379 Phil. 939
KAPUNAN, J.:
The Lazarrabal [sic] family were the registered owners of the properties, subject matter of this case.GABI appealed to the Court of Appeals. Thereafter, the respondent court issued its assailed decision, the dispositive portion of which reads:
In 1991, on different occasions, the subject properties were sold to Ruben Baculi, Editha Belocura, Lira Puno, Rafael Lapuz, Ladrioro Montealto, Joel Masecampo, Delsa N. Manay, Ilderim Castañares, Maria Theresa Puno, [and] Jill Mendoza. On June 27, 1994, plaintiff [herein private respondent GABI Multi-Purpose Cooperative], a registered non-stock, non-profit cooperative filed a civil complaint against defendants [herein petitioners] who were found residing and/or tilling the subject properties. Plaintiff alleged therein that it is the owner in fee simple of the subject properties; that defendants without any authority, resided, tilled, sow [sic] in the subject properties; that defendants refused to vacate inspite [sic] notice.
Plaintiff prays for the issuance of preliminary mandatory injunction to require defendants to remove the barricade constructed by them and for the issuance of a writ of injunction to restrain defendants from preventing plaintiff in developing the subject properties.
On July 20, 1997, the trial court issued a Temporary Restraining Order, enjoining defendants to desist from further stopping plaintiff's development of the properties. The trial court further required defendants to show cause why no writ of preliminary or mandatory injunction be issued against them.
On July 27, 1997, after hearing, the trial court lifted and dissolved the temporary restraining order it earlier issued upon failure of the plaintiff to prove its title over the subject properties.
On July 29, 1994, defendants filed their answer alleging that plaintiff has no personality to file this case since plaintiff does not appear to be the buyer of the properties neither were the properties titled in its name; that the subject properties are part of the forest reserve which cannot be privately acquired.
On August 3, 1994, defendants filed a Motion to Dismiss the complaint on the ground of lack of cause of action, plaintiff has no personality to sue; and lack of jurisdiction.
Plaintiff moved for the striking out of defendants' motion to dismiss, alleging that at this stage defendants could no longer file the said motion.
On August 18, 1994, the assailed order dismissing the complaint on the ground that plaintiff has no real interest in the case, was rendered.
Plaintiff filed a motion for reconsideration of the said order, but the trial court denied the same. The dispositive portion of the order dated January 9, 1995, of the trial court denying plaintiff's motion for reconsideration reads:
WHEREFORE, finding the Motion for Reconsideration to be without merit, the same is hereby denied. Notify counsel accordingly.
IT IS SO ORDERED.[4]
WHEREFORE, foregoing considered, the appealed order is hereby REVERSED and SET-ASIDE. A new one is hereby issued ordering the trial court to reinstate the complaint and to proceed with deliberate speed with the trial of the case.[5]Petitioners' Motion for Reconsideration was denied by the appellate court in its assailed Order, dated April 30, 1998. They then filed the instant petition praying that the dismissal of Civil Case No. CEB-16217 by the trial court be affirmed, and the decision by the appellate court reversing such dismissal be set aside.
The court was confronted with plaintiff’s Motion to Strike Out defendants' pleading entitled: Motion to Dismiss, after the court allowed the same to be filed on the ground alleged in the affirmative defenses, that the plaintiff has no real interest in the property in question. Inasmuch as the action in this case was instituted by the Gabi Multi-Purpose Cooperative which is not the titled owner, nor the holder of the title to the property in question, therefore, it has no legal capacity to sue in this case for lack of interest, not being the real party in interest of the property involved in this litigation. Plaintiff’s motion to strike out defendants' motion to dismiss is therefore denied for lack of merit, on the ground that the court has already resolved in the July 27, 1994 Order that if until today the plaintiff cannot produce and to show to this court the title in the name of Gabi Multi-Purpose Cooperative, the court will proceed to dismiss this case.It appears that the trial court dismissed the case on the ground that GABI was not the owner of the lands or one entitled to the possession thereof, and thus had no cause of action. In dismissal for lack of cause of action, the court in effect declared that plaintiff is not entitled to a favorable judgment inasmuch as one or more elements of his cause of action do not exist in fact.xxx
WHEREFORE, in view of all the foregoing arguments and considerations, this court hereby resolves to dismiss this case as it is hereby disrnissed.[9]
Records show that plaintiff-appellant was afforded the preliminary hearing required by law before the dismissal of the complaint based on the ground raised in the affirmative defenses.The Court disagrees with the appellate court's ruling. The hearing of July 27, 1994 was on the propriety of lifting the restraining order. At such preliminary hearing, the trial court required GABI to produce Certificates of Title to the lands in its name. GABI admitted that it did not have such Certificates, only Deeds of Sale from the registered owners. The order of the trial court dated July 27, 1994, reads in part:x x x
Procedurally, therefore, the complaint was properly dismissed.[10]
To begin with, the discussions started with the court asking whether the parties are present, and asked the defendants whether they have evidence to show why the temporary restraining order should not be continued, and not ripen into a preliminary injunction and they answered that the plaintiff, Gabi Multi Purpose Cooperative has "no locus standi" with Col.Solomon Dalid, to appear and litigate in this case, not being the actual registered owner of the property in question and therefore not the real party in interest.Instead, GABI offered to present evidence to prove its title in the ordinary course of trial. The pertinent portions of the Transcript of Stenographic Notes quoted by petitioners in their Manifestation and Motion, dated September 29, 1998, are reproduced below:
In view thereof, the court asked the plaintiff’s counsel to show to the court titles to prove that they are really the owners of the properties in question. And they could [not] show any, inasmuch as from the records before this court, only Deeds of Sale from the original owners of the properties in favor of individual persons appear.
