This case involves an appeal by Faustino Cruz from a Court of First Instance order dismissing his complaint for recovery of improvements and conveyance of land against J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. Cruz alleged two causes of action: reimbursement for improvements made on the land at the request of the Deudors (previous claimants), and conveyance of 3,000 square meters of land promised by the defendants for his services as an intermediary in a compromise agreement between the defendants and the Deudors. The Supreme Court ultimately dismissed the appeal, holding that the motion for reconsideration filed by Cruz in the lower court was pro-forma, thus not tolling the period for appeal, rendering the appeal filed out of time and the lower court's dismissal order final and executory.
Primary Holding
A motion for reconsideration that merely reiterates arguments already considered and resolved by the court is pro-forma and does not suspend the reglementary period for filing an appeal; consequently, an appeal filed beyond this period must be dismissed as the assailed order has become final and executory.
Background
The case arose from claims over a large tract of land. The Deudor family, asserting rights based on an "informacion posesoria," allegedly engaged Faustino Cruz to make improvements on a portion of this land. Subsequently, J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. (defendants-appellees), who were the registered owners, purportedly engaged Cruz to act as an intermediary to settle a civil case (Civil Case No. Q-135) with the Deudors concerning 50 quiñones of land, promising him 3,000 square meters as compensation. A compromise agreement was indeed reached between the Deudors and the defendants.
History
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Complaint filed by Faustino Cruz in the Court of First Instance of Quezon City (Civil Case No. Q-7751).
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Defendants J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. filed separate motions to dismiss the complaint.
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The Court of First Instance issued an order dated August 13, 1964, dismissing the complaint.
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Plaintiff Cruz filed a motion for reconsideration on August 22, 1964 (dated August 20, 1964).
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The Court of First Instance denied the motion for reconsideration on September 7, 1964.
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Plaintiff Cruz filed his record on appeal on September 24, 1964, directly to the Supreme Court.
Facts
- Faustino Cruz (plaintiff-appellant) alleged that upon request of the Deudor family, who claimed land based on an "informacion posesoria," he made permanent improvements valued at P30,400.00 and incurred expenses of P7,781.74 on approximately 20 quiñones of land.
- Cruz claimed that J.M. Tuason & Co., Inc. and Gregorio Araneta, Inc. (defendants-appellees) were benefiting from these improvements and should reimburse him.
- Cruz further alleged that in 1952, the defendants engaged his services as an intermediary to work for an amicable settlement of Civil Case No. Q-135 involving 50 quiñones of land (which included the 20 quiñones with improvements).
- As consideration for his services, the defendants allegedly promised to convey to Cruz 3,000 square meters of land he occupied, with the documents to be executed within ten years from the signing of the compromise agreement.
- A compromise agreement between the Deudors and the defendants was entered into on March 16, 1963, and approved by the court.
- Cruz claimed he fulfilled his part of the agreement by convincing the Deudors to settle and assisting in clearing occupants from the 20 quiñones.
- In mid-1963, Cruz demanded the conveyance of the 3,000 sq. m. lot, but the defendants refused.
- The complaint was filed on January 24, 1964.
- The trial court noted that the land supposedly improved by Cruz had been registered in the name of the defendants' predecessors-in-interest since 1914.
- The Supreme Court took judicial notice that the compromise agreement between Deudor and Tuason, relied upon by Cruz, had been declared rescinded and of no effect in previous Supreme Court decisions.
Arguments of the Petitioners
- The complaint states a sufficient cause of action for reimbursement of expenses and services based on the principle of unjust enrichment (Article 2142, Civil Code), as defendants are benefiting from the improvements.
- The Statute of Frauds is not applicable to the claim for the 3,000 sq. m. lot because the agreement was not a "sale of real property" but a promise to convey in consideration of services, and it has been partly executed by the plaintiff.
- The action for the conveyance of the 3,000 sq. m. lot has not prescribed, as the defendants had ten years from March 16, 1953 (date of compromise agreement) to execute the deed, meaning the cause of action accrued only on March 17, 1963, and the complaint was filed in January 1964, well within the prescriptive period for oral contracts.
Arguments of the Respondents
- The complaint states no cause of action for reimbursement of improvements because the agreement for improvements was between Cruz and the Deudors, not with the defendants; thus, Article 2142 (unjust enrichment) is inapplicable.
- Cruz cannot claim good faith in making improvements as the land was registered in the name of defendants' predecessors since 1914.
- The alleged agreement to convey 3,000 sq. m. of land is unenforceable under the Statute of Frauds (Article 1403, Sec. 2(e), Civil Code) as it involves an interest in real property and was not in writing.
- The action to compel conveyance of the 3,000 sq. m. lot has prescribed, as the alleged agreement was made in 1952, and the complaint was filed only in 1964.
- The plaintiff's motion for reconsideration in the lower court was a mere reiteration of arguments already refuted and passed upon, thus being pro-forma.
Issues
- Whether the trial court erred in dismissing the complaint on the ground that the claim over the 3,000 sq. m. lot is unenforceable under the Statute of Frauds.
- Whether the trial court erred in dismissing the complaint on the ground that the claim over the 3,000 sq. m. lot is barred by the statute of limitations.
- Whether the trial court erred in dismissing the complaint for failure to state a cause of action regarding the claim for reimbursement of expenses and services for improvements.
- Whether the appellant's motion for reconsideration filed in the trial court was pro-forma, thereby not suspending the period to appeal.
Ruling
- The Supreme Court found that the trial court erroneously applied the Statute of Frauds, as the agreement was not for the sale of real property but for services as an intermediary, and it had been partially executed by the appellant.
- The Court noted grave doubts about the appellant's ability to successfully maintain his cause of action for the 3,000 sq. m. lot, given that the underlying compromise agreement he helped broker had been declared rescinded in prior Supreme Court cases.
