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Civil Law and Rem Law-Macedonio vs. Ramo
Civil Law and Rem Law-Macedonio vs. Ramo
i>upreme lourt
;iManila
SECOND DIVISION
-versus - Present:
DECISION
This Petition for Review on Certiorarl seeks to set aside the July 20, 2010
2
Order of the Regional Trial Court of Baguio City (Baguio RTC), Branch 6, in
Civil Case No. 7150-R, entitled "Vilma Macedonio, Plaintiff, versus Catalina
Ramo, Yolanda S Marquez, Sps. Roel and Ophelia Pedro, Sps. Joeffry and Eliza
Balanag, and BPI Family Savings Bank, Inc., Defendants," which dismissed Civil
Case No. 7150-R withprejudice~t't/l
Factual Antecedents
During the course of the proceedings, the parties mutually agreed to settle.
Thus, the trial court set the case for further proceedings on November 11, 2005,
but on said date, the parties were unable to submit a compromise agreement. As a
result, the trial court in an Order5 of even date dismissed Civil Case No. 5703-R
for failure to prosecute, to wit:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the
latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law.
4
Rollo, pp. 70-75.
Id. at 78; penned by Presiding Judge Fernando Vil Pamintuan.
Decision 3 G.R. No. 193516
in the last hearing that they will submit their compromise agreement. For failure
to comply, this case is hereby dismissed for failure to prosecute.
IT IS SO ORDERED. 6
IT IS SO ORDERED.8
9
On August 16, 2006, the trial court issued still another Order, as follows:
Plaintiff is given until the end of this month of August, 2006 in order to
substantiate her Motion for Reconsideration, it appearing that she has been given
[since] November 24, 2005 up to the present, or for a period of almost NINE (9)
MONTHS to do the same.
IT IS SO ORDERED. 10
Meanwhile, it appears that Ramo was able to secure in her name a Sales
Patent, and on October 16, 2006, a certificate of title (Katibayan ng Orihinal na
11
Titulo Big. P-3535 or OCT P-3535) over the subject property.
12
The trial court issued yet another Order on October 23, 2006, viz:
IT IS SO ORDERED~ at/'
6
Id.
7
Id. at 81.
Id.
9
Id.; Annex "N" of the Petition; no page has been assigned, but the Order is found on the page immediately
following page 81.
JO Id.
11
Id. at 83-84.
12
Id. at 82.
13 Id.
Decision 4 G.R. No. 193516
In June 2007, Ramo caused the subject property to be subdivided into three
14
lots, which she then transferred to herein respondents, spouses Roel and Ophelia
Pedro (the Pedros), Yolanda S. Marquez (Marquez), and spouses Joeffry and Elisa
Balanag (the Balanags). The transfer to the Pedros and Marquez were through
Acknowledgment Trusts, 15 whereby Ramo admitted that she was not the owner of
the lots but merely held them in trust for the true owners - the Pedros and
Marquez. On the other hand, the transfer of the remaining lot to the Balanags was
through a deed of sale. 16 No part of the subject property was transferred to
petitioner.
On February 11, 2008, petitioner filed a Motion 17 praying that the trial
court issue an order directing the parties to comply with their oral agreement for
Ramo to return petitioner's money - or the ,P850,000.00 advance she made.
Ramo opposed the motion, arguing that the subject of the motion has become
moot and academic for petitioner's failure to file a motion for reconsideration of
the trial court's October 23, 2006 Order, and for failure of petitioner to comply
with her obligation to pay the balance of the purchase price even after title to the
property was presented in court. On the scheduled hearing of the motion, or on
March 24, 2008, the trial court issued an Order 18 stating-
IT IS SO ORDERED. 19
On June 22, 2009, it appears that Ramo agreed in open court to pay
petitioner and thus settle the case, whereupon the trial court issued an Order,20
which reads as follows:
The parties have talked to each other in order for the plaintiff to be paid.
IT IS SO ORDERED.2 1
Thereafter, petitioner received a June 29, 2009 letter22 signed by Ramo and
her counsel, admitting that Ramo received the total amount of ,P850,000.00 as
downpayment for the subject property, but proposing to return to petitioner o~$
14
Id. at 86-88.
15
Id. at 89, 92.
