[G.R. Nos. 92029-30. December 20, 1990.] "3.

"3. Plaintiff and defendant have been friends and in the course of this relationship, they
have exchanged mutual favors and accommodations, including discounting of check for cash.
NICANOR G. DE GUZMAN, JR., petitioner, vs. HON. COURT OF APPEALS, Former Fifth Division,
HON. REGIONAL TRIAL COURT, National Capital Judicial Region, Br. 48, Manila, and ENRIQUE 4. More than seven (7) years ago, several checks were issued by plaintiff to defendant
Kp. TAN, respondents. in exchange for cash which probably amounted to P280,900.00. In due time, these checks were
either fully paid, settled, extinguished or condoned by agreement of the parties, and for which
The Barristers Law Office for petitioner. reason, plaintiff did not anymore redeem the checks precisely because they have been close
Romualdo M. Jubay for respondents. and mutual friends.

DECISION 5.a. Lately, however, plaintiff received from defendant's lawyer a demand letter dated
1988 supposedly detailing out therein the former's obligation to the latter, as follows:
GANCAYCO, J p:
Principal Amount P280,900.00
A cause of action is the fact or combination of facts which affords a party a right to judicial
interference in his behalf. 1 An action means an ordinary suit in a court of justice, by which (Value of 66 dishonored checks)
one party prosecutes another for the enforcement or protection of a right, or the prosecution Legal Interest at 235,956.00
or redress of a wrong. 2
1% per Month (For 84
The cause of action must always consist of two elements: (1) the plaintiff's primary right and
the defendant's corresponding primary duty, whatever may be the subject to which they relate months or 7 years)
person, character, property or contract; and (2) the delict or wrongful act or omission of the
defendant, by which the primary right and duty have been violated. 3 The cause of action is Attorney's Collection 51,685.00
determined not by the prayer of the complaint but by the facts alleged. 4 Fee (At 10% Only)
The term right of action is the right to commence and maintain an action. 5 In the law on
pleadings, right of action is distinguished from cause of action in that the former is a remedial
right belonging to some persons, while the latter is a formal statement of the operative facts TOTAL Amount Due P568,541.00
that give rise to such remedial right. The former is a matter of right and depends on the
substantive law, while the latter is a matter of statement and is governed by the law of =========
procedure. 6 Copy of said letter is attached hereto as Annex A and made an integral part hereof.
The right of action springs from the cause of action, but does not accrue until all the facts which b. The claim of P568,541.00 is not due and owing from the plaintiff to the defendant
constitute the cause of action have occurred. 7 When there is an invasion of primary rights, because, as already stated, the amounts of the checks issued to defendant some more than
then and not until then does the adjective or remedial law become operative, and under it (7) years ago, were either fully paid, settled, extinguished or treated as condoned by
arise rights of action. There can be no right of action until there has been a wrong a violation agreement of the parties.
of a legal right and it is then given by the adjective law. 8
6. In the said letter, Annex A hereof, defendant threatened to "institute the proper
The herein petition for review on certiorari of a decision of the Court of Appeals dated January action and hold (plaintiff liable for the consequence," in the following manner:
30, 1990 in CA G.R. No. 22481 9 puts into test the sufficiency of the cause of action of a
complaint filed in the Regional Trial Court of Manila. cdll . . . unfortunately, you had not heeded his (defendant's) request and so we hereby inform you
that this shall definitely be our last letter to you on this matter and we are giving you a final
The undisputed antecedents are that on September 15, 1988, petitioner filed a complaint for period of ten (10) days from receipts hereof to remit full payment of said sum of P568,541.00,
damages and other equitable reliefs in the trial court, the relevant allegations of which are as
follows:
1
otherwise, without need of further advice to you, we shall institute the proper action and hold
you liable for the consequence. Cdpr
7. Defendant knows fully well that the sum of P568,541.00 is not wholly or partly due
or owing to him from plaintiff particularly the huge, fantastic, and unwarranted claim for
alleged legal interests in the sum of P235,956.00 which roughly accounts for 84% of the alleged
principal amount being collected by defendant from plaintiff under his ill-tenored Annex A
hereof, and the unwarranted claim for attorney's collection fees of P51,685.00.
8. Plaintiff is very reluctant to file the instant complaint against his defendant friend
but was gravely agitated to do so because of a clearly perceived and palpable injury to him as
unequivocally expressed in defendant's letter, Annex A hereof.
9. In the circumstances given, defendant has kept possession of the alleged checks
amounting to P280,900.00 at the expense of plaintiff and since the obligation thereunder has
either been fully or wholly paid, settled, extinguished, or condoned by agreement of the
parties, defendant holds them without just or legal ground and is bound to return them to
plaintiff.
