This case involves a petition for review on certiorari challenging the Court of Appeals' decision which reversed the trial court's denial of respondents Spouses Sy's motion to dismiss. Petitioner Zenaida Roa filed a complaint for cancellation of deeds of sale, annulment of title, and reconveyance, alleging that her property was fraudulently transferred to her niece, Francisco, and then sold to Spouses Sy, who she claims were buyers in bad faith. The Supreme Court reversed the Court of Appeals, holding that the CA erred in dismissing the complaint on the ground of "lack of cause of action" when the ground invoked by Spouses Sy was "failure to state a cause of action." The Court further ruled that by filing a motion for bill of particulars (construed as written interrogatories), Spouses Sy implicitly admitted the sufficiency of the complaint's allegations and that the complaint indeed stated a cause of action against them.
Primary Holding
A court cannot dismiss a complaint motu proprio on a ground not pleaded by the movant, specifically dismissing for "lack of cause of action" when the motion to dismiss alleged "failure to state a cause of action," as these are distinct grounds. Furthermore, when a defendant files a motion for bill of particulars or avails of modes of discovery like written interrogatories, they are deemed to have recognized the existence and sufficiency of the allegations of the adverse party's cause of action in the complaint, thereby barring them from subsequently challenging the complaint for failure to state a cause of action.
Background
Petitioner Zenaida D. Roa and her sister Amelia Roa were co-owners of a property in Makati City. Zenaida discovered that their title was cancelled and a new one was issued to their niece, Marie Antoinette R. Francisco, based on a purportedly forged deed of sale. Zenaida was in Washington D.C. at the time of the alleged execution, and Amelia suffered from Alzheimer's disease. Francisco subsequently sold the property to Spouses Robinson K. and Mary Valerie S. Sy. Zenaida filed a complaint to annul these transactions and recover the property, alleging that Spouses Sy were buyers in bad faith due to suspicious circumstances surrounding the sale.
History
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Complaint for cancellation of deeds of sale, annulment of title, and reconveyance with damages filed by Zenaida D. Roa in the Regional Trial Court (RTC) - Branch 66, Makati City on March 19, 2013.
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Spouses Sy filed a motion to dismiss on the ground of failure to state a cause of action.
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RTC denied Spouses Sy's motion to dismiss on August 7, 2013.
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Spouses Sy's motion for reconsideration was denied by the RTC on March 26, 2014.
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Spouses Sy filed a "Motion for Bill of Particulars" (April 14, 2014) and later an "Amended Motion for Bill of Particulars" (April 15, 2014).
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RTC granted the motion for bill of particulars on September 16, 2014, and petitioner complied.
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Presiding judge of RTC Branch 66 inhibited; case re-raffled to Branch 148.
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Spouses Sy filed a petition for certiorari with the Court of Appeals (CA G.R. SP No. 135555) assailing the denial of their motion to dismiss.
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Court of Appeals reversed the RTC in its Decision dated May 21, 2015, dismissing the complaint against Spouses Sy for lack of cause of action.
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Petitioner's motion for reconsideration was denied by the CA in its Resolution dated November 25, 2015.
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Petitioner Zenaida D. Roa filed a Petition for Review on Certiorari before the Supreme Court.
Facts
- Petitioner Zenaida D. Roa (Zenaida) and her sister Amelia Roa (Amelia) were the registered owners of a property in San Lorenzo Village, Makati City, covered by TCT No. 133936.
- On August 5, 2012, Zenaida learned that their title had been cancelled and a new TCT (No. 006-2012000849) was issued in the name of their niece, respondent Marie Antoinette R. Francisco (Francisco), by virtue of a purported deed of sale.
- Zenaida alleged this deed of sale was forged, as she was in Washington D.C. from March 20, 2012, to August 24, 2012, and could not have executed it on July 6, 2012, or had it notarized on July 10, 2012.
- Amelia allegedly could not have validly signed the deed due to suffering from Alzheimer's disease for the past ten years.
- Francisco subsequently sold the property to respondents Spouses Robinson K. and Mary Valerie S. Sy (Spouses Sy) for P35,000,000.00 via a Deed of Sale dated July 20, 2012, resulting in a new TCT (No. 006-2012000889) in Spouses Sy's name.
- Zenaida alleged Spouses Sy were buyers in bad faith, pointing out that Francisco obtained title in her name only on July 16, 2012, a mere four days before the sale to Spouses Sy on July 20, 2012.
- Zenaida contended that during the initial negotiation between Francisco and Spouses Sy, Zenaida and Amelia were still the registered owners, which should have alerted Spouses Sy.