16
Id. at 96-97.
17
ld.atl07-109.
18
Id. at 114.
19 Id.
20
Id. at 129.
21 Id.
22
Id. at 130.
Decision 5 G.R.No.193516
IT IS SO ORDERED.26
It appears that to this date, no action has been taken on the protest.
On April 21, 2010, petitioner filed with the Baguio RTC another civil case
against respondents for specific performance, annulment of documents and titles~t/Ot?'t?f
23
Id. at 131, unpaginated.
24
Id. at 134-136.
25
Id. at 145.
26 Id.
27
Id. at 160.
28
Id. at 146-159.
Decision 6 G.R. No. 193516
with damages. Docketed as Civil Case No. 7150-R and assigned to Branch 6,
petitioner prayed in the Complaint29 that the trial court: 1) rescind and nullify the
trust and sale agreements between Ramo and the other individual respondents; 2)
annul the certificates of title issued in favor of the Pedros, Marquez, and the
Balanags; 3) annul the mortgage contract subsequently executed by and between
the Balanags and respondent BPI Family Savings Bank, Inc. (BPI Family Bank)
covering the portion sold to the former; 4) nullify the subdivision plan covering
the property as it did not segregate the portion sold to petitioner, and thereafter
order that a new subdivision plan be made to segregate the 240 square meters sold
to petitioner; 5) in the alternative, rescind petitioner and Ramo's agreements and
order a refund of petitioner's payments with interest; 6) award moral and
exemplary damages in the total amount of Pl00,000.00, and attorney's fees and
litigation expenses in the total amount of Pl 00,000.00.
Ramo filed her answer with motion to dismiss the case, claiming that in
filing the case, petitioner violated the rule against forum-shopping since there had
already been a prior terminated case (Civil Case No. 5703-R) and a pending
Protest with the DENR. To this, petitioner filed her comment and opposition,
arguing that since Civil Case No. 5703-R was not decided on the merits and no
trial was conducted, Civil Case No. 7150-R is not barred. 30
On July 20, 2010, the trial court issued the assailed Order dismissing Civil
Case No. 7150-R with prejudice due to: a) violation of Section 5, Rule 7 of the
1997 Rules of Civil Procedure31 (1997 Rules), that is, for failure to inform the
court of the existence of Civil Case No. 5703-R and the DENR Protest; b) forum-
shopping; and c) litis pendentia under Section 1(e), Rule 16 of the 1997 Rules. 32
The trial court held that petitioner filed multiple cases based on the same cause of
action, although with different prayers for relief; that while Civil Case No. 5703-R
was for rescission and Civil Case No. 7150-R was for specific performance and,~
//
29
Id. at 161-174.
30
Id. at 39-40.
31
Sec. 5. Certification against forum shopping.
The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is
pending therein; (b) ifthere is such other pending action or claim, a complete statement of the present status
thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint
or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-
compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.
32
Rule 16 - MOTION TO DISMISS
Section 1. Grounds.
xx xx
(e) That there is another action pending between the same parties for the same cause;
Decision 7 G.R. No. 193516
annulment of documents and titles, both cases are premised on the same cause of
action - Ramo's purported wrongful conduct in connection with the cancelled sale
of the subject property; that rescission and specific performance could not be
prayed for in two separate cases without violating the rule against splitting a cause
of action; and that the pending DENR Protest which seeks to nullify the sales
patent and certificates of title issued to Ramo and the other individual respondents
is identical to petitioner's cause of action in Civil Case No. 7150-R for annulment
of documents and titles.
Petitioner moved to reconsider, but in an August 16, 2010 Order, 33 the trial
court stood its ground. Thus, petitioner instituted this direct recourse.
In a July 29, 2013 Resolution, 34 the Court resolved to give due course to the
Petition.
Issues
xx xx
CIVIL CASE NO. 5703-R AND CIVIL CASE NO. 7150-R DOES
(SIC) NOT INVOLVE THE SAME CAUSE OF ACTION
Petitioner's Arguments
In her Petition and Reply, petitioner maintains that the first case - or Civ~#'
36
33
Rollo, pp. 55-58.
34
Id. at 236-237.
35
Id. at 27.
36
Id. at221-223.
