G.R. No. 114061 - Korean Airlines Co., Ltd. vs. Court of Appeals

Davao City was the registered owner of a parcel of land in Daliao, Toril, Davao City, covered by Transfer Certificate of Title (TCT) No. T-29856.
The title originated from an earlier transaction wherein the land was allegedly donated by the late Engracia Tagalplace and Juan dela Cruz for use as a public market.
The heirs of Tagalplace and dela Cruz, claiming the property was meant for public use but had not been so utilized, sought reconveyance from Davao City.
The Sangguniang Panlungsod (City Council) issued Resolution No. 2398-01, authorizing then-Mayor Benjamin C. De Guzman to sign a deed of reconveyance, effectively transferring the property to the heirs.
Subsequent documentary evidence, particularly an annotation on TCT No. 1417, revealed that the property was sold rather than donated, noting that TCT No. T-9856 was part of a larger parcel originally under TCT No. 1417.
Historical records showed that:

TCT No. 1417 was cancelled on December 29, 1936, due to a deed of sale transferring Lot 134-A-2-B to the then Municipality of Davao.
Replacement titles—TCT No. 1588 (in the name of the Municipality of Davao) and TCT No. 1589 (in the name of Tagalplace and dela Cruz)—were issued following the cancellation.
In February 1971, TCT No. 1588 was cancelled and replaced by TCT No. 29856 when the Municipality purchased the property from Tagalplace and dela Cruz.

Based on the discovery that the transaction involving the land was a sale and not a donation, Davao City, under Mayor Rodrigo R. Duterte, initiated a legal action to annul the reconveyance deed.
The complaint was filed as Civil Case No. 28,908-2002 before the Regional Trial Court (RTC), Branch 17, under Judge Renato A. Fuentes, and ultimately a summary judgment was rendered voiding the deed of reconveyance, thereby restoring the title to Davao City.
De Guzman, the private respondent who had signed the deed in his official capacity as mayor, filed a petition for certiorari before the Court of Appeals (CA) contesting his inclusion as a party in the summary judgment.
The appellate process involved:

A petition for certiorari (G.R. No. 75168) filed by De Guzman to challenge his inclusion as a party; his motion to dismiss was denied.
The case being remanded by the CA from the RTC for further proceedings, highlighting concerns over summary procedure since genuine issues of fact remained.
The eventual dropping of De Guzman as co-defendant by Judge George Omelio in RTC-Branch 14, even though De Guzman reiterated that he was implicated solely by reason of signing the reconveyance in his official capacity.

The CA, in its first assailed Resolution dated August 5, 2011 (Special 23rd Division), granted De Guzman’s motion for partial reconsideration.

This resolution imposed treble costs of Five Thousand Pesos (P5,000.00) to be paid solidarily by both Davao City and its counsel.
The resolution identified Davao City’s continued prosecution of De Guzman as “mind boggling” despite earlier decisions dismissing De Guzman’s petition questioning his inclusion.

A second CA resolution, dated December 6, 2011, denied Davao City’s motion for reconsideration.
Davao City then elevated the matter to the Supreme Court through a petition for certiorari under Rule 65 of the Rules of Court, challenging the imposition of treble costs.

Davao City contended that the CA committed grave abuse of discretion by imposing treble costs without proper factual or legal basis. It argued that:

There was no evidence of bad faith or malice in filing its petition.
Its actions in implementing the reconveyance were supported by its longstanding belief that De Guzman was a real party in interest, as previously indicated by judicial decisions.
The absence of any proper motion to drop De Guzman as a party rendered Judge Omelio’s order questionable.

The contested CA resolutions had become final and were not subject to appeal.
The imposition of treble costs was within the judicial discretion provided by Section 8 of Rule 65, which allows the court, under appropriate circumstances, to award such costs.
His inclusion in the matter, though controversial, did not warrant further imposition of treble costs.

Whether the imposition of treble costs amounting to P5,000.00 against Davao City and its counsel by the CA, pursuant to Section 8 of Rule 65 of the Rules of Court, amounts to grave abuse of discretion meriting reversal.
Whether the CA, in ordering the payment of treble costs, acted with lack or excess of jurisdiction given that the resolutions were interlocutory in nature.
Whether De Guzman, by virtue of signing the reconveyance in his official capacity, should have been considered a real party in interest and properly included as a defendant in the annulment proceedings.
Whether the principles underlying the award of treble costs in other cases are analogous or applicable to the present case, considering the absence of any factual basis provided by the CA for such costs.