10. In writing the letter, Annex A hereof and demanding therein an obligation from
plaintiff which is not due and owing from the latter, defendant failed to act with justice,
observe honesty and good faith.
11. To prosecute the instant action, plaintiff has incurred actual expenses in the sum of
at least P15,000.00.
12. In the circumstances herein-above given, defendant acted in a wanton, reckless,
oppressive, or malevolent manner. Hence, exemplary damages in the sum of P200,000.00
should be imposed against the defendant for the public good, in addition to other damages
claimed herein.
13. Nominal damages should be adjudicated against the defendant in order that the
right of plaintiff which has been invaded by the defendant, may be vindicated or recognized,
and not for the purpose of indemnifying the plaintiff for any loss suffered by the latter.
14. To prosecute the case herein, plaintiff has retained the services of counsel at the
agreed attorney's fees of P75,000.00.
WHEREFORE, it is respectfully prayed that, after due hearing judgment be rendered in favor of
plaintiff and against defendant, as follows:
1. Ordering defendant to pay plaintiff the sum of P15,000.00 as actual or compensatory
damages;
2. Ordering the defendant to pay plaintiff the exemplary damages in the sum of
P200,000.00;
3. Ordering defendant to return to plaintiff the several checks mentioned in Annex A
of the complaint and adjudicating nominal damages in favor of plaintiff and against the
defendant;
4. Ordering defendant to pay plaintiff the sum of P75,000.00 for and as attorney's fees;
and
5. Ordering the defendant to pay the costs of the suit. prcd
Plaintiff prays for other relief just and proper in the premises of the case." 10
On October 8, 1988, private respondent filed a motion to dismiss the complaint for lack of
cause of action and prescription. An opposition thereto was filed by petitioner to which a reply
was made by private respondent. After a rejoinder was submitted by petitioner, on November
24, 1988 the trial court dismissed the complaint for failure to state a cause of action. 11
A motion for reconsideration thereof filed by petitioner, which was opposed by private
respondent, and to which a reply was filed by petitioner, was denied by the trial court on
March 17, 1989. 12
Hence, petitioner filed a petition for certiorari and mandamus and other relief in the Court of
Appeals against said orders of the trial court. As earlier stated, on January 30, 1990, the Court
of Appeals rendered its decision dismissing the appeal with costs against petitioner.
Thus, the herein petition whereby petitioner alleges that the trial court committed a grave
abuse of discretion in issuing the questioned orders dated November 24, 1988 and March 17,
1989, and that the Court of Appeals did likewise in dismissing the appeal of petitioner thereby
disregarding a question of substance not in accord with law.
The petition is impressed with merit.
A reading of the complaint shows that it is therein alleged that more than seven (7) years ago,
several checks were issued by petitioner to private respondent in exchange for cash amounting
to P280,900.00; that in due time, said checks were "either fully paid, settled, extinguished or
condoned by agreement of the parties" so petitioner did not anymore redeem the checks
because of their friendship; that on August 30, 1988, private respondent's lawyer sent a letter
of demand to petitioner to pay said principal amount plus interest and attorney's fees with a
total amount due of P568,541.00, which claim is not due and owing having been settled
between the parties; that in said letter threat of court action was made causing injury to
petitioner; that private respondent illegally withheld the petitioner's checks which should be
returned to petitioner; that for private respondent's act of demanding payment for an
2
obligation not due and for the former's failure to act with justice, observe honesty and good
faith, petitioner prays for relief by way of actual, exemplary and nominal damages, and also
prays that the private respondent be ordered to return to petitioner the checks mentioned in
the complaint, and to pay the costs.

Contrary to the findings of the lower court and the appellate court that the complaint states
no cause of action, this Court finds and so holds that it states a sufficient cause of action.

It must be remembered that when a party files a motion to dismiss the complaint for lack of
cause of action he is deemed to hypothetically admit the allegations thereof.

From the allegation of the complaint in this case it appears that, (1) petitioner has a primary
right, because of having paid his obligation to private respondent, to have the checks he issued
to cover the amount returned to him or otherwise cancelled by private respondent; and (2)
the primary right of was violated when private respondent demanded payment of a settled
obligation relying on the very checks of petitioner he had not returned. Consequently, on
account of such demand for payment for an obligation duly settled, the petitioner thereby
suffered damages 13 and should be afforded such relief as prayed for in the complaint. cdphil

Contrary to the observation made by the appellate court, the cause of action had not
prescribed. The cause of action accrued only on August 20, 1988 when in a demand letter for
payment private respondent thereby committed a wrongful act against petitioner. The
complaint was filed promptly on September 15, 1988, well within the four (4) year prescriptive
period of an action of this nature. 14

WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals
dated January 30, 1990 as well as the questioned orders of the Regional Trial Court of Manila
dated November 24, 1988 and March 17, 1989, are hereby REVERSED AND SET ASIDE. Let the
records of this case be remanded to the trial court for further proceedings. Costs against
private respondent.

