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690 Phil. 193


[ G.R. No. 175123, July 04, 2012 ]




Before us is a Petition for Review under Rule 45 of the Rules of Court.  Petitioners assail the Decision[1] dated 6 October 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 74435, affirming the Decision[2] dated 28 January 2002 in Civil Case No. 3276-AF of Branch 25 of the Regional Trial Court (RTC), Third Judicial Region of Cabanatuan City. The undisputed facts follow.

The case arose when respondents filed on 4 August 1998 a Complaint[3] against herein petitioners and Levi P. Sayo (Sayo) for the annulment of Transfer Certificate of Title (TCT) Nos. NT-250333 and NT-250334 registered under the name of Moldex Realty, Inc. (Moldex), and formerly covered by Original Certificate of Title (OCT) Nos. 3322 and 3323, respectively. Respondents likewise prayed for the award of damages.

Respondent Eduardo J. Villabona (Eduardo) alleged that he was the true owner of Lot No. 2346, covered by OCT No. 3322; and respondent spouses Ricardo Villabona (Ricardo) and Gilda Villabona (Gilda), of Lot No. 2527, covered by OCT No. 3323. They acquired these properties by virtue of a Deed of Sale dated 1 June 1977 executed by their parents, Rafael Villabona (Rafael) and Ursula Jose Villabona (Ursula).

Respondents claimed that sometime in January 1996, petitioner Moldex, through its alleged representative Sayo, negotiated for the purchase of the subject properties, whereby Lot No. 2346 would be sold for P1,132,080 and Lot No. 2527 for P511,320. Sayo then was able to successfully obtain from respondent Ricardo the original copy of OCT Nos. 3322 and 3323. According to respondents, Sayo encashed the check payment of petitioner Moldex for Lot No. 2346, while petitioner Anselmo Agero (Agero) encashed that for Lot No. 2527.

Respondents further alleged that petitioners caused the cancellation and transfer of OCT Nos. 3322 and 3323 through allegedly falsified Deeds of Absolute Sale[4] executed on 21 May 1996. They maintained that the deeds were falsified, because these were executed after the deaths of Rafael and Ursula on 3 June 1993 and 17 October 1990, respectively.

In support of their claims, respondents attached to their Complaint photocopies of the Deed of Sale executed by them and their parents, Rafael and Ursula; TCT Nos. NT-250333 and NT-250334; Certificates of Death of Rafael and Ursula; and Deeds of Absolute Sale allegedly executed between spouses Rafael and Ursula and petitioner Moldex.

In his Answer,[5] petitioner Agero denied being an agent of respondent Moldex in the purchase of the subject properties. He further denied having received money representing the purchase price of these lots.

Petitioner Moldex, meanwhile, alleged that Sayo and Agero were respondents’ real estate brokers and offered the subject properties for sale. It contended that respondents had executed Deeds of Absolute Sale on 21 May 1996, whereby Lot No. 2527 was sold for P383,490 and Lot No. 2346 for P849,060. In consideration of the sale of the two parcels of land, it issued on 13 May 1996 United Coconut Planters Bank (UCPB) Check No. 0000344050 in the sum of P1,132,080, which was endorsed by respondent Ricardo. The check was subsequently deposited and the amount therein stated withdrawn. Petitioner Moldex further alleged that respondent Ricardo voluntarily handed the titles over to Sayo, so that the latter could cause the transfer thereof. Finally, it denied having any knowledge of or participation in the alleged falsified Deeds of Absolute Sale. Petitioner Moldex attached to its Answer[6] photocopies of the deeds[7] it executed with respondent Ricardo, as well as the UCPB check including the dorsal part thereof.[8]

On 31 May 2000, respondents filed an Amended Complaint impleading Atty. Elias Estrella, the Deputy Register of Deeds of Cabanatuan City; Atty. Alfredo G. Ortaleza, the lawyer who notarized the alleged falsified Deeds of Absolute Sale; and Jacinto Uy, the chairperson of the Board of Directors of petitioner Moldex.

Trial ensued. After the presentation of Ricardo as the first witness on 5 October 2000, Atty. Cecilio Suarez, counsel for respondents, prayed for a resetting of the hearing for the presentation of another witness. The 14 December 2000 hearing was likewise reset for 18 January 2001 upon agreement of the parties. At the 18 January 2001 hearing, Judge Johnson L. Ballutay, the RTC executive judge, issued an Order, to wit:

When this case was called for the second time this morning, it was only defendant Levi P. Sayo and Atty. Samuel Acorda for the Moldex Realty, Inc. and Atty. Lamberto Magbitang for the defendant Anselmo S. Agero were in Court. There was no representation on the part of the plaintiffs [sic] neither for [sic] the plaintiffs themselves were in Court.

