Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

EUGENIO BASBAS, TEOFILO G.R. No. 172660

ARAS, RUFINO ARAS,
GERVACIO BASBAS, ISMAEL
ARAS, EUGENIO ARAS,
SIMFRONIO ARAS, Present:
FELICIANO ARAS, ROSITA
ARAS, EUGENIO BASBAS, JR. CORONA, C. J., Chairperson,
and SPOUSES PABLITO LEONARDO-DE CASTRO,
BASARTE and MARCELINA BRION,⃰
BASBAS BASARTE, DEL CASTILLO, and
Petitioners, VILLARAMA, JR., JJ.

- versus -

BEATA SAYSON and Promulgated:

ROBERTO SAYSON, JR.,
Respondents. August 24, 2011
x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

Petitioners seek to prevent the revival of a judgment rendered in favor of the respondents more than two decades
back.
This Petition for Review on Certiorari assails the February 17, 2004 Decision[1]of the Court of Appeals (CA) in CA-G.R.
CV No. 72385 which denied the appeal filed before it and affirmedin toto the May 21, 2001 Order[2] of the Regional
Trial Court of Ormoc City, Branch 35. Also assailed is the April 19, 2006 Resolution[3] denying the Motion for
Reconsideration thereto.

Factual Antecedents

On September 2, 1976, respondent Beata Sayson (Beata) and her husband Roberto Sayson, Sr. (Roberto Sr.) filed a
Petition for Registration of an agricultural land located in Cagbatang, Balagtas, Matag-ob, Leyte docketed as Land
Registration Case No. 0-177. The said application was opposed by the Republic of the Philippines and herein
petitioners Eugenio Basbas (Eugenio Sr.), Teofilo Aras (Teofilo) and Rufino Aras (Rufino). On March 22, 1979, the
Court of First Instance (CFI) of Leyte, Branch V (Ormoc City) rendered a Decision adjudicating to the spouses Sayson
said agricultural land and approving its registration under their names.[4]

The oppositors filed their appeal to the CA docketed as CA-G.R. No. 66541. In a Decision[5] dated July 24,
1985, the appellate court affirmed in toto the Decision of the CFI. This CA Decision became final and executory on
August 21, 1985[6] and, accordingly, a Writ of Possession was issued on November 21, 1985, which was never
implemented.
 The following year or on September 17, 1986, Original Certificate of Title (OCT) No. 2496[7] was issued to the
spouses Sayson pursuant to the March 22, 1979 CFI Decision. An Alias Writ of Possession was issued on April 6,
1989 but this could also not be implemented in view of the refusal of Eugenio Sr. and his son Eugenio Basbas, Jr.
(Eugenio Jr.). Claiming that the land they occupied is not the same land subject of the CFI Decision,[8] they
demanded that a relocation survey be conducted. Hence, a relocation survey was conducted by order of the Regional
Trial Court (RTC), Branch 12, Ormoc City.[9]

In an Order[10] dated September 13, 1989, the RTC approved the Commissioners Report[11] on the relocation
survey and ordered the original oppositors, petitioners Eugenio Sr., Teofilo and Rufino, as well as their co-petitioners
herein Gervacio Basbas (Gervacio), Ismael Aras (Ismael), Eugenio Aras (Eugenio), Simfronio Aras (Simfronio),
Feliciano Aras (Feliciano), Rosita Aras (Rosita) and Eugenio Jr. to vacate the subject property, viz:

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

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

SO ORDERED.[12]

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

It appearing from the records that respondents Eugenio Basbas, Teofilo Aras, Gervacio
Basbas, Rufino Aras, Ismael Aras, Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita
Aras and Eugenio Basbas[,] Jr. are parties to the present case, they having been the
principal oppositors to the petition filed by the applicants as shown in the records,
pages 34, 35 and 36, Vol. 1 x x x[13] (Emphasis supplied.)

This September 13, 1989 Order was, however, not implemented within the five-year period from the time it became
final.[14] Hence, respondent Beata and her son Roberto Sayson, Jr. (Roberto Jr.), as successor-in-interest of the late
Roberto Sr., filed on August 18, 1995 a Complaint for Revival of Judgment[15] before the RTC of Ormoc City, Branch
12,[16] docketed as Civil Case No. 3312-0. Impleaded as defendants were Eugenio Sr., Teofilo, Rufino, Gervacio,
Ismael, Eugenio, Simfronio, Feliciano, Rosita, and Eugenio Jr. Petitioner-spouses Pablito Basarte and Marcelina
Basbas-Sabarte[17] (spouses Basarte), who, although not identified in the September 13, 1989 Order as principal
oppositors in the land registration case, were likewise impleaded as defendants since they also allegedly harvested,
processed, and sold the coconuts found in the subject property.

Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and Eugenio Jr. filed a Motion to
Dismiss[18] on the ground that the Complaint states no cause of action. This was, however, denied[19] so the same set
of petitioners, except for Feliciano, filed an Answer with Counterclaim.[20]
In their Answer with counterclaim, said petitioners admitted the allegations in paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and
12 of respondents Complaint which state that:

xxxx

4. On March 22, 1979, the Honorable Judge Numeriano Estenzo rendered a decision in the above-
mentioned Land Registration [c]ase in favor of the petitioners x x x and against the oppositors, the
dispositive portion of said decision reads:

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

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

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

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

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

decision appealed from is hereby AFFIRMED in toto.

