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162836, July 30, 2009 NATURE: Petition for Review on Certiorari FACTS Jocson filed a complaint for Reconveyance and Damages against Marcelo Steel Corp (MSC) and Maria Cristina Fertilizer Corporation (MCFC) represented by their president, Jose Marcelo. The trial court ruled in favor of petitioner and ordered the defendants to pay P2,004,810.42, with legal interest, and attorneys fees in the amount of P200,000, plus costs. On appeal, the CA affirmed the decision of the TC. Since no appeal from the decision of the CA was made by the defendants, said decision became final and executory. Jocson thus filed a Motion for Issuance of Writ of Execution, which was granted by the court. A Writ of Execution was issued, and the properties of MSC were levied in full satisfaction of the judgment. Execution sale was scheduled; meanwhile Midas Corporation filed a third-party claim alleging that some of the levied properties were previously mortgaged to it. Thus the execution sale was postponed, and Jocson posted a P36M indemnity bond so the levied properties will not be released to Midas Corp. The execution sale proceeded in full satisfaction of judgment, and a certificate of sale was issued to petitioner Rodolfo Tuising, who was the highest bidder. MSC filed an Urgent Omnibus Motion to annul the execution sale and to issue an order directing the Sheriffs not to deliver the properties sold at the auction to Tiusing. The Trial Court granted MSCs motion and annulled the execution sale and cancelled the Certificate of Sale. Jocson moved for reconsideration arguing that the obligation was solidary and therefore may be enforced in full against either of the defendants. MSC filed a Manifestation and Motion on Satisfaction of Judgment, depositing P4,260,198.11 in Managers Check with the TC. TC denied Jocsons Motion and granted MSCs Manifestation and Motion. Jocson filed a Notice of Appeal but later withdrew it and instead filed a Petition for Certiorari with the CA, which however denied the petition, ruling that since the TCs decision was silent as to the nature of the obligation, the same is therefore joint; the MR was also denied, hence this petition. The petition filed before the SC however was not signed by Jocsons counsel but only by Tuisings counsel. Also, only Tuising signed the Verification and CNFS. Four months from filing the petition, Tuising filed a Special Power of Attorney allegedly signed by Jocson authorizing him (Tuising) to file the petition and to verify and certify the same. Meanwhile Jocson filed with the TC a Motion for Issuance of Alias Writ of Execution to implement the decision against MCFC. ISSUE: WON the petition is defective. HELD: Yes. RATIO: 1. Under Sec 3 of Rule 7, every pleading must be signed by the party or counsel representing him; otherwise it produces no legal effect.



There is nothing in the record of the case that shows Tusings counsel was authorized by Jocons counsel to sign on his behalf. b. Tusings counsel had no authority to sign for Jocson or his counsel. A pleading which lacks proper verification shall be treated as an unsigned pleading, and therefore without effect. a. A petition for review on certiorari requires verification (Section 1 Rule 45). b. Tuising did not explain why the SPA was belatedly filed. Lack of or a defective CNFS is generally not curable by its subsequent correction or submission, unless there is a need to relax the rule under special circumstances. a. Here there is no compelling reason to relax the rules. b. The CNFS is based on the rule that in the interest of orderly judicial procedure, litigants should not pursue simultaneous remedies in different fora. c. The CNFS requires personal knowledge, and the lone signing petitioner cannot be presumed to have personal knowledge of the filing by his copetitioners of any action similar to the current petition. d. The flaw is fatal because it was Jocson, the principal party in the original case, who did not sign. e. Further, Jocson filed a Motion for Issuance of Alias Writ, signifying that he did not anymore intend to appeal the decision of the CA.


2. AGANA V. LAGMAN (Carpio) GR No. 139018, April 11, 2005 NATURE: Special Civil Action. Ceriorari. FACTS Petitioner filed a Complaint for annulment of title, claiming he is the sole heir of one Teodorico Cruz who owned the subject parcel of land. She claims that the land was fraudulently sold to Eugenio Lopez Jr. who thereafter transferred it to respondent. Respondent filed its Answer with compulsory counterclaim consisting of damages due to the baseless and unjustified acts of the plaintiff and attorneys fees. Petitioner moved to dismiss the counterclaim on th ground of lack of a certificate of nonforum shopping (CNFS). TC denied motion, ruling that the claim being in the nature of a compulsory claim, it is therefore excluded from the coverage of Rule 7, Section 5. Upon MR of the petitioner however, invoking SC Administrative Circular 04-94, the court reversed itself and dismissed the counterclaim for lack of a CNFS. Respondent filed an MR, arguing that the Circular does not apply to compulsory counterclaims. Again the TC reversed itself and recalled its Order of dismissal. Thus this petition for certiorari. ISSUE: WON certificate of non-forum shopping is required in filing a compulsory counterclaim. HELD: No, a CNFS is not required. RATIO: If a counterclaim is merely permissive, a CNFS is required. If compulsory, it is not required

The circular applies only to initiatory and similar pleadings. A compulsory counterclaim is not an initiatory or similar pleading. A respondent has no choice but to raise a compulsory counterclaim otherwise it will be considered waived. 2. In Sto. Tomas University Hospital v Surla, the Court explains the nature of a compulsory counterclaim: a. It is auxiliary to the proceedings in the suit. b. It derives its substantive and jurisdictional support therefrom. c. It can only be properly pleaded in the Answer. d. It cannot remain outstanding for independent resolution. 3. Under the Rules, a compulsory counterclaim: a. Arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing partys claim; b. Is within jurisdiction of regular courts of justice; c. Does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction. d. Will be barred in the future if not set up. The counterclaim set up by the respondent, which consists of damages and attorneys fees, is clearly compulsory and so intertwined with the main case that it cannot proceed independently.