SO ORDERED.

Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

3
[G.R. No. 45350. May 29, 1939.]
BACHRACH MOTOR CO., INC., plaintiff-appellant, vs. ESTEBAN ICARAGAL and ORIENTAL
COMMERCIAL CO., INC., defendants-appellees.
B. Francisco for appellant.
Matias P. Perez for appellees.
SYLLABUS
1. REAL AND PERSONAL ACTION; FORECLOSURE OF MORTGAGE AFTER OBTAINING A
PERSONAL JUDGMENT; WAIVER. Most of the provisions of the Code of Civil Procedure are
taken from that of California, and In that jurisdiction the rule has always been, and still is, that
a party who sues and obtains a personal judgment against a defendant upon a note, waives
thereby his right to foreclose the mortgage securing it.
2. ID.; ID.; ID.; RULE FOUNDED ON STATUTORY PROVISIONS. It is true that this rule
is founded on express statutory provisions to that effect. In this jurisdiction, section 708 of the
Code of Civil Procedure provides that a creditor holding a claim against the deceased, secured
by a mortgage or other collateral security, has to elect between enforcing such security or
abandoning it by presenting his claim before the committee and share in the general assets of
the estate. Under this provision, it has been uniformly held by this court that, if the plaintiff
elects one of the two remedies thus provided, he waives the other, and if he fails, he fails
utterly.
3. ID.; ID.; ID.; PRINCIPLE FOLLOWED IN ORDINARY ACTIONS. There is indeed no valid
reason for not following the same principle of procedure in ordinary civil actions. With the
substitution of the administrator or executor in place of the deceased, or of the assignee or
receiver in place of the insolvent debtor, the position of the parties plaintiff and' defendant in
the litigation is exactly the same in special or insolvency proceedings as in ordinary civil actions.
4. ID.; ID.; ID.; RULE AGAINST SPLITTING A SINGLE CAUSE OF ACTION. Even if section
708 of the Code of Civil Procedure, or section 59 of the Insolvency Law were not in the attitude
books, there is still the rule against splitting a single cause of action. This rule, though not
contained in duly statutory provision, has been applied by this court in all appropriate cases.
The rule against splitting a single cause of action is intended "to prevent repeated litigation
between the same parties in regard to the same subject of controversy; to protect defendant
from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits."
(1 C. J., 1107.) It comes from that old maximum nemo debet bis vexare pro una et eadem causa
(no man shall be twice vexed for one and the same cause). And it developed, certainly not as
an original legal right of the defendant, but as an interposition of courts upon principles of
public policy to prevent inconvenience and hardship incident to repeated and unnecessary
litigations. (1 C. J., 1107.)
5. ID.; ID.; ID.; ID. For non-payment of a note secured by mortgage, the creditor has
a single cause of action against the debtor. This single cause of action consists in the recovery
of the credit with execution of the security. In other words, the creditor in his action may make
two demands, the payment of the debt and the foreclosure of his mortgage. But both demands
arise from the same cause, the non-payment of the debt, and, for that reason, they constitute
a single cause of action.
6. ID.; ID.; ID.; ID. Though the debt and the mortgage constitute separate
agreements, the latter is subsidiary to the former, and both refer to one and the same
obligation. Consequently, there exists only one cause of action for a single breach of that
obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single cause of
action by filing a complaint for payment of the debt, and thereafter another complaint for
foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the
subsequent complaint.
7. ID.; ID.; ID.; ID. BY allowing the creditor to file two separate complaints
simultaneously or successively, one to recover his credit and another to foreclose his mortgage,
the court would in effect, be authorizing him plural redress for a single breach of contract at
so much cost to the courts and with so much vexation and oppression to the debtor. In the
absence of express statutory provisions, a mortgage creditor may institute against the
mortgage debtor either a personal action for debt or a real action to foreclose the mortgage.
8. ID.; ID.; ID.; ID. A rule that would authorize the plaintiff to bring a personal action
against the debtor and simultaneously or successively another action against the mortgaged
property, would result not only in multiplicity of suits so offensive to justice, but also in
subjecting the defendant to the vexation of being sued in the place of his residence or of the
residence of the plaintiff, and then again in the place where the property lies.
9. ID., ID.; ID.; ID. The creditor's cause of action is not only single but indivisible,
although the agreements of the parties, evidenced by the note and the deed of mortgage, may
give rise to different remedies. (Frost vs. Witter, 132 Cal., 421.) The cause of action should not
be confused with the remedy created for its enforcement. And considering, that one of the
two remedies available to the creditor is as complete as the other, he cannot be allowed to
pursue both in violation of those principles of procedure intended to secure simple, speedy,
and unexpensive administration of justice.