SO ORDERED.

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

7. That consequently, on September 17, 1986 an Original Certificate of Title No. N-2496 was
issued in the names of Roberto Sayson and Beata O. Sayson, pursuant to Decree No. N-191615, by
the Register of Deeds for the Province of Leyte;

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

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

10. That on June 16, 1989, the Honorable Court, acting on the Progress Report of Deputy
Sheriff Placido Cayco, issued an Order on even date appointing Geodetic Engineer Jose A. Tahil as
Court Commissioner specifically to relocate Lot No. 1, Plan Psu-08-000235, LRC No. 0-177, Land Reg.
Record No. N51830 x x x This Order was dictated in open court in the presence of Mr. Eugenio
Basbas, Sr. and Eugenio Basbas, Jr. who had both objected to the Writ of Possession, and their
counsel Atty. Evargisto Escalon, and Attorney Demetrio D. Sarit, counsel for the applicants. x x x
 11. That pursuant to the [O]rder dated June 16, 1989 x x x the Court assigned
Commissioner, Engr. Jose A. Tahil, submitted his report stating that the job assigned to the
commissioner was already fully and peacefully accomplished; that his findings [show] that all points
are existing and intact on the field except x x x corner 3 of said lot x x x which at present [is] already
defined and indicated on the ground.The commissioner also attached a Sketch Plan of the land to his
report. x x x

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

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

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

However, petitioners admitted but denied in part:

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

2) paragraph 14, with respect to the allegation on the retirement of the Deputy Sheriff and the heart
condition of the Clerk of Court, for lack of sufficient knowledge and information sufficient to form a belief thereon.

On the other hand, they specifically denied:

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

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

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

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

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

xxxx

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

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

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

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

Pre-trial conference was thereafter set[24] but since not all petitioners were served with summons, this was reset and
alias summons was issued and served upon Simfronio and the spouses Basarte.[25] Upon receipt of summons,
Simfronio adopted the Answer with Counterclaim of Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita and Eugenio
Jr.[26] while the spouses Basarte filed a Motion to Dismiss[27] on the ground of lack of cause of action. As said motion
was also denied,[28] the spouses Basarte later filed a Manifestation[29] that they were also adopting the Answer with
Counterclaim filed by Gervacio and the others.

During the pre-trial conference on July 14, 1999, the RTC issued an Order[30] which provides in part, viz:

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

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

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

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

Hold the pre-trial conference in abeyance.

SO ORDERED. [31] (Emphasis supplied.)

In their Manifestation with Prayer,[32] respondents informed the RTC about the death of Eugenio Sr. and
Teofilo who were oppositors in the land registration case and the substitution by their heirs, namely, Gervacio,
Marcelina Basbas Basarte,[33] and Eugenio Jr. for Eugenio Sr. and Ismael, Vicente, Ligaya Aras (Ligaya), Rosendo
Aras (Rosendo) and Daina Aras (Daina) for Teofilo. Respondents prayed that their manifestation be considered for
the purpose of determining the proper parties to the case. Despite petitioners Counter-Manifestation,[34] the RTC
issued the following Order[35] on May 15, 1999:

The Manifestation of plaintiffs and the Counter-Manifestation of defendants having already

been submitted and duly noted, the Court hereby directs that henceforth in the denomination of this
case, the names of the original parties, Eugenio Basbas and Teofilo Aras (in Land Registration Case
No. 0-177) shall still remain to be so stated as defendants for purposes of the present case but with
additional names of their respective heirs to be included and stated immediately after each name as
heirs in substitution, namely: for Eugenio Basbas 1) Gervacio Basbas, 2) Marcelina Basbas Basarte,
and 3) Eugenio Basbas, Jr.; and for Teofilo Aras 1) Ismael Aras, 2) Vicente Aras, 3) Ligaya Aras, 4)
Rosendo Aras, and 5) Daina Aras.

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

x x x x[36]
 After summons were served, Vicente, Rosendo, Ligaya and Daina were, however, declared in default for not
filing any responsive pleading.[37] On February 2, 2001, the RTC issued a Pre-Trial Order[38] where the controverted
stipulations and issues to be tried, among others, were enumerated as follows:

Controverted Stipulations:

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

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

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

Issues

1. Whether x x x the plaintiffs are entitled to revival of judgment in the earlier [land
registration] case;

2. Whether x x x the defendants except for defendant Rufino Aras are the proper parties in
the present action;

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

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

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

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

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

Ruling of the Regional Trial Court

 In resolving respondents Omnibus Motion for Judgment on the Pleadings and/or Summary Judgment, the
RTC found that petitioners Answer does not essentially tender an issue since the material allegations of the Complaint
were admitted. Hence, said court issued an Order[42] dated May 21, 2001, the dispositive portion of which reads:

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

SO ORDERED.[43]

Petitioners thus filed a Notice of Appeal[44] which was approved in an Order dated June 06, 2001.[45]

