NATIONAL POWER CORPORATION vs. CITY OF CABANATUAN (Public Corporation).

G.R. No. 149110            April 9, 2003

NATIONAL POWER CORPORATION, petitioner,

vs.

CITY OF CABANATUAN, respondent.

FACTS:

Petitioner is a government-owned and controlled corporation. It is tasked to undertake the "development of hydroelectric generations of power and the production of electricity from nuclear, geothermal and other sources, as well as, the transmission of electric power on a nationwide basis."

Petitioner sells electric power to the residents of Cabanatuan City, posting a gross income of P107,814,187.96 in 1992. Pursuant to section 37 of Ordinance No. 165-92,8 the respondent assessed the petitioner a franchise tax amounting to P808,606.41, representing 75% of 1% of the latter's gross receipts for the preceding year.

Petitioner, whose capital stock was subscribed and paid wholly by the Philippine Government, refused to pay the tax assessment. It argued that the respondent has no authority to impose tax on government entities. 

The respondent filed a collection suit in the Regional Trial Court of Cabanatuan City, demanding that petitioner pay the assessed tax due, plus a surcharge equivalent to 25% of the amount of tax, and 2% monthly interest. 

Trial court issued an Order dismissing the case. On appeal, the Court of Appeals reversed the trial court's Order. The petitioner filed a Motion for Reconsideration on the Court of Appeal's Decision. This was denied by the appellate court.

ISSUE:

Whether local governments have no power to tax instrumentalities of the national government. 

RULING:

No. Taxation assumes even greater significance with the ratification of the 1987 Constitution. Thenceforth, the power to tax is no longer vested exclusively on Congress; local legislative bodies are now given direct authority to levy taxes, fees and other charges34 pursuant to Article X, section 5 of the 1987 Constitution, viz:

"Section 5.- Each Local Government unit shall have the power to create its own sources of revenue, to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the Local Governments."

The only way to shatter this culture of dependence is to give the LGUs a wider role in the delivery of basic services, and confer them sufficient powers to generate their own sources for the purpose. To achieve this goal, section 3 of Article X of the 1987 Constitution mandates Congress to enact a local government code that will, consistent with the basic policy of local autonomy, set the guidelines and limitations to this grant of taxing powers, viz:

Section 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units."

In the case at bar, section 151 in relation to section 137 of the LGC clearly authorizes the respondent city government to impose on the petitioner the franchise tax in question.

In its general signification, a franchise is a privilege conferred by government authority, which does not belong to citizens of the country generally as a matter of common right.

IN VIEW WHEREOF, the instant petition is DENIED and the assailed Decision and Resolution of the Court of Appeals dated March 12, 2001 and July 10, 2001, respectively, are hereby AFFIRMED.

MANILA ELECTRIC CO. vs. PROVINCE OF LAGUNA, (Public Corporation)

[G.R. No. 131359. October 4, 1999]

MANILA ELECTRIC CO. vs. PROVINCE OF LAGUNA, et al.

FACTS:

On the basis of Republic Act No. 7160 (Local Government Code of 1991), respondent province of Laguna enacted Laguna Provincial Ordinance No. 01-92, effective 01 January 1993, imposing a tax on businesses enjoying a franchise, at a rate of fifty (50%) of one percent (1%) of their annual receipts. 

Upon demand from respondent Provincial Treasurer, petitioner Manila Electric Company ("MERALCO") paid the tax, then amounting to P19,520,628.42, under protest. 

But a formal claim for refund was forthwith sent by MERALCO. The latter contended that the franchise tax it was paying to the National Government pursuant to P.D. 551 already included the franchise tax imposed under the Provincial Tax Ordinance. MERALCO argued that Laguna Provincial Ordinance No. 01-92 contravened the provisions of Section 1 of P.D. 551, hereunder quoted, thus -

"Section 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and power shall be two (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current.

"Such franchise tax shall be payable to the Commissioner of Internal Revenue or his duly authorized representative on or before the twentieth day of the month as may be provided in the respective franchise or pertinent municipal regulation and shall, any provision of the Local Tax Code or any other law to the contrary notwithstanding, be in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on earnings, receipts, income and privilege of generation, distribution and sale of electric current."