3. IGLESIA NI KRISTO V PONFERRADA (Callejo Sr.) GR No. 168943, October 27, 2006 NATURE: Petition for Review on Certiorari FACTS Petitioners Alicia, Alfredo, Roberto, Enrique and Susan, all surnamed Santos, represented by Enrique G. Santos, filed a Complaint for Quieting of Title and/or Accion Reivindicatoria against INC before RTC Quezon City. They allege that the 936-sqm lot was owned by their father Enrique Santos during his lifetime. When he died, he was survived by his wife and children, herein petitioners who are co-heirs and co-owners, who took peaceful and adverse possession of the property and of the duplicate title. When the QC Register of Deeds burned in 1988, the original title was burned as well. They had the title reconstituted based on the owners duplicate that they possessed. In 1996, they learned that INC was claiming ownership over the property based on a TCT which on its face cancelled the TCT under the name of Philippine National Bank. They were prevented by the INC from fencing the property. Petitioners claimed that their father never encumbered or disposed of their property. INC moved to dismiss the complaint: o Plaintiffs failed to comply with the requirement on verification and certification against forum shopping as only Enrique was the one who signed the pleadings, and there was no showing that he was so authorized to sign in behalf of the petitioners. o Absent any authority for Enrique Santos to sign on behalf of his co-heirs, they (the other heirs) must be impleaded as plaintiffs. Plaintiffs filed their Comment to the MTD: o Relationship of co-owners is fiduciary in character. o Any of the co-owner can act for another for the benefit of the property without need for an authorization. The RTC denied the motion ruling that the signature of Enrique constitutes substantial compliance. CA affirmed. Thus this petition.

ISSUE: WON the signature of Enrique alone constitutes compliance with the requirement under Sections 4 and 5 of Rule 7. HELD: Yes. RATIO: 1. The general rule is that the certification must be signed by all plaintiffs in a case, and the signature of only one of them is insufficient. But the rule on substantial compliance may be availed of with respect to the contents of the certification on the basis of commonality of interest (which is material in the relaxation of the Rules) of all the parties with respect to the subject of the controversy. a. The rules on forum shopping were meant to facilitate the orderly administration of justice and should not be interpreted with absolute literalness. b. The rule on strict compliance underscores its mandatory nature such that the certification cannot altogether be dispensed with. 2. Plaintiffs commonality of interest gave Enrique the authority to inform or certify non-forum shopping to the RTC on behalf of the others. a. As heirs, plaintiffs are co-owners pro indiviso since the property was not yet partitioned and its specific portions not yet adjudicated to each of the heirs. b. As such co-owners, each of the heirs may bring an action even without authorization or joining the others, because the suit is deemed instituted for the benefit of all. 3. The requirement on verification affects only the form of pleadings, and noncompliance with it is not fatal; it is not a jurisdictional requirement. a. The purpose of verification is to secure an assurance that the allegations in the petition are in good faith, true and correct, and not merely speculative. b. It is sufficient that one of the plaintiffs, who has personal knowledge and belief, swears to the truth of the allegations contained in the petition. 4. REPUBLIC V SANDIGANBAYAN (Corona) GR No. 152154, July 15, 2003 NATURE: Petition for Certiorari FACTS Petitioner Republic through PCGG, as represented by the OSG, filed a petition for forfeiture before the Sandiganbayan pursuant to EO Nos. 1, 2, 14, and 14-A. Petitioner sought to declare US$356 (now US$658M inclusive of interest), which was previously declared by the Swiss Federal Supreme Court as belonging in principle to RP, be deposited in escrow in the PNB as ill-gotten wealth. Additionally the petitioner also wanted to forfeit US$25M and US$5M in treasury notes in excess of the Marcos spouses salaries, lawful income, and income from legitimately acquired property. Before the case was set for pre-trial, a General Agreement and the Supplemental Agreements were executed by the Marcos children and the then PCGG Chairman for a global settlement of the assets of the Marcos family. The Marcos children filed a Motion on December 1995 for the approval of said agreements and for their enforcement. On October 18, 1996, the petitioner filed a motion for summary judgment, alleging that summary judgment is proper since respondents have not raised any genuine issue.

This motion was denied by the Sandiganbayan on November 20, 1997, because the motion to approve Compromise Agreement took precedence over the motion for summary judgment. Mrs. Marcos filed a Manifestation claiming she owned 90% of the funds with the remaining 10% belonging to the Marcos estate. After the pre-trial, petitioner filed another motion for summary judgment on March 10, 2000, alleging that after pre-trial certain facts were established warranting summary judgment. A hearing on the motion for summary judgment was conducted. The Sandiganbayan granted petitioner's motion for summary judgment but later reversed itself on the ground that ownership of the Marcoses of the Swiss Bank accounts was not shown. In the Answer filed by respondents, they set up the following defenses: Lack of knowledge (or information sufficient to form a belief as to the truth . . .) for lack of privity (in the case of the Marcos children); Inability to recall because it happened a long time ago; Denying an allegation (e.g. allegations made by the RP that the Marcoses stashed the countrys wealth, that they maintained Swiss bank account in the aggregate sum of US$356M, that they hid the money under layers of corporate entities, and that there are transactions involving Foundation accounts) but qualifying that funds were lawfully acquired (defense of Mrs. Marcos). The SC examined the defenses set up by the respondents in their Answer in order to determine whether there are genuine issues of fact and therefore whether a summary judgment is proper



