Bautista vs. Maya-Maya Cottages, Inc.

A plaintiff may amend its complaint once as a matter of right before a responsive pleading is served, even after the original complaint has been ordered dismissed, provided the order of dismissal is not yet final; a motion to dismiss is not a responsive pleading.

Petitioners Rafael Bautista and Ligaya Rosel are the registered owners of a 3,856-square meter lot in Natipuan, Nasugbu, Batangas, covered by OCT No. P-1436 issued on January 15, 1989. Respondent Maya-Maya Cottages, Inc. is a private corporation. The constitutional backdrop is Article XII, Section 3, which restricts private corporations from acquiring public alienable lands except by lease.

Spouses Rafael and Ligaya Bautista, petitioners herein, are the registered owners of a 3,856-square meter lot located at Natipuan, Nasugbu, Batangas, as evidenced by Original Certificate of Title (OCT) No. P-1436 issued in their names on January 15, 1989 by the Register of Deeds of Batangas. Respondent Maya-Maya Cottages, Inc. (MMCI) is a private corporation.

On May 13, 1996, MMCI filed with the Regional Trial Court (RTC) of Nasugbu, Batangas a complaint for cancellation of petitioners' title and damages, with application for a preliminary injunction, docketed as Civil Case No. 371. MMCI alleged that "without any color of right and through dubious means," petitioners were able to obtain OCT No. P-1436 in their names.

On May 29, 1996, petitioners filed a motion to dismiss the complaint on the ground that it does not state a cause of action. They averred that MMCI is a private corporation, hence disqualified under the Constitution from acquiring public alienable lands except by lease; MMCI cannot thus be considered a real party in interest.

In its Order dated August 30, 1996, the trial court granted the motion to dismiss, holding that since the property is an alienable public land, MMCI is not qualified to acquire it except by lease and thus has no cause of action. MMCI then filed a motion for reconsideration with a motion for leave to file an amended complaint for quieting of title, alleging that the technical description in petitioners' title does not cover the disputed lot. Petitioners filed their opposition, contending that the amended complaint also does not state a cause of action and that, if admitted, MMCI's theory of the case would be substantially modified.

On November 18, 1996, the trial court issued an Order denying petitioners' motion to dismiss, thereby reversing its August 30, 1996 Order dismissing the complaint in Civil Case No. 371. Petitioners then filed with the Court of Appeals a special civil action for certiorari and prohibition, docketed as CA-G.R. SP No. 43574, alleging that the amended complaint did not cure the defect in the original complaint and that the trial court committed grave abuse of discretion in admitting it. The records showed that petitioners had not filed a responsive pleading to the original complaint; what they filed was a motion to dismiss. The Court of Appeals dismissed the petition on November 24, 2000, and denied reconsideration on May 30, 2001, leading to the present petition for review on certiorari.

• Failure to State a Cause of Action: Petitioners maintained that the amended complaint did not cure the defect in the original complaint, which failed to state a cause of action.
• Grave Abuse of Discretion: Petitioners argued that in admitting the amended complaint, the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction, so certiorari and prohibition should lie.
• Change in Theory: Petitioners contended that if the amended complaint were admitted, respondent's theory of the case would be substantially modified.
• Corporate Disqualification: Petitioners contended that respondent corporation is barred from acquiring the subject lot because it is a private corporation disqualified under the Constitution from acquiring public alienable lands except by lease.

• Amended Complaint for Quieting of Title: Respondent sought leave to file an amended complaint for quieting of title, alleging that the technical description in petitioners' title does not cover the disputed lot.
• Admission of Amended Complaint: Respondent moved for reconsideration of the trial court's dismissal order and for admission of its amended complaint.

• Grave Abuse of Discretion in Admitting Amended Complaint: Whether the Court of Appeals erred in holding that the trial court did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in admitting respondent's amended complaint.

• Grave Abuse of Discretion in Admitting Amended Complaint: No. The trial court did not commit grave abuse of discretion because respondent had an absolute right to amend its complaint once before a responsive pleading was served, and a motion to dismiss is not a responsive pleading; the dismissal order was not yet final. The contention that respondent corporation is barred from acquiring the subject lot is a matter of defense for trial.

