GR 146089; (December, 2001) (Digest)
G.R. No. 146089 ; December 13, 2001
VIRGINIA GOCHAN, LOUISE GOCHAN, LAPU-LAPU REAL ESTATE CORPORATION, FELIX GOCHAN AND SONS REALTY CORPORATION, MACTAN REALTY DEVELOPMENT CORPORATION, petitioners, vs. MERCEDES GOCHAN, ALFREDO GOCHAN, ANGELINA GOCHAN-HERNAEZ, MA. MERCED GOCHAN GOROSPE, CRISPO GOCHAN, JR., and MARLON GOCHAN, respondents.
FACTS
Respondents, stockholders of two family corporations, offered to sell their shares to the individual petitioners for P200,000,000. Petitioners accepted, paid the amount, and received corresponding receipts from respondents. Respondents also executed “Release, Waiver and Quitclaim” documents, relinquishing any future claims. Subsequently, respondents required individual petitioners to sign a handwritten “promissory note” drafted by respondent Crispo Gochan, Jr., ostensibly to bind them to non-disclosure of the sale price. Unbeknownst to petitioners, Crispo Gochan, Jr. inserted a clause stating the payment was “in partial consideration of the sale.”
Later, respondents filed a complaint for specific performance and damages, alleging the existence of a Provisional Memorandum of Agreement that listed the P200 million plus several real properties as the total consideration. They claimed entitlement to the conveyance of these additional properties. Petitioners raised affirmative defenses in their Answer, including lack of jurisdiction due to alleged underpayment of docket fees, the Statute of Frauds, extinguishment of obligation by payment, and waiver by respondents. They moved for a preliminary hearing on these defenses.
ISSUE
Did the trial court commit grave abuse of discretion in denying the motion for a preliminary hearing on the affirmative defenses?
RULING
Yes. The Supreme Court granted the petition, reversing the Court of Appeals. The trial court’s denial of the motion for preliminary hearing constituted grave abuse of discretion. A preliminary hearing under Rule 16 of the Rules of Court is precisely designed to avoid unnecessary proceedings if a defense is indubitable.
The Court found several defenses plainly indubitable on their face. First, the claim was extinguished by payment, as evidenced by the receipts and the Release, Waiver and Quitclaim documents executed by respondents. Second, the Statute of Frauds barred the enforcement of the alleged agreement to convey real properties, as no written note or memorandum for such conveyance was signed by the party to be charged. The trial court erroneously ruled the Statute applied only to executory contracts; it applies to any agreement covered by its terms, regardless of execution. Third, respondents’ waiver and quitclaim expressly precluded the very suit they filed.
By refusing to conduct a preliminary hearing despite these patently meritorious defenses, the trial court evaded its positive duty, amounting to a virtual refusal to perform a duty enjoined by law. This arbitrary action warranted the extraordinary writ of certiorari. Consequently, the Court of Appeals erred in dismissing the petition and upholding the trial court’s interlocutory order.