VILMA QUINTOS, REPRESENTED BY HER ATTORNEY-IN-FACTS FIDEL I. QUINTOS, JR., ET parents bequeathed the property.

the property. Subsequent transfer of the siblings’ interest in favor

AL. VS. PELAGIA I. NICOLAS, ET AL. of respondent spouses Candelario was upheld.
G.R. No. 210252. June 16, 2014

FACTS: Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and CA: upheld lower court decision and held that since the property is co-owned by the
respondents Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, plaintiffs- appellants, ( 3/10 undivided interest) and defendants-appellees Spouses
Gilberto Ibarra, and the late Augusto Ibarra are siblings. Their parents, Bienvenido and Candelarios (7/10 undivided interest) and considering that plaintiffs-appellants had
Escolastica Ibarra, were the owners of the subject property, a 281 sqm. parcel of land already constructed a 3-storey building at the back portion of the property, partition
situated along Quezon Ave., Poblacion C, Camiling, Tarlac, covered by TCT No. is in order, in accord with the subdivision plan.
318717.
ISSUES:
The deceased parents left their 10 children ownership over the subject property. In 1. Whether or not the petitioners were able to prove ownership over the property;
2002, respondent siblings brought an action for partition against petitioners. The case 2. Whether or not the respondents’ counterclaim for partition is already barred by
was docketed as Civil Case No. 02-52 and was raffled to the RTC at Camiling, Tarlac laches
but was later on dismissed as neither of the parties appeared and appealed. or res judicata; and
3. Whether or not the CA was correct in approving the subdivision agreement as basis
Respondent siblings instead resorted to executing a Deed of Adjudication to transfer for the partition of the property.
the property in favor of the 10 siblings. As a result, TCT No. 318717 was canceled and
TCT No. 390484 was issued in the names of the 10 heirs of the Ibarra spouses. The HELD: PETITION IS PARTLY MERITORIOUS.
siblings sold their 7/10 undivided share over the property in favor of their co-
respondents, the spouses Recto and Rosemarie Candelario by virtue of a Deed of Petitioners were not able to prove equitable title or ownership over the property.
Absolute Sale and Agreement of Subdivision, and the title was partially cancelled as a Quieting of title is a common law remedy for the removal of any cloud, doubt, or
result. uncertainty affecting title to real property.

Petitioners filed a complaint for Quieting of Title and Damages against respondents
wherein they alleged that during their parents’ lifetime, the couple distributed their
real and personal properties in favor of their 10 children. Upon distribution,
petitioners alleged that they received the subject property and the house constructed
thereon as their share. They had been in adverse, open, continuous, and
uninterrupted possession of the property for over 4 decades and are allegedly entitled
to equitable title. Participation in the execution of the aforementioned Deeds was
denied.
Respondents, on the other hand, countered that petitioners’ cause of action was
already barred by estoppel when in 2006, one of petitioners offered to buy the 7/10
undivided share, which is an admission petitioners’ part that the property is not
entirely theirs. The Ibarras allegedly mortgaged the property but because of financial
constraints, respondent spouses Candelario had to redeem the property. Not having
been repaid, the Candelarios accepted their share in the subject property as payment.
Lastly, respondents sought, by way of counterclaim, the partition of the property.
RTC: dismissed petitioners’ complaint, as it did not find merit in
petitioners’ asseverations that they have acquired title over the property through
acquisitive prescription and noted there was no document evidencing that their
For an action to quiet title to prosper, two indispensable requisites must concur,
namely:
(1) the plaintiff or complainant has a legal or equitable title to or interest in the real
property subject of the action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on the
title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or efficacy.
In the case at bar, the CA correctly observed that petitioners’ cause of action must
necessarily fail mainly in view of the absence of the first requisite.
At the outset, it must be emphasized that the determination of whether or not
petitioners sufficiently proved their claim of ownership or equitable title is
substantially a factual issue that is generally improper for Us to delve into.In any event,
a perusal of the records would readily show that petitioners, as aptly observed by the
courts below, indeed, failed to substantiate their claim. Their alleged open,
continuous, exclusive, and uninterrupted possession of the subject property is belied
by the fact that respondent siblings, in 2005, entered into a Contract of Lease with the
Avico Lending Investor Co. over the subject lot without any objection from the
petitioners. Petitioners’ inability to offer evidence tending to prove that Bienvenido
and Escolastica Ibarra transferred the ownership over the property in favor of
petitioners is likewise fatal to the latter’s claim.
The cardinal rule is that bare allegation of title does not suffice. The burden of proof
is on the plaintiff to establish his or her case by preponderance of evidence.
Regrettably, petitioners failed to discharge the said burden. There is no reason to
disturb the finding of the RTC that all 10 siblings inherited the subject property from
Bienvenido and Escolastica Ibarra, and after the respondent siblings sold their aliquot
share to the spouses Candelario, petitioners and respondent spouses became co-
owners of the same.
The counterclaim for partition is not barred by prior judgment.
As to the issue of partition as raised by respondents in their counterclaim, the
petitioners countered that the action for partition has already been barred by res
judicata.
The Court had the occasion to rule that dismissal with prejudice satisfies one of the
elements of res judicata. It is understandable why petitioners would allege res judicata
to bolster their claim. However, dismissal with prejudice under Rule 17, Sec. 3 of the
Rules of Court cannot defeat the right of a co-owner to ask for partition at any time,
provided that there is no actual adjudication of ownership of shares yet. This is
pertinent to Article 494 of the Civil Code which discusses how the law generally does
not favor the retention of co-ownership as a property relation, and is interested
instead in ascertaining the co-owners’specific shares so as to prevent the allocation
of portions to remain perpetually in limbo. Thus, the law provides that each co-owner
may demand at any time the partition of the thing owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-
owners under Art. 494 of the Civil Code, the latter must prevail. To construe otherwise
would diminish the substantive right of a co-owner through the promulgation of
procedural rules. Such a construction is not sanctioned by the principle, which is too
well settled to require citation, that a substantive law cannot be amended by a
procedural rule. Art. 494 is an exception to Rule 17, Sec. 3 of the Rules of Court to the
effect that even if the order of dismissal for failure to prosecute is silent on whether
or not it is with prejudice, it shall be deemed to be without prejudice.