- Zenaida also highlighted that the only handwritten entry in the Deed of Sale to Spouses Sy was the property's title number, which should have made them suspicious.
- The notary public who purportedly notarized the Deed of Sale between Francisco and Spouses Sy, Atty. Tomas F. Dulay, Jr., denied notarizing said document.
Arguments of the Petitioners
- Petitioner Zenaida Roa argued that her complaint sufficiently stated a cause of action against Spouses Sy.
- Any defect or uncertainty in her complaint had already been cured by the bill of particulars she subsequently filed upon order of the trial court.
- The Court of Appeals erred in dismissing the complaint on the ground of "lack of cause of action" when the ground actually pleaded by Spouses Sy in their motion to dismiss was "failure to state a cause of action."
- Even assuming the complaint was deficient, the Court of Appeals should have ordered her to file an amended complaint instead of dismissing it.
- Spouses Sy are buyers in bad faith due to the suspicious circumstances surrounding their purchase of the property from Francisco.
Arguments of the Respondents
- Respondents Spouses Sy argued that the complaint failed to sufficiently allege a cause of action against them.
- The complaint contained no particular allegation of any wrongful or illegal act on their part that violated petitioner's right.
- The deficiency in the complaint cannot be cured by the subsequent filing of a bill of particulars, as cause of action is determined from the allegations of the complaint itself.
- They asserted that they are buyers in good faith, having relied on Francisco's title which contained no annotation of any adverse claim and had no notice of any defect.
Issues
- Did the Court of Appeals commit reversible error when it dismissed the complaint against Spouses Sy on the ground that petitioner has no cause of action against them, albeit what the latter actually pleaded was another ground, that is, failure to state a cause of action?
- Does the complaint state a cause of action against Spouses Sy?
- Does the filing of a motion for bill of particulars (construed by the Court as a request for written interrogatories) negate the claim that the complaint fails to state a cause of action?
Ruling
- Yes, the Court of Appeals committed reversible error. The Supreme Court granted the petition, reversed and set aside the CA's Decision and Resolution, and reinstated the RTC's Order denying the motion to dismiss.
- The Court of Appeals erred in dismissing the complaint on the ground of "lack of cause of action" when the ground invoked by Spouses Sy in their motion to dismiss before the RTC was "failure to state a cause of action." These are distinct grounds, and a court generally cannot motu proprio dismiss a complaint on a ground not pleaded, unless specific exceptions (not applicable here) are met.
- The filing of the "Motion for Bill of Particulars" by Spouses Sy, which the Supreme Court characterized as a request for written interrogatories (a mode of discovery under Rule 25), negated their claim that the complaint failed to state a cause of action. By seeking to elicit evidentiary matters relating to their defense of being buyers in good faith, Spouses Sy effectively acknowledged the existence and sufficiency of the allegations in the complaint.
- The complaint, in fact, sufficiently stated a cause of action against Spouses Sy. It alleged petitioner's right as a legitimate co-owner, Francisco's fraudulent acquisition of title, and Spouses Sy's purchase in bad faith due to awareness of irregularities (e.g., proximity of Francisco's title acquisition to the sale, handwritten title number on the deed of sale). Hypothetically admitting these allegations, petitioner would be entitled to the relief prayed for.
Doctrines
- Failure to State a Cause of Action vs. Lack of Cause of Action — Failure to state a cause of action refers to the insufficiency of the allegations in the pleading, determinable from the face of the complaint and can be raised early via motion to dismiss or affirmative defense. Lack of cause of action refers to the insufficiency of the factual basis for the action, determinable after questions of fact have been resolved through evidence, and is a ground for dismissal via demurrer to evidence after plaintiff rests their case. The Court emphasized these are not interchangeable and the CA erred by dismissing on "lack of cause of action" when "failure to state a cause of action" was pleaded.
- Motu Proprio Dismissal — Courts may not motu proprio dismiss a complaint based on a ground not pleaded by a party in a motion to dismiss or in the answer with affirmative defenses, except for: (1) lack of jurisdiction over the subject matter; (2) litis pendentia; (3) res judicata; or (4) prescription. Failure to state a cause of action and lack of cause of action are not among these exceptions.
- Cause of Action (Elements) — An act or omission by which a party violates a right of another. Its essential elements are: (a) a right in favor of the plaintiff; (b) an obligation on the part of the named defendant to respect or not to violate such right; and (c) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages. The Court found these elements alleged in Roa's complaint.
- Motion for Bill of Particulars (Rule 12, Rules of Court) — A motion for a more definite statement or for a bill of particulars is filed when a pleading is ambiguous, indefinite, or uncertain, to enable the movant to properly prepare a responsive pleading or prepare for trial. The Court clarified that by seeking a bill of particulars, parties in effect admit the complaint bears ultimate facts comprising a valid cause of action and merely ask for specification.
