Republic of the Philippines

Court of Appeals
VISAYAS STATION
Cebu City

Eighteenth (18 th ) Division

SPS. CRISOLOGO* & CA-G.R. CEB-CV No. 05635

PRISCILLA ABINES,
Plaintiffs-Appellants, Members:

- versus - INGLES, Chairperson

LAGURA-YAP, and
BANK OF THE PHILIPPINE LEGASPI, JJ.
ISLANDS, BPI FAMILY BANK,
PHILIPPINE ASSET Promulgated:
INVESTMENT (SPV-AMC), INC.,
and PHILIPPINE INVESTMENT December 21, 2016
ONE (SPV-AMC), INC.,
Defendants-Appellees.
x-------------------------------------------------------------------------x

DECISION
LEGASPI, J.:

This is an appeal filed by plaintiffs-appellants spouses Crisologo and

Priscilla Abines seeking to set aside the 5 July 2011 Order1 of Branch 19 of
the Regional Trial Court (RTC) of Cebu City in Civil Case No. CEB-33947.
The assailed Order dismissed plaintiffs-appellants' Complaint for failure of
plaintiffs-appellants to comply with the orders of the trial court. In the same
Order, the trial court granted defendant-appellee BPI's motion for the
cancellation of the notice of lis pendens annotated on Transfer Certificate of
Title (TCT) No. T-183370.

* Crisologo Abines died while the case was pending in the trial court. No motion for substitution of heirs
has yet been filed.
1 Records, pp. 106-107; issued by Judge Wilfredo Fiel Navarro.
CA-G.R. CEB-CV No. 05635
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The Factual Antecedents

This case originated from a Complaint2 for specific performance,

annulment of assignment and damages with TRO/preliminary injunction
filed by plaintiffs-appellants. The case was raffled to Branch 19 of the
Regional Trial Court of Cebu City, and docketed as Civil Case No. CEB-
33947.

As alleged, spouses Crisologo and Priscilla Abines, during their

lifetime, were the registered owners of 11 parcels of land situated in Cebu
City, covered by Transfer Certificate of Title (TCT) No. 99269. Sometime in
1999, plaintiffs-appellants obtained a loan from defendants-appellees Bank
of the Philippine Islands (BPI) and BPI Family Savings Bank (BPIFSB),
secured by a real estate mortgage over the aforementioned real properties.

The spouses Abines defaulted in their loan obligations and as a result,

defendants-appellees banks extrajudicially foreclosed the mortgaged
properties. As of June 15, 2001, plaintiffs-appellants' principal loan
obligation was P47,286,202.38.

An auction sale was conducted on May 21, 2001 wherein defendants-

appellees banks emerged as the winning bidders, having bought the
properties for only P35,730,184. Plaintiffs-appellants then filed a case
assailing the mortgage and extrajudicial foreclosure proceedings. The case
was raffled to the RTC, Branch 16 of Cebu City, docketed as Civil Case No.
CEB-27700. Meanwhile, defendants-appellees banks (“the banks”) filed a
case for collection of sum of money in the amount of P36,134,949.45,
representing the deficiency in the mortgage sale. The case was raffled to the
RTC, Branch 58 of Cebu City, docketed as Civil Case No. CEB-27464.

Civil Case No. CEB-27700 was eventually dismissed by the Court of

Appeals. Upon appeal, the Supreme Court denied the appeal with finality in
its Decision dated February 13, 2006, docketed as G.R. No. 167900. On the
other hand, Civil Case No. CEB-27464 was decided by the RTC in favor of
defendants-appellees, fixing plaintiffs-appellants' deficiency at
3
P19,227,174.53 pursuant to the Decision dated May 17, 2004. Plaintiffs-

2 Records, pp. 1-9.

3 Records, pp. 21-27.
CA-G.R. CEB-CV No. 05635
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appellants appealed the 17 May 2004 Decision to this Court, docketed as

CA-G.R. CV No. 00328.

Because Civil Case No. CEB-27700 had already become final, the
banks consolidated ownership over the 11 parcels of land and TCT No. T-
1833704 was issued in their favor.