Ruling of the Court of Appeals

Finding no merit in the appeal, the CA denied the same in a Decision[46] dated February 17, 2004. It noted that
petitioners Answer admitted almost all of the allegations in respondents complaint. Hence, the RTC committed no
reversible error when it granted respondents Motion for Judgment on the Pleadings and/or Summary Judgment. The
appellate court likewise found untenable the issue as regards the failure of the complaint to state a cause of
action. To the appellate court, petitioners refusal to vacate the subject property despite the final and executory
Decision of the CA in the land registration case and the September 13, 1989 Order of the RTC for them to vacate the
same, clearly support respondents cause of action against them. Also contrary to petitioners posture, the September
13, 1989 Order is a final order as it finally disposed of the controversy between the parties in the land registration
case. The CA likewise found the SPA executed by Beata in favor of Roberto Jr. as valid, hence, she was duly
represented during the pre-trial conference. The dispositive portion of said CA Decision reads:

WHEREFORE, premises considered, the present appeal is DENIED. The May 21, 2001 Decision of the
Regional Trial Court of Ormoc City, Branch 35 is AFFIRMED.
SO ORDERED.[47]

Their Motion for Reconsideration[48] having been denied in a Resolution[49] dated April 19, 2006, petitioners
are now before this Court through the present Petition for Review onCertiorari.

Issues

Petitioners impute upon the CA the following errors:

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

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

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

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

The Parties Arguments

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

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

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

Our Ruling

There is no merit in the petition.

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

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

In Tan v. De la Vega,[52] citing Narra Integrated Corporation v. Court of Appeals,[53] the court distinguished
summary judgment from judgment on the pleadings, viz:

The existence or appearance of ostensible issues in the pleadings, on the one hand, and their
sham or fictitious character, on the other, are what distinguish a proper case for summary judgment
from one for a judgment on the pleadings. In a proper case for judgment on the pleadings, there is
no ostensible issue at all because of the failure of the defending partys answer to raise an issue. On
the other hand, in the case of a summary judgment, issues apparently exist i.e. facts are asserted in
the complaint regarding which there is as yet no admission, disavowal or qualification; or specific
denials or affirmative defenses are in truth set out in the answer but the issues thus arising from the
pleadings are sham, fictitious or not genuine, as shown by affidavits, depositions, or admissions. x x
x.
Simply stated, what distinguishes a judgment on the pleadings from a summary judgment is the presence of
issues in the Answer to the Complaint. When the Answer fails to tender any issue, that is, if it does not deny the
material allegations in the complaint or admits said material allegations of the adverse partys pleadings by admitting
the truthfulness thereof and/or omitting to deal with them at all, a judgment on the pleadings is appropriate.[54] On
the other hand, when the Answer specifically denies the material averments of the complaint or asserts affirmative
defenses, or in other words raises an issue, a summary judgment is proper provided that the issue raised is not
genuine. A genuine issue means an issue of fact which calls for the presentation of evidence, as distinguished from
an issue which is fictitious or contrived or which does not constitute a genuine issue for trial.[55]

a) Judgment on the pleadings is not proper because petitioners

Answer tendered issues.

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

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

b) The issues raised are not genuine issues, hence rendition of

summary judgment is proper.
To resolve the issues of whether a revival of judgment is the proper action and whether respondents are the
proper parties thereto, the RTC merely needed to examine the following: 1) the RTC Order dated September 13,
1989, to determine whether same is a judgment or final order contemplated under Section 6, Rule 39 of the Rules of
Court; and, 2) the pleadings of the parties and pertinent portions of the records[56] showing, among others, who
among the respondents were oppositors to the land registration case, the heirs of such oppositors and the present
occupants of the property. Plainly, these issues could be readily resolved based on the facts established by the
pleadings. A full-blown trial on these issues will only entail waste of time and resources as they are clearly not
genuine issues requiring presentation of evidence.
 Petitioners aver that the RTC should not have granted respondents Motion for Judgment on the Pleadings
and/or Summary Judgment because of the controverted stipulations and the first three issues enumerated in the Pre-
trial Order, which, according to them, require the presentation of evidence. These stipulations and issues, however,
when examined, basically boil down to questions relating to the propriety of the action resorted to by respondents,
which is revival of judgment, and to the proper parties thereto the same questions which we have earlier declared as
not constituting genuine issues.

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

II. The Complaint states a cause of action.

Petitioners contend that the complaint states no cause of action since the
September 13, 1989 Order sought to be revived is not the judgment contemplated under Section 6, Rule 39 of the
Rules of Court. They also aver that the RTC erred when it ordered the revival not only of the September 13, 1989
Order but also of the July 24, 1985 CA Decision, when what was prayed for in the complaint was only the revival of
the former.

This Court, however, agrees with respondents that these matters have already been sufficiently addressed by
the RTC in its Order of May 9, 1997[57] and we quote with approval, viz:

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

So in this Complaint, what is sought is the enforcement of a judgment and the Order of this
Court dated September 13, 1989 is part of the process to enforce that judgment. To the mind of the
Court, therefore, the Complaint sufficiently states a cause of action.[58]