Refund was denied by the Province of Laguna. MERALCO thereupon filed with the Regional Trial Court of Sta. Cruz, Laguna, a complaint for refund against the province.

The trial court rendered its decision, dismissing the complaint of MERALCO and declaring Laguna Provincial Tax Ordinance No. 01-92 valid, binding, reasonable and enforceable.

ISSUE:

Whether the Laguna Provincial Tax Ordinance No. 01-92 is valid.

RULING:

Yes. Private respondent's invocation of the non-impairment clause of the Constitution is accordingly unavailing. The LGC was enacted in pursuance of the constitutional policy to ensure autonomy to local governments and to enable them to attain fullest development as self-reliant communities. 

The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section 5, Article 10 of the Constitution. Thus, Article 10, Section 5 of the Constitution reads:

"Section 5 - Each Local Government unit shall have the power to create its own sources of revenue and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the local Governments.'

With or without reservations clause, franchises are subject to altercations through a reasonable exercise of the police power; they are also subject to altercation by the power to tax, which like police power cannot be contracted away.

DRILON vs. LIM (Public Corporation)

G.R. No. 112497 August 4, 1994

HON. FRANKLIN M. DRILON, in his capacity as SECRETARY OF JUSTICE, petitioner,

vs.

MAYOR ALFREDO S. LIM, VICE-MAYOR JOSE L. ATIENZA, CITY TREASURER ANTHONY ACEVEDO, SANGGUNIANG PANGLUNSOD AND THE CITY OF MANILA, respondents.

The City Legal Officer for petitioner.

Angara, Abello, Concepcion, Regala & Cruz for Caltex (Phils.).

Joseph Lopez for Sangguniang Panglunsod of Manila.

L.A. Maglaya for Petron Corporation.

FACTS:

Judge Rodolfo C. Palattao declared Section 187 of the Local Government Code unconstitutional insofar as it empowered the Secretary of Justice to review tax ordinances and, inferentially, to annul them. 

ISSUE:

The principal issue in this case is the constitutionality of Section 187 of the Local Government Code.

RULING:

Section 187 is not unconstitutional, it authorizes the Secretary of Justice to review only the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the local government that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but he did not replace it with his own version of what the Code should be. He did not pronounce the ordinance unwise or unreasonable as a basis for its annulment. He did not say that in his judgment it was a bad law. What he found only was that it was illegal. All he did in reviewing the said measure was determine if the petitioners were performing their functions in accordance with law, that is, with the prescribed procedure for the enactment of tax ordinances and the grant of powers to the city government under the Local Government Code. As we see it, that was an act not of control but of mere supervision.

An officer in control lays down the rules in the doing of an act. If they are not followed, he may, in his discretion, order the act undone or re-done by his subordinate or he may even decide to do it himself. Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the work done or re-done but only to conform to the prescribed rules. He may not prescribe his own manner for the doing of the act. He has no judgment on this matter except to see to it that the rules are followed. In the opinion of the Court, Secretary Drilon did precisely this, and no more nor less than this, and so performed an act not of control but of mere supervision.

EVARDONE vs. COMELEC (Public Corporation)

G.R. No. 94010 December 2, 1991

FELIPE EVARDONE, petitioner,

vs.

COMMISSION ON ELECTIONS, ALEXANDER APELADO, VICTORINO E. ACLAN and NOEL A. NIVAL, respondents.

G.R. No. 95063 December 2, 1991

ALEXANDER R. APELADO, VICTORINO E. ACLAN and NOEL A. NIVAL, petitioners,

vs.

COMMISSION ON ELECTIONS and MAYOR FELIPE EVARDONE, respondents.

Zosimo G. Alegre for Felipe Evardone.

Elmer C. Solidon for petitioners in G.R. No. 95063.

FACTS:

Felipe Evardone is the mayor of the Municipality of Sulat, Eastern Samar.

Apelado et al. filed a petition for the recall of Evardone with the Office of the Local Election Registrar, Municipality of Sulat.