DECISION
MORAN, J p:
On June 11, 1930, defendant herein, Esteban Icaragal, with one Jacinto Figueroa, for value
received, executed in favor of the plaintiff, Bachrach Motor Co., Inc., a promissory note for one
thousand six hundred fourteen pesos (P1,614), and in security for its payment, said Esteban
4
Icaragal executed a real estate mortgage on a parcel of land in Pagil, Laguna, which was duly
registered on August 5, 1931, in the registry of deeds of the Province of Laguna. Thereafter,
promissors defaulted in the payment of the agreed monthly installments; wherefore, plaintiff
instituted in the Court of First Instance of Manila an action for the collection of the amount
due on the note. Judgment was there rendered for the plaintiff. A writ of execution was
subsequently issued and, in pursuance thereof, the provincial sheriff of Laguna, at the
indication of the plaintiff, levied on the properties of the defendants, including that which has
been mortgaged by Esteban Icaragal in favor of the plaintiff. The other defendant herein
Oriental Commercial Co., Inc., interposed a third-party claim, alleging that by virtue of a writ
of execution issued in civil case No. 88253 of the municipal court of the City of Manila, the
property which was the subject of the mortgage and which has been levied upon by the sheriff,
had already been acquired by it at the public auction on May 12, 1933. By reason of this third-
party claim, the sheriff desisted from the sale of the property and, in consequence thereof, the
judgment rendered in favor of the plaintiff remained unsatisfied. Whereupon, plaintiff
instituted an action to foreclose the mortgage. The trial court dismissed the complaint and,
from the judgment thus rendered, plaintiff took the present appeal.
The sole question before us is whether or not plaintiff-appellant is barred from foreclosing the
real estate mortgage after it has elected to sue and obtain a personal judgment against the
defendant-appellee on the promissory note for the payment of which the mortgage was
constituted as a security.
In Hijos de I. de la Rama vs. Saio (45 Phil., 703), the mortgage creditor, instead of instituting
proceedings for the foreclosure of his mortgage, filed a personal action for the recovery of the
debt. The mortgage debtor objected to the action, alleging that, if it be allowed, he would be
subjected to two suits, one personal and another for the foreclosure of the mortgage. We
answered this objection, laying down the rule that "in the absence of statutory provisions, the
mortgagee may waive the right to foreclose his mortgage and maintain a personal action for
the recovery of the indebtedness." And we emphasized the doctrine in the later part of our
decision by saying that "the rule is well established that the creditor may waive whatever
security he has and maintain a personal action, in the absence of statutory provisions to the
contrary." (P. 705.)
It is true that in Matienzo vs. San Jose (G. R. No. 39510, June 16, 1934), a decision of three
justices of this court ruled that "apart from special proceedings regulated by statute, an
unsatisfied personal judgment for a debt is no bar to an action to enforce a mortgage or other
lien given as security for such debt." But this decision cannot be made to prevail over a decision
given by this court in banc. Besides, the rule laid down in the De la Rama case is more in
harmony with the principles underlying our procedural system.
Most of the provisions of our Code of Civil Procedure are taken from that of California, and in
that jurisdiction the rule has always been, and still is, that a party who sues and obtains a
personal judgment against a defendant upon a note, waives thereby his right to foreclose the
mortgage securing it. (Ould vs. Stoddard, 54 Cal., 613; Felton vs. West, 102 Cal., 266; Craiglow
vs. Williams, 514 Cal. App., 45; 188 Pac., 76, following doctrine in Biddel vs. Brizzolara, 64 Cal.,
354; 30 Pac., 609; Brown vs. Willis, 67 Cal., 235; 7 Pac., 682; Barbieri vs. Ramelli, 84 Cal., 154;
23 Pac., 1086; Toby vs. Oregon Pac. R. Co., 98 Cal., 490; 33 Pac., 550; McKean vs. German-
American Sav. Bank., 118 Cal., 334; 50 Pac., 656; Woodward vs. Brown, 119 Cal., 283; 63 Am.
St. Rep., 108; 51 Pac., 2, 542; Meyer vs. Weber, 133 Cal., 681; 65 Pac., 1110; Crisman vs.
