Heirs of Pio Tejada and Soledad Tejada vs. Garry B. Hay

Leave to file an amended pleading should be liberally granted at any stage of the proceedings, including after the pre-trial conference and issuance of a pre-trial order, absent a showing that the motion for leave was made in bad faith or with intent to delay; the timing of the motion is not the primordial consideration.

The Tejada heirs are the children of Pio and Soledad Tejada. Respondent Garry B. Hay substituted Myrna L. Hay, who invoked deeds of absolute sale over the disputed parcel of land. The procedural dispute is governed by Rule 10 of the Rules of Court, which allows amendments to pleadings by leave of court and permits refusal only where the motion is made with intent to delay, and by the judicial policy favoring liberal amendment.

Petitioners are the heirs of Pio Tejada and Soledad Tejada, represented by Pio Domingo Tejada. Myrna L. Hay, later substituted by Garry B. Hay, filed a Complaint for Quieting of Title against them over a parcel of land. Myrna alleged that Pio sold the disputed parcel to Haru Gen Beach Resort and Hotel Corporation on November 12, 1988, as evidenced by a Deed of Absolute Sale; that Haru Gen later sold the property to her on March 5, 1992, as evidenced by another Deed of Absolute Sale; and that another Deed of Absolute Sale dated May 28, 1997 purported to show that Pio sold the same property to her.

Petitioners, on their own, filed an Answer dated August 26, 2016, seeking dismissal of the Complaint on the ground that the deeds of sale purportedly conveying title to Myrna were falsified because their father’s signature thereon was forged. The case was initially set for pre-trial on September 28, 2016, but due to several postponements, pre-trial ensued only on June 28, 2017. On even date, the RTC issued a Pre-Trial Order stating that trial was scheduled to begin on October 25, 2017. The initial trial was likewise postponed several times at Myrna’s or her counsel’s instance for several reasons. Eventually, instead of proceeding to trial, the RTC issued an Order dated June 27, 2018 referring the case to mediation on July 19, 2018.

On July 6, 2018, petitioners, through counsel, filed a Motion for Leave for their Amended Answer to be admitted to clarify several matters and hasten the determination of the actual merits of the controversy. Specifically, petitioners averred that the Amended Answer (a) specifies with particularity which of the allegations in the complaint are admitted and denied, and (b) asserts compulsory counterclaims such as the nullification of the deeds of absolute sale that Myrna invoked for being falsified, declaration of petitioners’ ownership over the property, and grant of damages. Petitioners argued that admission was warranted because no responsive pleading was filed for the original Answer, and the case had not yet gone to trial nor had it been called for preliminary conference. They stated that the leave sought and amendments made were not dilatory but would aid the court to resolve the case speedily and based on its real facts.

In an Order dated August 17, 2018, the RTC denied the Motion for Leave because the case had already gone through preliminary and pre-trial conference, contrary to petitioners’ claim. The RTC also ordered petitioners’ counsels to show cause why they should not be cited in contempt for erroneously asserting that the case had not yet gone through preliminary conference/pre-trial. In compliance, petitioners’ counsels filed an Explanation stating that their misconception regarding the stage of the proceedings was due to the RTC Order dated June 27, 2018 referring the case to mediation; they believed in good faith that the case was still at the pre-trial stage since Sections II and XII, Part Three of A.M. No. 11-1-6-SC-PHILJA provides that mediation proceedings are part of the pre-trial stage. Petitioners, through counsel, also filed a Motion for Reconsideration of the denial, but it was denied in an Order dated December 3, 2018.

Petitioners challenged the denial before the CA through a Petition for Certiorari under Rule 65. The CA found no grave abuse of discretion on the part of the RTC in denying the Motion for Leave, considering that the records showed the case had indeed already gone through the preliminary conference/pre-trial stage. The CA also found that the Amended Answer was not necessary since all the material elements of petitioners’ defense—that the deeds of absolute sale invoked by respondent were falsified—had already been stated in their original Answer.

• Liberal Allowance of Amendments: Petitioners argued that the CA erred in affirming the disallowance of the Amended Answer because amendments to pleadings are favored at any stage of the proceedings.
• Stage of Proceedings and Mediation: Petitioners maintained that the Motion for Leave was filed before initial trial and the case was still pending for mediation, so the amendment remained warranted.
• No Delay or Prejudice: Petitioners argued that the amendment was aimed neither to delay the proceedings nor to prejudice respondent but to clarify certain matters.
• Admission Warranted by Absence of Responsive Pleading and Trial: In their Motion for Leave, petitioners argued that admission was warranted because no responsive pleading was filed for the original Answer, and the case had not yet gone to trial nor had it been called for preliminary conference.
• Non-Dilatory and Aids Real Facts: Petitioners stated that the leave sought and amendments made were not dilatory, but would aid the court to resolve the case speedily and based on its real facts.