Aggrieved, plaintiffs-appellants sent the banks a letter, manifesting

therein their intention to “buy-back” the properties from the banks. 5 The
banks, through Jaime B. Rasco Jr., replied that all offers to buy the property
are subject to the final approval of the management, and that a formal letter
offer should be submitted so that the buy-back of the properties could be
processed.6

However, the banks assigned their right over plaintiffs-appellants'

deficiency of P19,227,174.53 in favor of Philippine Asset Investment (PAI),
Inc., which in turn, sold its rights to Philippine Investment One (POI). These
subsequent transfers were done without the knowledge and consent of
plaintiffs-appellants.

Only defendants-appellees BPI and BPIFSB filed an answer to the

Complaint. In their Answer with Compulsory Counterclaim to the
Complaint,7 defendants-appellees averred that BPI and BPIFSB are two
separate corporations, with a different set of officers and employees. Thus,
the acts of one bank do not bind the other.

The banks claimed that the letter sent by plaintiffs-appellants to Mr.

Jaime Rasco, the bank manager of BPI, merely informed Mr. Rasco of
plaintiffs-appellants' interest to buy back the properties and asked for the
amount that the bank was willing to sell the said properties. In response, Mr.
Rasco stated that all offers to buy back the properties are subject to the final
approval of the management and that they should submit a formal letter offer
so that the bank could start processing the approval of the proposed buy-
back. The banks averred that the Complaint should be dismissed for lack of
cause of action because there was no perfected contract of sale (buy-back of
4 Records, pp. 28-30.
5 Records, p. 31.
6 Records, p. 32.
7 Records, pp. 47-59.
CA-G.R. CEB-CV No. 05635
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the properties covered by TCT No. T-183370) between plaintiffs-appellants

and the banks. As a compulsory counterclaim, the banks claimed that they
are entitled to damages owing to the baseless and malicious suit filed against
them.

Crisologo Abines died on January 28, 2008 while the case was
pending before the trial court. Accordingly, plaintiffs-appellants' counsel
informed the trial court of Crisologo's death during the hearing of the case
on July 27, 2010. Counsel manifested that there is a need to substitute
Crisologo Abines with his heirs and that the Complaint must be amended to
include the buyer of the disputed properties as defendant. Per Order8 issued
on the same date, the trial court granted plaintiffs-appellants motions as
follows:

“When the case was called, counsel for plaintiffs as well as that of
the defendants appeared. Counsel for the plaintiffs manifested that it was
only recently that his office learned of the demise of one of the principal
plaintiffs in this case, Crisologo Abines, and prayed that he be given time
to file a Notice of Death as well as the substitution of said plaintiff.
Besides, given the manifestation of the defendant-bank, that the property
subject of this case had already been disposed of to third parties, plaintiffs'
counsel likewise prayed for time to implead the necessary parties, that is,
the vendees of the property in litigation.

Accordingly, the twin motions of the plaintiffs are hereby granted.

The plaintiffs are allowed fifteen (15) days from today to file the
necessary pleadings on their twin motions and likewise, defendants are
given the same period of fifteen (15) days from receipt of plaintiffs'
pleadings to comment thereon. Thereafter, the incidents will be deemed
submitted for resolution.”

During the pre-trial of the case on March 9, 2011, plaintiff-appellant

Priscilla Abines and her counsel manifested that the Complaint must be
amended to include the buyer of the properties, Cebu Korona Development
Corporation, as an indispensable party. Thus, they prayed for the
cancellation of the pre-trial conference in order to amend their Complaint.
The trial court granted their request per Order9 issued on the same date. The
9 March 2011 Order reads:

8 Records, p. 71.
9 Records, p. 102.
CA-G.R. CEB-CV No. 05635
Decision Page 5 of 11

“When the case was called, only plaintiff and counsel appeared.
There is no appearance for the defendant and counsel. However, counsel
for the plaintiff manifested to the court that there is a need to amend the
complaint in order to implead an indispensable party as one of the
defendants and he needs time to be able to do so and prayed for the
cancellation of today's pre-trial and he be given a period of time to file the
necessary amended pleadings and possibly a motion for leave together
with said amended pleading. Finding the motion to be well-taken, the
same is hereby GRANTED. The plaintiff is given fifteen (15) days from
today to file the necessary motion for leave together with the amended
pleading. And the defendant is given the same number of days from
receipt of the said motion to file any opposition or amended answer as it
may deem proper.

