G.R. No. 97463 - Ibonilla vs. Province of Cebu

Case Summary (G.R. No. 97463)

Factual Background

In 1952 the use and usufruct of forty parcels of land was granted to the Cebu (Sudlon) Agricultural School. On March 18, 1960, the Province of Cebu donated the forty lots to the School subject to two conditions: (1) that if the School ceased to operate ownership of the lots would automatically revert to the Provincial Government of Cebu; and (2) that the School could not alienate, lease or encumber the properties.

Statutory Reorganization of the School

Pursuant to BP Blg. 412, which incorporated and consolidated certain vocational schools in the Province of Cebu into one school system, the Cebu (Sudlon) Agricultural School became an extension of the Cebu State College of Agriculture in 1983. The donated parcels thus came under the institutional status of the school as reorganized under that law.

Triggering Controversy and Claim for Quieting of Title

On November 18, 1988 the Province of Cebu demanded return of the forty donated lots, asserting that the Deed of Donation was void ab initio because the Cebu (Sudlon) Agricultural School allegedly lacked the legal personality to be a donee of real property. A group described in the record as officials, faculty and employees of the School, parents of enrolled students, and various school organizations opposed rescission and filed a complaint to quiet title to the parcels.

Respondent Province’s Answer and Subsequent Agreement

In its answer the Province maintained that the Deed of Donation was null and void and that reconveyance was required because the School had ceased to exist and operate as such; the Province disclosed plans to use the lots for residences for Regional Trial Court judges, an NBI Drug Rehabilitation Center, and other government offices. On February 1, 1989 a Memorandum of Agreement was executed between the Province, represented by Governor Emilio M.R. Osmeña, and the Cebu State College of Science and Technology, represented by Secretary Lourdes R. Quisumbing, allocating nineteen lots to the Province, twenty-three lots to the school, and reserving Lot No. 1033 (covered by TCT No. 21411) for a national government center and DECS regional office; the agreement was ratified by the Sangguniang Panlalawigan and by the Board of Trustees of the School.

Motion to Dismiss and Trial Court Disposition

The Province moved to dismiss the quieting action on March 10, 1989, asserting the controversy had become moot and academic in light of the Memorandum of Agreement. The Regional Trial Court of Cebu City, by decision dated November 8, 1989, dismissed the complaint on the ground that the plaintiffs were not the real parties in interest. The trial court expressly declined to resolve whether the Memorandum of Agreement was legal or was executed illegally by the Secretary of Education, concluding dismissal was the only option because the plaintiffs lacked the requisite status to prosecute the suit.

Court of Appeals’ Ruling

The Court of Appeals, in its decision of February 8, 1991 in CA-G.R. CV No. 24536, affirmed the trial court. The appellate court found that the numerous petitioners were not owners of the lots, did not claim any legally protected interest that was violated, and suffered no injury warranting judicial relief. The Court of Appeals held that only a real party in interest may sue to quiet title and relied on Sec. 2, Rule 3 of the Rules of Court and authorities defining real party in interest as one who would be benefited or injured by the judgment or entitled to the avails of the suit, citing Lee vs. Romillo, Jr. and treating real interest as a present substantial interest as distinguished from a mere expectancy, citing Garcia vs. David.

Supreme Court Review and Holding

This Court entertained a petition for review on certiorari of the Court of Appeals’ decision but found no reversible error. The Court agreed that the petitioners were not real parties in interest because they did not assert ownership or any legal right to the parcels that the judgment could vindicate. The Court held that the finding of the trial court and the Court of Appeals that the petitioners lack

Case Syllabus (G.R. No. 97463)

Parties and Procedural Posture

Petitioners were officials, faculty, employees, parents of enrolled students, and various school organizations of the Cebu (Sudlon) Agricultural School who filed an action to quiet title over forty parcels of land.
Respondents included the Province of Cebu, the Cebu State College of Science & Technology (CSCST) (formerly Cebu [Sudlon] Agricultural School), the school's Board of Trustees and named members, and the Court of Appeals, Manila.
The petitioners commenced the action after the Province of Cebu sought reconveyance of the donated lots and after the province and the school executed a Memorandum of Agreement allocating the lots.
The Regional Trial Court of Cebu City dismissed the complaint by decision dated November 8, 1989 on the ground that the plaintiffs were not real parties in interest.
The Court of Appeals affirmed that decision by its decision dated February 8, 1991 in CA-G.R. CV No. 24536.
The petitioners filed a petition for review on certiorari to the Supreme Court in G.R. No. 97463 which the Court denied by decision dated June 26, 1992 for lack of merit.

Key Factual Allegations

The Province of Cebu granted use and usufruct of forty parcels to the Cebu (Sudlon) Agricultural School beginning in 1952 and donated the lots by Deed of Donation dated March 18, 1960.
The donation was made subject to two conditions that the lots would revert to the Province if the school ceased operation and that the school could not alienate, lease or encumber the properties.
Pursuant to BP Blg. 412, the Cebu (Sudlon) Agricultural School became an extension of the Cebu State College of Agriculture in 1983 and later formed part of CSCST.
On November 18, 1988 the Province of Cebu demanded return of the forty donated lots on the ground that the donation was void ab initio because the Cebu (Sudlon) Agricultural School allegedly lacked legal personality to be a donee.
On February 1, 1989 the Province and the CSCST, represented respectively by Governor Emilio M.R. Osmena and then Secretary Lourdes R. Quisumbing, executed a Memorandum of Agreement allocating nineteen lots to the Province, twenty-three lots to the school, and reserving Lot No. 1033 for a national government center and DECS regional office.
The Sangguniang Panlalawigan and the school's Board of Trustees ratified the Memorandum of Agreement, but the petitioners declined to withdraw their quieting of title suit.

Statutory Framework

The consolidation and incorporation of certain vocational schools into one system was effected by BP Blg. 412 as recited in the record.
The requirement that only a real party in interest may prosecute an action is found in Sec. 2, Rule 3 of the Rules of Court, as relied upon by the courts below.
The trial and appellate courts applied relevant precedents including Lee vs. Romillo, Jr. and Garcia vs. David in construing the