Gojo v. Goyola

G.R. No. L-26768  October 30, 1970

FAUSTINO GOJO, petitioner-appellant,  vs.

SEGUNDO GOYALA and ANTONINA ALMOGUERA, respondents-appellees.

BARREDO, J.:.

Appeal from the favorable decision of the CFI of Sorsogon on the counterclaim of respondents (herein appellees) in its Civil Case No. 1657-84 — the complaint (petition) of therein petitioner (herein appellant) having beet previously dismissed, without prejudice, for his failure to submit an amended complaint as required of him in the court a quo's earlier order.

Parties:

·         Gojo – buyer

·         Goyola and Almoguera - seller

Action:

·         Gojo: Petition for consolidation of ownership

·         Goyola: reformation of instrument

Facts

·         On 26 May 1951, Segundo, Goyala together with his now deceased wife Antonina Almoguera sold to appellant by a "Deed of Pacto de Retro Sale" a certain parcel of agricultural land (2.5 ha for P750.00), the repurchase to be made, according to the deed, within one year.

·         On July 4, 1951, the vendee paid another P100.00 as addition to the purchase price.

·         About ten (10) years after the execution of the said document, the vendee filed with the CFI by way of a petition for consolidation of ownership of the land described and involved in the "Deed of Pacto de Retro Sale."

·         The vendee alleged that the date for repurchase, May 26, 1952, having expired and the vendors not having been able to repurchase, the ownership over the land involved had become consolidated in him; and that for the purpose of recording in the Registry of Property the said consolidation of ownership, it was necessary that a judicial order be issued to that effect and accordingly prayed for such an order.

·         Segundo Goyala filed an opposition or answer to the petition and alleged the ff:

o    his wife Antonina had died in the year 1959

o    denied the pacto de retro sale, it was a cash loan of P750.00 payable in one year without interest

o    additional 60 pesos was granted as loan

o    respondents executed a mortgage in favor of the petitioner on a parcel of coconut land described

o    although the deed was executed in the form of a pacto de retro sale, the true and real intention of the parties thereto was that the same was a mere mortgage to secure the payment of the original loan of P750.00 together with the additional amount received thereafter, making a total loan of P810.00, payable within, one year without interest.

o    in the evening of May 26, 1952, he and his wife went to the house of the petitioner and tendered to him the sum of P810.00 to pay the debt, but said petitioner refused to receive the same and to cancel the document of mortgage.

o    He filed a counterclaim and prayed that

§  Court dismiss the petition

§  Order Gojo to accept the 810

§  Declare the document to be mortgage and not a pacto de retro sale, and ordering the same cancelled and with no more force and effect;

§  Ordering the petitioner to pay the respondents the sum of P1,800.00 per annum beginning May 26, 1951 until the final termination of this case as the reasonable monetary value of the products for the said property, and from this amount, there should be deducted however, the corresponding legal interest annually on said loans;

§  In case, however, that this Court should find the said instrument to be a true pacto de retro sale, and not a mere mortgage, it is hereby prayed that the petitioner be ordered to execute a deed of resale or repurchase of said property in favor of the respondents in accordance with Art. 1606 third paragraph of the Civil Code."

·         Goyala informed the trial court that the Antonina was already dead and that her surviving nearest kin are her children, namely: Leonor, Pedro, Juliana, Dolores, Valentina, Soledad, Penya, Mamerta, Salvador, Genesa, Felipe, Elegio — all surnamed Goyala.

·         RTC required the plaintiff is to submit an amended Complaint substituting therein for one of the defendants, Antonina Almoguera, now deceased her successors in interest as party defendants, within the reglementary period.

·         Goyala filed a motion to dismiss the complaint or petition on the ground that 43 days had lapsed after appellant's receipt of the trial court order,  yet he failed and neglected to submit the amended complaint required of him.

·         Trial court granted the MTD. 

·         Goyola filed a motion to declare Gojo in default in respect of said appellee's counterclaim. TC granted the petition

·         The Trial court ruled in favor of the defendant (counterclaim)

o    Deed of Pacto de Retro Sale an equitable mortgage and Goyala and Almoguera are allowed to redeem the property;

o    orders Faustino Gojo to withdraw the amount of P810.00 deposited with the Clerk of Court in full settlement of the loan,

o    cancels and declares without force and effect the aforementioned Deed of Pacto de Retro Sale executed by the spouses Segundo Goyala and Antonina Almoguera in favor of Faustino Gojo. Without costs

o    ordering the plaintiff to deliver and restore the possession of the land in question to the defendants.