ISSUE: WON the defenses set up constitute proper or specific denials as provided for in the Rules. HELD: No. RATIO: 1. Although one of the modes of specific denial is through a statement that the defendant is without knowledge or information sufficient to form a belief, if an allegation directly and specifically charges a party with having done, performed, or committed a particular act which the latter did not in fact do, perform, or commit, a categorical and express denial must be made. a. The purpose of requiring respondent to make a specific denial is to make them disclose facts which will disprove the allegations of the petitioner, so the parties will lay their cards on the table, reducing the controversy to its true terms. b. The RP specifically made allegations against them, and the Marcoses responded by simply saying they had no knowledge, a self-serving claim of ignorance of facts alleged. c. Respondents should have positively stated how they were ignorant of the facts. 2. A (specific) denial of the material allegation of the petition without setting forth the substance of the matters relied upon to support its general denial, when such matters were plainly within its knowledge and it could not logically pretend ignorance as to the same, failed to properly tender an issue. 3. An unexplained denial of information within the control of the pleader, or is readily accessible to him, or a profession of ignorance of a fact necessarily within the pleaders knowledge or means or knowing is evasive and is insufficient to constitute effective denial; they are no denial at all. a. Mere denials unaccompanied by any fact admissible in evidence at a hearing are not sufficient to raise genuine issues of fact.

The pleadings filed by the respondents contained no allegations of facts showing how the funds were lawfully acquired. c. By reviewing their own records, respondents could have easily determined the genuineness and due execution of the ITRs and balance sheets. d. Mrs. Marcoss privity to the transactions was evident from the fact that documents relating to the Swiss bank deposits bore her signatures. These documents, attached to the petition, were signed by Mrs. Marcos personally. The failure of Mrs. Marcos to specifically deny (under oath) the existence, much less the genuineness and due execution, of the instruments bearing her signature (and set forth what he claims to be the facts) was tantamount to a judicial admission of the genuineness and due execution of said instruments. a. Attached to the petition for forfeiture were documents bearing the signatures of the spouses Marcos and the aliases they used in their attempt to hide their identities b. Mrs. Marcos did not specifically deny the genuineness and due execution of the attached documents. c. This belied her claim that she is merely a beneficiary and does not own the accounts. The denials set up by the respondents had the earmark of a negative pregnant: where a fact is alleged with a qualifying or modifying language and the words of the allegation as so qualified are literally denied, the qualifying circumstances alone are denied while the fact itself is admitted. a. Mrs. Marcoss denial is limited only to her claim that the funds were lawfully acquired, contrary to RPs assertion. b. Therefore the allegations regarding existence of the Swiss bank deposits and the corresponding sums are not denied


5. JUABAN V ESPINA (Chico-Nazario) GR No. 170049, March 14, 2008 NATURE: Petition for Review on Certiorari FACTS Jocson filed a complaint for Reconveyance and Damages against Marcelo Steel Corp (MSC) and Maria Cristina Fertilizer Corporation (MCFC) which were represented by their president, Jose Marcelo. The Heirs of Bancale filed before the RTC of Lapu-Lapu an action against Paras for recovery of properties subject of the present case. Petitioners Juaban and Zosa entered their appearance as counsels for the Heirs of Bancale. The Heirs entered into an Agreement to Sell and Buy with respondent Rene Espina; in accordance with the Agreement, Espina advanced P2M to the Heirs; he then designated respondent Cebu Bay Discovery Properties Inc. (CDPI) as the vendee of the properties. On August 26, 1997, Petitioners filed a Motion to Fix Attorneys Fees, which motion was granted by the TC on the same day, fixing the attorneys fees at P9M. MR of the Heirs was denied. They filed a Notice of Appeal, but the TC issued an order which considered its decision final and executory, even before the period to appeal had lapsed. Another MR was filed by the Heirs, but the Court issued a Writ of Execution to Sheriff Gato, directing that the attorneys fees be taken from the money due from the buyer to the sellers.

Contrary however to the TCs order, Sheriff Gato levied upon the properties of the heirs to satisfy the attorneys fees. The properties were sold at public auction to petitioners for P9M. On December 1, 1998, the new presiding judge of RTC Lapu-Lapu issued an order setting aside the order it issued earlier which considered the previous order final and executory. The Sheriff, despite knowing that he no longer had authority, delivered to petitioners the final Deed of Conveyance without approval of the court. Meanwhile earlier respondents filed an action for injunction and damages with an application for the issuance of a temporary restraining order to enjoin the sale in a public auction of the subject properties. Only Respondent Espina signed the Verification and CNFS attached to the complaint; thus no one signed for CDPI. Petitioners filed an MTD, which was granted by the TC. A Notice of Appeal was filed; CA granted the application for TRO, which it later made permanent, reversing as well and setting aside the order of the TC dismissing the case. Petitioners MR was denied. Thus this petition. Petitioners alleged that only respondent Espina signed the Verification and CNFS. Petitioners claimed that the complaint should have been dismissed by the trial court since (1) respondent Espina had no more personal interest in the case, having assigned his rights to the subject properties to respondent CDPI; and (2) there was no authority or board resolution authorizing respondent Espina to file the complaint on behalf of his co-respondent CDPI.

