G.R. No. 110274 March 21, 1994
PRUDENCE REALTY and DEVELOPMENT CORPORATION, petitioner, vs. THE COURT OF APPEALS, HON. NORBERTO Y. GERALDEZ, in his capacity as Presiding Judge RTC, Branch 36, Calamba, Laguna, PAULINA GONZALES-HABANA, respondent.

FACTS

On July 29, 1979, Paulina Gonzales Habana sold three parcels of land to Prudence Realty and Development Corporation for P2,279,398.00. On September 2, 1980, the Corporation filed an action for rescission of the contract. On September 21, 1982, the then Court of First Instance of Manila rendered a judgment based on a compromise agreement reached by the parties. On February 19, 1990, Habana filed an action with the Regional Trial Court (RTC) of Calamba for the declaration of nullity of the compromise agreement, alleging that its paragraph 8(c) contained a potestative suspensive condition dependent solely on the will of the debtor Corporation. The Corporation moved to dismiss for lack of jurisdiction, arguing the action was actually for annulment of a judgment of an RTC, cognizable only by the Court of Appeals. On June 7, 1990, Habana amended her complaint to allege three alternative causes of action: 1) invalidity of the compromise agreement; 2) failure of the defendant to pay the balance of the purchase price; and 3) the need for the court to fix the period for such payment. The Corporation opposed the amendment, contending the jurisdictional defect of the first cause of action could not be cured by amendment, and that the second and third causes of action were premature and improperly joined. The RTC denied the motion to dismiss. The Corporation filed a special civil action for certiorari and mandamus with the Court of Appeals, which was dismissed. The Corporation then elevated the case to the Supreme Court.

ISSUE

1. Whether the issue of whether the parties intended a condition or a period requires preferential resolution and is decisive of the issue of jurisdiction.
2. Whether the issue of jurisdiction is determinable from the allegations in the pleadings and requires no further evidentiary basis.
3. Whether the proper remedy under the facts alleged in the second alternative cause of action is an independent action or a motion for execution.
4. Whether the second and third alternative causes of action are sufficient to state a cause of action for rescission and for fixing a period.

RULING

The Supreme Court GRANTED the petition. The second and third causes of action alleged by private respondent Habana were premature. Civil Case No. 1454-90-C in the RTC of Laguna was DISMISSED, without prejudice to the filing of the proper motion with the RTC of Manila for the fixing of the period for compliance by the petitioner with its obligation under the 1982 decision.
The Court held that the amended complaint was properly admitted, as a motion to dismiss is not a responsive pleading that would prevent amendment as a matter of right. However, on the merits, the Court found the second cause of action for rescission was premature. The compromise agreement had been embodied in a judgment, and the obligation of the Corporation to pay the balance was not yet due and demandable. The agreement stipulated payment from the proceeds of the sale of the subject properties, and there was no allegation that these properties had been sold. Consequently, the obligation had not yet arisen, and an action for rescission under Article 1191 of the Civil Code could not prosper. The action was essentially for the execution of the judgment, which must be filed in the court that rendered it (the RTC of Manila), not through an independent action. The third cause of action for fixing a period should likewise be filed with the RTC of Manila, which approved the compromise agreement, under Rule 39, Section 6 of the Rules of Court. The RTC of Laguna therefore had no jurisdiction to entertain the second and third causes of action.