• Delay and Repetition: Respondent maintained that the allowance of the Amended Answer would only cause further delay in the proceedings as it contains arguments already stated in the original Answer, albeit written “in a more scholarly, formal and well[-]researched manner[.]”

• Grave Abuse of Discretion in Denying Leave to Amend: Whether the RTC gravely abused its discretion in denying petitioners’ Motion for Leave and to Admit Attached Amended Answer with Counterclaim solely because the case had already gone through preliminary/pre-trial conference and a Pre-Trial Order had been issued.
• Liberal Allowance of Amendments: Whether amendments to pleadings should be liberally allowed at any stage of the proceedings, including after the pre-trial conference, absent intent to delay.
• Propriety of the Amended Answer: Whether the Amended Answer, which specifies denials and asserts compulsory counterclaims, should be admitted to aid the court in determining the real merits and avoiding multiplicity of suits.
• Prejudice and Delay: Whether admission of the Amended Answer would prejudice respondent or cause unnecessary delay.

• Grave Abuse of Discretion in Denying Leave to Amend: Yes. The RTC gravely abused its discretion in denying the Motion for Leave solely because the case had already gone through preliminary/pre-trial conference; the timing of the motion is not the primordial consideration.
• Liberal Allowance of Amendments: Yes. Rule 10, Sections 1 and 3, and judicial policy require liberal allowance of amendments at any stage, provided the motion is not made with intent to delay.
• Propriety of the Amended Answer: Yes. The Amended Answer should be admitted because it specifies denials as required by Rule 8, Section 10, and asserts compulsory counterclaims, which would aid the court in resolving the real controversies and avoiding multiplicity of suits.
• Prejudice and Delay: No. Admission would cause no prejudice to respondent since the defense was not substantially altered, and no basis exists to accuse petitioners of delay; respondent’s own postponements contributed to the delay.

• Grave Abuse of Discretion in Denying Leave to Amend: The RTC denied the Motion for Leave because the case had already gone through preliminary/pre-trial conference and a Pre-Trial Order had been issued. The RTC and CA, however, omitted determining whether the Motion for Leave was interposed only to delay the proceedings. Under Rule 10, Section 3, leave may be refused only if it appears that the motion was made with intent to delay. The primordial consideration is not when the motion was filed, but whether the amendments sought would aid the court to decide the case on the merits based on real facts without unnecessary delay and help avoid multiplicity of suits. Thus, the filing of the Motion for Leave after the issuance of the Pre-Trial Order was not reason enough to deny it or to discredit the Amended Answer as a dilatory tactic. The RTC therefore gravely abused its discretion.
• Liberal Allowance of Amendments: Sections 1 and 3, Rule 10, allow amendments by adding or striking out an inadequate allegation or description so that the actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious and inexpensive manner. The only limitation is that leave may be refused if the motion was made with intent to delay. Courts are impelled to treat motions for leave to file amended pleadings with liberality, especially when the motion is filed during the early stages of the proceedings or, at least, before trial. The Court reiterated that rules of procedure are mere tools designed to facilitate the attainment of justice, and their strict and rigid application on technical matters, which tends to frustrate rather than promote substantial justice, must be avoided.
• Propriety of the Amended Answer: A perusal of the Amended Answer showed that it specifies with particularity which of the allegations in the complaint are admitted and denied, and clearly sets forth the truth of the matter upon which petitioners rely to support any denial, as required under Section 10, Rule 8, unlike the original Answer. It also specifies special affirmative defenses and counterclaims: the nullification of the alleged falsified deeds of absolute sale, and the grant of damages and attorney’s fees. Under these conditions, admission was not only more prudent but warranted, as the Amended Answer contained allegations crucial for the complete and proper disposition of the case, to prevent multiplicity of suits, afford relief to all parties, aid the trial court in determining the real controversies, and expedite the proceedings.
• Prejudice and Delay: The admission of the Amended Answer would cause no prejudice to respondent since petitioners’ defense was not substantially altered, as the CA and respondent himself pointed out. There was no basis for respondent’s accusation that the Amended Answer was interposed only to delay the proceedings. Respondent and counsel themselves admitted that the delay was attributable to their repeated motions to postpone the hearings for several reasons. The grant of leave was in keeping with the policy favoring liberal treatment of amendments, especially those made before the conduct of trial.