WHEREFORE, as this hearing was called for the purpose of determining whether the temporary restraining order should ripen into a permanent injunction or in the alternative be lifted this afternoon, for failure of the plaintiffs to show titles to the properties in their names, and they have miserably failed the court hereby resolves to lift and dissolve the temporary restraining order it has issued. However, the defendants are hereby allowed, upon their own request, to file a motion to dismiss questioning the legal personality of Gabi Multi Purpose Cooperative within 15 days from today.[11]
On August 18, 1994, another hearing was conducted wherein GABI was again required to show Certificates of Title to the property in its name. On the basis of GABI's failure to show such Certificates at this second preliminary hearing, the trial court concluded that GABI had no title and thereafter dismissed the case.[13] Such action by the trial court was premature inasmuch as the issues of fact pertaining to GABI's title had not yet been adequately ventilated at that preliminary stage.
COURT: What we are saying, because it has been raised by counsel for the defendants[,] is: what personality has Gabi to sue in this case[.] They are saying that you have no locus standing[sic] in court. You need the proper party in interest. You are not the owners according to the titles. And you are suing, claiming that you are the owners and you have been in possession and that you have been molested by the defendants because you are the owner. But where does it show these? Of course, you alleged that. But where is the proof? We want the proof that you are really the owner. (TSN, 27 July 1994, at 9) We are asking a question of how does Gabi become the owner of this property such that Gabi is now trying to claim this property against the defendants. Such as [to] exclude the defendants from cultivating or tilting [sic] this property. There is no question about it. We are not questioning your existence as a corporation[,] as a corporate entity. We are asking the question, where lies the right of the ownership of Gabi? How can you prove that you own the property, adverse or against these defendants? And you did not show it to this court. I am afraid you have no cause of action. (TSN, id., at 9-10).ATTY. P. FLORES: ...in due time, we are going to present the document.COURT: But you have to present that now. Otherwise, I lift the injunction. I lift the temporary restraining order. And I have said and do [sic] it.ATTY. P. FLORES: Your Honor, please, the incident this afternoon is for the defendants to show cause why the injunction cannot be issued.COURT: When the court made a mistake in giving you this petition, the court cannot order another procedure. If the court commit[s] an error, it is the inherent power of this court to see to it that no injustice is committed. I am not bound by my own error. Only the dead and fools don't change their minds. (TSN, id., at 10)ATTY. FLORES First of all, your Honor, it is not [sic] an error to say that the Gabi Cooperative is not the owner because as a matter of fact, it is the owner. It is just bad enough that [they] were not able to bring with them the documents.[12]
It is a well-settled rule that in determining the sufficiency of the cause of action, ONLY the facts alleged in the complaint and no others, should be considered. In determining the existence of a cause of action, only the statements in the complaint may properly be considered. If the complaint furnish sufficient basis by which the complaint may be maintained, the same should not be dismissed regardless of the defenses that may be assessed [sic] by defendants-appellees.[18]The appellate court, relying on the general rule, made the following conclusion:
A reading of the above-quoted complaint would readily show that plaintiff-appellant has sufficient cause of action as against defendants-appellees.There are well-recognized exceptions to the rule that the allegations are hypothetically admitted as true and inquiry is confined to the face of the complaint. There is no hypothetical admission of the veracity of allegations if their falsity is subject to judicial notice,[20] or if such allegations are legally impossible, or if these refer to facts which are inadmissible in evidence, or if by the record or document included in the pleading these allegations appear unfounded.[21] Also, inquiry is not confined to the complaint if there is evidence which has been presented to the court by stipulation of the parties,[22] or in the course of hearings related to the case.[23]
In the complaint, it is alleged that plaintiff-appellant is the owner of the subject properties, thus, entitled to be respected in its possession and ownership. This is the first element.
Defendants-appellees are mere squatters of the subject properties who should vacate the premises upon demand by plaintiff-appellant. This is the second element.
Defendants-appellees unjustly refused to vacate the subject premises, thus, depriving plaintiff-appellant possession of the same. This is the third element.
In this case therefore, plaintiff-appellant has sufficient cause of action.[19]
Section 1. Grounds.-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:
(g) That the pleading asserting the claim states no cause of action;