G.R. No. 158819 ; April 16, 2009
ANTERO LUISTRO, Petitioner, vs. COURT OF APPEALS and FIRST GAS POWER CORPORATION, Respondents.

FACTS

First Gas Power Corporation (respondent) operates a gas-fired power plant and entered into a Substation Interconnection Agreement requiring it to construct a transmission line. On March 25, 1997, respondent entered into a Contract of Easement of Right-of-Way with Antero Luistro (petitioner). The Contract granted respondent a perpetual easement over 100 sq. m. of petitioner’s land for a tower and a 25-year easement over 2,453.60 sq. m. for overhead cables, for a total consideration of ₱88,608. Respondent commenced construction. On December 23, 1998, petitioner’s counsel wrote to respondent, requesting a work stoppage near his house, alleging it was dangerously close to the transmission line. On September 7, 2000, petitioner filed a complaint for “Rescission/Amendment And Or Modification of Contract Of Easement With Damages” against respondent and another entity. Petitioner alleged he entered into the Contract due to respondent’s fraud, misrepresentation, and false assurances, specifically that his house was supposed to be 20-25 meters away from the line but turned out to be only 7.23 meters directly underneath it, endangering his family. Respondent filed a Motion to Dismiss for failure to state a cause of action. The Regional Trial Court denied the motion. Respondent filed a petition for certiorari with the Court of Appeals, which set aside the trial court’s orders and dismissed the complaint against respondent for failure to state a cause of action. The Court of Appeals found the trial court’s orders did not comply with procedural rules and that the complaint failed to sufficiently allege a cause of action or fraud with particularity. Petitioner’s motion for reconsideration was denied.

ISSUE

1. Whether the trial court’s orders failed to comply with Section 3, Rule 16 of the 1997 Rules of Civil Procedure.
2. Whether the complaint states a sufficient cause of action.
3. Whether the complaint alleges fraud with particularity as required under Section 5, Rule 8 of the 1997 Rules of Civil Procedure.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ Decision and Resolution.
1. The trial court violated Section 3, Rule 16. Its order merely stated, “Examining the allegations in the complaint the Court finds that a cause of action sufficiently exist[s] against defendants,” without clearly and distinctly stating the reasons, which is procedurally required.
2. The complaint did not state a sufficient cause of action. In a motion to dismiss on this ground, the sufficiency of the factual allegations is examined. The complaint was based on an alleged breach of an undertaking that petitioner’s house would be 20-25 meters from the transmission line. However, no such undertaking existed in the Contract of Easement. The Contract only granted easement rights over specific areas as indicated in a sketch plan. Therefore, the alleged right that was violated did not exist in the Contract.
3. The complaint did not allege fraud with the particularity required by Section 5, Rule 8. The allegations were general, stating the contract was entered into by means of “fraud and machinations of words,” “misrepresentation, promises, false and fraudulent assurances and tricks,” without specifying the circumstances constituting the fraud. Furthermore, the Contract itself contained a clause stating its contents were explained to petitioner in a language he understood, and he signed voluntarily, negating the claim of fraud.