·         Appellant appealed to the Court of Appeals which upon its finding that the said appeal involves purely questions of law, certified the same to this Court for resolution.

Issues

[RELEVANT ISSUE] WON THE TRIAL COURT ERRED IN DISMISSING PETITIONER’S COMPLAINT

It is true that under Section 3 of Rule 17, a complaint may be dismissed for failure to prosecute if the plaintiff fails to comply with an order of the court, but it is obvious that the said provision cannot apply when the order supposedly ignored is a void one, as in this case.

The trial court ordered petitioner to amend the complaint only because it was informed that one of the defendants had died, the court directing that the plaintiff should name the heirs of the deceased as defendants in lieu of said deceased. Such an order runs counter to Caseñas vs. Resales, et al.:

When certain parties die and due notice was given to the trial court, it devolved on the said court to order, not the amendment of the complaint, but the appearance of the legal representatives of the deceased in accordance with the procedure and manner outlined in Rule 3, Section 17 of the Rules of Court, which provide:.

"SECTION 17.         Death of party. — After a party dies and the claim is not thereby extinguished, the court shall order, upon proper notice, the legal representative of the deceased to appear and to be substituted for the deceased, within a period of thirty (30) days, or within such time as may be granted. If the legal representative fails to appear within said time, the court may order the opposing party to procure the appointment of a legal representative of the deceased within a time to be specified by the court, and the representative shall immediately appear for and on behalf of the interest of the deceased. The court charges involved in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or administrator and the court may appoint guardian ad litem for the minor heirs."

Barrameda vs. Barbara: an order to amend the complaint, before the proper substitution of parties as directed by the rule has been effected, is void and imposes upon the plaintiff no duty to comply therewith to the end that an order dismissing the said complaint, for such non-compliance, would similarly be void.

Ferriera, et al. vs. Gonzales (1958), the continuance of a proceedings during the pendency of which a party thereto dies, without such party having been validly substituted in accordance with the rules, amounts to a "lack of jurisdiction".

WON PLAINTIFF IS IN DEFAULT WITH RESPECT TO DEFENDANT'S COUNTERCLAIM;

No occasion for the trial court to declare him in default in respect of appellee's counterclaim in this case, for the reasons that:

(a)     counterclaim "falls within the category of compulsory counterclaim" which does not call for an independent answer as the complaint already denies its material allegations; and

(b)     dismissal of the complaint in this case without prejudice carried with it the dismissal of the said counterclaim.

A plaintiff who fails or chooses not to answer a compulsory counterclaim may not be declared in default, principally because the issues raised in the counterclaim are deemed automatically joined by the allegations of the complaint.

There can be no doubt that appellant's counterclaim was a compulsory one in as much as it arises out of or is necessarily connected with transaction or occurrence that is the subject matter of the complaint; the complaint alleged that the right of appellee to repurchase the property in question had already expired and asked for an order of consolidation.

Appellant's counterclaim was for reformation of the deed claiming that it was only a mortgage. Thus the counterclaim was clearly inconsistent with and directly controverted; the whole theory and basic allegations of the complaint. In consequence, appellant's complaint stood as the answer to appellee's counterclaim; hence, the incorrectness of the trial court's order declaring the appellant in default in regard to said counterclaim is evident.

Besides, in line with the principle underlying Sec. 2 of Rule 17, it is not proper to dismiss a complaint when a compulsory counterclaim has been pleaded by defendant.

The reason is obvious. Under the cited provision, the right of the plaintiff to move for the dismissal of an action after the defendant has filed his answer is qualified by the clause providing that: "If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court." With this limitation, the power of the court to dismiss the complaint upon motion of plaintiff, which is usually without prejudice, is not purely discretionary. The purpose is to avoid multiplicity of suits over the same matter which would necessarily entail unnecessary expense and, what is worse, possibility of conflict and inconsistency in the resolution of the same questions. The same considerations would obtain, if the defendant were the one to ask for dismissal. The best interests of justice require that conflicting claims regarding the same matter should be decided in one single proceeding. Dismissing the complaint without prejudice, as the trial court has done in this case, albeit upon motion of the defendant, will not prevent the undesirable multiplication of suits and reventilation of the same issues in the subsequent action that may be filed by virtue of the reservation made in the disputed order of dismissal.

Case remanded.