Title
Roa vs. Spouses Sy
Case
G.R. No. 221586
Decision Date
Sep 14, 2021
Zenaida Roa contested fraudulent property transfer to Spouses Sy, alleging forged deeds and bad faith. Supreme Court reinstated her complaint, citing sufficient cause of action.

Case Summary (G.R. No. 221586)

Core factual allegations by petitioner

Petitioner alleges that she and her sister Amelia were the legitimate registered owners under TCT No. 133936. A deed of sale purportedly executed by petitioner and Amelia in favor of Francisco was forged while petitioner allegedly was abroad and Amelia suffered Alzheimer’s disease, making signature delivery impossible. Subsequently, Francisco obtained a title in her name and sold the property to Spouses Sy for P35,000,000, leading to issuance of a new title in the Spouses’ names. Petitioner alleges that the transfers were fraudulent and that Spouses Sy were not buyers in good faith.

Respondents’ principal defenses and procedural steps

Instead of filing an answer on the merits, Spouses Sy filed a motion to dismiss alleging failure to state a cause of action. They maintained they were buyers in good faith, relied on Francisco’s title which bore no adverse annotation, and that petitioner’s complaint contained only conjecture and lacked specific averments of the Spouses’ bad faith.

RTC’s disposition of the Spouses’ motion

The Regional Trial Court (Branch 66) denied the motion to dismiss, finding petitioner sufficiently alleged that Francisco fraudulently registered the property and that the Spouses purchased despite the fraudulent title. The court later granted the Spouses’ motion for a bill of particulars (after they filed a “motion for bill of particulars” and an amended motion), ordering petitioner to furnish more detailed information.

The bill of particulars versus written interrogatories issue

The questions the Spouses posed in their “motion for bill of particulars” were, in substance, written interrogatories aimed at eliciting evidentiary facts—possession on specific dates, possession of the duplicate title, actions taken before the Register of Deeds, the status of a prior administrative or judicial proceeding concerning the title, and other facts relevant to proving or disproving the Spouses’ good faith. The trial court correctly treated and granted the request for further specification, and petitioner complied.

Court of Appeals’ reasoning in reversing the RTC

The Court of Appeals reversed, holding that petitioner failed to particularly allege when the Spouses began negotiation with Francisco—an alleged ultimate fact needed to assess their due diligence—and thus the complaint should be dismissed for lack of cause of action. The appellate court also held that the Spouses were justified in relying on the face of Francisco’s title (without annotation) and were therefore buyers in good faith.

Fundamental procedural error identified by the Supreme Court

The Supreme Court found error in the Court of Appeals’ approach because Spouses Sy had sought dismissal on the ground of “failure to state a cause of action,” but the appellate court dismissed the case on the separate ground of “lack of cause of action.” The Court emphasized that courts may not, in general, dismiss a complaint on grounds not actually pleaded by the movant—except in limited circumstances (e.g., lack of jurisdiction, another pending action for the same cause, res judicata, or prescription). “Failure to state a cause of action” and “lack of cause of action” are distinct: the former addresses sufficiency of pleading and is tested on the face of the complaint at the outset; the latter concerns the factual sufficiency and is appropriate only after plaintiff has presented evidence and the court has adjudicated relevant factual matters (e.g., by demurrer to evidence under Rule 33).

Legal distinction between failure to state a cause of action and lack of cause of action

The Court reiterated established doctrine: failure to state a cause of action may be raised at the preliminary stage (Rule 16 motion to dismiss) and is resolved on the pleadings alone—accepting the allegations as true and asking whether, on their face, they state a legally recognizable right to relief. Lack of cause of action, however, requires resolution of factual disputes and can only be asserted effectively after the plaintiff has presented evidence (e.g., by demurrer to evidence). The appellate court’s dismissal for lack of cause of action, when the Spouses pleaded only failure to state a cause of action, was procedurally improper.

Effect of the Spouses’ request for bill of particulars/interrogatories

The Court analyzed the procedural posture and consequences of the Spouses’ requests. A bill of particulars is intended to clarify alleged ultimate facts already averred in a complaint; it does not supply material allegations missing from the pleading nor change the theory of the complaint. Written interrogatories (Rule 25) are discovery tools used to elicit material and relevant facts and generally presuppose recognition of the adversary’s cause of action. By seeking substantive and evidentiary particulars—questions that went to the existence and sufficiency of evidence on crucial facts such as possession, annotation of title, and actions taken by petitioner—the Spouses effectively treated the complaint as presenting a cognizable cause of action and sought to explore evidentiary matters. Thus, their act of invoking a bill of particulars/written interrogatories operated as a waiver of their preliminary contention that the complaint failed to state a cause of action; having pursued discovery, they were estopped from later asserting that the complaint was insufficient on its face.

Sufficiency of petitioner’s allegations to constitute a cause of action

The Court examined the complaint’s allegations and found them to meet the standard for stating a cause of action when taken as true: (1) petitioner and Amelia had a right as registered owners; (2) Francisco allegedly acquired title by fraud and forgery; (3) Francisco’s title was issued shortly before she sold to the Spouses; (4) circumstances alleged (e.g., handwritten insertion of the title number in the Deed of Sale, the timing/proximity of title issuance and sale, the denial by the purported notary that he notarized the sale) could indicate suspicious circumstances that should have put Spouses Sy on inquiry; and (5) the Spouses’ alleged failure to investigate despite those circumstances supports an inference of bad faith. These allegations, the Court held, are adequate to prima facie state a cause of action for cancellation of deeds and titles, reconveyance, and damages.

Evidentiary nature of contested issues and procedural implications

The Court noted that many of the issues raised—fraud, forgery, actual or constructive possession, and buyer’s good or bad faith—are primarily factual matters that must be resolved upon presentation

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