Title
De Camcam vs. Vazquez
Case
G.R. No. 227258
Decision Date
Feb 3, 2021
Dispute over property ownership involving mortgage, foreclosure, and sale with right of repurchase; SC ruled for remand due to genuine issues requiring trial.
property sale dispute
remanding the case
reconveyance
A

Case Summary (G.R. No. 227258)

Factual Background: The Property Transfers and the Contract Instruments

The subject property originally belonged to Camcam and was covered by TCT No. S-92989. On March 16, 1981, Camcam mortgaged the property to United Coconut Planters Bank (UCPB) as collateral for her loan of P3.6 Million. In 1986, Camcam left the country due to threats. While she was away, UCPB foreclosed the property, emerged as the winning bidder for P6.799 Million, and later consolidated title in its name. After the foreclosure, Camcam filed Civil Case No. 91-1671 for annulment in the RTC of Makati. That case ended in 1994 via compromise, allowing Camcam to redeem the property from UCPB for P26 Million. Camcam designated Bitanga as her trustee to redeem and hold title for her.

A Deed of Sale dated September 12, 1994 was executed between UCPB and Bitanga. Subsequently, in 1994, when Camcam needed funds, she obtained a P16 Million loan from an old friend, Vazquez, and mortgaged the subject property to secure the loan. The parties’ security arrangement was documented as a Sale with Right of Repurchase executed on September 27, 1994 between Bitanga and Vazquez, and re-executed on July 10, 1995 due to Bitanga’s wife’s failure to sign the first instrument. Camcam also executed a Guaranty dated September 27, 1994.

Petitioners stated that Camcam later fully paid her loan to Vazquez in 1996. In January 2, 2012, Vazquez demanded that Camcam vacate the property. In her letter-reply, Camcam refused, insisting that Vazquez had no right to the property because the Sale with Right of Repurchase was an equitable mortgage, that she had fully paid her loan plus interest, and that the transfer of title to Vazquez was void. She also argued before the RTC that, assuming she could not pay, the automatic transfer of ownership would be invalid as a pactum commissorium, and that the Sale with Right of Repurchase lacked consideration.

Vazquez, in his Answer, asserted that Bitanga had sold the subject property to him on September 27, 1994, with a right of repurchase for one year, and that the document was re-executed on July 10, 1995 to address the missing signature. Vazquez maintained that Camcam knew of the transactions involving the property from UCPB to Bitanga and from Bitanga to him. He further relied on Camcam’s notarized Guaranty, in which she allegedly warranted and guaranteed the validity of the sales from UCPB to Bitanga and from Bitanga to Vazquez, and undertook to pay expenses of litigation and attorney’s fees “without need of verbal or written demand or notices.” When petitioners failed to repurchase within the stipulated period, Vazquez claimed that title was transferred to him under TCT No. 213002. He also raised defenses that petitioners’ complaint stated no cause of action due to their admissions, that the Sale with Right of Repurchase was not an equitable mortgage, and that petitioners’ claims were allegedly waived, abandoned, extinguished, and barred by prescription.

Petitioners’ Complaint and the RTC’s Summary Judgment

On August 7, 2013, Vazquez filed a Motion for Summary Judgment, asserting that based on the pleadings and admissions, there was no genuine issue as to any material fact requiring trial. Petitioners opposed the motion, arguing that it was premature because they were still seeking amendments to the complaint, that genuine issues already existed requiring trial, and that there was still a material issue as to whether the Sale with Right of Repurchase was an equitable mortgage.

In a Resolution dated December 16, 2013, the RTC granted the Motion for Summary Judgment and dismissed petitioners’ complaint. The RTC reasoned that, based on Camcam’s admissions and documentary evidence, there was no longer any issue demanding a full-blown trial and that the record confirmed Vazquez’s ownership. Petitioners moved for reconsideration, but the RTC denied the motion in a Resolution dated April 7, 2014.

Proceedings Before the CA Concerning the Amended Complaint

Petitioners appealed to the CA in CA-G.R. CV No. 103230, asserting that the disposition was premature because they still sought amendment and because genuine issues required trial. In parallel, the records showed petitioners’ attempt to amend their complaint. Petitioners filed a Motion for Leave to Admit Amended Complaint with an attached amended complaint dated August 15, 2012, but the RTC denied the request in an Order dated November 5, 2012. Petitioners’ motion for reconsideration was also denied.

Petitioners then challenged the RTC’s denial of amendment via a petition for certiorari before the CA, docketed as CA-G.R. SP No. 129738. In a Decision dated August 28, 2014, the CA granted the certiorari petition and reversed the RTC. The CA held that the RTC erred in denying leave to admit the amended complaint because the RTC made no finding that the motion was filed with intent to delay under Section 3, Rule 10 of the Rules of Court. The CA emphasized that refusal to allow amendments (other than those available as a matter of right under Section 2, Rule 10) could be based only on the ground of intent to delay. It further stated that the amendments were proper to forestall delay in the resolution of the merits.

The CA’s fallo in CA-G.R. SP No. 129738 directed the RTC to admit the amended complaint and to try the case with dispatch.

Subsequently, in CA-G.R. CV No. 103230, the CA rendered its Decision on January 26, 2016, affirming the RTC’s summary judgment. It denied petitioners’ subsequent motion for reconsideration in a Resolution dated September 16, 2016. The CA reasoned, among others, that the absence of an injunctive order from the CA in CA-G.R. SP No. 129738 meant that the RTC was not restrained from continuing proceedings. The CA also held that Vazquez proved there was no genuine issue as to any material fact because Camcam admitted knowledge of the sale transactions and executed the Guaranty acknowledging the validity of the transactions leading to Vazquez’s ownership.

Petitioners’ Arguments on Review and the Court’s Disposition

In the Petition before the Supreme Court, petitioners argued that a supervening event—namely, the CA’s final action permitting and requiring the admission of their amended complaint—should have rendered the CA’s earlier affirmance of summary judgment moot. They also maintained that genuine issues existed that warranted trial. They sought reversal of the CA rulings and an order for the RTC to set the case for trial and proceed further.

The Supreme Court held that the petition had merit. It noted that in CA-G.R. SP No. 129738, the CA had already allowed the amendment of petitioners’ complaint. That CA ruling had been affirmed by the Court in G.R. No. 216657 by Resolution dated August 24, 2016, and that decision had attained finality. The Supreme Court applied the rule that an amended complaint supersedes the complaint under the Rules on Civil Procedure.

From that procedural effect, the Supreme Court concluded that the RTC’s grant of the Motion for Summary Judgment, and even the Motion itself, had “no leg to stand on” because both were based on the superseded complaint. Given this development, the Court ordered the case remanded to the RTC to proceed with the action based on the amended complaint, rather than leaving the summary dismissal to stand.

Accordingly, the Supreme Court reversed and set aside the CA Decision dated January 26, 2016 and the CA Resolution dated September 16, 2016 in CA-G.R. CV No.

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