Title
Central Realty and Development Corp. vs. Solar Resources, Inc.
Case
G.R. No. 229408
Decision Date
Nov 9, 2020
PNB sold land to Central; Molina claimed ownership, later sold to Solar. RTC canceled Molina’s claim, Solar filed own claim. SC ruled improper summary judgment, remanded for consolidation.

Case Summary (G.R. No. 229408)

Factual background and procedural posture prior to Branch 16 proceedings

  • Central acquired the subject land from PNB in 1989 and was the registered owner under TCT No. 198996. Central exercised acts of ownership (tax payments, leasing, mortgage, joint venture with Federal Land).
  • Molina asserted an adverse claim in May 2010 and later filed a specific performance suit (Branch 6) after unsuccessful demands. Branch 4 later cancelled Molina’s adverse claim after Central’s petition and found Central had not conveyed the property to any third party.
  • Molina sold the property to Solar in December 2013; Solar subsequently annotated its own adverse claim in June 2014. Solar sought substitution as plaintiff in Molina’s specific performance case after Molina’s death; substitution issues went to the Court of Appeals.
  • Central filed Civil Case No. P-14-0163 in Branch 16 seeking cancellation of Solar’s adverse claim. Central alleged Solar’s claim was procedurally defective (a prohibited second adverse claim under PD 1529), baseless, and that Solar was not an innocent purchaser for value. Solar countered, asserting its adverse claim was separate and valid, and contending the trial court was precluded from deciding ownership while Branch 6’s ownership action was pending (litis pendentia).

RTC-Manila (Branch 16) proceedings: motions, filings, exhibits

Key filings, claims and interlocutory rulings at Branch 16

  • Central moved for judgment on the pleadings, arguing Solar admitted all material allegations and therefore no issues remained. Central also moved to admit amended judicial affidavits of its witnesses; the court granted admission.
  • Solar filed an opposition with a motion to dismiss for litis pendentia and raised affirmative defenses (innocent purchaser, independent basis for its adverse claim) and submitted judicial affidavits and documentary exhibits. Solar’s counsel contested the propriety of judgment on the pleadings and disputed Central’s factual assertions.
  • Branch 16: denied Central’s motion for judgment on the pleadings (finding Solar raised affirmative defenses and tendered an issue); nevertheless the court rendered a motu proprio summary judgment sustaining Solar’s adverse claim and dismissed Central’s petition, while ordering the annotation to remain pending adjudication in Branch 6. Branch 16 treated the case as confined to the validity of the adverse claim and held that resolving that issue did not require deciding ownership.

Issues brought before the Supreme Court

Questions presented to the Supreme Court

Central raised pure questions of law under Rule 45 and asked the Supreme Court to decide, principally:

  1. Whether the trial court could render summary judgment motu proprio.
  2. Whether denial of Central’s motion for judgment on the pleadings was correct despite Solar’s alleged admissions of material allegations.
  3. Whether Solar’s adverse claim was barred by res judicata and PD 1529 (i.e., whether it constituted a prohibited second adverse claim).
  • Central also sought a declaration of ownership to finally dispose of the multiple pending cases involving the property and prayed for injunctive relief against Solar and other claimants.

Supreme Court’s threshold determinations on jurisdiction and nature of issues

Jurisdictional basis and characterization of issues as questions of law

  • The Supreme Court concluded that the petition presented pure questions of law appropriate for direct review under Rule 45 because the core issues required examination of the correct legal application (e.g., whether judgment on the pleadings should have been granted, whether a motu proprio summary judgment is permissible, legal effect of PD 1529 and res judicata) and did not require re‑weighing of factual evidence or credibility determinations.
  • The Court recognized, however, that certain factual questions (e.g., whether Solar was an innocent purchaser in good or bad faith) remained for Branch 6’s main ownership action and therefore were not resolved by Rule 45 review here.