Lanterman, 149 Cal., 647, 651; 117 Am. St. Rep., 167; 87 Pac., 89; Gnarin vs. Swiss American
Bank, 102 Cal., 181; 121 Pac., 726.) The same rule obtains in the States of Idaho, Montana,
Nevada and Utah. (See 2 Johns on Mortgages, 986, 101a, 1019, 1046.) It is true that this rule
is founded on express statutory provisions to that effect. We have here, however, section 708
of our Code of Civil Procedure which provides that a creditor holding a claim against the
deceased, secured by a mortgage or other collateral security, has to elect between enforcing
such security or abandoning it by presenting his claim before the committee and share in the
general assets of the estate. Under this provision, it has been uniformly held by this court that,
if the plaintiff elects one of the two remedies thus provided, he waives the other, and if he
fails, he fails utterly. (Veloso vs. Heredia, 33 Phil., 306; Cf. Osorio vs. San Agustin, 25 Phil., 404.)
The same rule applies under the Insolvency Law. (Sec. 59, Act No. 1956; Unson and Lacson vs.
Central Capiz, 47 Phil., 42; Chartered Bank of India, Australia and China vs. Imperial, 48 Phil.,
931; O'Brien vs. Del Rosario and Bank of the Philippine Islands, 49 Phil., 657.) There is indeed
no valid reason for not following the same principle of procedure in ordinary civil actions. With
the substitution of the administrator or executor in place of the deceased, or of the assignee
or receiver in place of the insolvent debtor, the position of the parties plaintiff and defendant
in the litigation is exactly the same in special or insolvency proceedings as in ordinary civil
actions.
But, even if we have no such section 708 of our Code of Civil Procedure, or section 59 of the
Insolvency Law, we have still the rule against splitting a single cause of action. This rule, though
not contained in any statutory provision, has been applied by this court in all appropriate cases.
Thus, in Santos vs. Moir (36 Phil., 350, 359), we said: "It is well recognized that a party cannot
split a single cause of action into parts and sue on each part separately. A complaint for the
recovery of personal property with damages for detention states a single cause of action which
cannot be divided into an action for possession and one for damages; and if suit is brought for
possession only a subsequent action cannot be maintained to recover the damages resulting
from the unlawful detention." In Rubio de Larena vs. Villanueva (53 Phil., 923, 927), we
reiterated the rule by stating that" . . . a party will not be permitted to split up a single cause
of action and make it the basis for several suits" and that when a lease provides for the
payment of the rent in separate installments, each installment constitutes an independent
cause of action, but when, at the time the complaint is filed, there are several installments due,
all of them constitute a single cause of action and should be included in a single complaint, and
if some of them are not so included, they are barred. The same doctrine is stated in Lavarro vs.
5
Labitoria (54 Phil., 788), wherein we said that "a party will not be permitted to split up a single
cause of action and make it a basis for several suits" and that a claim for partition of real
property as well as for improvements constitutes a single cause of action, and a complaint for
partition alone bars a subsequent complaint for the improvements. And in Blossom & Co. vs.
Manila Gas Corporation (55 Phil., 226, 240), we held that "as a general rule a contract to do
several things at several times is divisible in its nature, so as to authorize successive actions;
and a judgment recovered for a single breach of a continuing contract or covenant is no bar to
a suit for a subsequent breach thereof. But where the covenant or contract is entire, and the
breach total, there can be only one action, and plaintiff must therein recover all his damages."
The rule against splitting a single cause of action is intended "to prevent repeated litigation
between the same parties in regard to the same subject of controversy; to protect defendant
from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits."
(1 C. J., 1107.) It comes from that old maxim nemo bedet bis vexare pro una et eadem, cause
(no man shall be twice vexed for one and the same cause). (Ex parte Lange, 18 Wall., 163, 168;
21 Law. ed., 872; also U. S. vs. Throckmorton, 98 U. S., 61; 25 Law. ed., 93.) And it developed,
certainly not as an original legal right of the defendant, but as are interposition of courts upon
principles of public policy to prevent inconvenience and hardship incident to repeated and
unnecessary litigations. (1 C. J., 1107.)
For non-payment of a note secured by mortgage, the creditor has a single cause of action
against the debtor. This single cause of action consists in the recovery of the credit which
execution of the security. In other words, the creditor in his action may make two demands,
the payment of the debt and the foreclosure of his mortgage. But both demands arise from
the same cause, the non-payment of the debt, and, for that reason, they constitute a single
cause of action. Though the debt and the mortgage constitute separate agreements, the latter
is subsidiary to the former, and both refer to order and the same obligation. Consequently,
there exists only one cause of action for a single breach of that obligation. Plaintiff, then, by
applying the rule above stated, cannot split up his single cause of action by filing a complaint
for payment of the debt, and thereafter another complaint for foreclosure of the mortgage. If
he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the
creditor to file two separate complaints simultaneously or successively, one to recover his
credit and another to foreclose his mortgage, we will, in effect, be authorizing him plural
redress for a single breach of contract at so much cost to the courts and with so much vexation
and oppression to the debtor.