- Regarding the claim for reimbursement based on unjust enrichment (Article 2142), the Court held that the complaint did not state a sufficient cause of action against the defendants because a presumed quasi-contract cannot emerge when the subject matter is covered by an existing contract with a third party (the Deudors). Appellant's recourse was against the Deudors.
- The Supreme Court ultimately dismissed the appeal because the appellant's motion for reconsideration in the trial court was found to be pro-forma, as it merely reiterated arguments already discussed and resolved. Therefore, the motion did not suspend the period for appeal, and the appeal filed on September 24, 1964 (42 days after the dismissal order of August 13, 1964) was beyond the 30-day reglementary period, rendering the trial court's dismissal order final and executory.
Doctrines
- Statute of Frauds (Article 1403, Civil Code) — This statute requires certain contracts to be in writing to be enforceable. The Court clarified that it applies to specific transactions, not all dealings involving real property, and generally only to executory contracts, not those totally or partially performed. It was held inapplicable here because the agreement was for services with land as consideration, not a sale, and plaintiff had allegedly performed his part.
- Partial Performance (Exception to Statute of Frauds) — The doctrine that performance of a contract, in whole or in part, by one party takes the contract out of the operation of the Statute of Frauds. The Court noted that plaintiff's alleged fulfillment of his obligations (brokering the compromise, clearing occupants) constituted partial performance, making the Statute of Frauds inapplicable to his claim for the 3,000 sq. m. lot.
- Quasi-Contract (Article 2142, Civil Code - Solutio Indebiti / Negotiorum Gestio / Unjust Enrichment) — This refers to lawful, voluntary, and unilateral acts that give rise to a juridical relation to the end that no one shall be unjustly enriched or benefited at the expense of another. The Court held this inapplicable for the reimbursement claim because Cruz's improvements were made pursuant to an alleged contract with the Deudors, not the defendants. A quasi-contract cannot arise if there is an existing contract with a third party covering the act.
- Prescription of Actions — The legal principle that actions must be brought within a certain period, or they are barred. The trial court found the action for the 3,000 sq.m. lot prescribed. The Supreme Court did not definitively rule on this beyond noting the appellant's argument that the cause of action accrued later.
- Pro-Forma Motion for Reconsideration — A motion for reconsideration that does not raise new issues or arguments but merely reiterates those already considered and decided by the court. Such a motion does not toll or suspend the period for appeal. The Supreme Court applied this doctrine to find that Cruz's appeal was filed out of time because his motion for reconsideration was pro-forma.
- Judicial Notice — The act by which a court, in conducting a trial or framing its decision, will of its own motion, and without the production of evidence, recognize the existence and truth of certain facts having a bearing on the controversy at bar. The Supreme Court took judicial notice of its prior decisions declaring the Deudor-Tuason compromise agreement (which Cruz helped broker) rescinded.
Key Excerpts
- "From the very language of this provision (Article 2142), it is obvious that a presumed quasi-contract cannot emerge as against one party when the subject matter thereof is already covered by an existing contract with another party."
- "Corollarily, if the one who claims having enriched somebody has done so pursuant to a contract with a third party, his cause of action should be against the latter, who in turn may, if there is any ground therefor, seek relief against the party benefited."
- "It is elementary that the Statute refers to specific kinds of transactions and that it cannot apply to any that is not enumerated therein."
- "And it is likewise a fundamental principle governing the application of the Statute that the contract in dispute should be purely executory on the part of both parties thereto."
- "Virtually, therefore, appellant's motion for reconsideration was ruled to be pro-forma... Consequently, appellant's motion for reconsideration did not suspend his period for appeal."
Precedents Cited
- J. M. Tuason & Co., Inc. vs. Bienvenido Sanvictores, 4 SCRA 123 — Cited to show that the compromise agreement between Deudor and Tuason, upon which appellant Cruz partly based his claim (for services in brokering it), had been declared rescinded and set aside by the Supreme Court. This undermined Cruz's claim as the defendants did not ultimately benefit from that specific compromise.
- J. M. Tuason & Co., Inc. vs. Teodosio Macalindong, 6 SCRA 938 — Cited to reiterate the observation that the Deudor-Tuason compromise agreement had been rescinded, further weakening Cruz's position.
- Estrada vs. Sto. Domingo, 28 SCRA 890, 905-6 — Cited as authority for the rule that a pro-forma motion for reconsideration does not suspend the period for appeal. This was the ultimate basis for dismissing Cruz's appeal.
- Insular Life Assurance Co., Ltd. Employees Association-NATU vs. Insular Life Assurance Co., Ltd. [Resolution en banc of March 10, 1977 in G. R. No. L-25291] — Cited to support the Supreme Court's authority to consider a point (pro-forma nature of the motion for reconsideration) even if not discussed in the briefs, if it was covered by the issues below and apparent from the record.
Provisions
- Article 2142, Civil Code (Quasi-Contracts) — "Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another." Appellant invoked this for his claim for reimbursement of improvements. The Court found it inapplicable because his actions were allegedly based on a contract with the Deudors, not the defendants.
- Article 1403, Civil Code (Statute of Frauds) — Specifically, Sec. 2(e) regarding "an agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein." The trial court applied this to dismiss the claim for the 3,000 sq.m. lot. The Supreme Court found this application erroneous as the agreement was for services and partially executed.
- Article 19, Civil Code (Abuse of Rights) — "Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith." Mentioned by appellant in his motion for reconsideration in the context of unjust enrichment.
- Article 1145, Civil Code (Prescription of actions upon an oral contract) — Mentioned by appellant in his motion for reconsideration, arguing that his cause of action (if based on an oral contract for the 3,000 sq.m. lot) would prescribe in six years from accrual.