Thereafter, the incident will be deemed submitted for resolution

and/or a pre-trial conference maybe set by this court on a later date. The
plaintiff and counsel are notified in open court. Notify the defendant and
counsel, of this order.

SO ORDERED.”

Meanwhile, defendant-appellee BPI filed a Motion to Cancel Notice

of Lis Pendens10 annotated on TCT No. T-183370. The hearing of the
motion to cancel notice of lis pendens was set on July 5, 2011.

During the 5 July 2011 hearing of the motion to cancel lis pendens,
the trial court issued the assailed 5 July 2011 Order11 dismissing the
Complaint and cancelling the notice of lis pendens annotated on TCT No. T-
183370. The Order reads:

“This refers to the so-called MOTION TO CANCEL NOTICE

OF LIS PENDENS filed by defendant Bank of the Philippine Islands.
Notwithstanding the opposition, the court is inclined to grant the
defendant-movant's motion for it will be recalled that as early as July 27,
2010 the plaintiffs already manifested that one of them, that is, plaintiff
Crisologo Abines had already died. In fact, in deference to their motion,
the court granted the plaintiffs fifteen (15) days to file the necessary
pleading, that is, for the substitution of the deceased plaintiff. And
likewise, during the hearing held on March 9, 2011, the plaintiffs
manifested again to this court that there is a need to amend the complaint
in order to implead an indispensable party as one of the defendants.

10 Records, pp. 74-82.

11 Vide footnote 1.
CA-G.R. CEB-CV No. 05635
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Again, the plaintiffs were given fifteen (15) days from said date, that is,
from March 9, 2011 to file an amended complaint. Unfortunately,
however, no pleadings for the substitution of plaintiff Crisologo Abines
was filed until today. Neither was an amended complaint filed to implead
a new defendant as ordered by the court. In fine, therefore, the plaintiffs
have defied two (2) orders of this court, that is, the order of July 27, 2010
and that issued on March 9, 2011. Pursuant to section 3 Rule 17 of the
1997 Revised Rules of Civil Procedure, it is very clear that failure to
comply with any order of the Court on the part of the plaintiff or any
party, for that matter, may warrant dismissal of the Complaint upon the
court's discretion or instance.

Wherefore, the complaint in the above-entitled case is hereby

ordered dismissed. Moreover, the motion of defendant bank for
cancellation of the notice of lis pendens being well-taken and
meritorious, the same is hereby GRANTED. Let the notice of lis pendens
on Transfer Certificate of Title (TCT) No. T-183370 (covering Lot nos.
54, 55, 56, 60, 61, 62, 63, 64, 65, 66 and 91 of the Banilad Estate) be, as
it is hereby ordered, CANCELLED.

Notify both parties through their respective counsel, of this order.

SO ORDERED.”

Dissatisfied with the dismissal of the case, plaintiffs-appellants filed

an Omnibus Motion for Reconsideration and for Admission of Amended
Complaint,12 with attached Amended Complaint.13 In the Amended
Complaint, they indicated the heirs who would substitute the late Crisologo
Abines and impleaded Cebu Korona Development Corporation as an
additional defendant. However, the motion for reconsideration was denied
per the trial Court's Order14 dated August 14, 2012.

Hence, this appeal anchored on the following arguments:

I. WHETHER OR NOT THE LOWER COURT ERRED IN

REFUSING TO ADMIT THE AMENDED COMPLAINT AND IN
DISMISSING THIS CASE;

II. WHETHER OR NOT THE COURT ERRED IN

12 Records, pp. 146-148.

13 Records, pp. 112-120.
14 Records, pp. 89-90.
CA-G.R. CEB-CV No. 05635
Decision Page 7 of 11

ORDERING THE CANCELLATION OF THE NOTICE OF LIS

PENDENS ANNOTATED IN TCT NO. T-183370.

