G.R. No. 173292 ; September 1, 2010
Memoracion Z. Cruz, represented by Edgardo Z. Cruz, Petitioner, vs. Oswaldo Z. Cruz, Respondent.

FACTS

Memoracion Z. Cruz filed a complaint against her son, respondent Oswaldo Z. Cruz, for Annulment of Sale, Reconveyance, and Damages. She alleged that a parcel of land registered in her name was fraudulently transferred to Oswaldo and his wife via a simulated 1973 Deed of Sale. After Memoracion finished presenting her evidence-in-chief, she died on October 30, 1996. Her counsel informed the trial court of her death. Oswaldo then filed a Motion to Dismiss, arguing the action was personal and did not survive the plaintiff’s death under the Rules of Court.
The Regional Trial Court (RTC) dismissed the case without prejudice to its prosecution in proper estate proceedings. Memoracion’s heir, Edgardo Z. Cruz, manifested he was retaining the original counsel for the plaintiff and moved for reconsideration, which was denied. On appeal, the Court of Appeals (CA) affirmed the dismissal but deleted the RTC’s directive for estate proceedings, ruling the action was purely personal and abated upon Memoracion’s death.

ISSUE

Whether the action for Annulment of Sale, Reconveyance, and Damages survives the death of the petitioner-plaintiff.

RULING

Yes, the action survives. The Supreme Court reversed the CA and remanded the case to the RTC for further proceedings. The criterion for survival of an action depends on whether the wrong complained of affects primarily property rights, with injury to the person being merely incidental. An action for annulment of a deed of sale and reconveyance of real property is fundamentally a claim affecting property and property rights. Therefore, it survives the death of the plaintiff.
Applying Section 16, Rule 3 of the Rules of Court, the Court held that upon a party’s death and where the claim is not extinguished, the duty is to effect substitution by the deceased’s legal representative. Here, the counsel’s notification of death and the subsequent Manifestation by heir Edgardo Z. Cruz retaining the services of the original counsel constituted a substantial compliance with the substitution rules. Edgardo, as an heir, could be allowed substitution without requiring the appointment of an executor or administrator. The respondent, Oswaldo, though also an heir, was correctly excluded as a legal representative for being the adverse party. Thus, the RTC erred in dismissing the case instead of allowing the substitution and continuing the proceedings.