This is not to say, however, that the action for partition will never be barred by res
judicata. There can still be res judicata in partition cases concerning the same parties
and the same subject matter once the respective shares of the co-owners have been
determined with finality by a competent court with jurisdiction or if the court
determines that partition is improper for co- ownership does not or no longer exists.
The counterclaim for partition is not barred by laches. We now proceed to
petitioners’second line of attack. According to petitioners, the claim for partition is
already barred by laches since by 1999, both Bienvenido and Escolastica Ibarra had
already died and yet the respondent siblings only belatedly filed the action for
partition, Civil Case No. 02-52, in 2002. And since laches has allegedly already set in
against respondent siblings, so too should respondent spouses Candelario be barred
from claiming the same for they could not have acquired a better right than their
predecessors-in-interest.
Laches is the failure or neglect, for an unreasonable and unexplained length of time,
to do that which––by the exercise of due diligence––could or should have been done
earlier. It is the negligence or omission to assert a right within a reasonable period,
warranting the presumption that the party entitled to assert it has either abandoned
or declined to assert it. The principle is a creation of equity which, as such, is applied
not really to penalize neglect or sleeping upon one’s right, but rather to avoid
recognizing a right when to do so would result in a clearly inequitable situation. As an
equitable defense, laches does not concern itself with the character of the
petitioners’ title, but only with whether or not by reason of the respondents’ long
inaction or inexcusable neglect, they should be barred from asserting this claim at all,
because to allow them to do so would be inequitable and unjust to petitioners.
As correctly appreciated by the lower courts, respondents cannot be said to have
neglected to assert their right over the subject property. They cannot be considered
to have abandoned their right given that they filed an action for partition. The fact
that respondent siblings entered into a Contract of Lease with Avico Lending Investor
Co. over the subject property is evidence that they are exercising rights of ownership
over the same.
The CA erred in approving the Agreement for Subdivision. There is merit, however, in
petitioners’ contention that the CA erred in approving the proposal for partition
submitted by respondent spouses. Art. 496, as earlier cited, provides that partition
shall either be by agreement of the parties or in accordance with the Rules of Court.
In this case, the Agreement of Subdivision allegedly executed by respondent spouses
Candelario and petitioners cannot serve as basis for partition for respondents
admitted that the agreement was a falsity and that petitioners never took part in
preparing the same. The "agreement" was crafted without any consultation
whatsoever or any attempt to arrive at mutually acceptable terms with petitioners. It,
therefore, lacked the essential requisite of consent. Thus, to approve the agreement
in spite of this fact would be tantamount to allowing respondent spouses to divide
unilaterally the property among the co-owners based on their own whims and
caprices.
GO v. Cruz
 On October 26, 1981, California Manufacturing Co., Inc. (hereinafter, simply,
California) brought an action in the Court of First Instance of Manila against Dante Go,
accusing him of unfair competition. Its complaint contained an application for
preliminary injunction commanding Dante Go to immediately cease and desist from
the further manufacture, sale and distribution of said products, and to retrieve those
already being offered for sale.
About two weeks later, however, or on November 12, 1981, California filed a
notice of dismissal with the Court without prejudice pursuant to Sec. 1, Rule 17 of the
Rules of Court. WHEREFORE, it is respectfully prayed that the above-entitled case be
considered dismissed without prejudice conformably with Sec. 1, Rule 17 of the Rules
of Court.
Four days afterwards, or on November 16, 1981, California received by
registered mail a copy of Dante Go's answer with counterclaim dated November 6,
1981, which had been filed with the Court on November 9, 1981. On November 19,
1981 a fire broke out at the Manila City Hall destroying among others the sala of Judge
Tengco and the records of cases therein kept, including that filed by California against
Dante Go.
On December 1, 1981, California filed another complaint asserting the same
cause of action against Dante Go, this time with the Court of First Instance at Caloocan
City. an ex parte restraining order directing "the defendant ... to immediately cease
and desist from the further manufacture, sale, promotion and distribution of
spaghetti, macaroni and other pasta products contained in packaging boxes and labels
under the name 'GREAT ITALIAN,' which are similar to or copies of those of the
plaintiff, and ... recall ... all his spaghetti, macaroni and other pasta products using the
brand, 'GREAT ITALIAN.'"
On the day following the rendition of the restraining order, Dante Go filed
the present petition for certiorari, etc. with this Court praying for its nullification and
perpetual inhibition. On December 11, 1981, this Court, in turn issued a writ of
preliminary injunction restraining California, Judge Cruz and the City Sheriff from
enforcing or implementing the restraining order and from continuing with the hearing
on the application for preliminary injunction. (to be restrained from proceeding with
the case for unfair competition)
Dante Go contends that the case filed against him by California in the Manila
Court remained pending despite California's notice of dismissal. According to him,
since he had already filed his answer to the complaint before California sought dismissal
of the action three (3) days afterwards, such dismissal was no longer a matter of right
and could no longer be effected by mere notice in accordance with Section 1, Rule 17
of the Rules of Court, but only on plaintiff s motion, and by order of the Court; hence,
the Caloocan Court acted without jurisdiction over the second action based on the same
cause. He also accused California of forum shopping, of selecting a sympathetic court
for a relief which it had failed to obtain from another.
ISSUE: WON THE FIRST CASE FILED BY CALIFORNIA WAS STILL PENDING SINCE THE SAID
NOTICE OF DISMISSAL WAS FILED BY THE LATTER 3 DAYS AFTER GO (DEFENDANT) FILED
HIS ANSWER
HELD: NO (SERVICE OF THE ANSWER DETERMINES THE RIGHT OF THE PLAINTIFF TO
CAUSE THE DISMISSAL OF THE COMPLAINT BY MERE NOTICE-NOT THE FILING THEREOF)
What marks the loss by a plaintiff of the right to cause dismissal of the action
by mere notice is not the filing of the defendant's answer with the Court (either
personally or by mail) but the service on the plaintiff of said answer or of a motion for
summary judgment. This is the plain and explicit message of the Rules. "The filing of
pleadings, appearances, motions, notices, orders and other papers with the court,"
according to Section 1, Rule 13 of the Rules of Court, means the delivery thereof to
the clerk of the court either personally or by registered mail. Service, on the other
hand, signifies delivery of the pleading or other paper to the parties affected thereby
through their counsel of record, unless delivery to the party himself is ordered by the
court, by any of the modes set forth in the Rules, i.e., by personal service, service by
mail, or substituted service.’