cases is such that any judgment that may be rendered in the present case, regardless of which party is successful, would amount to res judicata in another case. 1. There is no identity of the parties in this case. There is no identity of rights asserted and reliefs prayed for. 2. Civil Case No. 2309 is for recovery of ownership and possession; while the instant case is for injunction and damages. 3. Forum shopping as a ground for the dismissal of actions is distinct and separate from the failure to submit a proper CNFS. 4. The presence of a CNFS would make a person guilty of forum shopping additionally liable for perjury. 6. Korea Technologies v. Lerma Ponente: J. Velasco, Jr. Date: 7 January 2008 Nature: Petition for Review on Certiorari under rule 45 Facts Korea Technologies Co., Ltd. (KOGIES), a corporation engaged in the supply and installation of LPG Cylinder manufacturing plants entered into a contract in the Philippines with Pacific General Steel Manufacturing Corporation (PGSMC) in which KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The parties amended the contracts terms of payment in Korea which stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders as well as install and initiate the operation of the plant. The total contract price amounted to USD 1,530,000. Then, PGSMC entered into a Contract of Lease with Worth Properties, Inc. (Worth) for use property with a warehouse building. The machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000. In a Certificate, it was shown that the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions. For the balance, PGSMC issued to checks, both of which were dishonored for the reason PAYMENT STOPPED. KOGIES sent a demand letter to PGSMC threatening to sue based on BP 22 to which the latter replied that the checks were funded and were stopped because KOGIES delivered a different brand of hydraulic press and that it had not delivered several equipment parts already paid for. PGSMC then informed KOGIES that it was cancelling the contract on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered and that PGSMC would dismantle and transfer the machineries. PGSMC filed an Affidavit-Complaint for Estafa against Mr. Dae Hyun Kang, President of KOGIES. KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries on mere imagined violations. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract. PGSMC again wrote KOGIES with the same threat of dismantling. KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea. KOGIES filed a Complaint for Specific Performance before the RTC. The RTC granted a TRO. KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks

ISSUE: WON the CNFS, signed only by Espina, is valid. HELD: Yes. RATIO: The CNFS must be signed by the plaintiff or any of the principal parties and not by counsel. When all the petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the CNFS substantially complies with the rules. 1. Espina's rights as a party to the Agreement is his right to the full realization of the purpose of the contract, which in this case would be the transfer of the ownership of the subject properties from the Heirs of Bancale either to him or to his designated vendee. 2. Espina has the personality to sue based on the agreement to sell and buy as he has been designated as the "Second Party," in his personal capacity, and not as agent or representative of a corporate entity. 3. Espina being a real party in interest also has the authority to sign the certification against forum shopping. 4. The signature of respondent Espina as one of the plaintiffs therein is sufficient. ISSUE #2: Issue: WON the appellee's are guilty of forum shopping/litis pendentia. HELD: No. RATIO: Forum shopping exists where the elements of litis pendentia are present, or where a final judgment in one case will amount to res judicata in the other. The requisites of litis pendentia are: (a) identity of parties, or at least such parties who represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; (c) identity with respect to the two (2) preceding particulars in the two (2)

for the reason that "their value was not received" as the former allegedly breached their contract and failed to make the plant operational although it earlier certified to the contrary. KOGIES averred that PGSMC violated Art. 15 by unilaterally rescinding the contract without resorting to arbitration. KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery. PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy. PGSMC then filed its Answer with Compulsory Counterclaim saying that it had the full right to dismantle because it had paid for them in full hat KOGIES was not entitled to the amount covered by the checks for failing to completely install and make the plant operational; and that KOGIES was liable for damages for altering the quantity and lowering the quality of the machineries and equipment. Moreover, PGSMC averred that it has already paid rent and is not willing to shoulder it anymore. The RTC issued an Order denying the application for a writ of preliminary injunction because PGSMC had paid KOGIES and that Art. 15 was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may arise between the parties. KOGIES filed its Reply to Answer and Answer to Counterclaim denying it had altered the machinery. It claimed that it had performed all the undertakings and already produced certified samples. The unfinished was PGSMCs fault since it failed to procure raw materials due to lack of funds. It also filed a Supplemental Memorandum with Motion to Dismiss the counterclaims. It filed its Motion for Reconsideration for the denial of the injunctive writ claiming that the contract for the sale of an "LPG manufacturing plant" such that the dismantling and transfer of the machinery and facilities would result in the dismantling and transfer of the very plant itself to the great prejudice of KOGIES as the still unpaid owner. PGSMC filed a Motion for Inspection of Things to determine alteration and proper installation. KOGIES opposed based on Art. 15. The RTC granted the motion for inspection, denied KOGIES MR and motion to dismiss counterclaims as these counterclaims fell within the requisites of compulsory counterclaims. KOGIES filed an Urgent MR. Without waiting for the resolution Urgent MR, KOGIES filed before the CA a petition for certiorari praying the enjoinment of the inspecting, dismantling, and transferring the machineries and to direct the RTC to enforce the specific agreement on arbitration. In the meantime, the RTC denied urgent MR and directed to proceed with the inspection. KOGIES filed a Supplement to the Petition informing the CA Order. It also reiterated its prayer. KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the machineries and equipment conformed to the specifications in the contract and were properly installed. Sheriff filed his Sheriffs Report finding that the machineries were not fully and properly installed. The CA affirmed the RTC orders and dismissed the petition for certiorari filed by KOGIES. The CA held that the counterclaims of PGSMC were compulsory ones and payment of docket fees was not required since the Answer with counterclaim was not an initiatory pleading. For the same reason, the CA said a certificate of non-forum shopping was also not required.

