Cruz vs. Cruz

An action for annulment of deed of sale, reconveyance, and damages survives the death of the plaintiff because the wrong complained of affects primarily and principally property and property rights, with any injuries to the person being merely incidental.

Memoracion Z. Cruz acquired a parcel of land in Tondo, Manila during her union with her common-law husband, registered under her name (TCT No. 63467). In August 1991, she discovered that the title had been transferred to her son, Oswaldo Z. Cruz, and the latter’s wife (TCT No. 0-199377) by virtue of a Deed of Sale dated February 12, 1973. Memoracion alleged that the deed was executed through fraud, forgery, misrepresentation, and simulation. Despite demands and barangay conciliation efforts, Oswaldo refused to reconvey the property.

• Acquisition and Registration: Memoracion Z. Cruz acquired a parcel of land located at Tabora corner Limay Streets, Bo. Obrero, Tondo, Manila during her union with common-law husband Architect Guido M. Cruz. The property was registered in her name under TCT No. 63467.
• Disputed Transfer: Sometime in July 1992, Memoracion discovered that the title to the property had been transferred to her son Oswaldo Z. Cruz and the latter's wife in August 1991 under TCT No. 0-199377. The transfer was made by virtue of a Deed of Sale dated February 12, 1973.
• Allegations of Fraud: Memoracion claimed the Deed of Sale was executed through fraud, forgery, misrepresentation, and simulation, rendering it null and void.
• Demand and Conciliation: Memoracion, assisted by her husband’s relatives, demanded that Oswaldo reconvey the property. Oswaldo refused. The dispute was brought to the Barangay, but remained unsettled, resulting in a certification to file action in court.
• Death of Plaintiff: On October 18, 1993, Memoracion filed the complaint. After finishing her evidence-in-chief, she died on October 30, 1996. Counsel notified the court on January 13, 1997, identifying her son Edgardo Z. Cruz as her legal representative.
• Substitution Attempt: On October 17, 1997, Edgardo Z. Cruz filed a Manifestation with the RTC, retaining the services of Memoracion's counsel for the plaintiff.

• Survival of Action: Petitioner argued that the action for annulment of deed of sale, reconveyance, and damages survives the death of the plaintiff because it primarily involves property and property rights, not purely personal actions.
• Error in Dismissal: Petitioner maintained that the CA erred in affirming the RTC's dismissal, as the proper procedural step upon the death of a party in a surviving action is the substitution of heirs, not the dismissal of the case.

• Purely Personal Action: Respondent argued that Memoracion's action for reconveyance is a purely personal action that does not survive the death of a party, pursuant to Section 21, Rule 3 of the Revised Rules of Court.
• Legal Absurdity: Respondent maintained that allowing the case to continue would result in legal absurdity, as one heir (Edgardo) would be representing the defendant (Oswaldo, who is also an heir) as a co-plaintiff in the case.

• Survival of Action: Whether an action for annulment of deed of sale, reconveyance, and damages survives the death of the plaintiff.
• Propriety of Dismissal: Whether the CA erred in affirming the RTC's dismissal of the case instead of ordering the substitution of the deceased plaintiff by her heirs.

• Survival of Action: The action survives the death of the plaintiff. The criterion for determining survivability depends on the nature of the action and the damage sued for. Where the wrong complained of affects primarily and principally property and property rights, and injuries to the person are merely incidental, the action survives. Because the complaint seeks the annulment of a deed of sale of real property and reconveyance, it principally affects property rights.
• Propriety of Dismissal: The dismissal was erroneous. When a party dies during the pendency of a case and the claim is not extinguished, the court must order the substitution of the deceased by his legal representative or heirs pursuant to Section 16, Rule 3 of the 1997 Revised Rules of Civil Procedure. The RTC was properly notified of Memoracion's death and the identity of her heir, Edgardo Cruz. The heir's subsequent Manifestation retaining counsel constituted a formal substitution. The RTC should have required Edgardo to appear and be substituted, rather than dismissing the complaint. Furthermore, Oswaldo, although an heir, was properly excluded as a legal representative because he is an adverse party in the case.

• Survival of Actions — An action survives the death of a party if the wrong complained of affects primarily and principally property and property rights, the injuries to the person being merely incidental. Conversely, if the injury complained of is to the person, and the property and rights of property affected are merely incidental, the action does not survive. Applied to this case, an action for annulment of sale of real property and reconveyance principally affects property and thus survives the plaintiff's death.
• Substitution of Parties upon Death — Under Section 16, Rule 3 of the 1997 Revised Rules of Civil Procedure, if a party dies during the pendency of an action and the claim is not extinguished, counsel must inform the court within 30 days of the death and provide the name and address of the legal representative. The heirs may be substituted for the deceased without requiring the appointment of an executor or administrator. If no legal representative is named or fails to appear, the court must order the opposing party to procure the appointment of an executor or administrator to protect the estate.
• Vesting of Inheritance — Under Article 777 of the Civil Code, rights to the succession are transmitted from the moment of the decedent's death. Heirs acquire a definite right to the property of the deceased even before judicial declaration in testate or intestate proceedings, vesting them with the interest to be substituted as parties in interest in pending litigation involving such property.
• Exclusion of Adverse Party as Legal Representative — An heir who is an adverse party in the pending litigation cannot act as the legal representative of the deceased for purposes of substitution.

• "The question as to whether an action survives or not depends on the nature of the action and the damage sued for. In the causes of action which survive, the wrong complained [of] affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive, the injury complained of is to the person, the property and rights of property affected being incidental."
• "From the moment of the death of the decedent, the heirs become the absolute owners of his property, subject to the rights and obligations of the decedent, and they cannot be deprived of their rights thereto except by the methods provided for by law. The moment of death is the determining factor when the heirs acquire a definite right to the inheritance whether such right be pure or contingent."

• Bonilla v. Barcena, 163 Phil. 516 (1976) — Controlling precedent followed. Established the criterion for determining whether an action survives the death of a party based on whether the wrong affects primarily property or person. Also established that heirs acquire a definite right to the inheritance upon the decedent's death, vesting them with the right to be substituted in pending litigation.
• Sumaljag v. Literato, G.R. No. 149787, 18 June 2008, 555 SCRA 53 — Followed. Ruled that a Petition for Declaration of Nullity of Deed of Sale of Real Property relates to property and property rights and survives the death of the petitioner. Also applied the doctrine that an heir who is an adverse party should be excluded as a legal representative.
• Heirs of Haberer v. Court of Appeals, 192 Phil. 62 (1981) — Followed. Applied to hold that the Manifestation filed by Memoracion's heir, Edgardo Cruz, retaining the services of the original counsel, constituted a formal substitution of the deceased plaintiff.

• Section 16, Rule 3, 1997 Revised Rules of Civil Procedure — Governs the duty of counsel and the procedure for substitution upon the death of a party. Applied to mandate that the RTC should have ordered the substitution of the deceased by her named heir instead of dismissing the case.
• Section 17, Rule 3, Old Rules of Court — Cited as the predecessor provision to Section 16, Rule 3, outlining the procedure for substitution upon death and the appointment of a legal representative if necessary.
• Article 777, Civil Code — Provides that rights to the succession are transmitted from the moment of the death of the decedent. Relied upon to establish that the heirs acquired interest in the litigated property upon Memoracion's death, justifying their substitution as parties in interest.

Nachura, A.E.B., Bersamin, L.P., Abad, R.A., and Mendoza, J.C.