Decision 8 G.R. No. 193516
Case No. 5703-R - cannot bar the filing of the second case - or Civil Case No.
7150-R, because while the first case was terminated, it was not tried on the merits,
and was dismissed solely for failure of the parties to submit their compromise
agreement. For this reason, petitioner argues that the dismissal of the first case
without prejudice left the parties to freely litigate the matter in the second action as
though the first case had not been commenced. 37
Next, petitioner concedes that while she failed to inform the trial court of
the first case and her DENR Protest, it was not her intention to conceal the
existence of these cases; she simply believed that the causes of action in the
second case and the Protest were different from those in the first. Petitioner adds
that the DENR Protest is not a proceeding that bars the second case she filed
against Ramo, since it is not a judicial action and it involves a different cause of
action, that is, reversion of the property due to Ramo's fraud and
misrepresentation in filing her application for a sales patent, which does not affect
the causes of action in Civil Case No. 7150-R.
Petitioner thus prays that the assailed dispositions of the trial court be
reversed and that the case be remanded for further proceedings and trial on the
merits.
Respondents' Arguments
Respondent BPI Family Bank, on the other hand, argues in its Comment39
that petitioner waived and relinquished her rights over the subject property by
filing the action for rescission, or Civil Case No. 5703-R; this being the case,
petitioner could only recover what she paid Ramo, which leaves Ramo's sale of a
portion of the subject property to the Balanags valid and binding. Consequently,
the mortgage executed between the Balanags and BPI Family Bank should not be
disturbed as well. It adds that assuming petitioner has a cause of action to recover
payments made to Ramo, she cannot seek specific performance of their sale
agreement; by filing the rescission case first, petitioner waived her rights and is
now precluded from resorting to an action for specific performance. Finally, it
maintains that the trial court correctly dismi~~ Cjy_il Case No. 7150-R on the
ground of splitting a single cause of action/V"UdU
37
Citing Spouses Cruz v. Spouses Caraos, 550 Phil. 98 (2007).
38
Rollo, pp. 182-192.
39
Id.at211-214.
Decision 9 G.R. No. 193516
Our Ruling
The trial court in Civil Case No. 5703-R committed grave abuse of
discretion in terminating or dismissing the case for failure of the parties to submit a
40
compromise agreement. In Goldloop Properties, Inc. v. Court of Appeals, the
Court held that dismissing the action without allowing the parties to present
evidence and after ordering them to compromise is tantamount to deprivation of
due process, and the "dismissal of an action for failure to submit a compromise
41
agreement, which is not even required by any rule, is definitely a harsh action."
The Court likewise held therein that ''the fact that negotiations for a compromise
agreement persisted even up to the time of the dismissal of the case strongly
demonstrates their earnest efforts to abide by the trial court's order to settle their
dispute amicably";42 thus, "dismissing an action on account of the failure of the
parties to compromise, would be to render nugatory the pronounced policy of the
law to encourage compromises, and thus open the floodgates to parties refusing to
agree upon an amicable settlement by simply railroading their opposing parties'
position, or even defeating the latter's claim by the expedient of an outright
dismissal."43
It is understandable why the trial court in Civil Case No. 5703-R should not
have precipitately dismissed the case: petitioner sought a refund of her payments
but evidently, Ramo was not willing to pay her. Thus, the compulsion for Ramo
to pay what she owed could only come from the trial court, after trial on the merits
is conducted. Indeed, even as Ramo made a judicial admission of her liability to
petitioner - that is, in open court on June 22, 2009 - and an extrajudicial
admission thereafter - via her June 29, 2009 letter which she and her counsel
signed - she refuses to pay petitioner what she owes. It is thus clear that Ramo
would by all means avoid all efforts at compromising the case in earnest, which
should have prompted the court to enter trial and cancel all efforts at settlement,
which Ramo used effectively to delay her final reckoning. Even as Ramo's
actions patently revealed her intentions, the trial court in Civil Case No. 5703-R
did not see through her stratagem.
For the same reasons, the Court finds that the dismissal of Civil Case No.
7150-R was unwarranted. It is true that while it was incumbent for petitioner to
have informed the trial court of Civil Case No. 5703-R and the pending DENR
Protest, this Court is inclined to forego petitioner's failure to abide by the
requirements of the 1997 Rules regarding certifications against forum-shopping, ~~
40
G.R. No. 99431, August 11, 1992, 212 SCRA 498.