The CA held that the petition for certiorari had been filed prematurely since KOGIES did not wait for the resolution of its urgent motion for reconsideration. Hence, we have this Petition for Review on Certiorari under Rule 45.

Relevant Issues 1. Were the counterclaims all compulsory not necessitating payment of docket fees and certificate of non-forum shopping? 2. Was the petition in the CA filed prematurely without waiting for the resolution of the Urgent MR? 3. Were the orders interlocutory, not proper subjects of certiorari? Ruling and Reasoning 1. Yes. The counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim in accordance with Section 8 of Rule 11 of the Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. It states, "A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein." It was not liable to pay filing fees for said counterclaims being compulsory in nature. However, effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross-claims. The answer as not an initiatory pleading but a responsive pleading hence a certificate of non-forum shopping is not required. 2. No. KOGIES First MR was already denied. KOGIES only remedy was to assail the RTCs interlocutory order via a petition for certiorari under Rule 65. On the urgent MR, the circumstances in this case allow an exception to the rule that before certiorari may be availed of, the petitioner must have filed a motion for reconsideration and said motion should have been first resolved by the court a quo. RTC Order directing the branch sheriff to inspect the plant, equipment, and facilities when he is not competent and knowledgeable on said matters is evidently flawed and devoid of any legal support. Moreover, there is an urgent necessity to resolve the issue on the dismantling of the facilities and any further delay would prejudice the interests of KOGIES. Indeed, there is real and imminent threat of irreparable destruction or substantial damage to KOGIES equipment and machineries. We find the resort to certiorari based on the gravely abusive orders of the RTC proper. Yes and No. Yes, the orders were interlocutory and the general rule is that interlocutory orders cannot be challenged by an appeal. However, where the assailed interlocutory order was issued with grave abuse of discretion or patently erroneous and the remedy of appeal would not afford adequate and expeditious relief, the Court allows certiorari as a mode of redress. The alleged grave abuse of discretion of the RTC equivalent to lack of jurisdiction in the issuance of the two assailed orders coupled with the fact that there is no plain, speedy, and adequate remedy in the ordinary course of law amply provides the basis for allowing the resort to a petition for certiorari under Rule 65.


Note: On the core issue of the arbitration clause, the court held Art. 15 valid based on Art. 2044 of the Civil Code. The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each other on equal footing. In itself, the SC has ruled in a catena of cases that arbitration clauses are valid. 7. Filipinas Textile Mills v. CA and State Investment House Inc. (SIHI)

Ponente: J. Tinga Date: 12 November 2003 Nature: Petition for Review on Certiorari of the CA Facts Filtex applied for domestic letters of credit to finance the purchase of various raw materials for its textile business. SIHI issued the letters of credit authorizing IndoPhil textile Mills (Indo-Phil), Texfiber Corporation (Texfiber), and Philippine Polyamide Industrial Corporation (Polyamide) to value on SIHI such drafts as may be drawn by said corporations against Filtex for an aggregate amount not exceeding P3,737,988.05. Filtex used these letters to cover its purchases from the three companies. The companies, upon the sale of textile, issued several sight drafts payable to the order of SIHI duly accepted by Filtex. These were then acquired in due course by SIHI. Bernardino Villanueva executed a comprehensive surety agreement whereby he guaranteed, jointly and severally with Filtex, the payment to SIHI of the debt of Filtex. It shall be a continuing surety until such time that the total outstanding obligation had been fully settled. Filtex executed and issued to SIHI several trust receipts in which Filtex agreed to hold the merchandise in trust for SIHI with liberty to sell for SIHIs account and to hand the proceeds to apply against any indebtedness. Filtex also agreed to pay SIHI interest at the rate of 25%. Filtex failed to pay despite demand so SIHI filed a Complaint. In its Answer with Counterclaim, Filtex interposed special and affirmative defenses, i.e., the provisions of the trust receipts, as well as the comprehensive surety agreement, do not reflect the true will and intention of the parties, full payment of the obligation, and lack of cause of action. Villanueva interposed the same and added that the comprehensive surety agreement is null and void. They failed to specifically deny under oath the genuineness and due execution of the actionable documents upon which the Complaint was based. The RTC held Filtex and Villanueva jointly and severally liable to SIHI. Filtex and Villanueva filed an Appeal contending that they have fully paid their debt and that the actionable documents are inadmissible in evidence because of non-payment of documentary stamp taxes. The CA ruled that Filtex et. al. had in effect, admitted the genuineness and due execution of said documents because of their failure to have their answers placed under oath, the complaint being based on actionable documents in line with Section 7, Rule 8 of the Rules of Court. The CA also ruled that there was unpaid balance. On appeal to SC, the petitioners argue that their implied admission of the genuineness and due execution of these documents for failure to specifically deny the same under oath should not be equated with an admission in evidence of the documents and an admission of their obligation. SIHI commented that in answers to the complaint, the petitioners expressly admitted the due execution of the documents and their obligation arising from these documents. Relevant Issue 1. Are the letters of credit, sight drafts, trust receipts and comprehensive surety agreement admissible in evidence despite the absence of documentary stamps? Ruling and Ratio: 1. Yes.The Answer withCounterclaim and Answer did not contain any specific denial under oath of the letters of credit, sight drafts, trust receipts and comprehensive surety agreement upon which complaint was based, thus giving rise to the implied admission of the genuineness and due execution of these documents. Under Sec. 8,

