CASE: G.R. No.

101566 August 17, 1992

HON. FLORENCIO A. RUIZ, JR. SENT OF GOD FOUNDATION, INC. S OF G FOUNDATION

INC., RAUL G. FORES, SENEN P. VALERO and FATHER ODON DE CASTRO, petitioners,
vs.
COURT OF APPEALS, SPOUSES OLEGARIO ORBETA and SUSANA ROSARIO S.
ORBETA, respondents.

FACTS:

The Crisologo family conditionally donated an island to the Sent of God Foundation.

Believing that the conditions of the donations had been violated, the Crisologos filed a
complaint for revocation of the donations and the recovery of the properties donated.
Impleaded as defendants were the Sent of God Foundation, the S of G Foundation, Inc., Raul G.
Fores, Senen F. Valero, and Father Odon de Castro, the last three as officers of the foundations.

Also included were Olegario Orbeta and his wife, Susana Rosario Orbeta, for their role in
facilitating the donations.

In their answer, the first-named defendants avers that the conditions of the donations had not
been violated. They filed a motion to dismiss.

The Orbeta spouses filed a cross-claim for damages against the other defendants for involving
them in the litigation.

RTC

The complaint was dismissed for lack of a cause of action. The cross-claim was also dismissed
because it "had no more leg to stand on."

The plaintiffs filed a motion for reconsideration, which was adopted by the Orbeta spouses in
an urgent ex parte manifestation. RTC denies the same.

CA-GR No. 16837

The Crisologos then challenged the order of dismissal before the Court of Appeals in a petition
for certiorari under Rule 65 of the Rules of Court. It was dismissed on the ground that the
proper remedy was an ordinary appeal.

CA-GR No. 17013

The Orbeta spouses filed their own petition for certiorari. This petition prospered. CA annulled
the dismissal of the complaint by the trial court and ordered its reinstatement.
ISSUE/S: Whether or not the Orbeta spouses, as cross-claimants in the original complaint,
could still appeal its dismissal in their petition for review.

RULING: NO.

The order of dismissal issued by RTC had already become final and executory at the time it was
sought to be reversed. This was correctly dismissed by the Court of Appeals on the ground, as
earlier stated, that the special civil action was not a substitute for a lost appeal.

When the Orbetas filed their own petition, it was also after the order they were questioning
had already become unappealable. On this score alone, the present petition must fail. Even as
the petition of the plaintiffs themselves had been earlier dismissed, similar treatment should
have been given to the petition of the Orbetas, who were appealing only as cross-claimants.

A cross-claim is any claim by one party against a co-party arising out of the transaction or
occurrence that is the subject matter either of the original action or of a counter-claim therein.
Such cross-claim may include a claim that the party against whom it is asserted is or maybe
liable to the cross-claimant for all or part of a claim asserted in the action against the cross-
claimant.

It is clear that the cross-claim arose from the complaint of the Crisologos and was not separable
from that main action. It had no independent existence and was based entirely on that
complaint. The cross-claim was defensive in character because it could prosper only if the
plaintiffs succeeded. As the plaintiffs failed to establish that the petitioners' refusal was not
justified, it necessarily followed that the private respondents' own cross-claim, which was
based on the same allegation, also had to fail.

In Torres v. Court of Appeals, SC declared:

A cross-bill strictly speaking is one brought by a defendant in an equity suit against . . .

other defendants in the same suit, touching the matters in question in the original bill. It
is considered as an auxiliary suit dependent upon the original bill, and can be sustained
only on matters growing out of the original bill. There is a well-defined distinction
between a cross-bill merely defensive in character, and one seeking affirmative relief.
The dismissal of the original bill carries with it a purely defensive cross-bill but not one
seeking affirmative relief. (Osius vs. Barton, 88 A.L.R. 394, 402)

The cross-claimants cannot claim more rights than the plaintiffs themselves, on whose cause of
action the cross-claim depended. The dismissal of the complaint divested the cross-claimants of
whatever appealable interest they might have had before and also made the cross-claim itself
no longer viable.

A party has an appealable interest only when his property may be diminished, his burdens
increased or his rights prejudiced by the order sought to be reviewed. In the case at bar, the
consequence of the dismissal of the complaint was the cessation of the cross-claimants'
exposure to injury, which risk would in fact have continued if the Crisologos' appeal had
succeeded. It bears stressing that when the plaintiffs' petition was dismissed by the Court of
Appeals, the cross-claim lost its basis, which was the dismissed complaint itself. Earlier, in fact,
the dismissal of the cross-claim had already become unappealable when the order dismissing
the complaint became final and executory.

It would be highly irregular to allow the reinstatement of the appeal lost by the plaintiffs
through another appeal made by the cross-claimants. Not only was the cross-claim defensive in
character and therefore deemed dismissed with the complaint but, as pointed out by the
petitioners, the cross-claimants and the plaintiffs were supposed to be opposing parties and
not in collusion with each other.

Our ruling is that the Orbetas, as cross-claimants, had no personality to pursue a remedy which
properly belonged to the Crisologos who, through their fault or negligence; failed to employ it.
Accordingly, the petition filed by the Orbetas should have been dismissed outright by the
respondent court on the ground that the cross-claimants were not proper parties to appeal the
dismissal of the complaint.

In view of the foregoing observations, the Court finds it unnecessary to resolve the issues raised
by the herein petitioners in their assignment of errors.

WHEREFORE, the decision rendered by the respondent court on September 28, 1990, and its
resolution dated August 27, 1991, are SET ASIDE and the dismissal of Civil Case No. 313-KC in
the Regional Trial Court of Ilocos Sur is AFFIRMED. No. costs.

SO ORDERED.