Here, California filed its notice of dismissal of its action in the Manila
Court after the filing of Dante Go's answer but before service thereof. Thus having
acted well within the letter and contemplation of the afore-quoted Section 1 of Rule
17 of the Rules of Court, its notice ipso facto brought about the dismissal of the action
then pending in the Manila Court, without need of any order or other action by the
Presiding Judge. The dismissal was effected without regard to whatever reasons or
motives California might have had for bringing it about, and was, as the same Section 1,
Rule 17 points out, "without prejudice," the contrary not being otherwise "stated in the
notice" and it being the first time the action was being so dismissed.
There was therefore no legal obstacle to the institution of the second action
in the Caloocan Court of First Instance based on the same claim. The filing of the
complaint invested it with jurisdiction of the subject matter or nature of the action. In
truth, and contrary to what petitioner Dante Go obviously believes, even if the first
action were still pending in the Manila Court, this circumstance would not affect the
jurisdiction of the Caloocan Court over the second suit. The pendency of the first
action would merely give the defendant the right to move to dismiss the second action
on the ground of auter action pendant or litis pendentia.
VALLANGACA vs. CA
FACTS:
 Rabanes made petitioner sign a deed of absolute sale the latter thinking it
was a mortgage contract. When the petitioners asked to redeem, Rabanes
refused and drove them out of his house. However, Petitioners were in
possession of said property and soo…
 Rabanes filed against petiioners 7 July 1971 an injunction suit.
 At the pretrial of said injunction suit, plaintiff Rabanes was advised by the
trial court that injunction was not the proper cause of action, because
injunction was merely an ancillary or provisional remedy to a main action. On
11 September 1972, another complaint entitled "Recovery of Possession"
(Civil Case No. 1139) 2 was lodged by Rabanes before the same court against
the same defendants in the action for injunction. Two (2) days later, or on 13
September 1972, the action for injunction was ordered dismissed by the trial
court.
 After trial in the second action involving recovery of possession, endered
judgment declaring plaintiff Rabanes (herein respondent) as the rightful
owner of the land and ordered the defendants (herein petitioners) to vacate
the same.
 From the above judgment, the defendant (petitioners) appealed to the Court
of Appeals affirming in toto the trial court's judgment, after finding no
reversible error therein.
 Petitioners, invoking the rule on "res judicata contend that the dismissal of
the "Injunction" case filed on 7 July 1971 by Rabanes against them, barred the
filing by Rabanes against them of the second action for "Recovery of
Possession." Petitioners maintain that the first suit, although styled as for
"Injunction", had for its actual primary purpose the recovery of the land in
dispute and, therefore, after its dismissal, no other action for recovery of
possession of the same land and against the same parties (herein petitioners)
could be pursued by the same complainant (Rabanes). In this connection,
petitioners would stress the fact that the dismissal of the suit for injunction
was not made without prejudice.
ISSUE: WON THE DISMISSAL WAS WITH PREJUDICE SO MUCH SO THA
HELD:
The requisites for res judicata have long been established. They are: (a) that
there be an earlier final judgment; (b) that the court which rendered it had jurisdiction
over the subject matter and the parties; (e) that it is a judgment on the merits; and (d)
that there is between the first and the second actions, Identity of parties, subject
matter and causes of action.
When the issue of res judicata is raised, at least two (2) actions before a
competent court are necessarily involved; one, still pending and the other, already
decided with finality. It is the final judgment that ends the controversy and precludes
a relitigation of the same causes of action.
Coming to the case at bar, it is to be noted that the first action for injunction
was filed on 7 July 1971, while the second action for recovery of possession was filed
on 11 September 1972. The order of dismissal of the injunction suit was issued on 13
September 1972. The defense of res judicata was invoked by herein petitioners (as
defendants) in their "Answer" dated 6 November 1972 in the action for Recovery of
Possession. 9 Given the above mentioned dates, it is clear that, while the Injunction
suit had not yet been disposed of with finality when the second action was filed, yet, at
the time the defendants interposed res judicata as an affirmative defense in their
"Answer" in the second action, the order of dismissal in the injunction case had already
become final. The dismissal order assumed the character of finality, there being no
showing that there was an appeal of the order when the "Answer" in the second action
was filed on 6 November 1972.
When the issue of res judicata is raised, at least two (2) actions before a
competent court are necessarily involved; one, still pending and the other, already
decided with finality. It is the final judgment that ends the controversy and precludes
a relitigation of the same causes of action.
Coming to the case at bar, it is to be noted that the first action for injunction
was filed on 7 July 1971, while the second action for recovery of possession was filed
on 11 September 1972. The order of dismissal of the injunction suit was issued on 13
September 1972. The defense of res judicata was invoked by herein petitioners (as
defendants) in their "Answer" dated 6 November 1972 in the action for Recovery of
Possession. Given the above mentioned dates, it is clear that, while the Injunction suit
had not yet been disposed of with finality when the second action was filed, yet, at
the time the defendants interposed res judicata as an affirmative defense in their
"Answer" in the second action, the order of dismissal in the injunction case had already
become final. The dismissal order assumed the character of finality, there being no
showing that there was an appeal of the order when the "Answer" in the second action
was filed on 6 November 1972.
The defense of res judicata was unavailing to the petitioners, because the
prior injunction suit against them, which was dismissed, was merely an ancillary and
not a main action pursuant to Sections 1 & 3, Rule 58 of the Rules of Court.
 From the above provisions, it can be clearly deduced that a writ of injunction
presupposes the pendency of a principal or main action. There being no main action
when the 7 July 1971 suit for injunction was filed, the latter was correctly dismissed.
Accordingly, there could be no prior judgment on the merits to speak of that resulted
in res judicata, from such dismissal of the injunction suit on 13 September 1972.
Petitioners would also like to impress that the dismissal order of 13
September 1972, in the injunction suit, not having been made without prejudice, bars
the second action for recovery of possession. (THUS WITH PREJUDICE DAW) Under
Sec. 2, Rule 17 of the Rules of Court which provides:
Sec. 2. Dismissal by order of the court.--Except as provided in the preceding
section, an action shall not be dismissed at the plaintiffs instance save upon order of
the court and upon such terms and conditions as the court deems proper. If a
counterclaim has been pleaded by a defendant prior to the service upon him of the
plaintiffs motion to dismiss, the action shall not be dismissed against the defendant's
objection unless the counterclaim can remain pending for independent adjudication
by the court. Unless otherwise specified in the order, a dismissal under this paragraph
shall be without prejudice.
