Civil Procedure - 144 Luistro vs CA (2009) Doctrine: Fraud must be alleged with particularity as required by Rule 8, Section 5.

A mere statement in the complaint that consolidator-facilitator of the Defendants FGPC and Balfour by means of fraud and machinations of words were able to convince[] the plaintiff to enter into CONTRACT OF EASEMENT OF RIGHT OF WAY is not deemed as sufficient compliance with the rule. Facts: First Gas Power Corporation sells the electric power generated by its facility to Meralco. It entered into a Substation Interconnection Agreement with Meralco and NPC which required First Gas to finance, construct, commission, and energize a 230-kilovolt electric power transmission line, approximately 25 km in Batangas. Under the SIA, First gas had the to acquire easements of right-of-way over affected lands located along the designated route of the transmission line. First Gas entered into a Contract of Easement of Right-of-Way (Contract) with Luistro, an owner of a parcel of land in Batangas. Under the contract, First Gas was granted perpetual easement over a 100-sq. m. portion of his property for the erection of the transmission line tower and a 25-year easement over 2,453.60 sq. m. portion of the property for the right to pass overhead line cables in consideration of P 88,608. Luistros counsel wrote a letter to First Gas asking for a temporary stoppage of all kinds of work within the vicinity of petitioners residential house pending settlement of petitioners grievance that the house and other improvements lay underneath the transmission wire/line being constructed and would endanger the life and health of the persons in the vicinity. Procedure: RTC Luistro filed a complaint for Rescission/Amendment And Or Modification of Contract Of Easement With Damages against First Gas and First Balfour Beatty Realty, Inc. Accdg to Luistro: he entered into the Contract under misrepresentation, promises, false and fraudulent assurances, and tricks of respondent. He said that while his house was supposed to be 20 to 25 meters away from the transmission wire/line, it turned out after the installation that his house was only 7.23 meters directly underneath the transmission wire/line. First Gas filed a MOTION TO DISMISS for failure to state cause of action. RTC denied MTC. RTC also denied MR. CA: First Gas filed petition for ceriorari before the CA. CA ordered dismissal for failure to state cause of action. CA denied the MR filed by Luistro. Issue/s: (1) WON RTC violated Section 3, Rule 16 of the 1997 Rules of Civil Procedure. YES! (2) WON lacked cause of action. YES! (3) (TOPICAL) WON complaint alleged fraud with particularity as required under Section 5, Rule 8 of the 1997 Rules of Civil Procedure. NO!

Held/Ratio: (1) RTC violated Sec 3, Rule 16 of the Rules of Civil Procedure in not stating clearly and distinctly declare the reasons for the dismissal. RTC merely stated: Examining the allegations in the complaint the Court finds that a cause of action sufficiently exist[s] against defendants. It did not explain WHY a sufficient cause of action existed in this case. It merely cited CC 19. (2) Complaint lacked cause of action. To sustain a motion to dismiss for lack of cause of action, it must be shown that the claim for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous, indefinite or uncertain. In this case, the alleged right of Luistro, which First Gas was supposed to have violated, did not exist in the Contract. (3) Complaint fell short of the requirement that fraud must be stated with sufficient particularity. In this case, complaint falls short of the requirement that fraud must be stated with particularity. Complaint merely states that consolidator-facilitator of the Defendants FGPC and Balfour by means of fraud and machinations of words were able to convince[] the plaintiff to enter into CONTRACT OF EASEMENT OF RIGHT OF WAY Hence, there is clearly no basis for the allegation that petitioner only signed the Contract because of fraud perpetrated by First Gas.

Digested by: Cari Mangalindan (A2015)