DANILO CALILAP, copies of said Promissory Notes are hereto attached as Annexes "A" and "A-1"
hereof;

7. That another Promissory Note antedated October 1, 1999  thru the machination of defendant ALONZO,
was signed by [petitioner] in the amount of PESOS: THREE MILLION FORTY SIX THOUSAND FOUR
HUNDRED ONE (Php 3,046,401.00) excluding interest, in favor of her co-defendants ESTELA CAMACLANG,
ALLAN CAMACLANG, LENIZA REYES, EDWIN REYES, JANE BACAREL and CHERRY CAMACLANG, a copy of
said Promissory Note is hereto attached as Annex "B" hereof;

8. That the Promissory Notes and blank checks were procured thru fraud and deceit. The consent of the
[petitioner] in the issuance of the two (2) aforementioned Promissory Notes was vitiated. Furthermore, the
same were issued for want of consideration, hence, the same should be cancelled, revoked or declared null and
void;

9. That as clearly shown heretofore, defendant ALONZO in collusion with her co-defendants, ESTELA
CAMACLANG, ALLAN CAMACLANG and ESTELITA LEGASPI likewise was able to induce plaintiff to sign
several undated blank checks, among which are:

· Metrobank Check No. 0111544

· Metrobank Check No. 0111545

· Metrobank Check No. 0111546

· Metrobank Check No. 0111547

· Metrobank Check No. 0111515

all in the total amount of Php 3,031,600.00, copies of said checks are hereto attached as Annexes "C", "C-1", "C-2",
"C-3" and "C-4", respectively;
10. That aside from the checks mentioned heretofore, defendant ALONZO, confederated and conspired with the
following co-defendants, FLORA CABRERA, NEMIA CASTRO, EDITH CALILAP, DANILO CALILAP, GLORIA
DOMINGUEZ, CARMENCITA GONZALES and ANNILYN C. SABALE and took advantage of the signature of
[petitioner] in said blank checks which were later on completed by them indicated opposite their respective
names and the respective amount thereof, as follows:

NAME AMOUNT METROBANK

Check No.
Flora Cabrera Php 337,584.58 0111460
Flora Cabrera 98,000.00 0111514
Nemia Castro 100,000.00 0111542
Nemia Castro 150,000.00 0084078
Edith Calilap/Danilo Calilap 490,000.00 0111513
Edith Calilap/Danilo Calilap 790,272.00 0111512
Edith Calilap/Danilo Calilap 1,220,000.00 0111462
Gloria Dominguez/ 1,046,040.00 0111543

Carmencita Gonzales
Annilyn C. Sable 150,000.00 0085134
Annilyn C. Sable 250,000.00 0085149
Annilyn C. Sable 186,000.00 0085112

Copy attached as Annexes "D", "D-1", "D-2", "D-3", "D-4", "D-5", "D-6", "D-7", "D-8", "D-9" and "D-10", respectively;

Furthermore, defendant ALONZO colluded and conspired with defendant NEMIA CASTO in procuring the
signature of [petitioner] in documents denominated as "Malayang Salaysay" dated July 22, 1999 in the
amount of PESOS: ONE HUNDRED FIFTY THOUSAND (Php 150,000.00) and another "Malayang Salaysay"
dated November 22, 1999 in the amount of PESOS: ONE HUNDRED THOUSAND (Php 100,000.00) Annexes "D-
11" and "D-12" hereof;

11. That said defendants took undue advantage of the signature of [petitioner] in the said blank checks and
furthermore forged and or falsified the signature of [petitioner] in other unsigned checks  and as it was
made to appear that said [petitioner] is under the obligation to pay them several amounts of money, when in
truth and in fact, said [petitioner] does not owe any of said defendant any single amount;

12. That the issuance of the aforementioned checks or Promissory Notes or the aforementioned "Malayang
Salaysay" to herein defendants were tainted with fraud and deceit, and defendants conspired with one
another to defraud herein [petitioner] as the aforementioned documents were issued for want of
consideration;

13. That the aforesaid defendants conspiring and confederating together and helping one another committed
acts of falsification and defraudation which they should be held accountable under law;