41
Id. at 508.
42 Id.
43 Id.
Decision 10 G.R. No. 193516
favor of deciding the case on the basis of merit, seeing, as the Court does, that a
rigid interpretation of the 1997 Rules would result in substantial injustice to
petitioner. The circumstances require that substance must prevail over form,
keeping in mind, as the Court has held countless times, that procedural rules are
mere tools designed to facilitate the attainment of justice; their application should
be relaxed when they hinder instead of promote substantial justice. Public policy
dictates that court cases should as much as possible be resolved on the merits and
not on technicalities. 44 Besides, "the Rules of Civil Procedure on forum shopping
are not always applied with inflexibility."45
More to the point, "the hallowed office and cardinal objective of the Rules
[is] to provide, at each possible instance, an expeditious and full resolution of
issues involving the respective rights and liabilities of the parties under substantive
46
law." "[T]he interests of truth and justice are better served where the court,
giving due consideration to technical objections, goes deeper into the basic legal
merits of the controversy and concentrates itself on the fundamental principles of
fairness and square dealing which always outweigh technical considerations."47
ANTECEDENTS
Respondent CATALINA RAMO was the applicant under a Townsite
Sales Application (TSA) with the Department of Environment and Natural
Resources-Cordillera Administrative Region (DENR-CAR) for the award of a
637 square meters [sic] lot at Res. Sec. "A", Baguio City.
The transaction between them was not consummated and for which
reason, the Petitioner fded several cases against Respondent Catalina
Ramo. 48 (Emphasis supplied)
44
Mid-Islands Power Generation Corporation v. Court ofAppeals, G.R. No. 189191, February 29, 20 I2, 667
SCRA 342, 354-355; Aneco Realty and Development Corporation v. Landex Development Corporation,
582 Phil. 183, 193 (2008); Penoso v. Dona, 549 Phil. 39, 46-47 (2007); Metro Rail Transit Corporation v.
Court of Tax Appeals, 507 Phil. 539, 543-545 (2005); Al-Amanah Islamic Investment Bank of the
Philippines v. Celebrity Travels and Tours, Inc., 479 Phil. 1041, I 052 (2004).
45
London v. Baguio Country Club Corporation, 439 Phil. 487, 492 (2002).
46
Spouses Valenzuela v. Court ofAppeals, 416 Phil. 289, 300 (2001).
47
People v. Fuentebella, 188 Phil. 647, 659-660 (1980).
48
Rollo, pp. 182-183.
Decision 11 G.R. No. 193516
alternative in her Complaint in Civil Case No. 7150-R. At the very least, this is
what she is entitled to, including interest and attorney's fees for having been
compelled to litigate. The trial court in Civil Case No. 7150-R should appreciate
petitioner's cause this much. Indeed, if the trial court felt at any point that the
DENR Protest should substantially affect the outcome of the case before it and
that it should give deference to the better judgment of the DENR, it could restrict
itself to petitioner's alternative prayer for a refund.
Given the foregoing, if justice is to be truly served, the trial court should not
have dismissed Civil Case No. 7150-R.
Nonetheless, by filing a Protest with the DENR and claiming that Ramo is
guilty of fraud and misrepresentation in filing her application for a sales patent,
and prodding the DENR to initiate reversion proceedings so that she may apply
for, bid, and acquire the property, petitioner is deemed to have admitted that Ramo
is not the owner of the subject property, and was not so when the same was sold to
her. This being the case, petitioner concedes that her purchase of the property is
illegal as the same belongs to the State; thus, her only recourse is to obtain a
refund of what she paid.
1. The assailed July 20, 2010 and August 16, 2010 Orders of the Regional
Trial Court of Baguio City, Branch 6, in Civil Case No. 7150-R are SET ASIDE;
SO ORDERED.
ij«~~
MARIANO C. DEL CASTILLO
Associate Justice
Decision 12 G.R. No. 193516
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
cl ~.··
AR~J.':Ji~~ lh_
Associate Justice
BIENVENIDO L. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
Decision 13 G.R. No. 193516
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.