G.R. No. L-21957. October 14, 1968
LAURO ADAMOS, ORO ADAMOS, DOMINGO ALMEDA, BENITA ALTO, ADELAIDA BERNARDO, SIMPLICIO BELISARIO, BERNARDINO CUSTODIO, AMADO DOMINGUEZ, GREGORIO SAN DIEGO, FELICISIMO G. FAUSTO, AN…
MAKALINTAL, J.:
This case is before us on
regular appeal from the order of the Court of First Instance of Manila
dismissing the complaint in its civil
case No. 53067.
The plaintiffs, numbering
thirty-three (33) in all, instituted this action for “Specific Performance
and Damages,” alleging four (4) causes of action against J.M. Tuason & Co. Inc., and Gregorio Araneta
Inc., the latter in its capacity as managing partner and attorney-in-fact of
the former. In the first cause of action
the complaint states that the plaintiffs are in possession of certain
residential lots situated in Matalahib and Tatalon, Quezon City, having
purchased the same sometime in 1949 from several persons collectively
designated as the Deudors; that said lots are all
embraced and included in a bigger parcel of land covered by a Torrens title in
the name of J.M. Tuason & Co. Inc.; that after 1949 the same
lots claimed by herein plaintiffs became the subject-matter of several civil cases in the Court of First Instance of Rizal (Quezon City) between the Deudors and J. M. Tuason Co.,
Inc.; that on March 16, 1953 the parties in those cases entered into a compromise agreement, subsequently embodied in the
decision of the Court, under which the legitimate purchasers of lots from the Deudors, named in a list attached to the said agreement,
among them the plaintiffs, “who are to continue and/or who are entitled to
elect and have elected to buy their respective lots from the legal owners who
are now the defendants (J.M. Tuason & Co. Inc.)
shall be credited (the) sums already paid by them under their former purchase
contracts from their respective predecessors-in-interest;” that it is
likewise provided in the compromise agreement that the so-called owners (J. M. Tuason & Co. Inc.), now the defendants, shall make new purchase contracts
in favor of the plaintiffs with respect to their respective lots acquired by
them from the Deudors at the current rate then existing at the
time of the execution of the compromise agreement;
that the plaintiffs “are…willing to buy their respective lots and/or elect to continue to purchase the same from the defendants and
also to sign new purchase contracts, but the defendants without any legal
justification whatsoever, deliberately refused and failed and still refuse and
fail to make new purchase contracts in favor of the herein plaintiffs up to the
present time, notwithstanding verbal and written demands made by the plaintiffs
to the defendants, and in spite of their written and verbal commitments to
plaintiffs.”
The third and fourth
causes of action, after incorporating by reference the allegations in the
first one, merely deal with the prices at which, according to the plaintiffs,
the defendants should sell the lots to them pursuant to the compromise agreement.
The fourth cause of
action contains a claim for damages and attorney’s fees.
The relief sought in the
complaint, aside from the claim for damages and attorney’s fees, is for the
defendants to be ordered
“to make new purchase
contracts in favor of the plaintiffs on their respective lots at the current
price ranging from P17.00 to P20.00 (per square meter) at the time of the execution of the compromise agreement.”
J. M. Tuason & Co. Inc., and Gregorio Araneta, Inc. filed separate motions to dismiss, both
pleading improper venue and failure to state a cause of
action, and the first alleging, besides, extinctive prescription and misjoinder of parties.
Over the plaintiffs’ opposition, the lower court granted the motion and
dismissed the complaint on one ground alone, namely, failure to state
a cause of action. The material portions
of the order of dismissal read as follows:
“x x x The compromise agreement upon which the plaintiffs based
their complaint had already been rescinded and set aside. After the rendition of the decision which was
based upon the compromise agreement, x x x several incidents arose in connection with the implementation thereof which
led to the issuance of two orders by the Court of First Instance of Rizal, Quezon City
Branch, in Civil Cases Nos. Q-135, Q-139, Q-174 and
Q-177.
“In the first order which was dated February 28, 1957, said
court directed those referred collectively as the ‘Deudors’
in the compromise agreement, to clear and deliver the peaceful possession of the 30 ‘quiñones‘ to J. M. Tuason & Co., Inc., and Gregorio Araneta, Inc.
within a period of four (4) months from that date.
“The ‘Deudors’ moved for the
reconsideration of said order while Gregorio Araneta,
Inc. filed a motion alleging that the former had not delivered the 30 ‘quiñones‘ despite the expiration of four months fixed in
the order of February 28, 1957 and praying that the Sheriff of Quezon City be directed to place movant
in possession of said parcel of land except those portions which were in the
possession of parties named individually in said motion.
“The Court of First Instance of Rizal,
Quezon City Branch, denied the motion for
reconsideration of the ‘Deudors‘ and granted the
motion of Gregorio Araneta, Inc. dated August 16,
1957 in an order dated January 10, 1958, wherein it made the following pronouncement:
‘x x x There is no excuse, therefore, for
the failure of the Deudors to deliver the remaining
30 quiñones, 4 years and 8 months after the execution and approval of the compromise
agreement. The equitable, if not the
legal, solution of the problem is the setting aside of the compromise agreement
of March 16, 1953, so far as it
still remains unimplemented or executory. The failure to deliver and the continued
mushrooming of houses in the area, despite the compromise, justify the release
of J. M. Tuason & Co., Inc. and Gregorio Araneta, Inc. from further obligations under the agreement of March 16, 1953.’