Respondent COMELEC issued Resolution No. 90-0557, approving the recommendation of Mr. Vedasto B. Sumbilla, Election Registrar of Sulat, Eastern Samar, to hold on 14 July 1990 the signing of the petition for recall against incumbent Mayor Evardone of the said Municipality.

Evardone filed before this Court a petition for prohibition with urgent prayer for immediate issuance of restraining order and/or writ of preliminary injunction.

The Court resolved to issue a temporary restraining order (TRO), effective immediately and continuing until further orders from the Court, ordering the respondents to cease and desist from holding the signing of the petition for recall on 14 July 1990 pursuant to respondent COMELEC's Resolution No. 2272 dated 23 May 1990.

On the same day (12 July 1990), the notice of TRO was received by the Central Office of the respondent COMELEC. But it was only on 15 July 1990 that the field agent of the respondent COMELEC received the telegraphic notice of the TRO—a day after the completion of the signing process sought to be temporarily stopped by the TRO.

In an en banc resolution the respondent COMELEC nullified the signing process held in Sulat, Eastern Samar for being violative of the order (the TRO) Apelado, et al., filed a motion for reconsideration which  COMELEC denied.

ISSUE:

The principal issue for resolution by the Court is the constitutionality of Resolution No. 2272 promulgated by respondent COMELEC by virtue of its powers under the Constitution and Batas Pambansa Blg. 337 (Local Government Code).  The resolution embodies the general rules and regulations on the recall of elective provincial, city and municipal officials.

RULING:

Article XVIII, Section 3 of the 1987 Constitution expressly provides that all existing laws not inconsistent with the 1987 Constitution shall remain operative, until amended, repealed or revoked.  Republic Act No. 7160 providing for the Local Government Code of 1991, approved by the President on 10 October 1991, specifically repeals B.P. Blg. 337 as provided in Sec. 534, Title Four of said Act.  But the Local Government Code of 1991 will take effect only on 1 January 1992 and therefore the old Local Government Code (B.P. Blg. 337) is still the law applicable to the present case. Prior to the enactment of the new Local Government Code, the effectiveness of B.P. Blg. 337 was expressly recognized in the proceedings of the 1986 Constitutional Commission. 

Batas Pambansa Blg. 337 shall continue to be effective until repealed by the Congress of the Philippines.

We therefore rule that Resolution No. 2272 promulgated by respondent COMELEC is valid and constitutional.  Conse­quently, the respondent COMELEC had the authority to approve the petition for recall and set the date for the signing of said petition.

GARCIA vs. COMELEC (Public Corporation)

G.R. No. 111511 October 5, 1993

ENRIQUE T. GARCIA, ET AL., petitioners,

vs.

COMMISSION ON ELECTIONS and LUCILA PAYUMO, ET AL., respondents.

Alfonso M. Cruz Law Offices for petitioners.

Romulo C. Felizmeña, Crisostomo Banzon and Horacio Apostol for private respondents.

FACTS:

Petitioner Enrique T. Garcia was elected governor of the province of Bataan in the May 11, 1992 elections. Some mayors, vice-mayors and members of the Sangguniang Bayan of the twelve (12) municipalities of the province constituted themselves into a Preparatory Recall Assembly to initiate the recall election of petitioner Garcia. moved that a resolution be passed for the recall of the petitioner on the ground of "loss of confidence." The motion was "unanimously seconded." Pursuant to the provisions of Section 70, paragraphs (a), (b) and (c) of Republic Act 7160, otherwise known as the Local Government Code of 1991.

Petitioners urged that section 70 of R.A. 7160 allowing recall through the initiative of the PRAC is unconstitutional because the people have the sole and exclusive right to decide whether or not to initiate proceedings.

ISSUE:

Whether  the original Petition and the Supplemental Petition assailing the constitutionality of section 70 of R.A. 7160 insofar as it allows a preparatory recall assembly initiate the recall of local elective officials is bereft of merit.

RULING:

Yes.