14. The foregoing acts, and transactions, perpetrated by herein defendants in all bad faith and malice, with
malevolence and selfish intent are causing anxiety, tension, sleepless nights, wounded feelings, and
embarrassment to [petitioner] entitling her to moral damages of at least in the amount of PESOS: FIVE
HUNDRED THOUSAND (Php 500,000.00);

15. That to avoid repetition of similar acts and as a correction for the public good, the defendants should be held
liable to [petitioner] for exemplary damages in the sum of not less than the amount of PESOS: TWO HUNDRED
THOUSAND (Php 200,000.00);

16. That to protect the rights and interest of the [petitioner] in the illegal actuations of the defendants, she was
forced to engage the services of counsel for which she was obliged to pay the sum of PESOS: ONE HUNDRED
THOUSAND (Php 100,000.00) by way of Attorney’s fees plus the amount of PESOS: THREE THOUSAND (Php
3,000.00) per appearance in court;
x x x (Emphasis and underscoring supplied)

The named defendants-herein respondents filed their respective Answers invoking, among other grounds for
dismissal, lack of cause of action, for while the checks subject of the complaint had been issued on account and for
value, some had been dishonored due to "ACCOUNT CLOSED;" and the allegations in the complaint are bare and
general.

By Order dated October 12, 2000, the trial court dismissed petitioner’s complaint for failure "to allege the ultimate
2 

facts"-bases of petitioners claim that her right was violated and that she suffered damages thereby.

On appeal to the Court of Appeals, petitioner contended that the trial court:

A. . . . FAILED TO STATE CLEARLY AND DISTINCTLY THE FACTS AND LAW ON WHICH THE APPEALED
ORDER WAS BASED, THEREBY RENDERING SAID ORDER NULL AND VOID.

B. . . . ERRED IN HOLDING THAT THE COMPLAINT FAILED TO ALLEGE ULTIMATE FACTS ON WHICH
[PETITIONER] RELIES ON HER CLAIM THEREBY DISMISSING THE CASE FOR LACK OF CAUSE OF ACTION.

C. . . . ERRED IN GIVING DUE COURSE TO THE MOTION TO DISMISS THAT CONTAINED A FAULTY NOTICE
OF HEARING AS THE SAME IS MERELY ADDRESSED TO THE BRANCH CLERK OF COURT. 3

In its Decision of March 21, 2003 affirming the dismissal order of the trial court, the appellate court held that the
4 

elements of a cause of action are absent in the case:

xxx

Such allegations in the complaint are only general averments of fraud, deceit and bad faith. There were no
allegations of facts showing that the acts complained of were done in the manner alleged. The complaint did not
clearly ascribe the extent of the liability of each of [respondents]. Neither did it state any right or cause of action on
the part of [petitioner] to show that she is indeed entitled to the relief prayed for. In the first place, the record shows
that subject checks which she sought to cancel or revoke had already been dishonored and stamped "ACCOUNT
CLOSED." In fact, there were already criminal charges for violation of Batas Pambansa Blg. 22 filed against
[petitioner] previous to the filing of the civil case for revocation/cancellation. Such being the case, there was actually
nothing more to cancel or revoke. The subject checks could no longer be negotiated. Thus, [petitioner’s] allegation
that the [respondents] were secretly negotiating with third persons for their delivery and/or assignment, is untenable.

In the second place, we find nothing on the face of the complaint to show that [petitioner] denied the genuineness or
authenticity of her signature on the subject promissory notes and the allegedly signed blank checks. She merely
alleged abuse of trust and confidence on the part of [Alonzo]. Even assuming arguendo that such allegations were
true, then [petitioner] cannot be held totally blameless for her predicament as it was by her own negligence that
subject instruments/signed blank checks fell into the hands of third persons. Contrary to [petitioner’s] allegations, the
promissory notes show that some of the [respondents] were actually creditors of [petitioner] and who were issued
the subject checks as securities for the loan/obligation incurred. Having taken the instrument in good faith and for
value, the [respondents] are therefore considered holders thereof in due course and entitled to payment.

x x x (Underscoring supplied)

Hence, the present petition for review on certiorari, petitioner faulting the appellate court:

1. . . . in sustaining the dismissal of the complaint upon the ground of failure to state a cause of action when there
are other several causes of action which ventilate such causes of action in the complaint;

2. . . . in finding that a requirement that a Decision which should express therein clearly and distinctly the facts and
the law on which it is based does not include cases which had not reached pre-trial or trial stage;

3. . . . in not finding that a notice of hearing which was addressed to the Clerk of Court is totally defective and that
subsequent action of the court did not cure the flaw. 5
In issue then is whether petitioner’s complaint failed to state a cause of action.

