FELIZARDO S. OBANDO AND THE ESTATES OF JOSE FIGUERAS AND DOÑA ALEGRIA STREBEL VDA. DE FIGUERAS, PETITIONERS, VS. EDUARDO F. FIGUERAS AND AMIGO REALTY CORPORATION AS REPRESENTED …

Obando versus Figueras

The Case

This is a petition for review brought by Felizardo Obando, together with the estates of Jose Figueras and Alegria Strebel Vda. de Figueras, against Eduardo Figueras and Amigo Realty Corporation. Obando had sued to annul a sale of two parcels of land in New Manila and to recover them for the Figueras estates. The trial court dismissed that action without prejudice after the probate court removed Obando as co-administrator, and the Court of Appeals affirmed. The case matters because it fixes the rules on three practical points: when a lawyer of record may still act for a client, when a motion to dismiss may be filed even after an answer and after the plaintiff has rested, and what happens to a civil case when the plaintiff loses his legal capacity to sue while it is pending.

Procedural History

Obando filed his complaint for annulment of contract and reconveyance with the Regional Trial Court of Quezon City, and the case was raffled to one of its branches. The respondents earlier moved to dismiss, but the trial court denied that motion, holding that it would recognize Obando's right to sue as judicial administrator unless the probate court removed him. After the probate court removed Obando as co-administrator, the respondents filed a joint motion to dismiss. The trial court granted it and dismissed the civil case without prejudice. Obando's motion for reconsideration was denied. He then went up to the Court of Appeals on a petition for certiorari and mandamus, and the Court of Appeals affirmed the dismissal. Obando came to the Supreme Court by a petition for review under Rule 45, and the Supreme Court denied the petition and affirmed the assailed ruling.

Facts

In 1964, Alegria Strebel Figueras and her stepsons Eduardo and Francisco filed a petition for the settlement of the intestate estate of her deceased husband, Jose Figueras. While that settlement was pending, Alegria died, and Eduardo assumed administration of the joint estates of the couple. Felizardo Obando, a nephew of Alegria, then filed a petition for the probate of what purported to be her last will and testament. The alleged will bequeathed to Obando and other members of the Obando clan properties of the Figueras couple, including two parcels of land on Gilmore Avenue in New Manila, covered by two transfer certificates of title. The probate case was consolidated with the intestate proceedings, and Obando was appointed as Eduardo's co-administrator of the joint estates.

Eduardo insisted that the will was a forgery. The document was sent to the National Bureau of Investigation, which found that the questioned signature and the standard signatures were not made by the same person. This led to the indictment and conviction of Obando for estafa through falsification of a public document. Meanwhile, the probate court had denied Eduardo's motion for authority to sell the two New Manila lots. Despite that denial, Eduardo sold the lots to Amigo Realty Corporation on the strength of an order issued by the probate court, and new titles were issued in the name of Amigo Realty.

On June 4, 1992, Obando, in his capacity as co-administrator and universal heir of Alegria, filed a complaint against Eduardo and Amigo Realty for the nullification of the sale. Later, the probate court removed Obando from his office as co-administrator of the joint estate. The respondents then filed a joint motion to dismiss the civil case, even though Obando had already rested his case, grounding the motion on his loss of legal standing. The trial court granted the motion and dismissed the case without prejudice.

Issues

• Whether or not the trial court could act on a motion to dismiss filed by a lawyer who was allegedly no longer the counsel of record of Eduardo Figueras.
• Whether or not a motion to dismiss based on lack of legal capacity to sue may still be granted after the responsive pleadings have been filed and after the plaintiff has rested his case.
• Whether or not the conviction of Obando for estafa through falsification and the revocation of his appointment as administrator, both still on appeal, are sufficient grounds to dismiss the civil case.
• Whether or not there was a conflict between the order dismissing the civil case and the earlier rulings of the trial court denying the previous motion to dismiss.

Applicable Provisions

Section 26, Rule 138 of the Rules of Court, on change of attorneys, provides:

An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party. A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client the full compensation stipulated in the contract. However, the attorney may, in the discretion of the court, intervene in the case to protect his rights. For the payment of his compensation the attorney shall have a lien upon all judgments for the payment of money, and execution issued in pursuance of such judgments rendered in the case wherein his service had been retained by the client.