In view of this, the presentation of the evidence for the plaintiffs is hereby considered closed and terminated specially so that there was a promise on the part of the plaintiffs, through counsel, that a settlement will be arrived at and a compromise agreement will be presented today, yet nothing was heard over [sic] on the part of the plaintiffs as well as counsel.

WHEREFORE, premises considered, the defendants are hereby allowed to present evidence on February 9, 2001 at 8:30 o’clock in the morning.[9]

The 9 February 2001 hearing was likewise reset, because Atty. Suarez was again absent.[10] He was again absent at the 9 March 2001 hearing, prompting the court to reiterate its Order of 18 January 2001.[11]

On 13 March 2001, respondents filed a Motion for Reconsideration of the RTC Order dated 18 January 2001, insisting that they were still to present two more witnesses.[12]

However, at the hearing scheduled on 16 March 2001, respondents and Atty. Suarez were absent yet again.[13]

The 5 April 2001 hearing was reset once more, upon agreement of the parties, in anticipation of an amicable settlement.[14]

On 23 May 2001, Atty. Suarez moved for the cancellation of the hearing scheduled for 25 May 2001 because of a previously scheduled one in another court. He further manifested that a compromise agreement had been approved by respondents and may be submitted for the approval of the trial court once the agreement was signed by the parties.[15]

During the 28 May 2001 hearing, Atty. Suarez and respondents were likewise absent. Petitioners objected to the resetting of the hearing on account of the numerous postponements attributable to the nonappearance of respondents and their counsel.[16] On 26 June 2001, upon agreement of the parties, the hearing was reset for 31 July 2001,[17] and had to be reset two times more for possible amicable settlement of the case.

Finally, with Atty. Suarez still failing to appear at the 12 November 2001 hearing, the RTC issued an Order submitting the case for decision based on whatever evidence had been adduced.[18]

On 28 November 2001, the trial court issued another Order, this time stating that there being no formal offer of evidence from petitioners, it thus resolved to set aside the previous Order. The court gave 15 days for petitioners to submit their written formal offer of evidence from receipt of the Order, after which the case was to be deemed submitted for resolution.[19]

On 28 January 2002, without waiting for the submission of the written formal offer of evidence, the RTC rendered its assailed Decision, the dispositive portion of which states:

WHEREFORE, premises considered:
  1. Declaring Transfer Certificate of Title Nos. NT-250333 and NT-250334 both of the Registry of Deeds of Cabanatuan City in the name of Moldex Realty Inc. is hereby declared null and void;

  2. Ordering jointly and severally the defendants to pay the plaintiffs the amount of P100,000.00 Philippine Currency, as actual, moral and exemplary damages; and,

  3. To pay the plaintiffs the sum of P10,000.00 as attorney[’]s fees. [20]

On the same day that petitioner Moldex received a copy of the Decision, 5 February 2002, it filed a Manifestation asking for a clarification of the trial court’s Order dated 28 November 2001, which it received on 29 January 2002. It alleged that it was in a quandary over whether to file its formal offer of evidence, considering that it had not yet presented any, and that the court had already ordered respondents’ presentation of evidence as closed and terminated without any formal offer. Moreover, petitioners stated:

  1. That defendant Moldex Realty, Inc. is more than willing to present its evidence but the court asked defendants [sic] counsel during the last hearing on November 12, 2001, if they wish to submit the case for decision and they agreed, considering that plaintiffs had been delaying the proceedings by their continuous absence and that they (plaintiffs) had not formally offered their evidence and rested their case;

  2. That for all intents and purposes of the law and pursuant to the Rules of Court, plaintiffs had not presented evidence at all.[21]

After it received a copy of the RTC’s Decision, however, petitioner Moldex filed a Motion for Reconsideration[22] on 11 February 2002. It alleged that Judge Ballutay gravely erred and abused his discretion when he rendered the assailed Decision before respondents had completed their evidence and rested their case, and before defendants had the opportunity to adduce evidence; that the Decision was rendered without the 15-day period given to petitioners to formally submit their evidence pursuant to the 28 November 2001 Order, which was received only on 29 January 2002; that the Decision was tantamount to a judgment on the pleadings and/or summary judgement; and that the Decision was contrary to the law and the facts.

On 27 February 2002, the RTC issued an Order[23] denying the Motion for Reconsideration for the following reasons: counsel for petitioner Moldex, Atty. Samuel Acorda, was absent on several hearing dates; he manifested in open court during the 31 May 2000 hearing that petitioner Moldex had nothing to do with the case; the parties failed to submit a compromise agreement despite manifesting that they would; and the case had already dragged on for a number of years.