We hold, therefore, that, in the absence of express statutory provisions, a mortgage creditor
may institute against the mortgage debtor either a personal action for debt or a real action to
foreclose the mortgage. In other words he may pursue either of the two remedies, but not
both. By such election, his cause of action can by no means be impaired, for each of the two
remedies is complete in itself. Thus, an election to bring a personal action will leave open to
him all the properties of the debtor for attachment and execution, even including the
mortgaged property itself. And, if he waives such personal action and pursues his remedy
against the mortgaged property, an unsatisfied judgment thereon would still give him the right
to sue for a deficiency judgment, in which case, all the properties of the defendant, other than
the mortgaged property, are again open to him for the satisfaction of the deficiency. In either
case, his remedy is complete, his cause of action undiminished, and any advantages attendant
to the pursuit of one or the other remedy are purely accidental and are all under his right of
election. On the other hand, a rule that would authorize the plaintiff to bring a personal action
against the debtor and simultaneously or successively another action against the mortgaged
property, would result not only in multiplicity of suits so offensive to justice (Soriano vs.
Enriques, 24 Phil., 584) and obnoxious to law and equity (Osorio vs. San Agustin, 25 Phil., 404),
but also in subjecting the defendant to the vexation of being sued in the place of his residence
or of the residence of the plaintiff, and then again in the place where the property lies.
In arriving at the foregoing conclusion, we are not unaware of the rule prevailing in certain
States American Union, to the enact that, in cases like the one at bar, the creditor can pursue
his remedies against the note and against the. security concurrently or successively. The
reason given for the rule seems to be that the causes of auctioning the two instances are not
the same, one being personal and the other, real. But, as we have heretofore stated, the
creditor's cause of action is not only single but indivisible, although the agreements of the
parties, evidenced by the note and the deed of mortgage, may give rise to different remedies.
(Frost vs. Witter, Cal., 421.) The cause of action should not be confused with the remedy
created for its enforcement. And considering, as we have shown, that one of the two remedies
available to the creditor is as complete as the other, he cannot be allowed to pursue both in
violation of those principles of procedure intended to secure simple, speedy and unexpensive
administration of justice. Judgment is affirmed, with costs against the appellant.
Avancea, C. J., Villa-Real, and Concepcion, JJ., concur.
6
[G.R. No. 35453. September 15, 1989.]
INDUSTRIAL FINANCE CORPORATION, petitioner, vs. HON. SERGIO A. F. APOSTOL, Judge of
the Court of First Instance of Rizal, Branch XVI, Quezon City, JUAN DELMENDO and
HONORATA DELMENDO and JOAQUIN PADILLA and SOCORRO PADILLA, respondents.
Santos S. Carlos for petitioner.
Elizardo Delmendo for private respondents.
SYLLABUS
1. CIVIL LAW; CREDIT TRANSACTIONS; MORTGAGE; REAL ESTATE; REMEDY OF
MORTGAGE CREDITOR; ACTION TO RECOVER BARS FURTHER REMEDY. In Manila Trading
and Supply Co. v. Co Kim and So Tek, we declared: "The rule is now settled that a mortgage
creditor may elect to waive his security and bring, instead, an ordinary action to recover the
indebtedness with the right to execute a judgment thereon on all the properties of the debtor,
including the subject-matter of the mortgage, subject to the qualification that if he fails in the
remedy by him elected, he cannot pursue further the remedy he has waived."
2. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. By instituting Civil Case No. Q-14417 in the Court
of First Instance of Rizal (Quezon City) to recover the unpaid balance on the promissory note
from the Padilla spouses and by subsequently obtaining a judgment in its favor, petitioner IFC
is considered to have abandoned its mortgage lien on the subject property covered by Transfer
Certificate of Title No. T-133625. The end result is the discharge of the real estate mortgage
and the Delmendos, having purchased the mortgaged property, automatically step into the
shoes of the original mortgagors with every right to have the title delivered to them free from
said encumbrance.
DECISION
FERNAN, C.J p:
The present petition is a direct appeal from the summary judgment dated March 15, 1972 of
the then Court of First Instance of Rizal, Branch 16 (Quezon City) in Civil Case No. Q-15942
entitled "Juan A. Delmendo and Honorata Delmendo v. Joaquin Padilla and Socorro Padilla and
Industrial Finance Corporation" as well as the order of said court dated July 7, 1972 denying
petitioner's motion for reconsideration of said judgment.
