GR 161298; (January, 2006) (Digest)
G.R. No. 161298 ; January 31, 2006
Spouses ANTHONY and PERCITA OCO, Petitioners, vs. VICTOR LIMBARING, Respondent.
FACTS
Respondent Victor Limbaring filed a Complaint for rescission of contracts, recovery of possession, and ownership against petitioners Spouses Anthony and Percita Oco. He alleged that he was the actual buyer of two lots from Sabas Limbaring, but the Deeds of Absolute Sale were executed in the names of his daughters, Jennifer and Sarah Jane. He claimed a trust relationship existed. Subsequently, during a settlement over a related criminal case, Percita Oco, Sabas’s daughter, agreed to pay respondent P25,000 for expenses to facilitate the transfer of the titles from his daughters to her name. After the titles were transferred, Percita failed to pay the agreed amount.
Petitioners moved to dismiss the complaint, asserting that respondent was not the real party in interest since he was not a party to the original deeds of sale executed by Sabas Limbaring in favor of his daughters. The Regional Trial Court initially denied the motion, but after trial, dismissed the complaint, finding respondent lacked legal standing. The Court of Appeals reversed, ordering rescission. Petitioners elevated the case to the Supreme Court.
ISSUE
Whether or not respondent Victor Limbaring is the real party in interest entitled to sue for the rescission of the contracts involving the subject properties.
RULING
The Supreme Court REVERSED the Court of Appeals and REINSTATED the trial court’s dismissal. The Court held that respondent was not the real party in interest. Basic procedural law requires every action to be prosecuted in the name of the real party in interest, who stands to be benefited or injured by the judgment.
Respondent’s claim of being a trustor—that he paid the purchase price and his daughters merely held the titles in trust—was a bare allegation insufficient to confer standing. The Court applied the legal presumption under Article 1448 of the Civil Code: when a parent pays the purchase price for a property conveyed to a child, the presumption is that a gift was made, not that a trust was created. To rebut this presumption, clear and satisfactory evidence is required. Respondent failed to discharge this burden. Consequently, the real parties to the original sales contracts were the vendor Sabas Limbaring and the vendees, his daughters. Respondent, being a stranger to these contracts, had no material interest to sue for their rescission. His cause of action, if any, was merely a personal claim for the P25,000 under the separate undertaking, which was not the primary relief sought in his complaint for rescission.