This provision governs the first issue, because it fixes when a lawyer's standing in a case ends and how substitution is effected.

Section 1, Rule 16 of the Rules of Court, on the grounds for a motion to dismiss, provides:

Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: That the plaintiff has no legal capacity to sue.

This provision governs the second issue, because it states the general period for filing a motion to dismiss and lists lack of legal capacity to sue as a ground.

Section 1, Rule 9 of the Rules of Court, on defenses and objections not pleaded, provides:

Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.

This provision governs the question of waiver, because the Court used it to explain which grounds for dismissal may be lost if not raised in time.

Ruling

On the first issue, the Court held that a lawyer's standing in a case remains until a substitute takes over pursuant to Section 26, Rule 138. Substitution is valid only if new counsel files a written application for substitution, the client's written consent is obtained, and the written consent of the lawyer to be substituted is secured, or, if it can no longer be obtained, the application carries proof that notice was served on him. Here, Eduardo did not dismiss Attorney Yuseco; he even manifested that he had been tricked into signing the manifestation and the compromise agreement. The filing of the motion to dismiss was not prejudicial but beneficial to Eduardo, so he had no reason to complain, and any irregularity should have been raised by the respondents, not the petitioners.

On the second issue, the Court held that the period to file a motion to dismiss depends on the circumstances. While the general rule requires the motion before the answer, the Court has allowed a motion to dismiss even after an answer on grounds of lack of jurisdiction, litis pendentia, lack of cause of action, and discovery during trial of evidence constituting a ground for dismissal. Except for lack of cause of action or lack of jurisdiction, the grounds may be waived. Here, the ground of lack of legal capacity became available only after the probate court divested Obando of his representation, so the respondents did not waive it. The Court stated the rule plainly:

Verily, if the plaintiff loses his capacity to sue during the pendency of the case, as in the present controversy, the defendant should be allowed to file a motion to dismiss, even after the lapse of the reglementary period for filing a responsive pleading.

On the third issue, the Court held that the pendency of the appeal from the conviction and from the removal did not make the dismissal premature. Obando derived his power to represent the estate from his appointment as co-administrator; when the probate court removed him, he lost that authority and could not continue prosecuting the civil case. Whether a final conviction for a crime involving moral turpitude is necessary to remove him is not a proper issue in this petition; he should raise it in his appeal from the decision removing him from administration. Because the conviction and the removal are on appeal, his legal standing could be restored, and so the dismissal was correctly made without prejudice, so that the case may continue without being barred by res judicata if his conviction is reversed and his appointment restored.

On the fourth issue, the Court held that there was no conflict between the trial court's rulings. The first motion to dismiss was denied because Obando still had legal capacity to sue as co-administrator. The second motion was granted because the probate court had already removed him. The change in his legal capacity accounts for the difference in the adjudication.

Doctrine

A lawyer's standing in a case remains until a substitute takes over in accordance with Section 26, Rule 138 of the Rules of Court, and substitution requires a written application, the client's written consent, and the written consent of the lawyer to be substituted, or proof of notice to him.

As a general rule, a motion to dismiss must be filed within the time for but before filing the answer, and grounds not raised are deemed waived under Section 1, Rule 9. But the Court allows a motion to dismiss even after an answer on grounds of lack of jurisdiction, litis pendentia, lack of cause of action, and discovery during trial of evidence constituting a ground for dismissal. If the plaintiff loses his capacity to sue during the pendency of the case, the defendant may move to dismiss even after the reglementary period for the responsive pleading has lapsed.

An estate administrator's power to sue on behalf of the estate comes from his appointment. Once the probate court removes him, he loses the legal capacity to sue, and the civil case may be dismissed. Where the removal and the conviction are still on appeal, the dismissal should be without prejudice, so that the case may continue without being barred by res judicata if his standing is restored.

Disposition

The Supreme Court denied the petition and affirmed the assailed ruling, with costs against the petitioners.

Remember This

The line to memorize is that if the plaintiff loses his capacity to sue during the pendency of the case, the defendant may move to dismiss even after the reglementary period for filing a responsive pleading. Examiners use this case on the timeliness of a motion to dismiss, on the effect of an administrator's removal from office, and on the requisites of substitution of counsel.