Supreme Court’s analysis on judgment on the pleadings

Whether denial of judgment on the pleadings was proper

  • Rule 34 Section 1 (judgment on the pleadings) authorizes judgment where an answer fails to tender an issue or admits material allegations. Judgment on the pleadings is confined to the parties’ pleadings and annexes without consideration of extrinsic evidence.
  • The Supreme Court upheld Branch 16’s denial of Central’s motion for judgment on the pleadings because Solar’s opposition, although containing admissions by implication, nonetheless asserted affirmative defenses (e.g., innocent purchaser, independent basis of claim) that tendered issues. Therefore, an ostensible issue existed, and judgment on pleadings was inappropriate.

Supreme Court’s analysis on summary judgment motu proprio and due process

Motu proprio summary judgment: rules and due process constraints

  • The Supreme Court held that summary judgment under Rule 35 requires a motion by a party supported by affidavits, depositions, or admissions and a hearing. The court may render judgment only after the prescribed motion and opportunity to present opposing affidavits and be heard.
  • Branch 16’s motu proprio entry of summary judgment without any party’s motion and without affording hearing or adherence to Rule 35 procedural requisites was improper. The Court cited authority (Calubaquib v. Republic; Diona v. Balangue; Development Bank v. Teston) emphasizing that summary judgment rendered without complying with procedural due process (notice, motion, opportunity to be heard, and reliance on affidavits on record) must be set aside.
  • The Court found the motu proprio summary judgment violated due process because the parties were not heard on the propriety of such relief, and no motion was filed seeking summary judgment. The Supreme Court therefore reversed and set aside the summary judgment component of the Omnibus Resolution.

Supreme Court’s treatment of PD 1529 (Section 70) and the scope of adverse claim proceedings

Adverse claim procedure under PD 1529 and limitations on relief in cancellation proceedings

  • The Court reiterated PD 1529, Section 70, which allows registration of an adverse claim effective for thirty days, after which cancellation may be sought by verified petition; it also bars a second adverse claim based on the same ground by the same claimant.
  • The Supreme Court emphasized that the purpose of the adverse claim mechanism and the mandated “speedy hearing” is to afford an adverse claimant an opportunity to be heard about the propriety of the claim, but that “speedy” does not excuse procedural shortcuts that deprive parties of due process.
  • The Court accepted that the petition for cancellation of adverse claim concerns the propriety (validity) of the adverse claim annotation and is distinct from a full adjudication of ownership; nevertheless, where issues overlap closely (e.g., ownership, good or bad faith), those matters are more appropriately decided in the main action.

Consolidation order and limits on declaring ownership in a Rule 45 petition

Consolidation of related cases and prohibition against declaring ownership by the Supreme Court in this proceeding

  • The Supreme Court found that Civil Case No. P-14-0163 (cancellation of Solar’s adverse claim) and Civil Case No. 13-130626 (specific performance and ownership issues in Branch 6) involve closely related issues affecting the same parties and property. Under Rule 31, consolidation is proper where actions involve common questions of law or fact; jurisprudence favors consolidation to avoid multiplicity of suits and to adjudicate all issues expeditiously and coherently.
  • The Court held it had no jurisdiction in this Rule 45 proceeding to make a declaration of ownership in Central’s favor because multiple actions affecting ownership were pending in different tribunals that had acquired jurisdiction. The Supreme Court could not divest those courts of their jurisdiction or resolve ownership in this special review without consideration of factual matters reserved for the trial courts.
  • Consequently, rather than deciding ownership, the Court ordered consolidation and remand.

Supreme Court disposition

Final disposition: partial grant, reversal of summary judgment, remand for consolidation

  • The Supreme Court PARTIALLY GRANTED the petition. It affirmed the Omnibus Resolution and the January 3, 2017 Resolution of Branch 16 insofar as they denied judgment on the pleadings and resolved other incidents, but REVERSED and SET ASIDE the motu proprio summary judgment rendered by Branch 16.
  • The case was REMANDED to RTC‑Manila, Branch 16 with instructions to consolidate Civil Case No. P‑14‑0163 (cancellation of Solar’s adverse claim) with Civil Case No. 13‑130626 (specific performanc
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