A cause of action has three elements: (1) the legal right of the plaintiff, (2) the correlative obligation of the
defendant, and (3) the act or omission of the defendant in violation of said legal right. In determining the presence of
these elements, inquiry is confined to the four corners of the complaint including its annexes, they being parts
6 

thereof. If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground of
7 

failure to state a cause of action.

8

As reflected in the above-quoted allegations in petitioner’s complaint, petitioner is seeking twin reliefs, one for
revocation/cancellation of promissory notes and checks, and the other for damages.

Thus, petitioner alleged, among other things, that respondents, through "deceit," "abuse of confidence"
"machination," "fraud," "falsification," "forgery," "defraudation," and "bad faith," and "with malice, malevolence and
selfish intent," succeeded in inducing her to sign antedated promissory notes and some blank checks, and "[by
taking] undue advantage" of her signature on some other blank checks, succeeded in procuring them, even if there
was no consideration for all of these instruments on account of which she suffered "anxiety, tension, sleepless
nights, wounded feelings and embarrassment."

While some of the allegations may lack particulars, and are in the form of conclusions of law, the elements of a
cause of action are present. For even if some are not stated with particularity, petitioner alleged 1) her legal right not
to be bound by the instruments which were bereft of consideration and to which her consent was vitiated; 2) the
correlative obligation on the part of the defendants-respondents to respect said right; and 3) the act of the
defendants-respondents in procuring her signature on the instruments through "deceit," "abuse of confidence"
"machination," "fraud," "falsification," "forgery," "defraudation," and "bad faith," and "with malice, malevolence and
selfish intent."

Where the allegations of a complaint are vague, indefinite, or in the form of conclusions, its dismissal is not proper
for the defendant may ask for more particulars. 9

With respect to the checks subject of the complaint, it is gathered that, except for Check No. 0084078, they were
10 

drawn all against petitioner’s Metrobank Account No. 00703-955536-7.

Annex "D-8" of the complaint, a photocopy of Check No. 0085134, shows that it was dishonored on January 12,
11 

2000 due to "ACCOUNT CLOSED." When petitioner then filed her complaint on March 28, 2000, all the checks
subject hereof which were drawn against the same closed account were already rendered valueless or non-
negotiable, hence, petitioner had, with respect to them, no cause of action.

With respect to above-said Check No. 0084078, however, which was drawn against another account of petitioner,
albeit the date of issue bears only the year − 1999, its validity and negotiable character at the time the complaint
was filed on March 28, 2000 was not affected. For Section 6 of the Negotiable Instruments Law provides:

Section 6. Omission; seal; particular money. – The validity and negotiable character of an instrument are not
affected by the fact that –

(a) It is not dated; or

(b) Does not specify the value given, or that any value had been given therefor; or

(c) Does not specify the place where it is drawn or the place where it is payable; or

(d) Bears a seal; or

(e) Designates a particular kind of current money in which payment is to be made.

x x x (Emphasis supplied)
However, even if the holder of Check No. 0084078 would have filled up the month and day of issue thereon to be
"December" and "31," respectively, it would have, as it did, become stale six (6) months or 180 days thereafter,
following current banking practice. 12

It is, however, with respect to the questioned promissory notes that the present petition assumes merit. For,
petitioner’s allegations in the complaint relative thereto, even if lacking particularity, does not as priorly stated call for
the dismissal of the complaint.

WHEREFORE, the petition is PARTLY GRANTED.

The March 21, 2003 decision of the appellate court affirming the October 12, 2000 Order of the trial court, Branch
20 of the RTC of Imus, Cavite, is AFFIRMED with MODIFICATION in light of the foregoing discussions.

The trial court is DIRECTED to REINSTATE Civil Case No. 2079-00 to its docket and take further proceedings
thereon only insofar as the complaint seeks the revocation/cancellation of the subject promissory notes and
damages.

Let the records of the case be then REMANDED to the trial court.

SO ORDERED.