Plaintiffs-appellants' main argument is that the trial court committed a

reversible error in dismissing the case and refusing to admit their Amended
Complaint. They claim that the delay in substituting the late Crisologo with
his heirs was not deliberate but was due to the late submission to plaintiffs-
appellants' counsel of the death certificate of Crisologo as well as the
complete names and addresses of his substituting heirs. They also point out
that it is difficult to determine the exact address of Cebu Korona
Development Corporation. They aver that to dismiss the case based on mere
technicality would cause great injustice on their part.

In their second argument, plaintiff-appellants stress that the trial court

erred in cancelling the notice of lis pendens annotated on TCT No. T-183370
without stating the legal grounds therefor. They cite that the trial court
merely stated that the motion to cancel lis pendens filed by BPI was “well-
taken and meritorious,” without even discussing if there is a legal ground to
cancel said notation.

For its part, defendant-appellee BPI filed its appeal brief15 to refute the
arguments raised by plaintiffs-appellants. It argues that the trial court was
correct in dismissing the case. To grant plaintiffs-appellants' motion to admit
amended complaint would render nugatory Section 3, Rule 17 of the Rules
of Court, which states that the complaint may be dismissed for failure of the
plaintiff to “prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court.” As to the second
argument, defendant-appellee BPI counters that the cancellation of the
notice of lis pendens was warranted under the circumstances obtaining in the
case.

THE RULING OF THE COURT

The appeal lacks merit.

Essentially, the pivotal issue involved in this case is the propriety of

the dismissal of the case by the trial court, which was grounded on plaintiffs-

15 Rollo, pp. 45-63.

CA-G.R. CEB-CV No. 05635
Decision Page 8 of 11

appellants' failure to comply with the orders of the court, in particular, the
Orders dated July 27, 2010 and March 29, 2011. The first Order granted
plaintiffs-appellants' request to file a notice of death and substitution of the
late Crisologo Abines. Meanwhile, the second Order granted plaintiffs-
appellants' request to amend the complaint in order to implead an additional
defendant. For failing to comply with these Orders, the trial court dismissed
the Complaint in the assailed 5 July 2011 Order.16

Failure to Comply with Orders of the Court is a ground for dismissal of

the Complaint

It is not disputed that plaintiffs-appellants failed to comply with the

27 July 2010 and 29 March 2011 Orders of the trial court. Plaintiffs-
appellants do not deny this fact. Instead, they raised the defense that the
lapses in complying with the Orders of the trial court were due to the
difficulty in ascertaining the exact address of the new party to be impleaded,
Cebu Korona Development Corporation, which was mentioned by the
defendants-appellees banks in their Motion to Cancel Notice of Lis Pendens.

We are not persuaded.

Plaintffs-appellants' failure in filing a motion for substitution of heirs

and for amendment of their Complaint is not justified in this case. The
Omnibus Motion for Reconsideration and for Admission of Amended
Complaint filed by plaintiffs-appellants is bereft of credible proof showing
that the address of Cebu Korona Development Corporation is difficult to
determine. We find this explanation untenable considering that plaintiffs-
appellants could have easily determined the corporation's address by
inquiring with the Securities and Exchange Commission. Furthermore, there
is nothing in the records which would show that plaintiffs-appellants filed a
Notice of Death and motion for substitution of heirs. Instead, plaintiffs-
appellants filed an omnibus motion with attached Amended Complaint,
indicating therein the heirs of Crisologo Abines. Taking these circumstances
into account, We find that the trial court acted correctly in dismissing the
Complaint for failure of plaintiffs-appellants to comply with its orders or
directives.

16 Vide footnote 1.
CA-G.R. CEB-CV No. 05635
Decision Page 9 of 11

In Garchitorena v. delos Santos,17 the Supreme Court explained that

the failure of a party to comply with the trial court's directive to amend the
complaint is a ground for the dismissal of the complaint. The High Court
elucidated on the matter as follows:

“To order an amendment to a complaint within a certain period of

time in order to implead as party plaintiff or defendant one who is not a
party to the case lies within the discretion of the Court. And where it
appears that the person to be impleaded is an indispensable party, the party
to whom such order is directed has no other choice but to comply with it.
His refusal or failure to comply with the order is a ground for the dismissal
of his complaint pursuant to section 3, Rule 30, of the Rules of Court
which provides:

'. . . When plaintiff fails . . . to prosecute his action for an

unreasonable length of time, or to comply with these rules or any order of
the court, the action may be dismissed upon motion of the defendant or
upon the court's own motion. . . .' (Emphasis supplied.)

