DOA ROSANA REALTY v.

MOLAVE DEVELOPMENT CORP

G.R No. 180523 | March 26, 2010 | ABAD, J.

c/o Aine Tawantawan

 Prayed for an award of MORAL & EXEMPLARY DAMAGES+

ATTORNEY’S FEES for a total of P1.1M.
PETITIONERS: DOA ROSANA REALTY DEV’T CORPORATION & SY KA KIENG

RESPONDENT: MOLAVE DEV’T CORPORATION

a)
DOCTRINE: “The trial court may dismiss a complainton the ground that the
claim or demand set forth in the plaintiff’scomplaint has been paid, waived,
abandoned, or otherwise EXTINGUISHED. This provision admits the obligation
b)
set forth in the complaint but points out that such obligation has been
extinguished.”
As a THIRD PARTY COMPLAINT, DOA REALTY sued MEDINA’s nephew
and the latter’s lawyer for allegedly conniving with MEDINA in
concealing from it the existence of the contract to sell between
MEDINA and ROA REALTY.
RTC declared MEDINA in default.

5) DOA REALTY filed an ANSWER and MOTION TO SET PRELIMINARY HEARING

on its SPECIAL AND AFFIRMATIVE DEFENSES.
FACTS

1) MEDINA executed a contract to sell its land to MOLAVE DEVELOPMENT

represented by its president, TINITIGAN for P14M.

2) MOLAVE paid P1M upon signing the contract and another P1.3M as first
installment but refused to pay the rest after being informed of the
Contentions:
existence of alleged tenants on the land by the DAR.
 That it acted in GOOD FAITH in purchasing the property;
3) 2 YEARS LATER, MEDINA wrote a letter to MOLAVE rescinding the contract
to sell and learned a month earlier that MEDINA sold the land to DOA  That MOLAVE was estopped for agreeing the cancellation of the
REALTY with the TCT already issued. contract to sell;
4) After learning of the sale, MOLAVE filed with the RTC-Tarlac an ACTION  That after the complaint was filed, TINITIGAN (president of MOLAVE)
FOR SPECIFIC PERFORMANCE, DELIVERY OF POSSESSION and ANNULMENT received from MEDINA’s COUNSEL a P1.3M partial reimbursement as
OF TITLE in CIVIL CASE against MEDINA, DOA REALTY and its chairman of shown by a receipt.
the Board of Directors, SY KA KIENG.

a) Defense of Molave: that TINITIGAN was treating the P1.3M as partial

Contention: payment for the damages she sought in the pending case
before the trial court.
 That MEDINA and DOA REALTY conspired to deprive it of the lot
 b) RTC denied DOA REALTY’s MOTION TO DISMISS.
6) CA, on petition, directed the RTC to conduct PRELIMINARY HEARING on
DOA REALTY special affirmative defense of good faith to which the RTC
did so and DISMISSED the complaint against DOA REALTY and SY KA
KIENG because:
 They were buyers in good faith and thus, MOLAVE has NO CAUSE OF
ACTION against them.
a) MOLAVE filed an MR but was DENIED by the trial court.
b) On appeal, the CA ruled that MOLAVE’s complaint stated CAUSE OF
ACTION against MEDINA and DOA REALTY and this remanded the
case to the RTC for further proceedings.
c) Unsatisfied, DOA REALTY filed this PRESENT PETITION.
ISSUE: Whether the CA erred in holding that no ground for dismissing MOLAV’s
complaint against DOA REALTY as the complaint stated CAUSE OF ACTION.
-YES
RULINGS+RATIO
 SECTION 1, RULE 16 of the RULES OF CIVIL PROCEDURE provides that the
trial court may dismiss a complainton the ground that the claim or
demand set forth in the plaintiff’scomplaint has been paid, waived,
abandoned, or otherwise EXTINGUISHED. This provision admits the
obligation set forth in the complaint but points out that such obligation
has been extinguished.
 In this case, by abandonment after MOLAVE DEVELOPMENT received
partial reimbursement from MEDINA as a consequence of the
cancellation of contract to sell between them. After MOLAVE filed the
complaint, it acknowledged having received P1.3M as a consideration
for the cancellation ofitscontract to sell with MEDINA as shown in an
ACKNOWLEDGEMENT RECEIPT.
 As to TINITIGAN’s defense that she only signed the receipt because
MEDINA’s lawyer would not have released the check to her CANNOT be
a valid ground for claiming vitiation of consent. If she did not want to
agree to the cancellation, she had no business in signing the receipt and
accepting the check. She should have asked for COMPLETE
PERFORMANCE OF THE CONTRACT TO SELL. Having received the P1.3M,
MOLAVE’s remainig remedy was to pursue a claim for the balance of
P1M that it paid MEDINA upon the execution of the contract to sell.
 Moreover, MOLAVE failed to overcome the presumption of good faith in
favor of DOA REALTY as the title to the property was unencumbered
when it bought the same and that DOA REALTY learned of the
unregistered contract to sell only after it had bought the land. In fact, it
even filed a third party complaint.
 Finally, the letter of DOA REALTY’s lawyer to the DAR stating that MEDINA
had retained him to represent her in the tenance case on the land
cannot serve as notice to DOA REALTY that MEDINA executed a contract
to sell in favor of MOLAVE as the letter did not mention such contract. At
best, it could only serve as a notice to DOA REALTY that the land could
have a tenancy problem.
 THEREFORE, MOLAVE DEVELOPMENT has NO VALID CLAIM AGAINST DOA
REALTY and its president.
FALLO: WHEREFORE, the Court REVERSES and SETS ASIDE the…Decision
and…Resolution of the Court of Appeals…and REINSTATED the…Resolution of
the Regional Trial COURT…DISMISSING the complaint against DOA REALTY and
SY KA KIEND. SO ORDERED.