Rule 31, case 2

ROMEO TESTON, represented by CONRADO COLARINA,

petitioner,
vs.
DEVELOPMENT
BANK
OF
THE
PHILIPPINES, LAND BANK OF THE PHILIPPINES, and
SECRETARY OF AGRARIAN REFORM, respondents.

In separate answers for SCC 4243, DBP, LBP, and the DAR
Secretary commonly averred that petitioner has no cause of
action since he was never the owner of the properties
because DBP rescinded the Deed of Conditional Sale for nonpayment of purchase price.

G.R. No. 144374 November 11, 2005

In separate answers for SCC 4242, GSIS, LBP, and the DAR
Secretary contend that Colarina has no cause of action since
he is not the owner of the lands, he only bought from AAA
the right to redeem the property and he failed to exercise
such right within the one-year period allowed by law.

There are two cases:

Case 1 Special Civil Case (SCC) No. 4243. This was filed by
Teston through Colarina on November 3, 1993. It was a
complaint against DBP, LBP, and DAR Secretary for the
determination and payment of just compensation of two
parcels of agricultural land. Teston alleges that he is the
owner of the two parcels of land in Brgy. Lantangan,
Mandaon, Masbate through a Deed of Conditional Sale from
DBP. He voluntarily offered the lands to the DAR Secretary
under the Comprehensive Agrarian Reform Law. It was for
consideration of P12,172,854.63, however the DBP without
notifying him transferred the land to the government through
the DAR. Teston argues that after the sale to him, DBP had no
right to transfer the properties.
Case 2 SCC No. 4242. This was filed by Colarina against the
GSIS, LBP, and the DAR Secretary for the determination and
payment of just compensation for fifteen parcels of
agricultural land. The lands were in Barrio Malaran and
Lamintao, Municipality of Dimasalong (now Uson), Masbate.
The land was originally mortgaged by the Associated
Agricultural Activities, Inc. (AAA) to GSIS but failed to pay the
loan, GSIS foreclosed the property at public auction, GSIS
was the highest bidder. Certificates of sale were issued and
registered in the name of the GSIS. Conrado claims that he
bought the lands from AAA on December 8, 1988, he then
offered to sell the lands to the DAR. But when GSIS
consolidated the titles to its name, it executed a Deed of
Transfer in favour of the DAR. Despite repeated demands,
LBP and DAR refused to determine and pay just
compensation for the lots.
Both cases raffled to RTC Masbate, Branch 48.

Without any order of the RTC expressly consolidating the

cases, a notice of hearing of both cases were sent to the
parties. RTC terminated the pre-trial on both cases in
November 16, 1994.
September 19, 1995, GSIS filed a motion to dismiss for failure
of the complaint to state a cause of action. That Colarina has
no right because he failed to redeem, therefore he was not
the real party-in-interest in the case. Colarina opposed by
declaring that GSIS was a necessary party being the
mortgagee but did not dispute his failure to redeem. No
pleading, manifestation, or motion was filed by the petitioner
Teston or respondents DBP, LBP, and the DAR Secretary.
At the hearing, only DBP appeared despite notice. LBP filed a
telegraphic motion for postponement. RTC thus considered
the motion to dismiss submitted for resolution. RTC issued its
order dismissing both cases for failure to state a cause of
action. It reasoned that Colarina failed to redeem and
Testons sale was rescinded.
Motion for Reconsideration was filed by Pejo Buenviaje &
Associates, common counsel of petitioner and Colarina, but
denied by RTC. Colarina and Teston filed separate petitions
for review in the CA. However, Colarinas petition was
granted by the CA but CA was reversed by the SC and
Testons petition was decided by the CA by affirming the RTC
decision. MR was denied hence this petition.

CA held that the RTC is given the option to have a joint

hearing or to order consolidation if the motion involves a
common question of law or fact, pursuant to Section 1 of Rule
31 of the 1997 Rules of Civil Procedure; since SCC 4242, and
4243 have a common question of law and face, which is the
determination and payment of just compensation, the joint
hearing conducted by the RTC was proper and valid; the rule
clearly gives the RTC discretion to decide what course of
action to take; furthermore, the court may make such orders
concerning proceedings therein to avoid unnecessary costs
or delay.
Petitioners claim is that no consolidation in contemplation of
the Rules took place since there was no order for
consolidation; the RTC only scheduled both cases for
simultaneous hearing. He further argues that the RTC erred in
dismissing in one order both cases based on a motion to
dismiss directed against one case only.
On the other hand, DBP submits that petitioners argument
regarding consolidation deals principally on technicalities and
semantics. It avers that it cannot be denied that the two
cases involved are of the same nature and pray for the same
relief. DBP admits that there was no written order from the
RTC expressly consolidating both cases, but it maintains that
the RTC scheduled both cases for simultaneous trial and
hearing and all the conditions for consolidation exist.
LBP submits that the RTC did not err, since the two cases
were consolidated and involved common questions of law
and facts.
ISSUE: WON the CA erred in applying Rule 31, Sec 1 of the
rules of civil procedure? YES
HELD: YES, CA erred.
Rule 31 Sec. 1. Consolidation When actions involving
a common question of law or fact or pending before
the court, it may order a joint hearing or trial of any or
all the matters in issue in the actions; it may order all
the actions consolidated; and it may make such orders

concerning proceedings therein as may tend to avoid

unnecessary costs or delay.
A court may order several actions pending before it to be
tried together where they arise from the same act, event or
transaction, involve the same or like issues, and depend
largely or substantially on the same evidence, provided that
the court has jurisdiction over the cases to be consolidated
and that the joint trial will not give one party an undue
advantage or prejudice the substantial rights of any of the
parties. The obvious purpose of the rule is to avoid
multiplicity of suits to guard against oppression or abuse, to
prevent delays, to clear congested dockets, to simplify the
work of the trial court; in short the attainment of justice with
the least expense and vexation to the parties litigants.
In the present case, although both were raffled to the
same RTC, involve the same prayer for determination
and payment of just compensation and petitioners are
represented by the same counsel, and respondents
LBP and DAR Secretary are common defendants, these
are not sufficient justifications for joint trial and joint
order dismissing both cases. There is no real identity
of parties, facts, or rights asserted. 4242 was initiated
by Colarina in his own name against GSIS and
concerns 15 parcels of land in a Barrio. 4243 was
instituted by Teston represented by Colarina against
DBP for 2 parcels of land in a Baranggay. Colarinas
claim is as a redemptioner while Teston claims as a
buyer. The causes of action are clearly different
events or transactions, involve different issues, and
ultimately will depend on different evidence.
RTC exceeded its jurisdiction in setting the joint trial of the
two cases.
In view of the improper consolidation, the RTC judge was also
in error by dismissing 4243 based on a motion to dismiss
filed by GSIS for 4242. GSIS claim that Colarina failed to
become the owner of the 15 parcels of land is totally alien
from the claim of DBP against Teston with respect to the 2
parcels of land from the deed of conditional sale.

Only Colarina was directed to file an opposition to GSIS

motion to dismiss while DBP, LBP, and DAR Secretary did not
file any motion to dismiss. RTC cannot motu proprio or on its
own initiative, consider the ground of lack of cause of action
on the part of petitioner when it was not raised by DBP in the
motion to dismiss filed by GSIS, without running afoul of
petitioners right to due process. Court will no longer delve

on the question of whether petitioners compliant failed to

state the cause of action.
WHEREFORE, instant petition is GRANTED. Case is
REMANDED to the court of origin for further proceedings
insofar as SCC no. 4243 is concerned.