On appeal, the CA affirmed the ruling of the trial court. It held that petitioners had been given ample time to present their evidence, but failed to do so and in fact agreed to submit the case for resolution. It further ruled that the trial court based its findings on the documents attached to the Complaint, pointing out that these documents had been properly identified and marked during the testimony of Ricardo. Neither did the CA find the RTC’s resolution of the case reprehensible despite the fact that the 15 days given to petitioners to submit their formal offer of evidence had not yet lapsed.

Moreover, delving into the merits of the case, the CA held that petitioner Moldex failed to prove that it had actually paid respondents the value of the subject properties. Furthermore, the appellate court held that the Deeds of Absolute Sale, which were purportedly signed by Ursula and Rafael Villabona, were null and void. Thus, the dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the assailed Decision, dated January 28, 2002, of the Regional Trial Court (Branch 25, Cabanatuan City), is hereby AFFIRMED in toto.


Hence, this Petition.

To recapitulate, upon failure of respondents and their counsel, Atty. Suarez, to appear during the 18 January 2001 hearing, the RTC decreed that their presentation of evidence was considered closed and terminated. On the same day, petitioners were ordered to present their evidence on 9 February 2001. However, the hearing scheduled for that day was also cancelled and reset due to the absence of Atty. Suarez. Again, on 9 March 2001, he was absent; thus, the trial was rescheduled for 5 April 2001. Thereafter, the parties exerted efforts to reach a compromise agreement, prompting the trial court to postpone the scheduled hearings. Neither did the court resolve respondents’ 13 March 2001 Motion for Reconsideration questioning the 18 January 2001 Order, which considered respondents’ presentation of evidence closed and terminated.

It is clear from the records that since 18 January 2001, petitioners did not have the opportunity to present their evidence through no fault of their own. Most of the time, counsel for respondents did not attend the scheduled hearings. While it is true that some of the postponements were attributable to petitioners, these were agreed upon by the parties in order to reach an amicable settlement. It must be emphasized that, in this jurisdiction, a compromise agreement is highly encouraged as provided under the Civil Code. Articles 2029 and 2030 thereof reads:

Art. 2029. The court shall endeavour to persuade the litigants in a civil case to agree upon some fair compromise.

Art. 2030. Every civil action or proceeding shall be suspended:

(1) If willingness to discuss a possible compromise is expressed by one or both parties; or

(2) If it appears that one of the parties, before the commencement of the action or proceeding, offered to discuss a possible compromise but the other party refused the offer.

The duration and terms of the suspension of the civil action or proceeding and similar matters shall be governed by such provisions of the rules of court as the Supreme Court shall promulgate. Said rules of court shall likewise provide for the appointment and duties of amicable compounders.

Furthermore, upon failure of the parties to present an amicable settlement, what the trial court should have done was to continue the trial by resolving respondents’ Motion for Reconsideration and allowing petitioners to present their evidence in chief. Rather, the RTC immediately considered the case submitted for decision on 12 November 2001. After realizing that no formal offer of evidence had been submitted by petitioners, it recalled the 12 November 2001 Order, through another Order dated 28 November 2001, and required petitioners to submit their formal offer of evidence.

Clearly, the procedure adopted by the RTC was contrary to that provided in Rule 30, Section 5 of the Rules of Court, which states:

SECTION 5. Order of trial. — Subject to the provisions of Section 2 of Rule 31, and unless the court for special reasons otherwise directs, the trial shall be limited to the issues stated in the pre-trial order and shall proceed as follows:

(a) The plaintiff shall adduce evidence in support of his complaint;

(b) The defendant shall then adduce evidence in support of his defense, counterclaim, cross-claim and third-party complaint;

(c) The third-party defendant, if any, shall adduce evidence of his defense, counterclaim, cross-claim and fourth-party complaint;

(d) The fourth-party, and so forth, if any, shall adduce evidence of the material facts pleaded by them;

(e) The parties against whom any counterclaim or cross-claim has been pleaded, shall adduce evidence in support of their defense, in the order to be prescribed by the court;

(f) The parties may then respectively adduce rebutting evidence only, unless the court, for good reasons and in the furtherance of justice, permits them to adduce evidence upon their original case; and

(g) Upon admission of the evidence, the case shall be deemed submitted for decision, unless the court directs the parties to argue or to submit their respective memoranda or any further pleadings.

If several defendants or third-party defendants, and so forth, having separate defenses appear by different counsel, the court shall determine the relative order of presentation of their evidence.