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

Anent the SPA, we find that given the particular circumstances in the case at bar, an SPA is not even necessary such
that its efficacy or the lack of it would not in any way preclude the case from proceeding. This is because upon
Roberto Sr.s death, Roberto Jr., in succession of his father, became a co-owner of the subject property together with
his mother, Beata. As a co-owner, he may, by himself alone, bring an action for the recovery of the co-owned
property pursuant to the well-settled principle that in a co-ownership, co-owners may bring actions for the recovery
of co-owned property without the necessity of joining all the other co-owners as co-plaintiffs because the suit is
presumed to have been filed for the benefit of his co-owners.[59]
While we note that the present action for revival of judgment is not an action for recovery, the September 13, 1989
Order sought to be revived herein ordered the petitioners, among others, to vacate the subject property pursuant to
the final and executory judgment of the CA affirming the CFIs adjudication of the same in favor of respondents. This
Order was issued after the failure to enforce the writ of execution and alias writ of execution due to petitioners
refusal to vacate the property. To this Courts mind, respondents purpose in instituting the present action is not only
to have the CA Decision in the land registration case finally implemented but ultimately, to recover possession thereof
from petitioners. This action is therefore one which Roberto Jr., as co-owner, can bring and prosecute alone, on his
own behalf and on behalf of his co-owner, Beata. Hence, a dismissal of the case with respect to Beata pursuant to
Sec. 5,[60] Rule 18 of the Rules of Court will be futile as the case could nevertheless be continued by Roberto Jr. in
behalf of the two of them.

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

SO ORDERED.
 SECOND DIVISION

MANUEL C. BUNGCAYAO, SR., G.R. No. 170483

represented in this case by his
Attorney-in-fact ROMEL R. Present:
BUNGCAYAO,
Petitioner, CARPIO, J., Chairperson,
BRION,
DEL CASTILLO,
- versus - ABAD, and
PEREZ, JJ.

FORT ILOCANDIA
PROPERTY HOLDINGS,
AND DEVELOPMENT Promulgated:
CORPORATION,
Respondent. April 19, 2010
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DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the 21 November 2005 Decision[2] of the Court of
Appeals in CA-G.R. CV No. 82415.

The Antecedent Facts

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

In July 1980, six parcels of land in Barrio Balacad (now Calayad) were transferred, ceded, and conveyed to
the Philippine Tourism Authority (PTA) pursuant to Presidential Decree No. 1704. Fort Ilocandia Resort
Hotel was erected on the area. In 1992, petitioner and other DSierto members applied for a foreshore lease
with the Community Environment and Natural Resources Office (CENRO) and was granted a provisional
permit. On 31 January 2002, Fort Ilocandia Property Holdings and Development Corporation (respondent)
filed a foreshore application over a 14-hectare area abutting the Fort Ilocandia Property, including the 5-
hectare portion applied for by DSierto members. The foreshore applications became the subject matter of a
conflict case, docketed Department of Environment and Natural Resources (DENR) Case No. 5473, between
respondent and DSierto members. In an undated Order,[3] DENR Regional Executive Director Victor J.
Ancheta denied the foreshore lease applications of the DSierto members, including petitioner, on the
ground that the subject area applied for fell either within the titled property or within the foreshore areas
applied for by respondent. The DSierto members appealed the denial of their applications. In a
Resolution[4] dated 21 August 2003, then DENR Secretary Elisea G. Gozun denied the appeal on the ground
that the area applied for encroached on the titled property of respondent based on the final verification
plan.

In a letter dated 18 September 2003,[5] respondent, through its Public Relations Manager Arlene de
Guzman, invited the DSierto members to a luncheon meeting to discuss common details beneficial to all
parties concerned. Atty. Liza Marcos (Atty. Marcos), wife of Governor Bongbong Marcos, was present as she
was asked by Fort Ilocandia hotel officials to mediate over the conflict among the parties. Atty. Marcos
offered P300,000 as financial settlement per claimant in consideration of the improvements introduced, on
the condition that they would vacate the area identified as respondents property. A DSierto member made
a counter-offer of P400,000, to which the other DSierto members agreed.

Petitioner alleged that his son, Manuel Bungcayao, Jr., who attended the meeting, manifested that he still
had to consult his parents about the offer but upon the undue pressure exerted by Atty. Marcos, he
accepted the payment and signed the Deed of Assignment, Release, Waiver and Quitclaim[6] in favor of
respondent.

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

Respondent countered that the area upon which petitioner and the other DSierto members constructed
their improvements was part of its titled property under Transfer Certificate of Title No. T-
31182. Respondent alleged that petitioners sons, Manuel, Jr. and Romel, attended the luncheon meeting on
their own volition and they were able to talk to their parents through a cellular phone before they accepted
respondents offer. As a counterclaim, respondent prayed that petitioner be required to return the amount
of P400,000 from respondent, to vacate the portion of the respondents property he was occupying, and to
pay damages because his continued refusal to vacate the property caused tremendous delay in the planned
implementation of Fort Ilocandias expansion projects.

In an Order[7] dated 6 November 2003, the trial court confirmed the agreement of the parties to cancel the
Deed of Assignment, Release, Waiver and Quitclaim and the return ofP400,000 to respondent. Petitioners
counsel, however, manifested that petitioner was still maintaining its claim for damages against respondent.

Petitioner and respondent agreed to consider the case submitted for resolution on summary
judgment. Thus, in its Order[8] dated 28 November 2003, the trial court considered the case submitted for
resolution. Petitioner filed a motion for reconsideration, alleging that he manifested in open court that he
was withdrawing his earlier manifestation submitting the case for resolution. Respondent filed a Motion for
Summary Judgment.

