G.R. No. 202004 - Chua vs. China Banking Corp.

Petitioners Rafael Bautista and Ligaya Rosel are the registered owners of a 3,856‑square meter lot located at Natipuan, Nasugbu, Batangas.
Their title, evidenced by Original Certificate of Title (OCT) No. P‑1436, was issued on January 15, 1989 by the Register of Deeds.

On May 13, 1996, Maya‑Maya Cottages, Inc. (MMCI), the respondent, filed a complaint before the Regional Trial Court (RTC) of Nasugbu, Batangas.
The complaint sought the cancellation of the petitioners’ title and damages, along with an application for a preliminary injunction.
Respondent alleged that the title was obtained “without any color of right and through dubious means.”

On May 29, 1996, petitioners filed a motion to dismiss on the ground that the complaint did not state a cause of action.
They argued that as MMCI is a private corporation, it is disqualified under the Constitution from acquiring public alienable lands except by lease, thus lacking the proper standing as the real party in interest.
The RTC, in its Order dated August 30, 1996, granted the motion to dismiss, basing its decision on the property being alienable public land and the respondent’s constitutional disqualification to acquire it beyond a lease.

Following the dismissal, respondent filed a motion for reconsideration along with a motion for leave to file an amended complaint for quieting of title.
In the amended complaint, respondent contended that the technical description in the petitioners’ title did not encompass the disputed lot.
Petitioners opposed the amendment, insisting that it did not address the original defect and substantially altered respondent’s theory of the case.

On November 18, 1996, the RTC issued an Order denying petitioners’ motion to dismiss, effectively reversing its August 30 decision.
Petitioners then elevated the issue by filing a special civil action for certiorari and prohibition with the Court of Appeals (CA-G.R. SP No. 43574), arguing that the amended complaint failed to cure the defect of the original complaint.
The Court of Appeals, on November 24, 2000, rendered a Decision dismissing petitioners’ special civil action.
A subsequent motion for reconsideration was filed by petitioners but was denied by the Appellate Court in its Resolution on May 30, 2001.

Whether the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction by admitting the respondent’s amended complaint.

Specifically, whether the amendment, introduced after the original complaint’s dismissal, properly cured the defect of not stating a cause of action.
Whether the procedural operation under Section 2, Rule 10 of the 1997 Rules of Civil Procedure, as amended, applied in this case, allowing the amendment as a matter of right before any responsive pleading was served.
The implications of the petitioners’ contention regarding the respondent’s status as a private corporation allegedly barred from acquiring public lands.