**Facts:**
Rafael and Ligaya Bautista, the petitioners, are the registered owners of a 3,856-square meter lot in Natipuan, Nasugbu, Batangas, as evidenced by Original Certificate of Title (OCT) No. P-1436, issued January 15, 1989. Maya-Maya Cottages, Inc. (MMCI), the respondent, filed a complaint against the Bautistas on May 13, 1996, seeking cancellation of their title and damages, along with an application for a preliminary injunction, docketed as Civil Case No. 371. The respondent argued that the Bautistas acquired OCT No. P-1436 through dubious means without any legitimate right.
The Bautistas responded on May 29, 1996, with a motion to dismiss the complaint for lack of cause of action, highlighting MMCI’s disqualification from acquiring public alienable lands by virtue of being a private corporation, as dictated by the Constitution. On August 30, 1996, the Regional Trial Court (RTC) of Nasugbu, Batangas, granted the motion, leading MMCI to file a motion for reconsideration and leave to amend the complaint to focus on quieting of title, asserting errors in the technical description of the Bautistas’ title.
Despite the Bautistas’ opposition to the amendment, arguing it would significantly alter the case’s theory, the trial court issued an order on November 18, 1996, revoking its initial dismissal and accepting the amended complaint. Unsettled, the Bautistas escalated the matter to the Court of Appeals through a special civil action for certiorari and prohibition, arguing that the amended complaint failed to rectify the original’s lack of cause of action and that admitting it constituted grave abuse of discretion. The Court of Appeals dismissed their petition on November 24, 2000, a ruling which was reaffirmed upon the Bautistas’ motion for reconsideration on May 30, 2001. Challenging this, the Bautistas filed a petition for review on certiorari to the Supreme Court.
**Issues:**
The central legal issue before the Supreme Court was whether the Court of Appeals erred in determining that the RTC did not commit grave abuse of discretion in admitting MMCI’s amended complaint.
**Court’s Decision:**
The Supreme Court denied the petition, upholding the decision and resolution of the Court of Appeals in totality. It ruled that, per Section 2, Rule 10 of the 1997 Rules of Civil Procedure, a party is entitled to amend their pleading once as a matter of right before a responsive pleading is served. Since the Bautistas filed a motion to dismiss rather than a responsive pleading to the original complaint, MMCI retained the right to amend their complaint. The Supreme Court found that the Court of Appeals correctly determined the trial court did not gravely abuse its discretion in admitting the amended complaint. Furthermore, the issue regarding MMCI’s qualification to acquire the lot was deemed a matter of defense that should be evaluated during the trial.
**Doctrine:**
The Supreme Court reiterated the principle under the 1997 Rules of Civil Procedure allowing a party to amend their pleading once as a matter of right before a responsive pleading is served, emphasizing that a motion to dismiss is not considered a responsive pleading in this context.
**Class Notes:**
– **Amendment of Pleadings:** A party may amend its pleading once as a matter of right before any responsive pleading is served (Section 2, Rule 10, 1997 Rules of Civil Procedure).
– **Motion to Dismiss vs. Responsive Pleading:** A motion to dismiss is not regarded as a responsive pleading. The right to amend pleadings as of right is not forfeited by filing a motion to dismiss.
– **Defensive Matters:** Issues such as a corporation’s qualification to acquire land are considered matters of defense and are best addressed during a full-blown trial.
**Historical Background:**
This case highlights the procedural and substantive complexities involved in real property litigation, notably around the amendment of complaints and the interpretation of constitutional restrictions on corporate land ownership in the Philippines. It showcases the judiciary’s mechanisms for rectifying procedural errors and ensuring that disputes are resolved based on their substantive merits rather than technicalities, reflecting the legal system’s commitment to due process and equitable resolution of disputes.
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