A dismissal order is generally deemed to be without prejudice to the filing of
another action. The only instance when dismissal of an action is with prejudice is,
when the order itself so states. Stated differently, when the court issues, upon the
plaintiff's instance, a dismissal order that is silent as to whether it is with or without
prejudice, such as in the case at bar, the presumption is, that it is without prejudice.
(THE PRESUMPTION IS ALWAYS WITHOUT PREJUDICE IF DISMISSAL IS DONE UPON
PLAINTIFF’S INSTANCE) The cases cited by petitioners to support their contention
cannot be made to apply here as they deal with dismissal orders issued as a result of
plaintiff's failure to prosecute, and are covered by Section 3, and not Section 2, Rule 17
which provides:
Sec. 3. Failure to prosecute. — If plaintiff fails to appear at the time of the
trial, or to prosecute his action for an unreasonable length of time, or to comply with
these rules or any order of the court, the action may be dismissed upon motion of the
defendant or upon the court's own motion. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise provided by court.
Dismissals of actions (under Section 3) which do not expressly state whether
they are with or without prejudice are held to be with prejudice or on the merits.
EXECUTIVE SECRETARY v. GORDON
FACTS:
The aforesaid case was filed on June 29, 1998 because of respondent Gordons
apprehension that he would be removed and replaced as chairman of the (SBMA)
upon the change of administration from President Fidel V. Ramos to President Joseph
Ejercito Estrada. The petition was for prohibition to prevent Gordons ouster
as chairman of the SBMA on the ground that he had a fixed term of office of six years
which would not expire until February 10, 2004.
As respondent Gordon apprehended, upon assuming office on June 30, 1998,
President Joseph Ejercito Estrada issued Administrative Order No. 1, recalling,
withdrawing, and canceling the appointment of Richard J. Gordon as Chairman of the
Subic Bay Metropolitan Authority for a term of six (6) years, dated February 10, 1998,
by former President Fidel V. Ramos.
On July 1, 1998, instead of pressing his motion for a temporary restraining order,
respondent Gordon filed a Notice of Withdrawal of [his] Petition. This was done at 9:21
in the morning. At 11:30 A.M. of that same day, he filed a petition for certiorari and
prohibition in the Regional Trial Court of Olongapo City, where it was docketed as Civil
Case No. 255-0-98.
E.S filed a petition to declare respondents in contempt of court. The petition is
filed against respondents Richard Gordon and his counsel, the latter having filed the
case in the Olongapo City Regional Trial Court after filing a notice of withdraw the case
pending in this Court. Petitioners charge that, the act of respondents in filing two (2)
petitions involving the same issues before this Court and the Regional Trial Court at
Olongapo City, both pending, constitutes forum-shopping and contempt of court.
In its resolution, this Court granted respondents prayer for leave to withdraw
their petition in G.R. No. 134071, without prejudice to the disposition of the present
petition for contempt.
Respondents deny the charge against them. They contend that they in fact complied
with Rule 7, 5 of the Rules of Court by disclosing, in the certification of non-forum
shopping attached to their petition for certiorari and prohibition before the Regional
Trial Court of Olongapo City, the existence and subsequent withdrawal of their petition
for prohibition before this Court. They argue that, as held in PCGG v. Sandiganbayan,
it is neither forum-shopping nor defiance of a courts authority for a party to file a case
in the lower court, even after applying for a similar relief in the Supreme Court, where
such party had first sought the withdrawal of the case before the Supreme Court in
order to seek recourse before the lower court.
ISSUE: WON GORDON COMMITTED FORUM SHOPPING IN FILING THE SAME PETITION
WITH THE RTC WHILE DESPITE NOT WAITING THE OOUT COME OF THE NOTICE OF
WITHDRAWAL OF THE PETITION
HELD: NO HE DID NOT
In the case at bar, although respondent Gordon filed a petition for prohibition
before this Court and, after two days, filed substantially the same petition before the
Regional Trial Court of Olongapo City, the fact remains that (1) before filing his petition
in the Olongapo court he first filed a notice of withdrawal of his petition which this Court
later granted and (2) he withdrew his petition in this Court for the following reason:
Due, however, to the present policy of the Court requiring parties and their counsel
to adhere strictly to the hierarchy of courts and in order to obviate any technical
objection on this ground, petitioner has deemed it fit to withdraw, as he hereby
withdraws, the instant petition so that it may be filed in the proper court where it can
be ventilated on its merits.
No adverse decision had been rendered by this Court against respondent Gordon for
which reason he thought it proper to institute the second action in the trial court. The
situation he found himself in is similar to that in which a party, after filing a suit,
realizes he made a mistake because the court in which he has brought the case has no
jurisdiction. He, therefore, withdraws his action and refiles it in the proper forum. For,
indeed, the policy of this Court respecting the hierarchy of courts and consequently
prohibiting the filing of a petition in this Court in view of the concurrent jurisdiction
with the lower courts has been consistently observed in the absence of any compelling
reason for departing from such policy. It is clear from respondents actions and
explanation that they had no intention of disregarding court processes. They in fact
complied with Rule 7, 5 of the Rules of Civil Procedure.
This case is distinguishable from E. Razon, Inc. v. The Philippine Port Authority. In the E.
Razon case, petitioners, after filing a petition for certiorari with prayer for the issuance
of a temporary restraining order in the Supreme Court, filed an hour later a similar
petition before the Regional Trial Court and, having been assured of a favorable action
by the latter court, then sought the withdrawal of the petition in this Court. Petitioners
were found guilty of forum-shopping. The acts of petitioners constitute a clear case of
forum-shopping, an act of malpractice that is proscribed and condemned as trifling
with the courts and abusing their processes, it was held.
In contrast, in the case at bar, respondent Gordon filed a notice of withdrawal of his
petition before this Court prior to the filing of his petition in the Regional Trial Court as
the appropriate forum. While it is true he and his counsels did not wait for this Court
to act on the Notice of Withdrawal of Petition filed by them before filing substantially
the same petition in the Regional Trial Court, the Court understands their
situation. They were faced with a predicament: Administrative Order 1 ousting
respondent Gordon from the chairmanship of the SMBA had been issued and was in
fact about to be enforced hence a writ of preliminary injunction had to be obtained if
respondent Gordon was to remain in office.
