Ponente: Nachura, J.
FACTS:
·
In 1964, spouses Justiniano and Ligaya Montano
owned three parcels of land in Tanza, Cavite. The land was utilized as an
integrated farm and as a stud farm used for raising horses. Justiniano was then
serving as congressman for the lone district of Cavite and as minority floor
leader. In 1972, when then President Ferdinand Marcos placed the country under
martial law, Justiniano went on self-exile to the US to avoid the harassment
and threats made against him by the dictator.
·
In 1975, while still in the US, the Montanos
transferred the said properties to Tres Cruces Agro-Industrial Corporation
(TCAIC) in exchange for shares of stock in the company. A year later, in
October 1976, TCAIC sold the properties to International Country Club, Inc.
(ICCI) for P6M.
·
ICCI immediately mortgaged the parcels of land
to Citizens Bank and Trust Co. (later renamed as Associated Bank) for P2M. The
loan matured but remained unpaid, prompting Associated Bank to foreclose the
mortgage. The properties were then put on public auction and were sold to
Associated Bank, the sole and highest bidder. In 1987, TCTs for the subject
property were issued in the name of Associated Bank.
·
Following the ouster of Marcos from Malacanang
in 1986, the spouses Montano returned to the Philippines. After discovering the
transfer of the properties, the Montanos immediately took physical possession
of the same and began cultivating the land.
·
In 1989, the Montanos filed an action for
reconveyance of title against Associated Bank, praying that the transfer of the
properties from TCAIC to ICCI, and from ICCI to Associated Bank, be declared
null and void. In their complaint, the
spouses Montano averred that the transfer of the parcels of land to TCAIC was
done only to avoid the confiscatory acts being applied by the dictator against
the Montanos' properties, in retaliation for the latter's open opposition to
Marcos. They claimed that TCAIC was only forced to sell the properties to ICCI
after the latter intimidated and threatened the relatives of the Montanos who
were left in the Philippines. They also argued that the mortgage by ICCI to
Associated Bank was made to generate money for the latter's corporate officers
as evidenced by the lack of any effort on the part of ICCI to service the loan.
·
In its Answer in 1989, Associated Bank set
forth the following affirmative defenses:
that the complaint did not state a cause of action; that the allegation
of threat and intimidation was not averred with particularity; that the bank
was an innocent purchaser for value; and that, even if the complaint stated a
cause of action, the same had already prescribed or had been barred by estoppel
and laches.
·
In 1997, or eight years after filing its
Answer, Associated Bank filed a Motion to Dismiss based on two grounds: that
the complaint stated no cause of action and that the case was already barred by
the statute of limitations.
·
RTC ruling: The spouses Montano's action for
reconveyance of real property resulting from fraud is barred by the statute of
limitations for having been filed beyond the four-year prescriptive period from
discovery of fraud.
·
CA ruling: RTC ruling is reversed. In
resolving a motion to dismiss based on insufficiency of the complaint, it must
hypothetically admit the facts alleged. If Associated Bank had actually
conspired with others to manipulate procedures to put the title out of reach of
the spouses Montanos, as alleged in the latter's complaint, it it is not only a
right but becomes the duty of the court to proceed to hear and adjudicate the
case on its merits.
·
Hence, the instant petition.
RULING:
Whether
the Associated Bank can still file a Motion to Dismiss even if it had already
filed an Answer raising affirmative defenses. – YES.
·
Section 6, Rule 16 of the ROC states that:
"If no motion to dismiss has been filed, any of the grounds for dismissal
provided for in this Rule may be pleaded as an affirmative defense in the
answer and, in the discretion of the court, a preliminary hearing may be had
thereon as if a motion to dismiss had been filed."
·
The rule is based on practicality. Both the
parties and the court can conveniently save time and expenses necessarily
involved in a case preparation and in a trial at large, when the issues
involved in a particular case can otherwise be disposed of in a preliminary
hearing.
·
Since the rule provides that the preliminary
hearing may be had thereon as if a motion to dismiss had been filed, such
hearing shall therefore be conducted in the manner provided in Section 2, Rule
16 of the ROC, which reads: "At the hearing of the motion, the parties
shall submit their arguments on the question of law and their evidence on the
questions of fact involved except those not available at that time. Should the
case go to trial, the evidence presented during the hearing shall automatically
be part of the evidence of the party presenting the same."
·
Therefore, it is inconsequential that
Associated Bank had already filed an answer to the complaint prior to its
filing of a motion to dismiss. The option of whether to set the case for
preliminary hearing after the filing of an answer which raises affirmative
defenses, or to file a motion to dismiss raising any of the grounds set forth
in Section 1, Rule 16 of the Rules are procedural options which are not
mutually exclusive of each other.
Whether the spouses Montano's complaint for
reconveyance should be dismissed. – NO.
·
When the ground for dismissal is that the
complaint states no cause of action, such fact can be determined only from the
facts alleged in the complaint and from no other. The test, therefore, is
whether, assuming the allegations of fact in the complaint to be true, a valid
judgment could be rendered in accordance with the prayer stated therein. Where
the allegations are sufficient but the veracity of the facts is assailed, the
motion to dismiss should be denied.
·
In the present case, the spouses Montano's
complaint clearly states a cause of action and raises issues of fact that can
be properly settled only after a full-blown trial. On this ground, the Associated
Bank's motion to dismiss must be denied.
·
Also, the RTC erred when it dismissed the
spouses Montanos' complaint on account of prescription. It is true that an
action for reconveyance of real property resulting from fraud may be barred by
the statute of limitations, which requires that the action shall be filed
within four (4) years from the discovery of the fraud.
·
The RTC, however, seemed to have overlooked
the fact that the basis of spouses Montano's complaint for reconveyance is not
fraud but threat, duress and intimidation, allegedly employed by Marcos cronies
upon the relatives of the Montano's while the latter were on self-exile.
·
Article 1391 of the Civil Code provides:
"An action for annulment shall be brought within four years. This period shall
begin: In case of intimidation, violence or undue influence, from the time the
defect of the consent ceases. x x x"
·
In the instant case, the threat or
intimidation upon the spouses is deemed to have ceased only upon the ouster of
then President Marcos from power on February 21, 1986. The four-year
prescriptive period must, therefore, be reckoned from the said date. Thus, when
the spouses filed their complaint for reconveyance on September 15, 1989, the
period provided for by law had not yet prescribed.