G.R. No. L-32436 - IN RE: Validity of Section 4 and Section 8, par. 2, Republic Act No. 6132

Petitioners Juanito Geronimo, Antonia Limson, and Linda Geronimo were the registered owners of a parcel of land in Balagtas, Bulacan, originally acquired in 1977 from Petra Marcelino.
In 1989, their brother, Carlito Geronimo, proposed developing the property into a resort—a novel concept at the time as there was no existing resort facility in the area.
Enticed by the idea and considering his lack of income and their residence in different locations, petitioners “sold” the land to Carlito and registered the title in his name without receiving any monetary consideration; instead, Carlito was designated as project manager.

Following the transfer, Carlito secured a loan from the Bank of Floridablanca by mortgaging the property.
With funds from the bank loan coupled with capital contributions from petitioners, he developed the Villa Cristina Resort.
Management of the resort was carried out jointly by Carlito and Dionisia Santos until Carlito’s death on June 13, 2002.

On February 7, 2003, petitioners filed a petition for the cancellation of title against the heirs of Carlito, represented by Angelito Geronimo, in the RTC of Malolos, Bulacan, Branch 17.
The petition asserted that the implied trust created between petitioners and Carlito had been extinguished upon his death.
The RTC, facing difficulties in serving the respondents due to an incorrect address, ordered the issuance of an alias writ of summons after the original summons failed to reach them.

Respondents received the alias writ of summons on September 9, 2003, with the 90-day period for filing an answer approaching expiration.
An immediate motion for a 15-day extension was filed by respondents and granted by the RTC on September 10, 2003.
Subsequent motions for further time extensions were approved in RTC orders dated October 9 and October 17, 2003.
On October 27, 2003, respondents posted their motion to dismiss, which was received on November 5, 2003, alleging:

The improper service of summons due to wrong address information.
Lack of cause of action against them, contending that petitioners, being well-educated, would not have transferred the property without receiving any consideration.

Due to respondents’ failure to file their motion for dismissal within the extended period, petitioners moved to declare respondents in default.
The RTC declared respondents in default on February 17, 2004, subsequently ordering petitioners to present evidence ex parte.
Petitioners presented evidence on March 15, 2004, including the testimony of Dionisia Santos and a demand letter from respondents asserting that the property belonged to their deceased father.
Based on the evidence, the RTC ruled that an implied trust existed between petitioners and Carlito, nullifying the sale of the property and ordering the cancellation of Carlito’s title, to be replaced with a new title in the names of petitioners, as rendered in the May 25, 2004 decision.

Respondents immediately filed a petition for certiorari in the Court of Appeals, asserting grave abuse of discretion by the RTC in:

Declaring them in default.
Issuing the May 25, 2004 ruling due to their alleged timely filing of the motion for dismissal.

The Court of Appeals, in a May 24, 2005 decision, noted the posting of the motion to dismiss and granted the petition for certiorari, remanding the case for further proceedings.
Petitioners’ motion for reconsideration was denied by the CA in a resolution dated September 20, 2005.

Petitioners advanced a petition for certiorari before the Supreme Court, arguing that the CA erred in allowing the petition for certiorari considering that respondents had not moved for reconsideration of the May 25, 2004 RTC decision.
The Supreme Court emphasized the principle that a special civil action for certiorari may only prosper if there is no plain, speedy, and adequate remedy available in the ordinary course of law, such as filing a motion for reconsideration.
Finding that respondents failed to avail themselves of this remedy, the Supreme Court granted the petition:

Reversing the May 25, 2005 decision and the September 20, 2005 resolution of the Court of Appeals.
Reinstating the February 17, 2004 and May 12, 2004 orders as well as the May 25, 2004 RTC decision.

Whether the RTC improperly declared respondents in default despite respondents’ filings and motions for extension.

The controversy centered on the timeliness of respondents’ motion to dismiss and whether their underlining procedural actions should prevent the declaration of default.
Respondents contended that the service of summons was improper given the incorrect address, which should have barred the RTC from exercising jurisdiction over them.

Whether respondents had a plain, speedy, and adequate remedy in the form of a motion for reconsideration before resorting to the special civil action for certiorari.

The central inquiry was if respondents’ failure to file a timely motion for reconsideration rendered the RTC’s orders and decision free from grave abuse of discretion.
The issue extended to determining if the discretionary extension of time to file answers or motions was misapplied or used arbitrarily.

Whether the creation of an implied trust, as proven by the evidence, warranted the cancellation of the sale and the subsequent issuance of a new title to petitioners.

Determination of the authenticity and applicability of the implied trust doctrine under Civil Code, Art. 1453.
Assessment of the evidentiary basis provided by the testimony of the principal witness and documentary evidence.