SAMSON v. FIEL-MACARAIG
FACTS:
Petitioners Benedicta M. Samson and Marcial M. Samson obtained a loan amounting
to P10,000,000 from FEBTC. The loan was secured by a real estate mortgage over four
parcels of land located in Marikina City.
When petitioners failed to comply with the terms of the loan agreement, FEBTC filed
an application for extra-judicial foreclosure of the real estate mortgage with the Office
of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial Court (RTC) of Marikina
City. FEBTCs application was given due course, and a Notice of Sheriffs Sale was issued,
setting the public auction sale of the mortgaged properties. mortgaged real properties
were sold at public auction to FEBTC as the highest bidder, and a Certificate of Sale
was issued in favor of the bank.
Almost two years later, or on 4 June 2002, petitioners, together with Pepito, Zenaida,
Julieta, Edgardo, Rolando, Rempson, and Rocky, all surnamed Samson, filed a case for
Annulment of Extra-judicial Foreclosure and/or Nullification of Sale and the Certificates
of Title, plus Damages and with Prayer for a Temporary Restraining Order [TRO] and/or
Writ of Preliminary Injunction. They questioned the validity of the 29 June 2000 auction
sale for alleged lack of posting and publication requirements. Impleaded as defendants
in the case were BPI, FEBTC, Julia Cecily Coching-Sosito, in her capacity as Clerk of
Court and Ex-Officio Sheriff of the RTC of Marikina City, and the Register of Deeds of
Marikina City.
The Registrar of Deeds of Marikina City filed a Manifestation stating that the
certificates of title subject of the case had already been cancelled and the titles to the
mortgaged properties were consolidated in the name of BPI.
A hearing on the application for a TRO and/or Writ of Preliminary Injunction was held
on 2 August 2002. On 9 August 2002, private respondent BPI filed its Answer with
Counterclaim and Opposition. Public respondent Julia Cecily Coching-Sosito, the Clerk
of Court and Ex-Officio Sheriff of the RTC of Marikina City did not file an answer.
RTC of Marikina City, Branch 192, issued an Order denying plaintiffs application for
TRO and/or Writ of Preliminary Injunction. Six months later, or on 20 June 2003, the
RTC issued an Order dismissing the complaint for failure to prosecute for an
unreasonable length of time.
Plaintiffs filed a Motion for Reconsideration, but this was denied by the RTC
Plaintiffs, except Benedicta and Marcial Samson, filed a Notice of Appeal dated 27
January 2004. On 10 February 2004, Benedicta and Marcial Samson filed with the
Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Revised Rules of
Civil Procedure.
The Court of Appeals rendered judgment dismissing the petition.
On 4 February 2005, petitioners filed the instant petition for review before this Court.
Petitioners claim that the appellate court erred in dismissing the petition for certiorari
since public respondent RTC Judge Geraldine Fiel-Macaraig gravely abused her
discretion amounting to lack of jurisdiction when she dismissed the case (Complaint
for Annulment of Extra-judicial Foreclosure and/or Nullification of Sale and the
Certificates of Title, plus Damages and with Prayer for TRO and/or Writ of Preliminary
Injunction) for failure to prosecute despite the fact that one of the defendants, Ex-
Officio Sheriff Julia Cecily Coching-Sosito, had not yet submitted her responsive
pleading; hence, the issues were not yet joined and it was still premature for petitioners
to move for a pre-trial of the case. Petitioners also questioned the validity of the
second public auction for lack of posting and publication.
ISSUE: WON RTC IMPORPERLY DISMISSED THE CASE FOR FAILURE TO PROSECUTE DUE
TO THE FACT THAT ONE OF THE DEFENDANTS FAILED TO FILE ANSWER (RESPONSIVE
PLEADING)
HELD: NO
The RTC dismissed the case with prejudice for failure to prosecute for an unreasonable
length of time, pursuant to Section 3, Rule 17 of the Rules of Court which states, thus:
Section 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the
plaintiff fails to appear on the date of the presentation of his evidence in chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply
with these Rules or any order of the court, the complaint may be dismissed upon
motion of the defendant or upon the courts own motion, without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in a separate
action. This dismissal shall have the effect of an adjudication upon the merits, unless
otherwise declared by the court. (Emphasis supplied)
The RTC Order dated 20 June 2003 was a final judgment which disposed of the case
on the merits. This was even clarified in the subsequent RTC Order of 22 December
2003 (which denied petitioners motion for reconsideration) wherein the lower court
stated that: Therefore, the dismissal was with prejudice or a dismissal that had the
effect of adjudication upon the merits in accordance with Section 3, Rule 17 of the Rules
of Court.
The remedy to obtain reversal or modification of the judgment on the merits is
appeal. This is true even if the error, or one of the errors, ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject matter, or the
exercise of power in excess thereof, or grave abuse of discretion in the findings of fact
or of law set out in the decision. The availability of the right to appeal precludes
recourse to the special civil action for certiorari. The RTC Order subject of the petition
was a final judgment which disposed of the case on the merits; hence, it was a subject
for an ordinary appeal, not a petition for certiorari.
Even assuming that certiorari may lie, the Court still cannot grant the instant petition
because the petitioners failed to show that public respondent, in issuing the assailed
Orders, acted without or in excess of jurisdiction, or gravely abused her discretion
amounting to lack or excess of jurisdiction. As mentioned earlier, the RTC issued the
assailed Order in accordance with Section 3, Rule 17, in relation to Section 1, Rule 18 of
the Revised Rules of Civil Procedure. There is no showing that the RTC judge issued the
Order in a despotic or arbitrary manner, or that she was motivated by passion or
personal hostility against petitioners. Grave abuse of discretion implies such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other
words, where the power is exercised in an arbitrary manner by reason of passion,
prejudice, or personal hostility,[22] and it must be so patent or gross as to amount to
an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law.[23] Such is wanting in this case.
We agree with private respondent BPI that the failure of the Ex-Officio Sheriff to file her
Answer should not have prevented petitioners from performing their duty under
Section 1 of Rule 18. Petitioners could have availed of other remedies, such as the filing
of a motion to declare Ex-Officio Sheriff in default,[24] to avoid unnecessary delay in
court proceedings.