In Bautista vs. Teodoro, Jr., 54 Off. Gaz. 619, this Court upheld the
dismissal by the trial court of a complaint for failure of the plaintiff to
comply with its order, either to amend her complaint or to file a bill of
particulars within ten days from receipt of notice and within an extension
of time prayed for by her and granted by the court.”

Furthermore, We find guidance in the case of Asia United Bank v.

Goodland United Inc.18 In that case, the Supreme Court ruled that the party
seeking a relaxation of the rules should advance meritorious reasons to
support his or her plea of liberality. It is not enough that the party stands to
lose his or her property. It must be shown that a relaxation of the rules of
procedure would ultimately serve the ends of substantial justice. The
Supreme Court explained as follows:

“Indeed, the primordial policy is a faithful observance of the Rules

of Court, and their relaxation or suspension should only be for persuasive
reasons and only in meritorious cases, to relieve a litigant of an injustice
not commensurate with the degree of his thoughtlessness in not complying
with the procedure prescribed. Further, a bare invocation of 'the interest of
substantial justice' will not suffice to override a stringent implementation
of the rules.

17 G.R. No. L-17045, June 30, 1962.

18 G.R. No. 188051, November 22, 2010.
CA-G.R. CEB-CV No. 05635
Decision Page 10 of 11

A reading of the CA's Decision readily shows that the leniency it

granted GOODLAND was merely anchored on substantial justice. The CA
overlooked GOODLAND's failure to advance meritorious reasons to
support its plea for the relaxation of Rule 138, Section 26. The fact that
GOODLAND stands to lose a valuable property is inadequate to dispense
with the exacting imposition of a rather basic rule.

More importantly, the CA failed to realize that the ultimate

consequences that will come about should GOODLAND's appeal proceed
would in fact contravene substantial justice. The CA and, eventually, this
Court will just re-litigate an otherwise non-litigious matter and thereby
compound the delay GOODLAND attempts to perpetrate in order to
prevent AUB from rightfully taking possession of the property.”

Specific grounds for cancellation of Lis Pendens not required

We also rule that the trial court acted correctly in cancelling the notice
of lis pendens annotated on TCT No. T-183370. Since there is no more
pending suit to speak of, the lis pendens annotated on the title should
necessarily be cancelled.

There is no need to indicate the specific ground for cancellation of the

lis pendens considering that the first paragraph of Section 77,19 P.D. No.
1529 only applies in cases where a notice of lis pendens is cancelled before
final judgment. In this case, the Order dismissing the Complaint finally
disposed of the case.

WHEREFORE, the appeal is DENIED. The 5 July 2011 Order of

Branch 19 of the RTC of Cebu City in Civil Case No. CEB-33947 is
AFFIRMED.

SO ORDERED.
19 Section 77. Cancellation of lis pendens. Before final judgment, a notice of lis pendens may be canceled
upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse
party, or that it is not necessary to protect the rights of the party who caused it to be registered. It may
also be canceled by the Register of Deeds upon verified petition of the party who caused the registration
thereof.
At any time after final judgment in favor of the defendant, or other disposition of the action such as to
terminate finally all rights of the plaintiff in and to the land and/or buildings involved, in any case in
which a memorandum or notice of lis pendens has been registered as provided in the preceding section,
the notice of lis pendens shall be deemed canceled upon the registration of a certificate of the clerk of
court in which the action or proceeding was pending stating the manner of disposal thereof.
CA-G.R. CEB-CV No. 05635
Decision Page 11 of 11

Original Signed
GERMANO FRANCISCO D. LEGASPI
Associate Justice

WE CONCUR:

Original Signed
GABRIEL T. INGLES
Executive Justice

Original Signed
MARILYN B. LAGURA-YAP
Associate Justice

C E R T I FI CAT I O N

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court.

Original Signed
GABRIEL T. INGLES
Executive Justice
Chairperson, Eighteenth Division