• Grave Abuse of Discretion in Admitting Amended Complaint: Section 2, Rule 10 of the 1997 Rules of Civil Procedure provides that a party may amend his pleading once as a matter of right at any time before a responsive pleading is served, or, in the case of a reply, within ten days after service. Before any responsive pleading is filed, the right to amend is absolute, regardless of whether a new cause of action or change in theory is introduced. A motion to dismiss is not the responsive pleading contemplated by the Rule. The records show that petitioners had not filed a responsive pleading to the original complaint; they filed only a motion to dismiss. Consequently, respondent, as plaintiff, could file an amended complaint even after the original complaint was ordered dismissed, provided the order of dismissal was not yet final, as in this case. The Court of Appeals thus correctly held that the trial court did not gravely abuse its discretion, and neither certiorari nor prohibition would lie. As to petitioners' contention that respondent corporation is barred from acquiring the subject lot, the Court held that this is a matter of defense that can only be properly determined during the full-blown trial.

• Amendment as a Matter of Right under Section 2, Rule 10 — A party may amend his pleading once as a matter of right at any time before a responsive pleading is served. Before any responsive pleading is filed, the right is absolute, regardless of whether a new cause of action or change in theory is introduced. Applied: respondent could amend its complaint even after the original complaint was dismissed because no responsive pleading had been served and the dismissal order was not final.
• Motion to Dismiss Is Not a Responsive Pleading — A motion to dismiss does not constitute the responsive pleading contemplated by the rule. Applied: petitioners' filing of a motion to dismiss did not cut off respondent's right to amend its complaint as a matter of right.
• Dismissal Order Must Not Be Final — A plaintiff may file an amended complaint even after the original complaint was ordered dismissed, provided that the order of dismissal is not yet final. Applied: the order of dismissal was not final, so the amended complaint was properly admitted.
• Corporate Disqualification as a Matter of Defense — The claim that a corporation is barred from acquiring public alienable land is a matter of defense that can only be properly determined during a full-blown trial. Applied: the Court declined to resolve the issue at the pleading stage.
• Certiorari and Prohibition Require Grave Abuse of Discretion — Certiorari and prohibition will not lie absent grave abuse of discretion amounting to lack or excess of jurisdiction. Applied: because the trial court did not gravely abuse its discretion in admitting the amended complaint, the appellate court correctly dismissed the petition.

• "A party may amend his pleading once as a matter of right at any time before a responsive pleading is served or, in the case of a reply, at any time within ten (10) days after it is served." — This states the controlling rule under Section 2, Rule 10 of the 1997 Rules of Civil Procedure.
• "The above provision clearly shows that before the filing of any responsive pleading, a party has the absolute right to amend his pleading, regardless of whether a new cause of action or change in theory is introduced." — This is the ratio decidendi on the scope of the right to amend.
• "It is settled that a motion to dismiss is not the responsive pleading contemplated by the Rule." — This defines the key procedural point that preserved respondent's right to amend.
• "It follows that respondent, as a plaintiff, may file an amended complaint even after the original complaint was ordered dismissed, provided that the order of dismissal is not yet final, as in this case." — This is the Court's application of the rule to the facts and its core holding.

• Radio Communications of the Phils., Inc. vs. Court of Appeals, G.R. No. 121397, April 17, 1997, 271 SCRA 286 — Cited for the rule that a motion to dismiss is not the responsive pleading contemplated by the Rule.
• Prudence Realty and Dev’t. Corp. vs. Court of Appeals, 231 SCRA 379 (1994) — Cited in Radio Communications for the same rule.
• Soledad vs. Mamangun, 8 SCRA 110 (1963) — Cited in Radio Communications for the same rule.
• Salazar vs. Bartolome, G.R. No. 43364, September 30, 1976, 73 SCRA 247, 250 — Cited for the proposition that a plaintiff may file an amended complaint even after the original complaint was ordered dismissed, provided the order of dismissal is not yet final.
• Paeste and Carpio vs. Jaurigue, 94 Phil. 179 (1953) — Cited in Salazar for the same proposition.

• Section 2, Rule 10, 1997 Rules of Civil Procedure, as amended — Provides that a party may amend his pleading once as a matter of right at any time before a responsive pleading is served, or, in the case of a reply, within ten days after service. Applied: respondent was allowed to amend its complaint because petitioners had not served a responsive pleading, only a motion to dismiss.
• Article XII, Section 3, Constitution — Cited by petitioners as the basis for arguing that a private corporation is disqualified from acquiring public alienable lands except by lease. The Court did not resolve the merits, holding that the matter is a defense for trial.

Artemio V. Panganiban (Chairman), Renato C. Corona, Conchita Carpio Morales, and Cancio C. Garcia.