Rule 8 of the Rules of Court, when an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth what he claims to be the facts. The admission of the genuineness and due execution of a document means that the party whose signature it bears admits that he voluntarily signed the document or it was signed by another for him and with his authority; that at the time it was signed it was in words and figures exactly as set out in the pleading of the party relying upon it; that the document was delivered; and that any formalities required by law, such as a seal, an acknowledgment, or revenue stamp, which it lacks, are waived by him. (Benguet Exploration v. CA) Under Section 173 of the IRC the liability for payment of the stamp taxes is imposed on the person making, signing, issuing, accepting, or transferring the document. Filtex was the issuer and acceptor of the trust receipts and sight drafts, respectively, while the letters of credit were issued upon its application. Villanueva signed the comprehensive surety agreement. Thus, being among the parties obliged to pay the documentary stamp taxes, the petitioners are estopped from claiming that the documents are inadmissible in evidence for non-payment thereof.

8. Sy Tiong v. Sy Chim Ponente: J. Tinga Date: 30 March 2009 Nature: Facts Note: This case is a consolidation of criminal and civil cases touching on many issues. The following facts lead to the relevant issue. Juanita Tan, corporate treasurer of Sy Siy Ho & Sons, Inc. (the corporation) under the name and style Guan Yiac Hardware, submitted a letter to the corporations Board of Directors stating that the control, supervision and administration of all corporate funds were exercised by Sy Chim and Felicidad Chan Sy (Spouses Sy), corporate president and assistant treasurer, respectively. Tan disclosed that Felicidad did not make cash deposits to any of the corporations banks for a period thus the total bank remittances for the past years were less than reflected in the books. Tan sought to be free from any responsibility over all corporate funds. The Board granted the request and authorized an external auditor to render a complete audit. The auditor attributed to the Spouses Sy P67,117,230.30 as unaccounted receipts and disbursements. A demand letter was served on the Spouses Sy. On the same date, the children of the Spouses Sy allegedly stole from the corporation cash, postdated checks and other important documents. After the incident, the Spouses Sy allegedly transferred residence and ceased reporting to the corporation. The corporation filed a complaint for robbery. Sy Tiong Shiou, corporate Vice President and General Manager, called a special meeting to fill up the positions vacated. He was subsequently elected as the new president and his wife, Juanita Tan, the new Vice President. Despite this, Sy Chim still caused the issuance of a Notice of Stockholders meeting in his capacity as president.

The corporation, through Romer S. Tan, filed its Amended Complaint for Accounting and Damages against the Spouses Sy praying for accounting and restitution. By Answer, the Spouses Sy averred that Sy Chim was a mere figurehead and Felicidad Chan Sy merely performed clerical functions, as it was Sy Tiong Shiou and Tan, who have been authorized by the corporations by-laws to supervise, control and administer and were the ones responsible for the unaccounted funds. The Spouses Sy also pursued their counter-claim for moral and exemplary damages and attorneys fees. The Spouses Sy filed their Motion for Leave to File Third-Party Complaint praying that their attached Third Party Complaint be allowed and admitted against Sy Tiong Shiou and his spouse. The Spouses Sy accused Sy Tiong Shiou and Juanita Tan as directly liable for the corporations claim for misappropriating corporate funds. The trial court granted the motion. The counsel of Sy Tiong and Tan discovered that they were not furnished with the copies of several pleadings, as well as a court order, which resulted in their having been declared in default for failure to file their answer to the third-party complaint. Thus, they opted not to file MR and filed a petition for certiorari in the CA. The CA granted the petition of Sy Tiong. It declared that a third-party complaint is not allowed under the Interim Rules of Procedure Governing Intra-Corporate Controversies under R.A. No. 8799 it not being included in the exclusive enumeration of allowed pleadings under Section 2, Rule 2 thereof. Moreover, even if such a pleading were allowed, the admission of the third-party complaint would have no basis from the facts or the law and jurisprudence. The CA also ruled that the judge committed a manifest error amounting to lack of jurisdiction in admitting the third-party complaint and in summarily declaring Sy Tiong Shiou and Juanita Tan in default. The Spouses Sy filed MR which was denied. In the SC, the Spouses Sy argue that a third-party complaint is not excluded or prohibited by the Interim Rules, and that the CA erred in ruling that their thirdparty complaint is not actionable because their action is not in respect of the corporations claims. They add that the disallowance will result in multiplicity of suits.