As gathered from the records, the facts are as follows:
In 1968, spouses Joaquin Padilla and Socorro Padilla bought on credit three units of Isuzu trucks
from the Industrial Transport and Equipment, Inc. They executed a promissory note for
P159,600, the balance of the purchase price, securing payment thereof by a chattel mortgage
of said trucks and, as additional collateral, a real estate mortgage on their property covered by
Transfer Certificate of Title No. T-133625 in favor of the seller. 1 Subsequently, Industrial
Transport and Equipment, Inc. indorsed the note and assigned the real estate mortgage to
petitioner Industrial Finance Corporation (IFC), which assignment was duly registered in the
Registry of Deeds of Quezon City and annotated on the title of the mortgaged realty. prcd
On May 15, 1970, in view of the failure of the Padillas to pay several installments on the note,
the assignee IFC sued Joaquin Padilla in the Court of First Instance of Rizal (Quezon City) for
the recovery of the unpaid balance on the note including attorney's fees. 2
In due time, decision was rendered on April 16, 1975, the dispositive portion of which reads:
"WHEREFORE, premises considered judgment is hereby rendered in favor of plaintiff (IFC) and
against defendant (Joaquin Padilla) to pay plaintiff.
"A. the sum of P82,996.75 with twelve (12%) percent interest per annum from the date
of the filing of the complaint until fully paid;
"B. to pay attorney's fees in the amount of P20,749.93 equivalent to 25% of the whole
amount due; and
"C. to pay the costs of this suit." 3
On appeal to the Court of Appeals, the trial court was sustained except for the modification
that the attorney's fees were reduced to 12% of the balance. 4 As no appeal was brought by
either of the parties, the appellate court decision became final and executory.
Meanwhile, on September 9, 1971, private respondents Juan Delmendo and Honorata
Delmendo filed a complaint against petitioner IFC, as principal party, and the Padilla spouses,
as formal parties, in respondent Court of First Instance (Civil Case No. Q-15942). The
Delmendos alleged that they were the transferees of the real property covered by Transfer
Certificate of Title No. T-133625 of the Quezon City Register of Deeds which was mortgaged
earlier by the Padillas to the Industrial Transport and Equipment, Inc. to secure the payment
of a promissory note in the sum of P159,600 and then assigned to petitioner IFC. The
Delmendos prayed for the cancellation of the mortgage lien annotated on Transfer Certificate
of Title No. T-133625 and the delivery to them by petitioner of the owner's copy of said title
with damages and attorney's fees, considering that petitioner IFC had waived its rights over
the mortgage when it instituted a personal action against the Padillas in Civil Case No. Q-14417
for collection of a sum of money.
Petitioner IFC moved for the dismissal of the complaint, contending that it had not waived its
right over the mortgage lien. Cdpr
The Delmendos filed a motion for summary judgment which respondent trial court granted.
Thus:
7
"WHEREFORE, for being meritorious, the same is hereby granted. Judgment is rendered, as
prayed for in the Complaint.
"a) declaring the real estate mortgage in favor of the Industrial Transport and Equipment
Corporation and the assignment thereof in favor of the Industrial Finance Corporation
forfeited, waived and abandoned, and therefore released pursuant to law and jurisprudence;
"b) ordering the Register of Deeds of Quezon City to remove and cancel from Transfer
Certificate of Title No. 133625, Book T-672, Page 25, the annotations of the real estate
mortgage (PE-8612/T-133625 and of the assignment of mortgage (PE-8768/T-133265);
"c) ordering the defendant Industrial Finance Corporation to surrender to the Register
of Deeds of Quezon City the owner's copy of TCT No. T-133626 upon receipt of this order; and
"d) with costs against the defendants.
"SO ORDERED." 5
Upon denial of its motion for reconsideration, petitioner IFC came to this Court raising the
issue of whether, by filing a personal action for the recovery of a debt secured by a real estate
mortgage, petitioner is deemed to have abandoned, ipso jure, its mortgage lien on the
property in question.
The above question is certainly far from novel. In a host of decided cases, the most recent of
which is Danao v. Court of Appeals, 6 this Court has resolved this issue in the affirmative.
In Manila Trading and Supply Co. v. Co Kim and So Tek, 7 we declared: Cdpr
"The rule is now settled that a mortgage creditor may elect to waive his security and bring,
instead, an ordinary action to recover the indebtedness with the right to execute a judgment
thereon on all the properties of the debtor, including the subject-matter of the mortgage,
subject to the qualification that if he fails in the remedy by him elected, he cannot pursue
further the remedy he has waived."
The case of Bachrach Motor Co., Inc. v. Icarangal and Oriental Commercial Co., Inc., 8 which
similarly involves a promissory note secured by a real estate mortgage, gives us an extensive
discussion on the rule, to wit:
"For non-payment of a note secured by mortgage, the creditor has a single cause of action
against the debtor. This single cause of action consists in the recovery of the credit with
execution of the security. In other words, the creditor in his action may make two demands,
the payment of the debt and the foreclosure of his mortgage. But both demands arise from
the same cause, the non-payment of the debt, and, for that reason, they constitute a single
cause of action. Though the debt and the mortgage constitute separate agreements, the latter
is subsidiary to the former, and both refer to one and the same obligation. Consequently, there
exists only one cause of action for a single breach of that obligation. Plaintiff, then, by applying
the rule above stated, cannot split up his single cause of action by filing a complaint for
foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the
subsequent complaint. By allowing the creditor to file two separate complaints simultaneously
or successively, one to recover his credit and another to foreclose his mortgage, we will, in
effect, be authorizing him plural redress for a single breach of contract at so much cost to the
courts and with so much vexation and oppression to the debtor.