The trial court rendered a Summary Judgment[9] dated 13 February 2004.

The Decision of the Trial Court

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

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

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

SO ORDERED.[10]

Petitioner appealed from the trial courts decision.

The Decision of the Court of Appeals

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

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

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

The dispositive portion of the Court of Appeals decision reads:

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

SO ORDERED.[11]

Thus, the petition before this Court.

The Issues
Petitioner raises the following issues in his Memorandum:[12]

1. Whether respondents counterclaim is compulsory; and

2. Whether summary judgment is appropriate in this case.

The Ruling of this Court

The petition has merit.

Compulsory Counterclaim

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

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

The criteria to determine whether the counterclaim is compulsory or permissive are as follows:

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

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

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

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

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

In this case, the only issue in the complaint is whether Manuel, Jr. is authorized to sign the Deed of
Assignment, Release, Waiver and Quitclaim in favor of respondent without petitioners express approval and
authority. In an Order dated 6 November 2003, the trial court confirmed the agreement of the parties to
cancel the Deed of Assignment, Release, Waiver and Quitclaim and the return of P400,000 to
respondent. The only claim that remained was the claim for damages against respondent. The trial court
resolved this issue by holding that any damage suffered by Manuel, Jr. was personal to him. The trial court
ruled that petitioner could not have suffered any damage even if Manuel, Jr. entered into an agreement
with respondent since the agreement was null and void.

Respondent filed three counterclaims. The first was for recovery of the P400,000 given to Manuel, Jr.; the
second was for recovery of possession of the subject property; and the third was for damages. The first
counterclaim was rendered moot with the issuance of the 6 November 2003 Order confirming the
agreement of the parties to cancel the Deed of Assignment, Release, Waiver and Quitclaim and to return
the P400,000 to respondent. Respondent waived and renounced the third counterclaim for
damages.[19] The only counterclaim that remained was for the recovery of possession of the subject
property. While this counterclaim was an offshoot of the same basic controversy between the parties, it is
very clear that it will not be barred if not set up in the answer to the complaint in the same
case. Respondents second counterclaim, contrary to the findings of the trial court and the Court of Appeals,
is only a permissive counterclaim. It is not a compulsory counterclaim. It is capable of proceeding
independently of the main case.

The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the counterclaimant is
bound to pay the prescribed docket fees.[20] Any decision rendered without jurisdiction is a total nullity and
may be struck down at any time, even on appeal before this Court.[21] In this case, respondent did not
dispute the non-payment of docket fees. Respondent only insisted that its claims were all compulsory
counterclaims. As such, the judgment by the trial court in relation to the second counterclaim is considered
null and void[22] without prejudice to a separate action which respondent may file against petitioner.

Summary Judgment

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

Section 1. Summary Judgment for claimant. - A party seeking to recover upon a claim,
counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor upon all or any part thereof.

Summary judgment has been explained as follows:

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

WHEREFORE, we MODIFY the 21 November 2005 Decision of the Court of Appeals in CA-G.R. CV No.
82415 which affirmed the 13 February 2004 Decision of the Regional Trial Court of Laoag City, Branch 13,
insofar as it ruled that respondents counterclaim for recovery of possession of the subject property is
compulsory in nature. WeDISMISS respondents permissive counterclaim without prejudice to filing a
separate action against petitioner.

SO ORDERED.
 FIRST DIVISION

MARITIMEINDUSTRY AUTHORITY (MARINA) G.R. No. 173128

and/or ATTY. OSCAR M. SEVILLA,
Petitioners, Present:

CORONA, C.J.,
- versus - Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

MARC PROPERTIES CORPORATION, Promulgated:

Respondent.
February 15, 2012
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DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 which seeks to reverse the Decision[1] dated
June 2, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 80967.The CA dismissed petitioners appeal
questioning the summary judgment rendered by the trial court which ordered petitioner to reimburse the
expenses incurred by the respondent for repair/renovation works on its building.

The factual antecedents:

On October 23, 2001, petitioner Maritime Industry Authority (MARINA), a government agency represented
by then Administrator and concurrently Vice-Chairman of the Board of Directors Oscar M. Sevilla, entered
into a Contract of Lease[2] with respondent Marc Properties Corporation represented by its Executive Vice-
President Ericson M. Marquez. It was agreed that the MARINA offices will be transferred from PPL Building,
Taft Avenue, Manila to an eight-storey commercial building (MARC Building) and Condominium Unit 5 of
MARC 2000 Tower which are both owned by respondent. The parties fixed the monthly rental
at P1,263,607.74 (plus VAT) from January 1, 2002 up to December 31, 2002 and renewable for the same
one-year period. The Contract of Lease also contained the following provisions:

Article II

xxxx

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

Article IX

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

Article XI

xxxx

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

On December 14, 2001, respondent received a letter from Administrator Sevilla requesting for rescission of
their Contract of Lease for the reason that the MARINA Board of Directors during its 158th Regular Meeting
resolved to deny the proposed transfer of the MARINA office from its present address to respondents
building.[4] In its letter-reply dated December 17, 2001, respondent expressed disappointment and
enumerated those facts and circumstances for which respondent believes that the Boards decision was
unreasonable. Respondent asserted that if the Board will not reconsider its decision, MARINA must take
responsibility for the cost already incurred by respondent as damages and lost rental opportunity. Thus,
respondent said it can only accept the request for rescission upon reimbursement of P1,055,000.00
representing the amount advanced by respondent and paid to its Contractors and payment of penalty
equivalent to 2 months rental or P2,527,215.48 in accordance with Art. IX, Sec. 9.00 of the Contract of
Lease. With no immediate response from petitioners, respondent again wrote Administrator Sevilla
reiterating its position on the matter.[5]