ELOISA MERCHANDISE v. TREBEL
FACTS
Respondent BDO extended a credit accommodation to petitioner Eloisa
Merchandising, Inc. (EMI) and it was secured by a real estate mortgage (REM) over its
properties. BDO filed an application for extrajudicial foreclosure before the Office of the
Ex-Officio Sheriff, RTC. A notice was issued setting the auction sale of the mortgaged
properties.
Hence, petitioners filed a complaint for the annulment of REM. BDO filed a motion to
dismiss on the ground of lack of cause of action but it was denied. BDO then filed its
answer. The petitioners failed to appear twice during the pre-trial conference despite
notice. Hence, the case was also dismissed twice. The case was once again dismissed
due to inaction of petitioners for unreasonable length of time.
Petitioners appealed to the CA but it affirmed the trial court’s dismissal. Hence, the
petition for review under Rule 45. Petitioners contend that the only reason for the trial
court’s dismissal of the case was the failure of their counsel to move to set the case for
pre-trial. However, Section 1, Rule 18 of the 1997 Rules of Civil Procedure, as
amended, imposing upon the plaintiff the duty to promptly move to set the case for
pre-trial, had been repealed and amended by A.M. No. 03-1-09-SC which took effect
on August 16, 2004. This amendment to the rule on pre-trial now imposes on the clerk
of court the duty to issue a notice of pre-trial if the plaintiff fails to file a motion to set
the case for pre-trial conference.
ISSUE: WON THE DISMISSAL OF THE CASE FOR FAILURE OF PLAINTIFF TO PROSECUTE
WAS PROPER
HELD: YES
Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, the failure
on the part of the plaintiff, without any justifiable cause, to comply with any order of
the court or the Rules, or to prosecute his action for an unreasonable length of time,
may result in the dismissal of the complaint either motu proprio or on motion by the
defendant. The failure of a plaintiff to prosecute the action without any justifiable cause
within a reasonable period of time will give rise to the presumption that he is no longer
interested to obtain from the court the relief prayed for in his complaint; hence, the
court is authorized to order the dismissal of the complaint on its own motion or on
motion of the defendants. The presumption is not, by any means, conclusive because
the plaintiff, on a motion for reconsideration of the order of dismissal, may allege and
establish a justifiable cause for such failure. The burden to show that there are
compelling reasons that would make a dismissal of the case unjustified is on the
petitioners.
Under Section 1, Rule 18 of the 1997 Rules of Civil Procedure, as amended, it is the duty
of the plaintiff, after the last pleading has been served and filed, to promptly move ex
parte that the case be set for pre-trial. On August 16, 2004, A.M. No. 03-1-09-SC (Re:
Proposed Rule on Guidelines to be Observed by Trial Court Judges and Clerks of Court
in the Conduct of Pre-Trial and Use of Deposition-Discovery Measures) took effect,
which provides that:
Within five (5) days from date of filing of the reply, the plaintiff must promptly move ex
parte that the case be set for pre-trial conference. If the plaintiff fails to file said motion
within the given period, the Branch COC shall issue a notice of pre-trial.
We note that when the above guidelines took effect, the case was already at the pre-
trial stage and it was the failure of petitioners to set the case anew for pre-trial
conference which prompted the trial court to dismiss their complaint.
In Olave v. Mistas, this Court said that even if the plaintiff fails to promptly move for
pre-trial without any justifiable cause for such delay, the extreme sanction of dismissal
of the complaint might not be warranted if no substantial prejudice would be caused
to the defendant, and there are special and compelling reasons which would make the
strict application of the rule clearly unjustified. In the more recent case of Espiritu v.
Lazaro,this Court affirmed the dismissal of a case for failure to prosecute, the plaintiff
having failed to take the initiative to set the case for pre-trial for almost one year from
their receipt of the Answer. Although said case was decided prior to the effectivity of
A.M. No. 03-1-09-SC, the Court considered the circumstances showing petitioners’ and
their counsel’s lack of interest and laxity in prosecuting their case.
In this case, while there was no substantial prejudice caused to herein respondent,
who has already consolidated the ownership of petitioners’ properties, secured new
titles in its name and successfully implemented a writ of possession issued by another
branch, there was neither patent abuse in the trial court’s dismissal of the complaint
for the third time, the earlier two dismissals having been precipitated by petitioners’
non-appearance at the pre-trial conference. Contrary to petitioners’ assertion, the
trial court did not find their offered excuses as meritorious or justifiable; the trial court
in the exercise of discretion simply reinstated the case "in the interest of justice" but
explicitly warned petitioners to be more circumspect in attending to the case.
While under the present Rules, it is now the duty of the clerk of court to set the case
for pre-trial if the plaintiff fails to do so within the prescribed period, this does not
relieve the plaintiff of his own duty to prosecute the case diligently. This case had been
at the pre-trial stage for more than two years and petitioners have not shown special
circumstances or compelling reasons to convince us that the dismissal of their
complaint for failure to prosecute was unjustified.
HEIRS OF FAVIS SR. v. GONZALES
FACTS: CASE DIGEST: HEIRS OF DR. MARIANO FAVIS, SR. v. JUANA GONZALES
FACTS: Dr. Mariano Favis, Sr. (Dr. Favis) was married to Capitolina Aguilar (Capitolina)
with whom he had seven children. When Capitolina died in March 1994. Dr. Favis
married Juana Gonzalez (Juana), his common-law wife with whom he sired one child,
Mariano G. Favis (Mariano), he executed an affidavit acknowledging Mariano as one
of his legitimate children. Mariano is married to Larcelita D. Favis (Larcelita), with
whom he has four children.
Dr. Favis died intestate on July 29, 1995. On October 16, 1994, prior his death, he
allegedly executed a Deed of Donation transferring and conveying properties in favor
of his grandchildren with Juana. Claiming the said donation prejudiced their legitime,
Dr. Favis children with Capitolina, petitioners herein, filed an action for annulment of
the Deed of Donation, inventory, liquidation, liquidation and partition of property
before the RTC against Juana, Sps. Mariano and Larcelita and their grandchildren as
respondents.
