G.R. No. L-43306. October 29, 1976.
GREGORIO LORENO and FELISA LAVILLA, petitioners, vs. THE HON. NUMERIANO G. ESTENZO, as Presiding Judge of the Court of First Instance of Iloilo, Branch III, ANA GONZALES, SALVACION LUCENO, CARINA LUCENO, MARINA LUCENO, ESPERANZA LUCENO AND LORETO LUCENO, respondents.

FACTS

Private respondents filed a complaint for recovery of possession and damages, alleging that petitioners were unlawfully detaining two parcels of land under a 1961 lease agreement. They claimed petitioners paid only P1,000 of the P3,000 consideration and, while in possession, fraudulently caused the lots to be titled in their own names during cadastral proceedings. Petitioners, in their answer, denied the lease and asserted absolute ownership by virtue of a 1961 deed of absolute sale from respondent Ana Gonzales. They further argued that the action was barred by prescription, as the cadastral court’s decision awarding them the lands was rendered in 1964 and the corresponding titles were issued in 1966.
During pre-trial, the parties submitted affidavits and memoranda. The trial court, treating these submissions as a basis for judgment on the pleadings under Rule 20, Section 3, rendered a summary judgment ordering petitioners to reconvey the lands, pay the balance of the lease consideration, and provide damages. Petitioners challenged this judgment via certiorari, contending the existence of genuine factual issues precluding summary adjudication.

ISSUE

Whether the trial court committed grave abuse of discretion in rendering a summary judgment despite the presence of genuine issues of fact.

RULING

Yes. The Supreme Court reversed and set aside the decision, remanding the case for trial on the merits. A judgment on the pleadings under Rule 19 is proper only when the answer fails to tender any genuine issue, admitting the material allegations of the complaint. A summary judgment under Rule 34 requires a showing that, except for the amount of damages, there is no genuine issue as to any material fact. The Court found neither condition present. The core dispute—whether the transaction was a lease or an absolute sale—constituted a fundamental factual issue requiring a full trial for the presentation of evidence. The petitioners’ answer explicitly pleaded the deed of sale as the basis of their ownership, directly contradicting the respondents’ claim of a lease. The determination of which document governed the parties’ agreement, and the attendant issue of alleged fraud in the cadastral proceedings, necessitated a trial where the credibility of evidence and witnesses could be assessed. The presumption of bad faith cited by the trial court could not be sustained without such a hearing. Consequently, the summary judgment was prematurely rendered, constituting grave abuse of discretion. The case was ordered remanded for a full trial to resolve the contentious factual issues.