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

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

xxxx

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

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

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

wrote a letter, dated October 30, 2001, addressed to Mr. Emilio C. Yap, informing the
latter that Pursuant to Section 4 of the Contract of Lease for the Fourth, Fifth and
Sixth floors of the PPL Bldg., which floors we are presently occupying, we regret to
inform you that MARINA isnot renewing said Lease Contract beginning January 2002.

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

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

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

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

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

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

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

x x x x[7] (Italics supplied.)

Petitioners through the Solicitor General filed their Answer[8] specifically denying the foregoing allegations.
Petitioners argued that respondents demand for P2,527,215.48 is based solely on Art. V, Sec. 5.0 of the
Contract of Lease, which provision presupposes the approval of the contract which is subject to the
suspensive condition provided in Art. XI, Sec. 11.13. Petitioners contended that by claiming that there was
no reason to reject the Contract of Lease considering the clear advantages of approving the same,
respondent is effectively imposing its judgment on the Board of Directors and the OP; this simply cannot be
done. Petitioners pointed out that the approval or rejection of the contract is a prerogative lodged solely on
the said authorities and respondent is devoid of any authority to question the wisdom of the Boards
rejection of the contract as obviously there were other considerations -- to which respondent is not privy --
factored in by the Board in its decision. Lastly, petitioners asserted that this being a suit against the State, it
must be dismissed outright as there was no allegation in the complaint that the State had given its consent
to be sued in this case.

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

On March 5, 2003, the trial court issued an Order[9] granting in part the motion for summary
judgment. Citing petitioners admission in the Answer that Administrator Sevilla, as an act of good faith,
offered in behalf of MARINA to shoulder the actual expenses incurred for the works done on the premises
based on their request, as well as the other proofs/official receipts submitted by respondent and the
January 23, 2002, May 13, 2002 and July 1, 2002 letters of Administrator Sevilla who promised or at least
gave the impression that respondent will be reimbursed by MARINA of the amount of P1,555,170.40, the
trial court ruled that summary judgment for the said claim is proper.Accordingly, the trial court ordered:

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

SO ORDERED.[10]
Respondent then moved to set the case for pre-trial, which was granted. Meanwhile, petitioners filed a
motion for reconsideration[11] of the March 5, 2003 Order arguing that while admittedly they had offered to
pay the respondent reimbursement for the alterations/renovations made on its building as shown by the
afore-mentioned letters of Administrator Sevilla, petitioners did not admit that such alterations/renovations
which respondent claims to have been prosecuted on the MARC Building were actually made thereon and
that such changes were in fact in accordance with the plans prepared and provided for by MARINA.
Petitioners stressed that these factual matters are still to be determined which can only be done through a
full-blown trial; the reimbursable amount being also subject to verification since petitioners have not yet
been given the opportunity to independently confirm such amount. Further, it was contended that
respondents submission of accomplishment reports on the alterations/renovation works it claims to have
been done and the amount it allegedly expended do not automatically establish petitioners liability for the
same. Petitioners subsequently requested that the scheduled pre-trial be cancelled pending resolution of
their motion for reconsideration of the March 5, 2003 Order.[12]

In its Order[13] dated June 30, 2003, the trial court denied petitioners motion for reconsideration, as
follows:

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

xxxx

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

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

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

SO ORDERED.[14]

The Office of the Solicitor General received a copy of the above order on July 14, 2003. On July 18, 2003,
the Solicitor General filed a notice of appeal. Said notice of appeal was later withdrawn upon manifestation
by the Solicitor General that since the March 5, 2003 Order is a partial summary judgment, the same is
interlocutory and not appealable, without prejudice to petitioners availment of the appropriate remedy from
the said ruling.[15]
On the scheduled pre-trial hearing on July 3, 2003, counsel for petitioners appeared but without a special
power of attorney as directed in the Notice of Pre-Trial. On motion of the respondent, the trial court
declared petitioners as in default and allowed the respondent to present its evidence ex-
parte.[16] Petitioners filed a motion for reconsideration claiming that the scheduled pre-trial was premature
considering the pendency of their motion for reconsideration of the March 5, 2003 Order, and invoking the
liberal policy on setting aside default orders. The trial court, however denied said motion for
reconsideration.[17]

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

On December 1, 2003, the trial court rendered its Decision[19] upholding the March 5, 2003 order granting
the prayer for reimbursement but denying the rest of respondents claims. The dispositive portion thereof
reads:

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

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

No pronouncement as to costs.

