G.R. No. 173292 - Cruz vs. Cruz

Case Summary (G.R. No. 173292)

Relevant Dates and Procedural Posture

Complaint filed with the RTC: October 18, 1993.
Plaintiff’s death: October 30, 1996; counsel notified court by manifestation on January 13, 1997.
RTC order dismissing the case: June 2, 1997.
CA decision affirming with modification: December 20, 2005; CA resolution denying reconsideration: June 21, 2006.
Supreme Court disposition: grant of petition, reversal of CA decision, and remand for further proceedings (case decided in 2010).

Facts

Petitioner alleged ownership of a parcel of land (registered under TCT No. 63467) and claimed that respondent and his wife had caused a transfer of title (TCT No. 0-199377) in August 1991 pursuant to an allegedly fraudulent and simulated Deed of Sale dated February 12, 1973. Petitioner sued for annulment of sale, reconveyance, and damages, claiming the deed to be forged and obtained through misrepresentation and simulation. After presenting her evidence in chief, petitioner died. Counsel later notified the trial court and identified Edgardo Cruz as legal representative/heir.

Proceedings Below

Following the notice of death, respondent moved to dismiss on the ground that the action was purely personal and therefore did not survive the plaintiff’s death. The RTC granted the motion and dismissed the case on June 2, 1997, directing that the action be prosecuted, if at all, in proper estate proceedings. Edgardo, the heir, later manifested retention of counsel and attempted substitution; procedural disputes arose regarding the proper remedy and substitution. The Court of Appeals affirmed the dismissal but deleted the RTC’s directive that the case be prosecuted in estate proceedings.

Issues Presented

Whether the cause of action for annulment of deed of sale, reconveyance and damages is purely personal and therefore extinguished by petitioner’s death.
Whether the Court of Appeals erred in affirming the RTC order dismissing the petition.

Legal Standard on Survival of Action

The controlling test (as articulated in Bonilla v. Barcena and applied in subsequent jurisprudence) distinguishes actions that survive from those that do not by reference to the primary nature of the interest asserted: actions that primarily and principally affect property and property rights survive the death of the plaintiff; actions whose primary injury is to the person do not survive and are extinguished by death. Article 777 of the Civil Code establishes that succession rights transmit from the moment of death, vesting heirs with ownership and interests in the decedent’s property immediately upon death. Under the 1997 Rules, Section 16, Rule 3 (Death of party; duty of counsel) prescribes counsel’s duty to inform the court of the death and to provide the name and address of the legal representative; it authorizes substitution of heirs without formal appointment of an executor or administrator and directs procedures where no representative appears.

Application of the Legal Standard to the Present Case

The petition sought annulment of a deed of sale affecting real property, reconveyance of the property, and damages—claims that primarily seek protection and vindication of property rights. Under Bonilla and Sumaljag, a petition to annul a deed of sale of real property is a property action and therefore survives the death of the plaintiff. The trial court’s dismissal on the ground of non-survivability was therefore erroneous because the nature of the action was not purely personal but principally concerned property rights.

Substitution and Counsel’s Duties under Rule 3, Section 16

When the action survives, it was incumbent on petitioner’s counsel to inform the court of the death and to supply the name and address of the legal representative; this duty was discharged by counsel’s January 13, 1997 manifestation providing Edgardo’s name and address. Section 16 authorizes substitution of heirs as parties without formal appointment of an executor or administrator, and the court should have ordered the legal representative to appear and be substituted within thirty days. The procedural remedy available—substitution by heirs—was not invoked by the RTC; the court instead dismissed the action. A subsequent manifestation by Edgardo (October 17, 1997) indicating retention of counsel was treated by the Supreme Court as a formal substitution, consistent with precedents such as Heirs of Haberer.

