G.R. No. 214934 - Pacific Rehouse Corp. vs. Ngo

On February 17, 1994, petitioner Pacific Rehouse Corporation entered into a Deed of Conditional Sale with Benjamin G. Bautista for a 52,341-square meter parcel of land in Imus, Cavite, covered by TCT No. T-800.
The contract provided for an initial down payment of P2,198,322.00 with the balance payable upon completion by Bautista of the necessary transfer documents.

Despite the petitioner’s payment totalling P6,598,322.00 and repeated offers to settle the remaining balance, Bautista failed to execute the deed of absolute sale and did not deliver the certificate of title.
Bautista even proceeded to sell the property to another buyer, prompting the filing of a complaint for specific performance and damages on April 30, 2008 (Civil Case No. 2031-08).

Attorneys for both parties filed their responsive pleadings and the case was set for pre-trial.
Bautista’s counsel then filed a Manifestation and Notice of Death (February 14, 2009), mandating substitution pursuant to Section 16, Rule 3 of the Rules of Court, which his counsel failed to accomplish due to lack of information on his heirs.
Petitioner located Bautista’s surviving spouse, Rosita Bautista, and faced a directive to amend the complaint for her impleader. Failure to duly comply led to an RTC Order dismissing Civil Case No. 2031-08 on February 23, 2010.
A subsequent motion for reconsideration led the RTC to set aside the dismissal Order (September 20, 2010) and to put proceedings on hold pending petitioner’s appointment of an executor or administrator for Bautista’s estate.

Respondent Joven L. Ngo, represented by Oscar J. Garcia, initiated a Verified Petition for Cancellation of Notice of Lis Pendens on May 6, 2009 (LRC Case No. 1117-09).
Respondent alleged that Bautista had obtained a P8,000,000.00 loan secured by a real estate mortgage over the subject property, which was foreclosed upon, resulting in his acquisition of the property via a certificate of sale.
Finding petitioner’s Notice of Lis Pendens on TCT No. T-800, respondent argued that petitioner was aware of the underlying mortgage, thus challenging petitioner’s claim to recover the property.

Petitioner moved to consolidate Civil Case No. 2031-08 with LRC Case No. 1117-09, citing that both cases involved the same property and their resolution would affect each other.
Initially, the RTC denied consolidation but later, via the April 7, 2011 Omnibus Order, consolidated the two cases and directed petitioner to appoint an executor or administrator within 30 days.
Respondent’s motions to reconsider and urgent motions were denied, and additional petitions and motions ensued concerning the jurisdiction and proper venue for the cancellation of the Notice of Lis Pendens.

In a March 20, 2014 Decision, the CA gave due course only to the petition regarding the April 7, 2011 Omnibus Order, dismissing the petition with respect to the other orders due to procedural lapses.
The CA ruled in favor of respondent by setting aside the RTC’s consolidation order and dismissing Civil Case No. 2031-08, holding that the complaint for specific performance and damages was an action in personam which did not survive Bautista’s death.

Petitioner later moved for reconsideration, which was denied in an October 8, 2014 Resolution, leading to the present petition for review on certiorari contesting the CA’s dismissal based on Bautista’s death.

Whether the Court of Appeals correctly dismissed Civil Case No. 2031-08 solely on the ground of Bautista’s death.
Whether the nature of petitioner’s complaint, although titled as one for specific performance and damages, is in fact a real action aimed at recovering title to the subject property.
Whether the substitution of a deceased party should be applied under Section 16, Rule 3 of the Rules of Court when the claim primarily affects property rights.
Whether the consolidation of Civil Case No. 2031-08 with LRC Case No. 1117-09 is mandated to prevent conflicting adjudications relating to the same property.