Petitioners cannot point to any specific provision of the Constitution that will sustain this submission. To be sure, there is nothing in the Constitution that will remotely suggest that the people have the "sole and exclusive right to decide on whether to initiate a recall proceeding." The Constitution did not provide for any mode, let alone a single mode, of initiating recall elections. Neither did it prohibit the adoption of multiple modes of initiating recall elections. The mandate given by section 3 of Article X of the Constitution is for Congress to "enact a local government code which shall provide for a more responsive and accountable local government structure through a system of decentralization with effective mechanisms of recall, initiative, and referendum . . ." By this constitutional mandate, Congress was clearly given the power to choose the effective mechanisms of recall as its discernment dictates. The power given was to select which among the means and methods of initiating recall elections are effective to carry out the judgment of the electorate. Congress was not straightjacketed to one particular mechanism of initiating recall elections. What the Constitution simply required is that the mechanisms of recall, whether one or many, to be chosen by Congress should be effective. Using its constitutionally granted discretion, Congress deemed it wise to enact an alternative mode of initiating recall elections to supplement the former mode of initiation by direct action of the people. 

It is not constitutionally impermissible for the people to act through their elected representatives. Nothing less than the paramount task of drafting our Constitution is delegated by the people to their representatives, elected either to act as a constitutional convention or as a congressional constituent assembly. The initiation of a recall process is a lesser act and there is no rhyme or reason why it cannot be entrusted to and exercised by the elected representatives of the people. 

SANCHEZ vs COMELEC (Public Corporation)

G.R. Nos. 94459-60             January 24, 1991

GUILLERMO R. SANCHEZ, and CARLITO T. TAN, petitioners,

vs.

THE COMMISSION ON ELECTIONS and its COMMISSIONERS, ZACARIAS V. PIZARRO, Jr., in his capacity as CITY ELECTION REGISTRAR OF BUTUAN CITY, EMMANUEL R. BALANON and MANUEL D. CAÑETE, respondents.

FACTS:

Private respondents Emmanuel R. Balanon, a defeated candidate for City Mayor and Manuel D. Cañete filed separate notices of recall against petitioners, Guillermo R. Sanchez and Carlito T. Tan, incumbent city mayor and vice-mayor, respectively, of Butuan City, before the City Election Registrar.

Repondent City Election Registrar Pizarro approved the schedule of signing to be conducted from Mondays to Fridays beginning February 14, 1990 to March 15, 1990, as well as the designated five (5) signing centers for the purpose, in line with the guidelines provided in Sec. 6 and other provisions of Comelec Resolution No. 1612" 

Petitioners filed their opposition thereto, contending among others, that there is no valid ground to justify the amendment of the recall proceedings already underway.

Petitioners filed their "petition to deny the proposed amendments of schedule of signing" of the recall proceedings 

On the same date, respondent COMELEC issued Minute Resolution No. 90-0254 suspending the recall proceedings against petitioners until the funding requirements therefor shall have been adequately clarified.

Thereafter, respondent COMELEC promulgated Resolution No. 2272, providing for the rules and regulations on the recall of elective provincial, city and municipal officials.

Respondent COMELEC issued Minute Resolution No. 90-0590 (Annex "0-2" of the petition) declaring as null and void the signing process conducted under Resolution No. 1612, said resolution having been superseded by Resolution No. 2272 and setting the date for the signing process on August 11, 18 and 25 1990.

Alleging lack or excess of jurisdiction or with grave abuse of discretion on the part of respondent COMELEC in issuing Resolution No. 2272 and Minute Resolution No. 90-0590, petitioners filed this instant petition for prohibition and injunction with prayer for the issuance of a temporary restraining order.

ISSUE:

Whether thr petitioners contention that Resolution No. 2272 is unconstitutional there being no legislative enactment yet on mechanism of recall as mandated under Sec. 3, Art. X of the Constitution.

RULING:

We find the contention devoid of merit.

While it is true that Sec. 3, Art. X of the Constitution mandates the Congress to enact a local government code providing among others for an effective mechanism of recall, nothing in said provision could be inferred the repeal of BP 337, the local government code existing prior to the adoption of the 1987 Constitution. Sec. 3, Art. X of the Constitution merely provides that the local government code to be enacted by Congress shall be "more responsive" than the one existing at present. Until such time that a more responsive and effective local government code is enacted, the present code shall remain in full force and effect. Thus, under Sec. 3, Art. XVIII, "(a)ll existing laws, decrees, executive orders, proclamations, letters of instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed, or revoked."