(5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling reasons. Such motion must be verified and under oath. Rule 2, Sec.2. Pleadings allowed.The only pleadings allowed to be filed under these Rules are the complaint, answer, compulsory counterclaims or cross-claims pleaded in the answer, and the answer to the counterclaims or cross-claims. There is a conflict, for while a third-party complaint is not included in the allowed pleadings, neither is it among the prohibited ones. Nevertheless, this conflict may be resolved by following the well-entrenched rule in statutory construction, that every part of the statute must be interpreted with reference to the context. This spirit and intent can be gleaned from Sec. 3, Rule 1:These Rules shall be liberally construed in order to promote their objective of securing a just, summary, speedy and inexpensive determination of every action or proceeding. A third-party complaint is a claim that a defending party may, with leave of court, file against a person not a party to the action, called the third-party defendant, for contribution, indemnity, subrogation or any other relief, in respect of his opponents claim. It is actually a complaint independent of, and separate and distinct from the plaintiffs complaint. In fact, were it not for Rule 6, Section 11 of the Rules of Court, such third-party complaint would have to be filed independently and separately from the original complaint by the defendant against the third-party defendant. The purpose of a third-party complaint is to avoid circuitry of action and unnecessary proliferation of law suits and of disposing expeditiously in one litigation all the matters arising from one particular set of facts. It appears that the summary nature of the proceedings governed by the Interim Rules, and the allowance of the filing of third-party complaints is premised on one objectivethe expeditious disposition of cases. Moreover, following the rule of liberal interpretation the SC found that a third-party complaint is not, and should not be prohibited in controversies governed by the Interim Rules. 2. Yes. Some substantive basis for a third-party claim must be found to exist, whether the basis be one of indemnity, subrogation, contribution or other substantive right. The bringing of a third-party defendant is proper if he would be liable to the plaintiff or to the defendant or both for all or part of the plaintiffs claim against the original defendant, although the third-party defendants liability arises out of another transaction. The defendant may implead another as third-party defendant: (a) on an allegation of liability of the latter to the defendant for contribution, indemnity, subrogation or any other relief; (b) on the ground of direct liability of the thirdparty defendant to the plaintiff; or (c) the liability of the third-party defendant to both the plaintiff and the defendant. In determining the sufficiency of the third-party complaint, the allegations in the original complaint and the third-party complaint must be examined. A third-party complaint must allege facts which prima facie show that the defendant is entitled to the claim. The allegations in the third-party complaint impute direct liability on the part of Sy Tiong Shiou and Juanita Tan to the corporation for the very same claims which the corporation interposed against the Spouses Sy. It is clear therefore that the Spouses Sys third-party complaint is in respect of the plaintiff corporations claims and thus the allowance of the third-party complaint is warranted.

Relevant Issue 1. Is a third-party complaint allowed in this kind of dispute? 2. Should the third-party complaint of Spouses Sy be allowed? Ruling and Reasoning 1. Yes.

The relevant provisions are: Rule 1, Sec. 8. Prohibited pleadings.The following pleadings are prohibited: (1) Motion to dismiss; (2) Motion for a bill of particulars; (3) Motion for new trial, or for reconsideration of judgment or order, or for reopening of trial; (4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly compelling reasons. Such motion must be verified and under oath; and

9. PTA of St. Matthew Academy v. Metrobank

Ponente: J. del Castillo Date: 2 March 2010 Nature: Facts Denivin Ilagan and Josefina Ilagan (spouses Ilagan) were granted a loan by the Metropolitan Bank and Trust Co in the amount of P4,790,000.00 secured by mortgage over parcels of land. Upon default, an extrajudicial foreclosure was conducted with Metrobank being the highest bidder for which a Certificate of Sale was issued. During the period of redemption, the Bank filed an Ex-Parte Petition for Issuance of a Writ of Possession by posting bond which was approved. The St. Mathew Christian Academy of Tarlac, Inc. filed a Petition for Injunction with Prayer for Restraining Order the Bank and the Provincial Sheriff of Tarlac. The court issued a joint decision entitling Metrobank to a writ of possession and ruling that St. Matthew is bound by the writ because it is not a third person as it is owned by the mortgagors and that even if it had a lease, its not binding on third persons as it was not annotated on the back of the title. Pending resolution of the MR of the Joint Decision, the PTA of St. Mathew Christian Academy (SMCA) and Gregorio Inalvez, Jr., Rowena Layug, Malou Malvar, Marilou Baraquio, Gary Sinlao, Luzviminda Ocampo, Marife Fernandez, Fernando Victorio, Ernesto Aganon, and Rizalino Manglicmot who are teachers and students of SMCA filed a Motion for Leave to file Petition in Interventionwhich was granted. Howeverthe trial court reversed itself by ruling that the intervention would have no bearing on the issuance and implementation of the writ of possession. Thus, it directed that the writ be implemented by placing Metrobank in physical possession of the property. Without filing MR, the PTA et. al. filed a Petition for Certiorari and Prohibition before the CA. Such was dismissed by the CA for lack of merit because the writ of possession had already been issued and the remedy was to file a petition that the sale be set aside and the writ of possession cancelled. Moreover, no MR was filed. Relevant Issues 1. As a procedural issue inserted in the merits, did the lack of authority to sign the certificate of non-forum shopping made the writ irregular? 2. Is a petition to set aside the foreclosure in the LRC case the proper remedy and not certiorari? 3. Is an MR necessary before filing a petition for review on Certiorari? Ruling and Reasoning 1. No. The lack of authority to sign the certificate of non-forum shopping attached to the Petition for Issuance of Writ of Possession was an insignificant lapse.In Green Asia Construction and Development Corporation v. Court of Appeals, it was said that it bears stressing that a certification on non-forum shopping is required only in a complaint or a petition which is an initiatory pleading. In this case, the subject petition for the issuance of a writ of possession filed by private respondent is not an initiatory pleading. Although private respondent denominated its pleading as a petition, it is more properly a motion. What distinguishes a motion from a petition or other pleading is not its form or the title given by the party executing it, but its purpose. The purpose of a motion is not to initiate litigation, but to bring up a matter arising in the progress of the case where the motion is filed.