Case Syllabus (G.R. No. 173292)

The Case

Nature of action: Petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure, seeking review of the Court of Appeals' Decision dated 20 December 2005 and Resolution dated 21 June 2006 in CA‑G.R. CV No. 80355.
Subject matter: Petition for Annulment of Sale, Reconveyance and Damages concerning a parcel of real property in Tondo, Manila.
Parties: Petitioner — Memoracion Z. Cruz (represented on appeal by her son, Edgardo Z. Cruz); Respondent — Oswaldo Z. Cruz (defendant and appellee below).
Collegiate author of decision on appeal: Associate Justice Magdangal M. De Leon (CA), with Associate Justices Portia AliAo‑Hormachuelos and Mariano Del Castillo concurring.
Supreme Court ponente: Justice Carpio.

Antecedent Facts

Ownership claimed: Memoracion Z. Cruz claimed ownership of a parcel of land at Tabora corner Limay Streets, Bo. Obrero, Tondo, Manila, registered in her name under TCT No. 63467 at the Register of Deeds of Manila.
Alleged conveyance: Title to the property was discovered by Memoracion in July 1992 to have been transferred into the names of appellee Oswaldo Z. Cruz and his wife in August 1991 under TCT No. 0‑199377, allegedly by virtue of a Deed of Sale dated February 12, 1973.
Allegations of invalidity: Memoracion alleged that the Deed of Sale was executed through fraud, forgery, misrepresentation and simulation, and therefore null and void.
Attempts to resolve: Memoracion and her husband’s relatives asked appellee to settle the problem; repeated pleas and demands were allegedly refused by appellee.
Barangay certification: A complaint was filed before the barangay having jurisdiction over the property and the barangay issued a certification to file an action in court, which became the subject controversy.

Trial Proceedings and Events at Trial

Filing: On October 18, 1993, Memoracion filed her Complaint for Annulment of Sale, Reconveyance and Damages in the Regional Trial Court (RTC), Manila.
Evidence: Memoracion finished presenting her evidence in chief.
Death of plaintiff: Memoracion died on October 30, 1996, after presentation of her evidence in chief.
Notice to court: On January 13, 1997, Memoracion’s counsel, Atty. Roberto T. Neri, filed a Manifestation notifying the trial court of Memoracion’s death and attaching a certificate thereof; the Manifestation named her son Edgardo Cruz as the legal representative and provided his address.
Defendant’s response: Appellee Oswaldo moved to dismiss on grounds that (1) the reconveyance action is a personal action which does not survive a party’s death under Section 21, Rule 3 of the then‑applicable Rules, and (2) continuation would create legal absurdity because one heir would represent the defendant and be a co‑plaintiff.

RTC Order and Subsequent Motions

RTC disposition: On June 2, 1997, the trial court issued an Order dismissing the case with the disposition: “Wherefore, in view of the foregoing, this case is ordered dismissed without prejudice to the prosecution thereof in the proper estate proceedings.”
Post‑dismissal actions by heirs/counsel:
- October 17, 1997: Edgardo Z. Cruz, son and heir, manifested retention of Atty. Neri as counsel for the plaintiff.
- Atty. Neri filed a Motion for Reconsideration of the June 2, 1997 Order; this motion was denied by Acting Presiding Judge Cielito N. Mindaro‑Grulla on October 31, 2000.
Appeal and conflicting rulings:
- Edgardo, as an heir, filed a notice of appeal on behalf of the deceased plaintiff, signed by Atty. Neri; Judge Mindaro‑Grulla dismissed the appeal, stating the proper remedy was certiorari under Rule 65.
- On motion for reconsideration, Judge Lucia Pena Purugganan later granted reconsideration, stating the remedy under the circumstances was an ordinary appeal.

Court of Appeals Proceedings and Ruling

CA petition: Petitioner filed with the Court of Appeals a Petition for Review under Rule 45.
CA decision: On December 20, 2005, the Court of Appeals rendered judgment affirming with modification the RTC order.
Dispositive language quoted from CA: “WHEREFORE, the appealed Order is AFFIRMED, with MODIFICATION. The trial court’s directive as to the prosecution of the action in the proper estate proceedings is DELETED. SO ORDERED.”
CA resolution: Petitioner’s Motion for Reconsideration was denied by the Court of Appeals in its Resolution dated June 21, 2006.
Result: Appeal to the Supreme Court