“From the orders of February 28, 1957 and January 10, 1958, the ‘Deudors‘ appealed
to the Supreme Court, but on May 30, 1961 it affirmed them and held among
others the following:
‘x x x In any event, said paragraph is
but a faithful
statement of the law pertinent to the subject, inasmuch as the period of four (4) months, given to the Deudors, in
said decision, for the delivery of the land of 30 quiñones
to which their right to collect P614,925.74 was
subject as a
suspensive condition – constituted a resolutory period.
When the same expired with said suspensive
condition still unfulfilled, appellants’ right to comply with it was extinguished, and the conditional obligation of the appellees to pay said sum was terminated (Article
1193, Civil Code of the Philippines). (Florencio Deudor, et al. vs. J.
M. Tuason & Co., Inc., G. R. L-13768, May 30,
1961)’
“Whatever doubt
there could still be as to the effect of the
ruling in the above-quoted case on the compromise agreement of March 16, 1953, was dispelled by a subsequent
decision of the Supreme Court in ‘J. M.
Tuason & Co., Inc., et al. vs. Bienvenido Sanvictores’, G. R.
L-16886, promulgated on January
30, 1962 when it stated that –
‘It is also worthy of
note that the compromise between Deudor
and Tuason upon which Sanvictores
predicates his right to buy the lot he occupies, has been validly rescinded and
set aside, as recognized by this Court in its decision in G.R. No. L-13768, Deudor vs. Tuason,
promulgated on May 30, 1961.’
“WHEREFORE, the Court is of the opinion and so holds that the
complaint states no cause of action and by virtue thereof is hereby dismissed
without pronouncement as to costs.”
The plaintiffs moved to
reconsider, were turned down, and came up directly to this Court on appeal.
It is a well-settled rule
that in a motion to dismiss based on the ground that the complaint fails to
state a cause of action, the question submitted to the
court for determination is the sufficiency of the allegations in the complaint
itself. Whether those allegations are
true or not is beside the point, for their truth is hypothetically admitted by
the motion. The issue rather is: admitting them to be true, may the court render
a valid judgment in accordance with the prayer in the complaint? Stated otherwise, the insufficiency of the
cause of action must appear on
the face of the complaint in order to sustain a dismissal on this ground. No extraneous matter may be considered, nor
facts not alleged, which, would require evidence and
therefore must be raised as defenses and await the trial (Garcon vs. Redemptorist Fathers, L-23510, May 30, 1966). So rigid is the norm prescribed that if the
court should doubt the truth of the facts averred it must not dismiss the complaint
but require an answer and proceed to hear the case on the merits (Republic Bank
vs. Cuaderno, L-22399, March 30, 1967).
In departing from this
rule and taking cognizance of facts not alleged or referred to in the
complaint, specifically the so-called rescission of the compromise agreement
on which the plaintiffs’ complaint is predicated, the lower court committed an
error. The alleged rescission the extent
of its effects on the different aspects of that agreement and specifically on
the present claims of the plaintiffs, are matters of defense which should be
properly raised in the answer. It is
unsafe to lift the idea of “rescission” from the context in which it
was used in the two cases relied upon by the lower court and apply it here
without a previous inquiry into the facts to determine whether or not it is
indeed applicable.
In their brief the
defendants as appellees insist on the other ground
alleged by them below in support of their motion to dismiss but not passed upon
by the lower court, namely, that venue was improperly laid. We do not agree with the defendants. All the allegations as well as the prayer in
the complaint show that this is not a
real but a personal action – to compel the defendants to execute the
corresponding purchase contracts in favor of the plaintiffs and to pay
damages. The plaintiffs do not claim
ownership of the lots in question: they
recognize the title of the defendant J. Tuason,
Inc. They do not ask that possession be delivered to them, for they allege to
be in possession. The case cited by the
defendants (Abao et al. vs. J. M. Tuason
& Co., Inc., G. R. L-16796, Jan. 30, 1962) is therefore not in point. In that case, as stated by this Court in its
decision, the “plaintiffs’ action is predicated on the theory that they
are occupants, landholders”, and ‘most’ of them ‘owners by purchase’ of the residential lots in question; that, in
consequence of the compromise agreement adverted to above, between the Deudors and defendant corporations, the latter had
acknowledged the right and title of the Deudors
in and to said lots; and hence,
the right and title of the plaintiffs, as successors-in-interest of the Deudors; that, by entering into said agreement, defendant
corporations had, also, waived their right to invoke the indefeasibility of the
Torrens title in favor of J. M. Tuason & Co.,
Inc.; and that defendants have no right, therefore, to oust plaintiffs from
the lots respectively occupied by them and which they claim to be entitled to
hold. Obviously, this action affects,
therefore, not only the possession of real property, but, also, the title
thereto. Accordingly, it should have
been instituted in the Court of First Instance of the Province of Rizal in which said property is situated (Section 3, Rule 5 of the Rules of Court)”.
Wherefore, the order appealed from is set aside, and the case is remanded for further proceedings, with costs
against the defendants-appellees in this instance.
Concepcion, C.J., Reyes, J.B.L., Dizon, Sanchez, Castro, Angeles, Fernando, and Capistrano, JJ., concur.
Zaldivar, J., on official leave.