Moreover, without verifying the date of receipt by petitioners of the 28 November 2001 Order, and without waiting for the submission of their formal offer of evidence, the RTC rendered its Decision. Not only the parties, but even the court itself is bound by its own Order. The RTC further brushed aside petitioner Moldex’s Manifestation filed on 5 February 2002 that it still had to present evidence to prove its case, as well as its explanation that it only received the 28 November 2001 Order on 29 January 2002.

It is equally important to note that the trial court relied merely on the Annexes of photocopied documents attached to the Complaint, without giving the same weight to those attached to petitioner Moldex’s Answer. On the one hand, respondents claim that the titles to the subject properties were transferred by virtue of falsified Deeds of Absolute Sale executed by their deceased parents in favor of petitioner Moldex. On the other hand, petitioner Moldex alleges that the titles were transferred to its name by virtue of the Deeds of Absolute Sale executed by respondents themselves. It further claims that payment had been made upon Ricardo’s endorsement of the check, extinguishing its obligation to him. Clearly, there were still substantial issues that needed to be threshed out that necessitated the presentation of evidence.

In Borje v. Court of First Instance of Misamis Occidental, Branch II,[25] we said:

Verily, the above discussion shows the need of presentation of proof for the respective allegations of the parties. For the respondent Court to make a summary finding of lack of malice or bad faith on the part of private respondents from those controverted facts and then decree the dismissal of the case is, therefore, violative of due process. In view of the doubtful question of facts presented herein, respondent court, in the exercise of sound discretion, should have refused to consider and decide in a summary manner and should have allowed the parties to present proof in support of their respective stand. This is because the right to a hearing, which is the right of the parties interested or affected to present their respective cases and submit evidence in support thereof, is one of the primary cardinal rights of litigants.

The importance of this right has been underscored in several cases of this nature decided by this Court. In one of such cases, De Leon vs. Henson, this Court ruled that the dismissal of an action upon a motion to dismiss constitutes a denial of due process, if, from a consideration of the pleadings, it appears that there are issues of fact which cannot be decided without a trial of the case on the merits. Similarly, in Constantino vs. Estenzo, citing Garanciang, et al. vs. Garanciang, et al. and Boñaga vs. Soler, this Court held as follows:

“x x x Summary or outright dismissals of actions are not proper where there are factual matters in dispute which need presentation and appreciation of evidence. The demands of a fair, impartial and wise administration of justice call for faithful adherence to legal precepts on procedure which ensure to litigants the opportunity to present their evidence and secure a ruling on all the issues presented in their respective pleadings. ‘Short cuts’ in judicial processes are to be avoided where they impede rather than promote a judicious dispensation of justice.[26] (Emphasis supplied)

It was therefore incumbent on the RTC to allow the presentation of petitioner’s evidence for the proper disposal of the case.

In all, we find that the trial court violated the parties’ due process when it proceeded with the trial contrary to the procedure provided by the Rules of Court. It failed to resolve respondents’ Motion for Reconsideration questioning the 18 January 2001 Order and prevented petitioners from presenting their evidence in chief.

WHEREFORE, in view of the foregoing, the 6 October 2006 Decision of the Court of Appeals in CA-G.R. CV No. 74435 and the 28 January 2002 Decision and 27 February 2002 Order of Branch 25 of the Regional Trial Court of Cabanatuan City in Civil Case No. 3276-AF are hereby REVERSED and SET ASIDE.

Let this case be remanded to Branch 25 of the Regional Trial Court of Cabanatuan City, which is hereby ORDERED to resolve respondents’ Motion for Reconsideration dated 6 March 2001 and to proceed with the trial thereafter, as provided under the Rules of Court.


Carpio, (Chairperson), Brion, Perez, and Reyes,  JJ., concur.

[1] Rollo,  pp.-7-25: penned by Associate Justice Edgardo F. Sundiam with Associale Justices Rodrigo V. Cosico and Celia C. Librea-Leagogo concurring.

[2] Rollo,  pp.-70-75.

[3] Records, pp. 2-6.

[4] Id. at 16-17.

[5] Id. at 29-36.

[6] Id. at 42-49.

[7] Id. at 54-59.

[8] Id. at 60.

[9] Id. at 134.

[10] Id. at 136.

[11] Id. at 139.

[12] Id. at 140-142.

[13] Id. at 143.

[14] Id. at 145.

[15] Id. at. 148-149.

[16] Id. at 152.

[17] Id. at 154.

[18] Id. at 162.

[19] Id. at 163.

[20] Id. at 169.

[21] Rollo, p. 76.

[22] Records, pp. 172-176.

[23] Id. at 182-183.

[24] Rollo, p. 25.

[25] 177 Phil. 532 (1979).

[26] Id. at 541-542.

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