Case Digest (G.R. No. 174669)
Facts:
Belle Corporation v. Erlinda De Leon‑Banks, et al., G.R. No. 174669, September 19, 2012, Supreme Court Third Division, Peralta, J., writing for the Court.The parties are siblings and their descendants (respondents) who alleged ownership rights in a 13.29‑hectare parcel in Paliparan, Talisay, Batangas, and Belle Corporation (petitioner), the purchaser of the disputed lot from Nelfred Properties Corporation (NELFRED), a company controlled by Nelia De Leon‑Alleje and her husband Alfredo Alleje (Spouses Alleje). Respondents claimed the property had been transferred by their parents, the late Eufronio and Josefa De Leon (the late spouses), to Nelia/Nelfred in trust for the equal benefit of all their children.
Chronology: in 1979 the late spouses executed a Deed of Absolute Sale (the 1979 Deed) conveying the Paliparan property to Nelia (through NELFRED); the deed was registered in December 1980 and thereafter NELFRED obtained tax declarations in its name but did not register the land in the Torrens system. In September 1997 Belle and NELFRED (and the Spouses Alleje) executed a Contract to Sell; after payment in installments Belle obtained a Deed of Absolute Sale on June 24, 1998 (the 1998 Deed).
On January 19, 1998 respondents filed a Complaint for Annulment of Deed of Sale, Reconveyance of Property with prayer for preliminary injunction and damages, alleging the 1979 transaction was a transfer in trust, that NELFRED paid no consideration, that respondents had the right to be notified and to consent to any sale, and that Spouses Alleje repudiated the trust and sold the property to Belle, which purchased in bad faith or without adequate inquiry.
Procedural history in the lower courts: Spouses Alleje and NELFRED filed a Motion to Dismiss asserting prescription and laches; Belle separately moved to dismiss arguing it was an innocent purchaser and that the cause of action was unenforceable or barred by laches. On September 23, 1998 the Regional Trial Court (RTC), Branch 6, Tanauan, Batangas, dismissed the Complaint as to Belle for failure to state a cause of action because the Complaint did not allege Belle’s bad faith. Respondents then moved to file an Amended Complaint adding factual allegations charging Belle with knowledge and bad faith; on April 29, 1999 the RTC reconsidered, lifted the dismissal and admitted the Amended Complaint. Belle filed a Motion for Reconsideration or to Dismiss the Amended Complaint; on December 16, 1999 the RTC issued an order dismissing the Amended Complaint (the assailed RTC Order).
Respondents appealed to the Court of Appeals (CA). On May 18, 2006 the CA, in CA‑G.R. CV No. 74669, reversed the RTC and ordered Belle to file its answer within 15 days. Belle’s motion for reconsideration to the CA was denied in a September 4, 2006 Resolution. Belle then filed a petition for review on certiorari under Rule 45 to the Supreme Court seeking to set aside...(Pro-only)
Issues:
- Did the RTC err in dismissing respondents’ Amended Complaint for failure to state a cause of action?
- Can petitioner Belle Corporation’s alleged bad faith be resolved on a motion to dismiss?
- Are factual and affirmative defenses relating to the nature of the trust, prescription, and estoppel proper bases for dismi...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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