SO ORDERED.[20]

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

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

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

authenticity, genuineness and due execution of the documents (e.g., receipts) relative to the
renovation, suffice it to note that plaintiff-appellee had offered its evidence on 13 December
2002 or three (3) months prior to the issuance of the contested order. Yet, defendant-
appellant has never lift its finger to challenge the authenticity, genuineness, and due
execution of the said documents. For this failure, it is established beyond cavil that there is
no genuine issue as to any material fact warranting thereby the issuance of a summary
judgment.[23]
Hence, this petition raising the sole issue of whether the CA was correct in sustaining the trial courts order
granting the motion for partial summary judgment thereby dispensing with a full trial on respondents claim
for reimbursement of P1,555,170.40, the amount allegedly advanced by respondent for the
repair/renovation works on its building. With the previous dismissal by the CA of respondents appeal and its
petition for certiorari in this Court, the present petition is thus confined to the propriety of the trial courts
partial summary judgment insofar as the aforesaid claim for reimbursement.

We find the petition meritorious.

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

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

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

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

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

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

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

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

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

x x x x[28]

Furthermore, petitioners averred in their Opposition to Plaintiffs Motion for Summary Judgment in
Favor of Plaintiff:

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

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

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

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

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

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

It must be stressed that trial courts have limited authority to render summary judgments and may
do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded by the
parties are disputed or contested, proceedings for summary judgment cannot take the place of trial.[31]As
already stated, the burden of demonstrating clearly the absence of genuine issues of fact rests upon the
movant, in this case the respondent, and not upon petitioners who opposed the motion for summary
judgment. Any doubt as to the propriety of the rendition of a summary judgment must thus be resolved
against the respondent. But here, the partial summary judgment was premised merely on the trial courts
hasty conclusion that respondent is entitled to the reimbursement sought simply because petitioners failed
to point out what particular works were not done or implemented not in accordance with MARINAs
specifications after demands were made by respondent and the filing of the complaint in court. Precisely, a
trial is conducted after the issues have been joined to enable herein respondent to prove, first, that
repair/renovation works were actually done and such were in accordance with MARINAs request,
and second, that it actually advanced the cost thereof by paying the contractors; and more importantly, to
provide opportunity for the petitioners to scrutinize respondents evidence, cross-examine its witnesses and
present rebuttal evidence. Moreover, the trial court should have been more circumspect in ruling on the
motion for summary judgment, taking into account petitioners concern for judicious expenditure of public
funds in settling its liabilities to respondent.

The partial summary judgment rendered under the trial courts Order dated March 5, 2003 being a
nullity, the case should be remanded to saidcourt for the conduct of trial on the issue of the reimbursement
of expenses for repair/renovation works being claimed by the respondent. For this purpose, petitioners shall
be afforded fair opportunity to scrutinize the respondents evidence, cross-examine its witnesses and
present controverting evidence. It is to be noted that the partial summary judgment was rendered before
petitioners were declared non-suited. Petitioners had promptly challenged the validity of the default order
and even sought an injunction against the ex-parte presentation of evidence by the respondent; however,
the CA did not act on the matter until the rendition of the trial courts December 1, 2003
Decision. Substantial justice in this instance can best be served if a full opportunity is given to both parties
to litigate their dispute and submit the merits of their respective positions.[32]

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

No costs.

SO ORDERED.
 Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

THE HEIRS OF NICOLAS S. CABIGAS, G.R. No. 175291

NAMELY: LOLITA ZABATE CABIGAS,
ANECITA C. CANQUE, DIOSCORO CABIGAS,
FIDEL CABIGAS, and RUFINO CABIGAS,
Petitioners,

- versus -
Present:
MELBA L. LIMBACO, LINDA L. LOGARTA,
RAMON C. LOGARTA, HENRY D. SEE, CARPIO, J.,
FREDDIE S. GO, BENEDICT Y. QUE, AWG Chairperson,
DEVELOPMENT CORPORATION, PETROSA LEONARDO-DE CASTRO,*
DEVELOPMENT CORPORATION, and BRION,
UNIVERSITY OF CEBU BANILAD, INC., PERALTA,** and
Respondents. PEREZ, JJ.

Promulgated:

July 27, 2011

x------------------------------------------------------------------------------------x

DECISION

BRION, J.:

We resolve the petition for review on certiorari[1] filed by Lolita Cabigas, Anecita Canque, Dioscoro
Cabigas, Fidel Cabigas, and Rufino Cabigas (petitioners), heirs of Nicolas S. Cabigas, to reverse and set
aside the resolutions of the Court of Appeals (CA) in CA-G.R. CV No. 01144 dated May 31, 2006[2] and
October 4, 2006,[3] dismissing their ordinary appeal for being the wrong recourse.

THE FACTS
On February 4, 2003, the petitioners filed a complaint for the annulment of titles of various parcels
of land registered in the names of Melba Limbaco, Linda Logarta, Ramon Logarta, Eugenio Amores, New
Ventures Realty Corporation, Henry See, Freddie Go, Benedict Que, AWG Development Corporation (AWG),
Petrosa Development Corporation (Petrosa), and University of Cebu Banilad, Inc. (UCB) with the Regional
Trial Court (RTC) of Cebu City, docketed as Civil Case No. 28585.
 The complaint alleged that petitioner Lolita Cabigas and her late husband, Nicolas Cabigas,
purchased two lots (Lot No. 742[4] and Lot No. 953[5]) from Salvador Cobarde on January 15, 1980. Cobarde
in turn had purchased these lots from Ines Ouano[6] on February 5, 1948.