• Liberal allowance of amendments to pleadings — Rule 10, Sections 1 and 3, allow amendments by leave of court to ensure actual merits are speedily determined without technicalities. Leave may be refused only if the motion was made with intent to delay. The Court applied this by holding that the RTC’s denial based solely on the pre-trial stage was grave abuse of discretion.
• Intent to delay as the only limitation — The only limitation under Rule 10, Section 3, is intent to delay. The timing of the motion is not the primordial consideration; the question is whether the amendment would aid the court in deciding the case on the merits based on real facts without unnecessary delay and avoid multiplicity of suits. No such intent was found.
• Pre-trial order does not bar amendment — The filing of a motion for leave after the issuance of a Pre-Trial Order is not reason enough to deny it or to discredit the amended pleading as a dilatory tactic. The amendment may be admitted if it serves the complete and proper disposition of the case.
• Rules of procedure as tools of justice — Procedural rules are mere tools designed to facilitate the attainment of justice; their strict and rigid application on technical matters, which tends to frustrate rather than promote substantial justice, must be avoided. The Court invoked this to favor admission of the Amended Answer.
• Specific denial and compulsory counterclaims — Under Rule 8, Section 10, a defendant must specify each material allegation not admitted and set forth the substance of the matters relied upon to support the denial. An amended answer that complies and asserts compulsory counterclaims may be admitted to prevent multiplicity of suits and afford complete relief.

• "Bona fide amendments to pleadings are allowed at any stage of the proceedings so that every case may as much as possible, be determined on its real facts, affording complete relief to all the parties involved in the case." — This opening statement articulates the judicial policy favoring amendments and frames the Court’s resolution of the procedural dispute.
• "In the exercise of such discretion, trial courts may grant leave and allow the filing of an amended pleading so long as it does not appear that the motion for leave was made in bad faith or with intent to delay the proceedings." — This passage states the controlling standard for granting leave to amend after pre-trial, limiting refusal to cases of bad faith or dilatory intent.
• "In the exercise of the discretion to grant or deny leave of court to admit amended pleadings, the primordial consideration is not when the motion was filed, but rather whether the amendments sought to be admitted would aid the court to decide the case on the merits based on real facts without unnecessary delay, and help avoid multiplicity of suits." — This is the ratio decidendi on why the timing of the motion, by itself, cannot justify denial.
• "Thus, the filing of the Motion for Leave after the issuance of the Pre-Trial Order is not reason enough to deny it and to discredit the Amended Answer as a sheer dilatory tactic." — This directly rejects the RTC and CA’s sole ground for denial and is central to the finding of grave abuse of discretion.

• Spouses Tatlonghari vs. Bangko Kabayan-Ibaan Rural Bank, Inc., 792 Phil. 309, 516 (2016) — Cited for the rule that trial courts may grant leave and allow the filing of an amended pleading so long as it does not appear that the motion for leave was made in bad faith or with intent to delay the proceedings.
• Yujuico vs. United Resources Asset Management, Inc., 762 Phil. 198, 207 (2015) — Cited for the policy of liberality in amendments and for the rule that the primordial consideration is not when the motion was filed but whether the amendment would aid the court in deciding the case on the merits without unnecessary delay and avoid multiplicity of suits.
• Quirao vs. Quirao, 460 Phil. 605, 611-612 (2003) — Cited for the rule that amendments to pleadings are favored and should be liberally allowed at any stage of the lawsuit as long as they are not dilatory, and for the reminder that rules of procedure are tools to facilitate justice.
• Chong vs. CA, 554 Phil. 43, 50-51 (2007) — Cited for the proposition that the admission of an amended answer may be warranted to prevent multiplicity of suits and afford relief to all parties, and that amendments may be allowed at any stage.
• Valenzuela vs. CA, 518 Phil. 68, 76 (2006) — Cited for the rule that after pre-trial, the filing of an amended answer is no longer a matter of right but subject to the trial court’s discretion.

• Rule 10, Section 1, Rules of Court — Pleadings may be amended by adding or striking out an allegation or the name of any party, or by correcting a mistake in the name of a party or a mistaken or inadequate allegation or description in any other respect, so that the actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious and inexpensive manner. The Court applied this to allow the Amended Answer.
• Rule 10, Section 3, Rules of Court — Substantial amendments may be made only upon leave of court, but such leave may be refused if it appears to the court that the motion was made with intent to delay. The Court held that no intent to delay was shown, and the denial based on the pre-trial stage was improper.
• Rule 8, Section 10, Rules of Court — A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. The Court found the Amended Answer complied, unlike the original Answer.
• Rule 18, Section 2, Rules of Court — The pre-trial is mandatory, and the court shall consider the necessity or desirability of amendments to the pleadings. The Court cited this in noting that the pre-trial stage is the point at which amendments should be considered.
• A.M. No. 11-1-6-SC-PHILJA, Sections II and XII, Part Three — The Consolidated and Revised Guidelines to Implement the Expanded Coverage of Court-Annexed Mediation and Judicial Dispute Resolution provide that mediation proceedings are part of the pre-trial stage. Petitioners’ counsel invoked this in explaining their belief that the case remained at the pre-trial stage.

Leonen, SAJ. (Chairperson), Lazaro-Javier, Dimaampao, and Kho, Jr., JJ., concur. Justice Dimaampao was designated as additional member vice J.J. Lopez per Raffle dated September 6, 2022.