G.R. No. L-21598 May 19, 1966
ENCARNACION VDA. DE VALENCIA, ET AL., plaintiffs and appellants, vs. PEDRO DEUDOR, ET AL., defendants and appellees.

FACTS

On February 4, 1949, Pedro Deudor sold a parcel of land (Lot 128) to Andres Valencia for P3,600, with a P400 down payment and the balance payable within ten years. Andres Valencia died on May 9, 1952, leaving his wife and children as heirs. This land was part of a bigger property covered by TCT No. 37686 and became subject to litigation in Case No. Q-135, “Pedro Deudor, et al. v. J. M. Tuason & Co., Inc., et al.” The heirs’ motion to intervene in that case was denied. A decision in Case No. Q-135 was rendered on April 10, 1953, based on a Compromise Agreement dated March 16, 1953, between the Deudors and J.M. Tuason & Co., Inc., which listed Andres Valencia among those with the right to continue buying the lands. The heirs later tendered P2,439.93 as the alleged balance of the purchase price, but both J.M. Tuason & Co., Inc. and the Deudors refused, stating a new contract at a higher price was needed per the Compromise Agreement. The heirs filed a suit for specific performance with damages on February 3, 1956. Years later, on March 4, 1961, the plaintiffs filed for a preliminary injunction, alleging that spouses Maximo Sison and Victoria Enriquez, claiming title from J.M. Tuason & Co., Inc., had wrested a portion of the land. The court issued the injunction. The plaintiffs then filed an amended complaint on April 8, 1961, adding the Sison spouses as defendants, alleging they acted in bad faith to dispossess the plaintiffs. The Sison spouses moved to dismiss, arguing that with the rescission of the Deudor-Tuason Compromise Agreement (as ruled by the Supreme Court in other cases), the plaintiffs’ preferential right to buy was lost. The trial court dismissed the amended complaint against the Sison spouses on April 11, 1962, prompting this appeal.

ISSUE

Does the amended complaint state a cause of action against the spouses Maximo Sison and Victoria Enriquez?

RULING

Yes. The Supreme Court reversed the trial court’s order of dismissal. For purposes of a motion to dismiss, the allegations in the complaint are deemed admitted. The plaintiffs’ amended complaint relied not solely on the rescinded Deudor-Tuason Compromise Agreement but also on the original sale executed by Pedro Deudor in favor of Andres Valencia on February 4, 1949. Therefore, even with the rescission of the Compromise Agreement, a cause of action for specific performance based on the 1949 sale remains against Pedro Deudor and his successor-in-interest. Furthermore, the amended complaint alleged that the Sison spouses acted in bad faith in seeking to despoil and dispossess the plaintiffs of the land previously sold to their predecessor. Admitting these allegations, a cause of action is stated against said spouses. The case was remanded to the trial court for further proceedings.