RTC nullified the Deed of Donation. The trial court found that Dr. Favis, at the age of
92 and plagued with illnesses, could not have had full control of his mental capacities
to execute a valid Deed of Donation.
The Court of Appeals ordered the dismissal of the petitioners nullification case. The
CA motu proprioproprio ordered the dismissal of the complaint for failure of
petitioners to make an averment that earnest efforts toward a compromise have been
made, as mandated by Article 151 of the Family Court.
HELD:
Section 1, Rule 9 provides for only four instances when the court may motu proprio
dismiss the claim, namely: (a) lack of jurisdiction over the subject matter; (b) litis
pendentia ; (c) res judicata ; and (d) prescription of action.10Specifically in Gumabon v.
Larin,11 cited in Katon v. Palanca, Jr.,12 the Court held:
x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when
the court clearly had no jurisdiction over the subject matter and when the plaintiff did
not appear during trial, failed to prosecute his action for an unreasonable length of
time or neglected to comply with the rules or with any order of the court. Outside of
these instances, any motu proprio dismissal would amount to a violation of the right of
the plaintiff to be heard. Except for qualifying and expanding Section 2, Rule 9, and
Section 3, Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of Civil
Procedure brought about no radical change. Under the new rules, a court may motu
proprio dismiss a claim when it appears from the pleadings or evidence on record that
it has no jurisdiction over the subject matter; when there is another cause of action
pending between the same parties for the same cause, or where the action is barred
by a prior judgment or by statute of limitations. x x x.
CHING v. CHENG
Respondent-plaintiffs Joseph Cheng, Jaime Cheng, and Mercedes Igne (the Chengs)
filed a complaint for declaration of nullity of titles against Ramon Ching before
the Regional Trial Court of Manila.
The complaint was amended, with leave of court, to implead additional defendants,
including Po Wing Properties, of which Ramon Ching was a primary stockholder. The
amended complaint was for "Annulment of Agreement, Waiver, Extra-Judicial
Settlement of Estate and the Certificates of Title Issued by Virtue of Said Documents
with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction.".
Sometime after, Lucina Santos filed a motion for intervention and was allowed to
intervene.
After the responsive pleadings had been filed, Po Wing Properties filed a motion to
dismiss on the ground of lack of jurisdiction of the subject matter. The Regional Trial
Court of Manila, Branch 6, granted the motion to dismiss. Upon motion of the Chengs’
counsel, however, the Chengs and Lucina Santos were given fifteen (15) days
to file the appropriate pleading. They did not do so.
The Chengs and Lucina Santos filed a complaint for "Annulment of Agreement, Waiver,
Extra-Judicial Settlement of Estate and the Certificates of Title Issued by Virtue of Said
Documents with Prayer for Temporary Restraining Order and Writ of Preliminary
Injunction" against Ramon Ching and Po Wing Properties (the second case) and raffled
to Branch 20 of theRegional Trial Court of Manila. When Branch 20 was made aware of
the first case, it issued an order transferring the case to Branch 6, considering that the
case before it involved substantially the same parties and causes of action.
The Chengs and Lucina Santos filed a motion to dismiss their complaint in the second
case, praying that it be dismissed without prejudice. RTC Branch6 issued an order
granting the motion to dismiss on the basis that the summons had not yet been served
on Ramon Ching and Po Wing Properties, and they had not yet filed any responsive
pleading. The dismissal of the second case was made without prejudice.
Ramon Ching and Po Wing Properties filed a motion for reconsideration of the order
dated November 22, 2002. They argue that the dismissal should have been with
prejudice under the "two dismissal rule" of Rule 17, Section 1 of the 1997 Rules of Civil
Procedure, in view of the previous dismissal of the first case.
During the pendency of the motion for reconsideration, the Chengs and Lucina Santos
filed a complaint for "Disinheritance and Declaration of Nullity of Agreement and
Waiver, Affidavit of Extra judicial Agreement, Deed of Absolute Sale, and Transfer
Certificates of Title with Prayer for TRO and Writ of Preliminary Injunction" against
Ramon Ching and Po Wing Properties (the third case) and was eventually raffled
to Branch 6.
Ramon Ching and Po Wing Properties filed their comment/opposition to the
application for temporary restraining order in the third case. They also filed a motion
to dismiss on the ground of res judicata, litis pendencia, forum-shopping, and failure
of the complaint to state a cause of action.
RTC Branch 6 issued an omnibus order resolving both the motion for reconsideration
in the second case and the motion to dismiss in the third case. The trial court denied
the motion for reconsideration and the motion to dismiss, holding that the dismissal
of the second case was without prejudice and, hence, would not bar the filing of the
third case.
while their motion for reconsideration in the third case was pending, Ramon Ching
and Po Wing Properties filed a petition for certiorari (the first certiorari case) with the
Court of Appeals, assailing the order which upheld the dismissal of the second case.
The trial court issued an order denying the motion for reconsideration in the third
case. The denial prompted Ramon Ching and Po Wing Properties to file a petition for
certiorari and prohibition with application for a writ of preliminary injunction or the
issuance of a temporary restraining order (the second certiorari case) with the Court
of Appeals.
The Court of Appeals rendered the decision in the first certiorari case dismissing the
petition. The appellate court ruled that Ramon Ching and Po Wing Properties’ reliance
on the "two-dismissal rule" was misplaced since the rule involves two motions for
dismissals filed by the plaintiff only. Upon the denial of their motion for
reconsideration, Ramon Ching and Po Wing Properties filed this present petition for
review under Rule 45 of the Rules of Civil Procedure.
ISSUES:
I. Whether the trial court’s dismissal of the second case operated as a bar to the filing
of a third case, as per the "two-dismissal rule"; and
II. Whether respondents committed forum shopping when they filed the third case
while the motion for reconsideration of the second case was still pending.
III. Whether or not the third case be dismissed should the respondents indeed
committed forum shopping.
RULING:
I. NO. Rule 17 of the Rules of Civil Procedure governs dismissals of actionsat the
instance of the plaintiff. Hence, the "two-dismissal rule" under Rule 17, Section 1 of
the Rules of Civil Procedure will not apply if the prior dismissal was done at the
instance of the defendant. Dismissals upon the instance of the defendant are generally
governed by Rule 16, which covers motions to dismiss.