- Written Interrogatories (Rule 25, Rules of Court) — A mode of discovery where a party serves written questions on the adverse party to elicit material and relevant facts. The Court found Spouses Sy's "Motion for Bill of Particulars" was, in reality, a request for written interrogatories as it sought to discover evidentiary matters for their defense. Availing this mode implies recognition of the adverse party's cause of action.
- Effect of Availing Modes of Discovery on Challenge to Sufficiency of Complaint — When parties avail of modes of discovery, such as written interrogatories, they are deemed to have recognized the existence and sufficiency of the allegations of the adverse party's cause of action. They no longer put in issue the sufficiency of such allegations but rather seek to unveil evidentiary matters for trial preparation. This barred Spouses Sy from pursuing their theory of failure to state a cause of action.
Key Excerpts
- "Failure to state a cause of action is not the same as lack of cause of action; the terms are not interchangeable."
- "To emphasize, lack of cause of action may only be raised after the questions of fact have been resolved on the basis of stipulations or admissions or evidence presented by the plaintiff. Before then, it cannot be raised as a ground for dismissal; much less, can the court dismiss the case on that ground."
- "This means that when parties seek a bill of particulars, they in effect admit that the complaint bears the ultimate facts comprising a valid cause of action. What they ask for though is simply a specification of these ultimate facts to enable them to properly prepare their responsive pleading or to prepare for trial. Consequently, any challenge against the complaint based on its supposed failure to state a cause of action is no longer feasible after the parties have sought a bill of particulars."
- "It goes without saying, therefore, that when parties avail of any mode of discovery under the Rules, in this case, a request for written interrogatories (albeit erroneously referred to by Spouses Sy here as a bill of particulars), they are deemed to have recognized the existence and sufficiency of the allegations of the adverse party's cause of action in the complaint."
Precedents Cited
- Colmenar v. Colmenar et al. — Cited to illustrate that a trial court errs in dismissing a complaint on a ground entirely different from that which a defendant actually raised in its motion to dismiss (e.g., dismissing for failure to state a cause of action when the defendant ProFriends invoked lack of cause of action).
- Apostolic Vicar of Tabuk, Inc. v. Spouses Sison — Referenced for explaining the distinction between "failure to state a cause of action" (insufficiency of allegations) and "lack of cause of action" (insufficiency of factual basis).
- Asia Brewery, Inc. v. Equitable PCI Bank — Quoted extensively to further elaborate on the distinction between failure to state a cause of action (raised before responsive pleading, based on allegations) and lack of cause of action (raised after plaintiff presents evidence, based on facts and law).
- Spouses Chu v. Benelda Estate Development Corporation — Cited for the definition of a cause of action.
- Virata v. Sandiganbayan — Referenced in relation to a motion for a more definite statement or bill of particulars and its purpose, and that it is not its office to supply material allegations or change the cause of action.
- Koh v. IAC, Dulay v. Dulay, Security Bank Corporation v. CA, Republic v. Sandiganbayan — Cited in the context of modes of discovery (written interrogatories) enabling parties to unmask evidence and the implication that availing such recognizes the adverse party's cause of action.
- Spouses Arenas v. Court of Appeals — Cited in relation to questions delving into matters of evidence that generally establish a buyer's good faith.
Provisions
- Rule 9, Section 1, Rules of Court (Effect of Failure to Plead) — Cited to enumerate the specific grounds (lack of jurisdiction over subject matter, litis pendentia, res judicata, prescription) upon which a court may motu proprio dismiss a claim, noting that failure to state a cause of action and lack of cause of action are not included.
- Rule 16, Section 1(g), 1997 Rules of Court (Motion to Dismiss - Grounds) — Referenced as the rule under which a motion to dismiss for failure to state a cause of action may be raised at the earliest stages.
- Rule 33, Section 1, Rules of Court (Demurrer to Evidence) — Mentioned as the basis for dismissal due to lack of cause of action, after the plaintiff has completed the presentation of evidence.
- Rule 12, Section 1, 1997 Rules of Civil Procedure (Bill of Particulars - When applied for; purpose) — Cited to explain that a party may move for a bill of particulars for matters not averred with sufficient definiteness to enable proper preparation of a responsive pleading or for trial.
- Rule 25, Section 1, Rules of Court (Interrogatories to Parties; service thereof) — Cited as the rule governing written interrogatories, a mode of discovery used by Spouses Sy (though mislabeled as a motion for bill of particulars).