It is not necessary to initiate an original action in order for the purchaser at an extrajudicial foreclosure of real property to acquire possession. Even if the application for the writ of possession was denominated as a "petition", it was in substance merely a motion. Indeed, any insignificant lapse in the certification on non-forum shopping filed by the MBTC did not render the writ irregular. After all, no verification and certification on non-forum shopping need be attached to the motion. It is immaterial that the certification on non-forum shopping in the MBTCs petition was signed by its branch head. Such inconsequential oversight did not render the said petition defective in form. Yes. The proper remedy for the petitioners is a separate, distinct and independent suit, provided for under Section 8 of Act No. 3135.


SEC. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession canceled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninetysix; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal. In De Gracia v. San Jose, it was held that the order for a writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. No discretion is left to the court. And any question regarding the regularity and validity of the sale (and the consequent cancellation of the writ) is left to be determined in a subsequent proceeding as outlined in section 8. Such question is not to be raised as a justification for opposing the issuance of the writ of possession, since, under the Act, the proceeding for this is ex parte. Since the writ of possession had already been issued the proper remedy is an appeal and not a petition for certiorari. Yes. As a general rule, a motion for reconsideration must be filed before resort to the special civil action of certiorari is made. The petitioners have the burden to substantiate that their immediate resort to the appellate court is based on any of the exceptions to the general rule. They have to show the urgent and compelling reasons for such recourse. The afore-cited allegations of the petitioners in their petition before the CA did not dispense with the burden of establishing that their case falls under any of the exceptions to the general rule.


10. Permanent Savings and Loan Bank v. Velarde Ponente: J. Austria-Martinez Date: 23 September 2004 Nature: Facts Permanent Savings and Loan Bank sought to recover in a complaint for sum of money from Mariano Velarde P1,000,000.00 plus accrued interests and penalties, based on a loan evidenced by a promissory note, a loan release sheet and a loan

disclosure statement. The bank, represented by its Deputy Liquidator after it was placed under liquidation, sent a letter of demand but despite receipt of said demand letter, Velarde failed to settle his account. Another letter was sent and counsel replied, stating that the obligation "is not actually existing but covered by contemporaneous or subsequent agreement between the parties " In his Answer, respondent disclaims any liability on the instrument: as to any liability arising therefrom, the receipt of the said amount of P1-Million shows that the amount was received by another person, not the herein defendant. Hence, no liability attaches and as further stated in the special and affirmative defenses that, assuming the promissory note exists, it does not bind much less is there the intention by the parties to bind the herein defendant. In other words, the documents relative to the loan do not express the true intention of the parties.It contained a denial under oath, which reads: I, MARIANO Z. VELARDE, of age, am the defendant in this case, that I caused the preparation of the complaint and that all the allegations thereat are true and correct; that the promissory note sued upon, assuming that it exists and bears the genuine signature of herein defendant, the same does not bind him and that it did not truly express the real intention of the parties as stated in the defenses xxx.

In fact, respondents allegations amount to an implied admission of the due execution and genuineness of the promissory note. Also, it effectively eliminated any defense relating to the authenticity and due execution of the document, e.g., that the document was spurious, counterfeit, or of different import on its face as the one executed by the parties; or that the signatures appearing thereon were forgeries; or that the signatures were unauthorized. Both the trial court and the Court of Appeals erred in concluding that respondent specifically denied petitioners allegations regarding the loan documents, as respondents Answer shows that he failed to specifically deny under oath the genuineness and due execution of the promissory note and its concomitant documents. Therefore, respondent is deemed to have admitted the loan documents and acknowledged his obligation with petitioner; and with respondents implied admission, it was not necessary for petitioner to present further evidence to establish the due execution and authenticity of the loan documents sued upon. While Section 22, Rule 132 of the Rules of Court requires that private documents be proved of their due execution and authenticity before they can be received in evidence, i.e., presentation and examination of witnesses to testify on this fact; in the present case, there is no need for proof of execution and authenticity with respect to the loan documents because of respondents implied admission thereof.

After bank rested its case, respondent filed with leave of court his demurrer to evidence. The trial court found merit in demurrer to evidence and dismissed the complaint including respondents counterclaims. The CA agreed with the trial court and affirmed the dismissal. It found that petitioner failed to present any evidence to prove the existence of respondents alleged loan obligations, considering that respondent denied petitioners allegations in its complaint. It also found that petitioner banks cause of action is already barred by prescription.

Relevant Issues 1. Did the bank fail to establish the genuineness, due execution and authenticity of the loan documents? Ruling and Reasoning 1. No.

Velardes denials do not constitute an effective specific denial as contemplated by law. In Songco vs. Sellner, the Court expounded on how to deny the genuineness and due execution of an actionable document, viz.: This means that the defendant must declare under oath that he did not sign the document or that it is otherwise false or fabricated. Neither does the statement of the answer to the effect that the instrument was procured by fraudulent representation raise any issue as to its genuineness or due execution. On the contrary such a plea is an admission both of the genuineness and due execution thereof, since it seeks to avoid the instrument upon a ground not affecting either.