As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except
when it is the second time that the plaintiff caused its dismissal. Accordingly, for a
dismissal to operate as an adjudication upon the merits, i.e, with prejudice to the re-
filing of the same claim, the following requisites must be present:
(1) There was a previous case that was dismissed by a competent court;
(2) Both cases were based on or include the same claim;
(3) Both notices for dismissal were filed by the plaintiff; and
(4) When the motion to dismiss filed by the plaintiff was consented to by the
defendant on the ground that the latter paid and satisfied all the claims of the former.
The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."When
a complaint is dismissed a second time, the plaintiff is now barred from seeking relief
on the same claim.
The dismissal of the second case was without prejudice in view of the "two-dismissal
rule"
Here, the first case was filed as an ordinary civil action. It was later amended to include
not only new defendants but new causes of action that should have been adjudicated
in a special proceeding. A motion to dismiss was inevitably filed by the defendants on
the ground of lack of jurisdiction.
The dismissal of the first case was done at the instance of the defendant under Rule
16, Section 1(b) of the Rules of Civil Procedure, which states:
SECTION 1. Grounds.— Within the time for but before filing the answer to
thecomplaint or pleading asserting a claim, a motion to dismiss may be made on any
of the following grounds:
....
(b) That the court has no jurisdiction over the subject matter of the claim;
....
Under Section 5 of the same rule, a party may re-file the same action or claim subject
to certain exceptions.
Thus, when respondents filed the second case, they were merely refiling the same
claim that had been previously dismissed on the basis of lack of jurisdiction. When
they moved to dismiss the second case, the motion to dismiss can be considered as
the first dismissal at the plaintiff’s instance.
When respondents filed the third case on substantially the same claim, there was
already one prior dismissal at the instance of the plaintiffs and one prior dismissal at
the instance of the defendants.
While it is true that there were two previous dismissals on the same claim, it does not
necessarily follow that the re-filing of the claim was barred by Rule 17, Section 1 of the
Rules of Civil Procedure. The circumstances surrounding each dismissal must first be
examined to determine before the rule may apply, as in this case. Thus, the trial court's
dismissal of the second case is not a bar to the filing of the third case.
II. YES. To determine whether a party violated the rule against forum shopping, the
most important factor to ask is whether the elements of litis pendentia are present,
or whether a final judgment in one case will amount to res judicata in another;
otherwise stated, the test for determining forum shopping is whether in the two (or
more) cases pending, there is identity of parties, rights or causes of action, and reliefs
sought.
When respondents filed the third case, petitioners’ motion for reconsideration of the
dismissal of the second case was still pending. Clearly, the order of dismissal was not
yet final since it could still be overturned upon reconsideration, or even on appeal to
a higher court.
The prudent thing that respondents could have done was to wait until the final
disposition of the second case before filing the third case. As it stands, the dismissal
of the second case was without prejudice to the re-filing of the same claim, in
accordance with the Rules of Civil Procedure. In their haste to file the third case,
however, they unfortunately transgressed certain procedural safeguards, among
which are the rules on litis pendentia and res judicata.
The requisites of litis pendentia are: (a) the identity of parties, or at least such as
representing the same interests in both actions; (b) the identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (c) the identity of the
two cases such that judgment in one, regardless of which party is successful, would
amount to res judicata in the other.
There is no question that there was an identity of parties, rights, and reliefs in the
second and third cases. While it may be true that the trial court already dismissed the
second case when the third case was filed, it failed to take into account that a motion
for reconsideration was filed in the second case and, thus, was still pending.
Considering that the dismissal of the second case was the subject of the first certiorari
case and this present petition for review, it can be reasonably concluded that the
second case, to this day, remains pending.
Hence, when respondents filed the third case, they engaged in forum shopping. Any
judgment by this court on the propriety of the dismissal of the second case will
inevitably affect the disposition of the third case.
III. NO. The rule essentially penalizes the forum shopper by dismissing all pending
actions on the same claim filed in any court. However, the rule on forum shopping will
not strictly apply when it can be shown that (1) the original case has been dismissed
upon request of the plaintiff for valid procedural reasons; (2) the only pending matter
is a motion for reconsideration; and (3) there are valid procedural reasons that serve
the goal of substantial justice for the fresh new· case to proceed.
The motion for reconsideration filed in the second case has since been dismissed and
is now the subject of a petition for certiorari. The third case filed apparently contains
the better cause of action for the plaintiffs and is now being prosecuted by a counsel
they are more comfortable with. Substantial justice will be better served if
respondents do not fall victim to the labyrinth in the procedures that their travails led
them. It is for this reason the Supreme Court denied the petition.
PARANAQUE KINGS v. SANTOS

FACTS:

Petitioner filed a Complaint before the RTC (docketed as Civil Case No. 91-786) against
Santos and respondent David A. Raymundo (Raymundo) to whom Santos allegedly
sold the leased premises on September 21, 1988 for a consideration of ₱5,000,000.00,
without giving petitioner the opportunity to exercise its priority to buy the same.

Petitioner argued that the sale was simulated and that there was collusion between
Santos and Raymundo (respondents).

Respondents respectively moved for the dismissal of the Complaint on the main
ground that it stated no cause of action. Raymundo alleged that there were, in fact,
previous offers made to petitioner that the latter simply ignored. Santos, on the other
hand, maintained that petitioner had already recognized and respected Raymundo's
status as the new owner-lessor of the subject properties due to its payment of lease
rentals to Raymundo, and, as such, is now estopped from challenging Raymundo's
title. In addition, Santos claimed that the deed of assignment executed in favor of
petitioner did not include the "first option" clause provided in the lease contract.

RTC dismissed petitioner's Complaint on the ground that it "does not contain any valid
cause of action." Petitioner then filed a motion for reconsideration which was,
however, denied by the RTC.

CA Decision was reversed: finding that the Complaint "sufficiently alleges an

actionable contractual breach" on the part of respondents. The Court explained that
the trial and appellate courts based their decision on the allegation that Santos had
actually offered the subject properties for sale to petitioner prior to the final sale in
favor of Raymundo, but that the offer was rejected. However, the Court held that in
order to have full compliance with the contractual right granting petitioner the first
option to purchase, the sale of the subject properties for the amount of ₱9,000,000.00,
the price for which it was finally sold to Raymundo, should have' likewise been first
offered to petitioner. Necessarily, the Court remanded the case to the trial court for
further proceedings.