Agoy v. Court of Appeals
REITERATIONFacts
The Antecedents: The underlying dispute concerns petitioners' claim to ownership of several parcels of land in Quezon City, asserting their rights through an alleged Composition Title in the name of Don Santiago G. Manongdo, registered in 1893. This claim is in opposition to the Tuason family's registration case initiated in 1911, which ultimately resulted in the Tuasons being granted Original Certificate of Title No. 735. The petitioners' claim is further complicated by the fact that the basis of their claim, Titulo de Propriedad No. 4136, has previously been declared null and void by this Court. Procedural History: Petitioners have engaged in a protracted legal battle, including an original action for annulment of judgment in the Court of Appeals (CA-G.R. SP. Case No. 25853) which was dismissed, and subsequently denied due course by this Court for late filing (G.R. No. 117177). The subject properties were transferred through various entities, eventually being acquired by Philippine National Bank (PNB) subsidiaries, including Management and Development Corporation (MADECOR), and later sold to Mega Prime Realty and Holdings, Inc. Petitioners filed a complaint for annulment of title against PNB, MADECOR, Mega Prime, and the Register of Deeds, alleging that PNB's holding period for the properties exceeded the statutory limit under Republic Act No. 337. The Regional Trial Court (RTC) dismissed the case for failure to state a cause of action, a decision affirmed by the Court of Appeals. The Petition: Petitioners seek review of the Court of Appeals' decision and resolution, raising issues concerning the alleged grave abuse of discretion by PNB in diverting public funds and circumventing banking laws through its subsidiary, MADECOR, and questioning the legality of MADECOR's registration and PNB's privatization. They also argue that PNB should have been represented by the Office of the Government Corporate Counsel (OGCC) instead of its own legal department. The Court notes that the issues raised before it were not the same issues passed upon by the Court of Appeals, and that the core of the petitioners' claim lacks merit as their purported right to the land has been previously dismissed and the basis of their claim declared null and void, constituting res judicata.
Issue(s)
Whether the trial court properly dismissed the complaint for lack of cause of action. Whether the Philippine National Bank (PNB) must be represented exclusively by the Office of the Government Corporate Counsel (OGCC) or if its own legal department may handle its cases.
Ruling
The petition is DENIED for lack of merit. The Decision dated September 12, 2003, and the Resolution dated March 16, 2004, of the Court of Appeals in CA-G.R. SP No. 63923 are AFFIRMED. Costs against the petitioners.
Ratio Decidendi
On Issue 1: The Court ruled that the trial court's dismissal for lack of cause of action was proper because petitioners failed to establish the first element of a cause of action: a legal right. A cause of action requires a right in favor of the plaintiff, an obligation on the defendant to respect that right, and a violation of that right by the defendant. Petitioners' claim rested entirely on Titulo de Propriedad No. 4136, which the Supreme Court had already declared null and void in Intestate Estate of the Late Don Mariano San Pedro y Esteban v. Court of Appeals. Because the title is void, petitioners have no right over the property and cannot question subsequent transfers or PNB's compliance with banking regulations. Furthermore, the dismissal of their prior annulment action in G.R. No. 117177 constitutes res judicata on the issue of ownership. On Issue 2: The Court held that PNB is authorized to be represented by its own legal department under Section 13 of its Revised Charter (E.O. 80). While the Administrative Code (E.O. 292) designates the Office of the Government Corporate Counsel (OGCC) as the principal law office for all government-owned and controlled corporations (GOCCs), it does not preclude the existence of internal legal departments. The OGCC exercises control and supervision over these departments, but the departments themselves continue to perform their functions, including litigation. Therefore, PNB's legal department had the authority to file the motion to dismiss, and petitioners' motion to expunge such filing was baseless. The Court emphasized that existing legal divisions are maintained separately and continue to represent their respective agencies under the OGCC's oversight.
Main Doctrine
A petition for annulment of title must be dismissed for lack of cause of action if the petitioners have no right over the subject parcels of land, especially when the validity of the title from which their claim is derived has already been declared null and void by the Supreme Court, and the issue of ownership has been rendered moot by res judicata.