Considering that the present local government code (BP 337) is still in effect, respondent COMELEC's promulgation of Resolution No. 2272 is therefore valid and constitutional, the same having been issued pursuant to Sec. 59 of BP 337. It reads:

Sec. 59. Supervision by the Commission on Elections. — The Commission on Elections shall conduct and supervise the process of and election on recall in the manner and time herein provided and, in pursuance thereof, promulgate the necessary rules and regulations.

JOSE LAGON vs. CA (Civil Law Review 2)

G.R. No. 119107             March 18, 2005

JOSE V. LAGON, Petitioner,

vs.

HONORABLE COURT OF APPEALS and MENANDRO V. LAPUZ, respondents.

FACTS:

Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate court, two parcels of land located at Sultan Kudarat. A few months after the sale, private respondent Menandro Lapuz filed a complaint for torts and damages against petitioner before the Regional Trial Court (RTC) of Sultan Kudarat.

In the complaint, private respondent, as then plaintiff, claimed that he entered into a contract of lease with the late Bai Tonina Sepi Mengelen Guiabar over three parcels of land (the "property") in Sultan Kudarat, Maguindanao beginning 1964. One of the provisions agreed upon was for private respondent to put up commercial buildings which would, in turn, be leased to new tenants. The rentals to be paid by those tenants would answer for the rent private respondent was obligated to pay Bai Tonina Sepi for the lease of the land. In 1974, the lease contract ended but since the construction of the commercial buildings had yet to be completed, the lease contract was allegedly renewed.

When Bai Tonina Sepi died, private respondent started remitting his rent to the court-appointed administrator of her estate. But when the administrator advised him to stop collecting rentals from the tenants of the buildings he constructed, he discovered that petitioner, representing himself as the new owner of the property, had been collecting rentals from the tenants. He thus filed a complaint against the latter, accusing petitioner of inducing the heirs of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it.

In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to sell the property to him, contending that the heirs were in dire need of money to pay off the obligations of the deceased. He also denied interfering with private respondent's leasehold rights as there was no lease contract covering the property when he purchased it; that his personal investigation and inquiry revealed no claims or encumbrances on the subject lots.

ISSUE:

Whether the purchase by petitioner of the subject property, during the supposed existence of private respondent's lease contract with the late Bai Tonina Sepi, constituted tortuous interference for which petitioner should be held liable for damages.

RULING:

The elements of tortuous interference with contractual relations: (a) existence of a valid contract; (b) knowledge on the part of the third person of the existence of the contract and (c) interference of the third person without legal justification or excuse. In that case, petitioner So Ping Bun occupied the premises which the corporation of his grandfather was leasing from private respondent, without the knowledge and permission of the corporation. The corporation, prevented from using the premises for its business, sued So Ping Bun for tortuous interference.

As regards the first element, the existence of a valid contract must be duly established. To prove this, private respondent presented in court a notarized copy of the purported lease renewal. While the contract appeared as duly notarized, the notarization thereof, however, only proved its due execution and delivery but not the veracity of its contents. Nonetheless, after undergoing the rigid scrutiny of petitioner's counsel and after the trial court declared it to be valid and subsisting, the notarized copy of the lease contract presented in court appeared to be incontestable proof that private respondent and the late Bai Tonina Sepi actually renewed their lease contract. Settled is the rule that until overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the facts that gave rise to its execution and delivery.

The second element, on the other hand, requires that there be knowledge on the part of the interferer that the contract exists. Knowledge of the subsistence of the contract is an essential element to state a cause of action for tortuous interference.12 A defendant in such a case cannot be made liable for interfering with a contract he is unaware of. While it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if followed by a reasonable inquiry, will lead to a complete disclosure of the contractual relations and rights of the parties in the contract.

