Mid-Pasig Land Development Corp. vs. Sandiganbayan

G.R. No. 110296 (October 30, 1996)

Facts:

This case revolves around a dispute over ownership of an 18.2-hectare parcel of land located in Ortigas Center, Pasig City. The land was originally purchased by Anchor Estate Corporation from Ortigas and Company Limited Partnership in 1968 for P6,400,000. However, in 1971, the title to the property was transferred to Mid-Pasig Land Development Corporation instead of Anchor. Subsequently, an additional 2.4 hectares were sold to Mid-Pasig, resulting in the issuance of Transfer Certificate of Title Nos. 337158 and 469702 in favor of Mid-Pasig.

Following the 1986 People Power Revolution, Jose Y. Campos, who was the president and majority stockholder of both Anchor and Mid-Pasig, turned over control of these corporations and the associated titles to the Presidential Commission on Good Government (PCGG). Campos claimed that he and other shareholders were acting as nominees for former President Ferdinand Marcos. Ricardo C. Silverio, who claimed to be the actual beneficial and legal owner of the remaining 30% of Anchor, filed a complaint against the PCGG, Asset Privatization Trust, Mid-Pasig, and Ortigas and Company Limited, alleging that the transfer of the land was fraudulent and prejudicial to his interests. Silverio sought the reconveyance of the property and damages.

On December 14, 1992, Silverio filed a motion to declare Mid-Pasig in default due to its failure to respond to the complaint. The Sandiganbayan subsequently declared Mid-Pasig in default, leading to the filing of a petition for certiorari by the PCGG, which argued that it was not required to file an answer pending the resolution of the default motion.

Legal Issues:

1. Whether the Sandiganbayan had jurisdiction over the complaint for reconveyance, given that the property had already been ceded to the government.
2. Whether Ricardo C. Silverio was the real party in interest in the suit.

Arguments:

• Petitioner (PCGG): The PCGG contended that it was not obligated to file an answer to the amended complaint while the motion for default was pending. It also argued that any failure to file was due to a misunderstanding of a complex legal issue. Furthermore, the PCGG asserted that the Sandiganbayan lacked jurisdiction over the case since the property in question had already been ceded to the government.

• Respondent (Silverio): Silverio maintained that he was the rightful owner of the property and that the transfer to Mid-Pasig was fraudulent. He argued that the Sandiganbayan had jurisdiction over the case as it involved the recovery of property that was allegedly part of ill-gotten wealth.

Court's Decision and Legal Reasoning:

The Supreme Court granted the petition filed by the PCGG, setting aside the Sandiganbayan's order declaring Mid-Pasig in default. The Court noted that with the filing of a "Manifestation and Confession of Judgment" by Silverio, which indicated that he would no longer pursue the motion for default, there was no longer a need to address the merits of the case. The Court allowed the PCGG to file its answer to the amended complaint within 15 days, effectively reinstating Mid-Pasig's right to defend itself in the proceedings.

Significant Legal Principles or Doctrines Established:

1. The case underscores the importance of the real party in interest doctrine, emphasizing that only those with a legitimate claim to the property can initiate legal proceedings regarding ownership.
2. It highlights the procedural aspects of default judgments, particularly the implications of a party's failure to respond to a complaint and the conditions under which such defaults can be contested or set aside.
3. The ruling also clarifies the jurisdictional boundaries of the Sandiganbayan, particularly in cases involving the recovery of properties previously ceded to the government.