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

When the airport expansion project fell through, respondents Melba Limbaco, Ramon Logarta, and
Linda Logarta, the legal heirs of Ouano, succeeded in reclaiming title to the two lots through an action for
reconveyance filed with the lower court;[8] the titles over these lots were thereafter registered in their
names.[9] They then subdivided the two lots[10] and sold them to New Ventures Realty Corporation, Eugenio
Amores, Henry See, Freddie Go, Benedict Que, Petrosa, and AWG. AWG, in turn, sold one of the parcels of
land to UCB. All the buyers registered the titles over their respective lots in their names.

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

THE RTC RESOLUTION

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

As the RTC explained, the unregistered sale of the lots by Ouano to Cobarde was merely an in
personam transaction, which bound only the parties. On the other hand, the registered sale between Ouano
and the National Airports Corporation, a buyer in good faith, was an in rem transaction that bound the
whole world. Since Cobardes rights to the properties had already been cut off with their
registration in the name of the National Airports Corporation, he could not sell any legal
interest in these properties to the Cabigas spouses. Hence, under the Torrens system, the
petitioners are strangers to the lots and they had no legally recognized interest binding it in rem that the
courts could protect and enforce against the world.[12]
The petitioners filed a notice of appeal to question the RTC resolution. In response, respondents
AWG, Petrosa, and UCB filed a motion to dismiss the appeal, claiming that the petitioners raised only
questions of law in their appeal; thus, they should have filed an appeal by certiorari with the Supreme
Court, and not an ordinary appeal with the appellate court.
 THE COURT OF APPEALS RESOLUTIONS

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

However, the CA remanded the case to the RTC for further proceedings on the Motion to Set Case
for Hearing on Special and Affirmative Defenses filed by respondents Henry See, Freddie Go, and Benedict
Que.

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

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

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

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

(2) The paramount and overriding considerations of substantial justice and equity justify the reversal
and setting aside of the questioned resolutions.

THE RULING

We AFFIRM the assailed CA resolutions.

Petitioners availed of the wrong mode of appeal

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

Section 2. Modes of appeal.

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

(b) Petition for review. The appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for review
in accordance with Rule 42.

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

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

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

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

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

a) Whether or not the National Airports Corporation acted with good faith when it purchased the
properties from Ouano;
b) Whether the heirs of Ouano acted with good faith in recovering the properties from the National
Airports Corporation; and
c) Whether the subsequent buyers of the properties acted with good faith in purchasing the
properties from the heirs of Ouano.

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

We quote the pertinent portions of the RTC decision:

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

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

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

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

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

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

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

As astutely observed by the CA, the RTC resolution merely collated from the pleadings the facts that
were undisputed, admitted, and stipulated upon by the parties, and thereafter ruled on the legal issues
raised by applying the pertinent laws and jurisprudence on the matter. In other words, the RTC did not
resolve any factual issues, only legal ones.

When there is no dispute as to the facts, the question of whether or not the conclusion drawn from
these facts is correct is a question of law.[17] When the petitioners assailed the summary judgment, they
were in fact questioning the conclusions drawn by the RTC from the undisputed facts, and raising a
question of law.

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

Rendition of summary judgment was proper

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

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

Summary or accelerated judgment is a procedural technique aimed at weeding out sham

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

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

We disagree with the petitioners.

 At the outset, we note from the respondents pleadings that several respondents[20] denied that the
sale between Ouano and Cobarde ever occurred. It would, therefore, appear that a factual issue existed
that required resolution through a formal trial, and the RTC erred in rendering summary judgment.

A closer examination of the parties submissions, however, makes it apparent that this is not a
genuine issue of fact because, as will be discussed below, the petitioners do not have any legally
enforceable right to the properties in question, as their predecessors-in-interest are not buyers in good
faith.

i. Cabigas spouses are not buyers in good faith

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

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

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

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

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

Article 1544. If the same thing should have been sold to different vendees, the ownership
shall be transferred to the person who may have first taken possession thereof in good faith,
if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith
was first in the possession; and, in the absence thereof, to the person who presents the
oldest title, provided there is good faith.

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

property is the good or bad faith not of the seller, but of the buyer; specifically, we are tasked to determine
who first registered the sale with the Registry of Property (Registry of Deeds) in good faith.

As accurately observed by the RTC, the petitioners, in their submissions to the lower court, never
imputed bad faith on the part of the National Airports Corporation in registering the lots in its name. This
oversight proves fatal to their cause, as we explained in Spouses Chu, Sr. v. Benelda Estate Development
Corporation:

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

Since the petitioners never alleged that the National Airports Corporation acted with bad faith when
it registered the lots in its name, the presumption of good faith prevails. Consequently, the National
Airports Corporation, being a registrant in good faith, is recognized as the rightful owner of the lots in
question, and the registration of the properties in its name cut off any and all prior liens, interests and
encumbrances, including the alleged prior sale to Cobarde, that were not recorded on the titles. Cobarde,
thus, had no legal rights over the property that he could have transferred to the Cabigas spouses.
 Since the Cabigas spouses have no legally recognizable interest in the lots in question, it follows that
the petitioners, who are subrogated to the rights of the former by virtue of succession, also have no legally
recognizable rights to the properties that could be enforced by law. The petitioners clearly have no cause of
action against the respondents, and the RTC correctly dismissed their complaint for annulment of title.

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

SO ORDERED.