In this case, petitioner claims that he had no knowledge of the lease contract. His sellers (the heirs of Bai Tonina Sepi) likewise allegedly did not inform him of any existing lease contract.

After a careful perusal of the records, we find the contention of petitioner meritorious. He conducted his own personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man probe deeper and watch out for any conflicting claim over the property. An examination of the entire property's title bore no indication of the leasehold interest of private respondent. Even the registry of property had no record of the same.

HEIRS OF ROMANA INGJUG-TIRO vs SPOUSES LEON V. CASALS (Civil Law Review 2)

G.R. No. 134718            August 20, 2001

HEIRS OF ROMANA INGJUG-TIRO; BEDESA, PEDRO, RITA all surnamed TIRO, and BARBARA TIRO (deceased) represented by NORMA SARAMOSING, HEIRS OF FRANCISCO INGJUG: LEONARDO, LILIA, FERNANDA, ZENAIDA, PACITA and ANTONIO, all surnamed INGJUG; and HEIRS OF FRANCISCA INGJUG-FUENTES: ULDARICO and GUILLERMA, all surnamed FUENTES, and PAULINA INGJUG-FUENTES (deceased) represented by VICTOR, ELENA, SERGIA and DESIDERIO, all surnamed MUÑEZ, petitioners,

vs.

SPOUSES LEON V. CASALS and LILIA C. CASALS, SPOUSES CARLOS L. CLIMACO and LYDIA R. CLIMACO, SPOUSES JOSE L. CLIMACO, JR. and BLANQUITA C. CLIMACO, and CONSUELO L. CLIMACO, respondents.

BELLOSILLO, J.:

FACTS:

A parcel of land originally titled in the name of Mamerto Ingjug, the property is located in Cebu. The claimants are the descendants of Mamento Ingjug on one hand who allege that they have been deprived of their successional rights through fraud and misrepresentation, and a group of vendees on the other hand claiming to have acquired the property for value and in good faith. The case filed by the descendants of Mamerto Ingjug was dismissed by the trial court on the ground of prescription and laches. The dismissal was affirmed by the Court of Appeals. The affirmance by the appellate court is now assailed in this petition for review.

ISSUE:
Whether petitioners' right to institute a complaint for partition and reconveyance is effectively barred by prescription and laches.

RULING:
In actions for reconveyance of the property predicated on the fact that the conveyance complained of was null and void ab initio, a claim of prescription of action would be unavailing.13 "The action or defense for the declaration of the inexistence of a contract does not prescribe.14 "Neither could laches be invoked in the case at bar. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity, which has been aptly described as "justice outside legality," should be applied only in the absence of, and never against, statutory law. Aequetas nunguam contravenit legis. The positive mandate of Art. 1410 of the New Civil; Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should preempt and prevail over all abstract arguments based only on equity. Certainly, laches cannot be set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time.

Considering the foregoing, the trial court judge should not have summarily dismissed petitioners' complaint; instead, he should have required the defendants to answer the complaint, deferred action on the special defenses of prescription and laches, and ordered the parties to proceed with the trial on the merits. Verily, the dismissal of the case on the ground of prescription and laches was premature. The summary or outright dismissal of an action is not proper where there are factual matters in dispute which need presentation and appreciation of evidence. Here, petitioners still had to prove the following: first, that they were the coheirs and co-owners of the inherited property; second, that their coheirs-co-owners sold their hereditary rights thereto without their knowledge and consent; third, that forgery, fraud and deceit were committed in the execution of the Deed of Extrajudicial Settlement and Confirmation of Sale since Francisco Ingjug who allegedly executed the deed in 1967 actually died in 1963, hence, the thumbprint found in the document could not be his; fourth, that Eufemio Ingjug who signed the deed of sale is not the son of Mamerto Ingjug, and therefore not an heir entitled to participate in the disposition of the inheritance; fifth, that respondents have not paid the taxes since the execution of the sale in 1965 until the present date and the land in question is still declared for taxation purposes in the name of Mamerto Ingjug, the original registered owner, as of 1998; sixth, that respondents had not taken possession of the land subject of the complaint nor introduced any improvement thereon; and seventh, that respondents are not innocent purchasers for value.