JUAN S. GELIG, ET AL., PLAINTIFF-APPELLANT, VS. CECILIA NAZARENO, LINDA NAZARENO, ISABEL MAGALLON VDA. DE NAZARENO, BRYAN SHERWIN NAZARENO, ROBERTO L. NAZARENO, MARIA DE GUZMAN …

Gelig versus Nazareno

The Case

This is the case of Gelig versus Nazareno, an original appeal brought to the Supreme Court from a trial court order that dismissed a complaint for quieting of title, declaration of nullity, and reconveyance. Juan Gelig, claiming to be the surviving heir of the original owners of a large parcel of land in Lapu-lapu City, sued Cecilia Nazareno, Linda Nazareno, and the other registered owners and transferees of the subdivided lots, alleging that the deeds of sale and the titles issued to them were tainted with fraud. The case matters to a reviewee because it is a compact lesson in remedial law: it teaches the difference between failure to state a cause of action and lack of cause of action, and it teaches the stringent standard for dismissing a case for failure to prosecute.

Procedural History

Juan Gelig filed his complaint before the Regional Trial Court of Lapu-lapu City in March 1997. He later amended his complaint several times, impleading the present registered owners as defendants. The defendants moved to dismiss on the ground that Gelig failed to prosecute his case for an unreasonable length of time, and later supplemented that motion with the ground of lack of cause of action. In an order dated January 18, 2006, the trial court granted the motion and dismissed the case. Gelig went directly to the Supreme Court by original appeal, since the order of dismissal was issued by the trial court in the exercise of its original jurisdiction. The Supreme Court submitted the case for decision without the appellees' brief.

Facts

The late Claudio Gelig and Guillerma Menguito owned Lot Number 3589 in Agus, Lapu-lapu City, with an area of 24,211 square meters. They were survived by four children: Jesus, Lorenza, Emiliana, and Atanacio. In September 1965, the four children executed a confirmation of extrajudicial partition and adjudicated the lot among themselves. Atanacio received a portion later designated as Lots 3589-A and 3589-B. Lorenza, Emiliana, and Jesus received the portion later designated as Lot 3589-C.

Atanacio then sold his share to Linda Nazareno by a deed of absolute sale dated October 1965. Linda had the entire lot surveyed and subdivided, and the title was reconstituted at her expense. Lot 3589-C was further subdivided, and portions of it were sold to Cecilia Nazareno and to Linda Nazareno, who in turn conveyed one portion to her son. Titles were issued in the names of the Nazareno transferees.

In March 1997, Juan Gelig, claiming to be the heir of Jesus Gelig, filed suit. He alleged that the sale by Atanacio to Linda was contained in a falsified document; that the reconstitution of title was done without the approval of the compulsory heirs; that the subdivision and the deeds of sale were the product of conspiracy and fraudulent schemes; and that the vendors Lorenza and Emiliana merely affixed their thumbmarks although they were lettered persons. He alleged that he had possessed the lots publicly, adversely, and continuously in the concept of an owner for over thirty-two years, and that the titles issued to the defendants cast a cloud on his title. The trial court dismissed the case, ruling that Gelig was not a party to any of the conveyances, was not a declared heir, had no personality to question the transactions, and that his action had prescribed.

Issues

• Whether or not the trial court erred in dismissing the case for failure to prosecute under Rule 17, Section 3 of the Rules of Court.
• Whether or not the trial court erred in dismissing the case on the ground of lack of cause of action.
• Whether or not the trial court erred in dismissing the case on the basis of prescription without a formal hearing on the merits.

Applicable Provisions

Rule 17, Section 3 of the 1997 Rules of Civil Procedure provides:

Sec. 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 court's 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.

This is the ground the defendants invoked, and the Court measures the plaintiff's conduct against its requirement of unjustified delay.

Rule 18, Section 1 of the same Rules provides:

Sec. 1. When conducted. – After the last pleading has been served and filed, it shall be the duty of the plaintiff to promptly move ex parte that the case be set for pre-trial.

This defines the plaintiff's duty to move for pre-trial, which the trial court found Gelig had violated.

Rule 16, Section 1, paragraph g of the Rules of Court provides:

(g) That the pleading asserting the claim states no cause of action;

This is the only proper ground for dismissal based on the pleading, and the Court uses it to distinguish failure to state a cause of action from lack of cause of action.

Ruling

On the first issue, the Court ruled that the dismissal for failure to prosecute was improper. The fundamental test is whether the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude, and there must be an unwillingness to prosecute. Here, Gelig could not be faulted for not moving for pre-trial because there was a pending incident, the petition to cancel the notice of lis pendens, which the defendants themselves had filed. The defendants had also moved more than once for a pre-trial setting, so another motion from Gelig would have been repetitive. Gelig had, in fact, filed a motion to set the case for pre-trial as early as October 2001, but the trial court did not act on it. Moreover, under the amended guidelines that took effect in August 2004, it became the duty of the branch clerk of court to issue a notice of pre-trial if the plaintiff failed to move, and no such notice was issued.

On the second issue, the Court ruled that lack of cause of action is not a proper ground for a motion to dismiss. The proper ground is failure to state a cause of action. The Court explained the distinction: failure to state a cause of action refers to the insufficiency of the pleading, while lack of cause of action refers to a situation where the evidence does not prove the cause of action alleged. A complaint states a cause of action if it avers the legal right of the plaintiff, the correlative obligation of the defendant, and the act or omission of the defendant in violation of that right. The existence of a cause of action is determined solely by the allegations in the complaint, and a motion to dismiss hypothetically admits the truth of the factual allegations well pleaded. Here, the trial court improperly relied on allegations beyond the complaint, specifically on evidence presented in the petition to cancel the notice of lis pendens.

On the third issue, the Court held that the trial court erred in dismissing the case on the ground of prescription without a formal hearing on the merits. The complaint alleged possession in the concept of an owner, and the plaintiff was entitled to substantiate that allegation at trial.

Doctrine

First, a dismissal for failure to prosecute under Rule 17, Section 3 requires a showing that the plaintiff is chargeable with want of due diligence and is unwilling to prosecute. The test is whether, under the circumstances, the plaintiff failed to proceed with reasonable promptitude. A plaintiff who has filed a motion to set the case for pre-trial, and who is awaiting action on a pending incident, cannot be said to have failed to prosecute.

Second, failure to state a cause of action and lack of cause of action are distinct. Failure to state a cause of action is a ground for dismissal under Rule 16, Section 1, paragraph g, and is determined solely by the allegations in the complaint. Lack of cause of action is a matter of insufficiency of evidence and may be raised only after the facts have been resolved on the basis of the evidence. A motion to dismiss on the ground of failure to state a cause of action hypothetically admits the truth of the well-pleaded facts in the complaint.

Disposition

The Supreme Court granted the appeal, set aside the trial court's order of dismissal, and remanded the case for further proceedings, with the plaintiff prevailing on the procedural questions raised.

Remember This

The single line worth memorizing is that failure to state a cause of action is a defect in the pleading, while lack of cause of action is a defect in the evidence, and only the former may be raised in a motion to dismiss. Examiners like to use this case to test the distinction between the two grounds and the stringent standard for dismissal for failure to prosecute.