ANASTACIO N. ABAD, PLAINTIFF AND APPELLANT, VS. CANDIDA CARGANILLO VDA. DE YANCE, ET AL., DEFENDANTS AND APPELLEES.

On August 30, 1950, the plaintiff, Anastacio N. Abad, filed in the
Court of First Instance of Pangasinan a complaint against the
defendants Candida Garganillo Vda. de Yance, et al., praying that the
deed of sale with right of repurchase dated December 10, 1931, be
declared a mere equitable mortgage, and that the defendants be ordered
to vacate the land described in paragraph 2 of the complaint and to
deliver to the plaintiff certain amounts of palay as his share in the
harvest of the land in question or their equivalent in money at P17.87
per cavan. On October 20, 1950, the plaintiff filed an amended
complaint, with practically the same prayer as in the original
complaint. On November 4, 1950, the defendants filed a motion to
dismiss the amended complaint on the ground that its causes of action
are barred by prior judgment and by the statute of limitations. This
motion to dismiss was opposed by the plaintiff, and on December 4,
1950, the court issued an order overruling the motion to dismiss and
ordering the defendants to answer the complaint within the reglementary
period. On January 5, 1951, the plaintiff filed a motion for default,
alleging that the defendants had failed to file an answer, and on
January 17, 1951, the court declared the defendants in default, and
authorized the plaintiff to present his evidence on January 29, 1951.
In the meantime, or on January 26, 1951, the court received notice of
the filing in the Court of Appeals by the defendants of a petition for
certiorari, to annul the order of default and to have plaintiff’s
amended complaint dismissed, as a result of which the Court of First
Instance of Pangasinan issued an order on January 29, 1951, suspending
further proceedings. Simultaneously, the defendants filed a motion to
vacate the order, of default. On December 5, 1951, the defendants’
petition for certiorari was dismissed by the Court of Appeals on the
ground that they did not file in the trial court a motion for the
reconsideration of the order denying their motion to dismiss the
amended complaint. On December 17, 1951, the defendants filed in the
Court of First Instance of Pangasinan a motion for reconsideration,
praying that plaintiff’s amended complaint be dismissed with costs, the
defendants invoking the following passage appearing in the decision of
the Court of Appeals dismissing the defendants’ petition for certiorari:

“The land involved in Yance’s petition of September
17, 1938, is identically the one which Anastacio Abad claims that he
had placed as a mere security for a loan of P1,800, but it was made to
appear as sold a retro. In this petition Yance asked that the
Register of Deeds be ordered ‘to enter and note at the back of Title
No. 48515 the herein attached deed of sale with right of repurchase.’
If that contract was really one of mortgage, Abad should have so
maintained in his answer, instead of admitting that it was one of a
sale a retro and waiving away objection that it be so
annotated. The nature of the contract entered into between Abad and
Yance has thus already been determined. Abad cannot take back his
admission and attack this contract asking that it be interpreted as one
of mortgage.”

On December 22, 1951, the plaintiff filed a petition to strike out
the defendant’s motion for reconsideration, after which the court, on
January 15, 1952, issued an order setting aside the order of default,
required the defendants to answer the amended complaint within 10 days,
and denied the defendants’ motion for reconsideration. On January 22,
1952, the defendants filed a motion praying that the order of January
15, be reconsidered and that their motion for reconsideration filed on
December 17, 1951 be resolved on the merits. On January 29, 1952, the
plaintiff in turn filed a motion for reconsideration, praying that the
order of default be maintained and the defendants’ motion for
reconsideration be striken from the records. This was followed by a
motion filed by the defendants on January 29, 1952, praying that
plaintiff’s amended complaint be dismissed with costs, on the ground of
res judicata, in that the Court of Appeals, in dismissing the
defendants’ petition for certiorari, already ruled upon the nature of
the contract between the plaintiff and the defendants. After hearing,
the Court of First Instance of Pangasinan issued an order on February
25, 1952, dismissing the case with cost against the plaintiff, citing
the following pronouncement of the Court of Appeals in its decision
dismissing the defendants’ petition for certiorari: “The nature of the
contract entered into between Abad and Yance has already been
determined. Abad cannot take back his admission and attack this
contract asking that it be interpreted as one of mortgage.” From this
order the plaintiff has appealed.

It is at once obvious that the lower court erred in dismissing the
case. It is significant that, in the decision of the Court of Appeals,
the dismissal of the petition for certiorari filed by the defendants
was based on the latter’s failure to move for the reconsideration of
the order of the Court of First Instance of Pangasinan denying the
defendants’ motion to dismiss the amended complaint. What was said by
the Court of Appeals with reference to the nature of the contract in
question was purely an obiter dictum, unnecessary for its
decision. If it were not so, the defendants, petition would have been
granted and plaintiffs amended complaint would have been dismissed. The
matter touched upon by the Court of Appeals and invoked by the
defendants, may have a proper place in an answer.

Wherefore, the appealed order is hereby set aside and the case
remanded to the Court of First Instance of Pangasinan for further
proceedings, starting from the issuance of an order by said court
requiring the defendants to file an answer within a reasonable period.
So ordered without costs.

Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador, and Concepcion, JJ., concur.