"We hold, therefore, that, in the absence of express statutory provisions, a mortgage creditor
may institute against the mortgage debtor either a personal action for debt or a real action to
foreclose the mortgage. In other words, he may pursue either of the two remedies, but not
both. By such election, his cause of action can by no means be impaired, for each of the two
remedies is complete in itself. Thus, an election to bring a personal action will leave open to
him all the properties of the debtor for attachment and execution, even including the
mortgaged property itself. And, if he waives such personal action and pursues his remedy
against the mortgaged property, an unsatisfied judgment thereon would still give him the right
to sue for a deficiency judgment, in which case, all the properties of the defendant, other than
the mortgaged property, are again open to him for the satisfaction of the deficiency. In either
case, his remedy is complete, his cause of action undiminished, and any advantages attendant
to the pursuit of one or the other remedy are purely accidental and are all under his right of
election."
We likewise held in Movido v. RFC and the Provincial Sheriff of Samar, 9 that "a mortgagee
who sues and obtains a personal judgment against a mortgagor upon his credit waives thereby
his right to enforce the mortgage securing it."
Therefore, by instituting Civil Case No. Q-14417 in the Court of First Instance of Rizal (Quezon
City) to recover the unpaid balance on the promissory note from the Padilla spouses and by
subsequently obtaining a judgment in its favor, petitioner IFC is considered to have abandoned
its mortgage lien on the subject property covered by Transfer Certificate of Title No. T-133625.
The end result is the discharge of the real estate mortgage and the Delmendos, having
purchased the mortgaged property, automatically step into the shoes of the original
mortgagors with every right to have the title delivered to them free from said encumbrance.
LLphil
WHEREFORE, finding no error in the summary judgment under appeal, the same is hereby
affirmed in toto.
Considering the length of time that this case has been pending, this decision is declared
immediately executory.
SO ORDERED.
8
[G.R. No. 53564. February 27, 1987.]
JUAN BAYANG, petitioner, vs. HON. COURT OF APPEALS and BENIGNO BIONG, respondents.
Rodrigo Matutina for petitioner.
Luceniano E. Lancin for private respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMARY JUDGMENT; PROPER WHERE NO
SERIOUS CONTROVERSY EXISTS; CASE AT BAR. In its decision, the Court of Appeals quoted
the following excerpt from Singleton vs. Philippine Trust Co. on the nature and functions of the
summary judgment: "Summary judgment is one of the methods sanctioned in the present
Rules of Court for a prompt disposition of civil actions wherein there exists no serious
controversy. The procedure may be availed of not only by claimants, but also by defending
parties who may be the object of unfounded claims. A motion for summary judgment assumes
that scrutinizing of the facts will disclose that the issues presented by the pleadings need not
be tried because they are so patently unsubstantial as not to be genuine issues, or that there
is no genuine issue to any material facts or where the facts appear undisputed and certain
from the pleadings, depositions, admissions and affidavits." We hold that there was no
genuine or triable issue of fact raised by the parties, in view particularly of the affirmative
defense of res judicata invoked by the private respondent. That defense is sustained
2. ID.; ID.; RES JUDICATA; ELEMENTS. A long line of decisions has consistently held
that for res judicata to apply: a) the former judgment must be final; b) it must have been
rendered by a court having jurisdiction over the subject matter and the parties; c) it must be a
judgment on the merits; and d) there must be between the first case and second case identity
of parties, identity of subject matter and identity of cause of action.
3. ID.; ID.; ID.; ID.; CASE AT BAR. The decision in Civil Case No. 1892 became final and
executory on February 2, 1978. There is no dispute that the trial court which rendered that
decision had jurisdiction over the subject-matter and the parties to the proceeding. The case
was tried on the merits. The parties to Civil Case No. 1892 and the subsequent Civil Case No.
2589 are the same petitioner and private respondent now before us. The petitioner would
draw a distinction between the land in dispute in Civil Case No. 1892 and the income from that
land being claimed in Civil Case No. 2589. But that is in our view splitting hairs to split a cause
of action. The subject matter is essentially the same in both cases as the income is only a
consequence or accessory of the disputed property. Clearly, then, Civil Case No. 2589 is barred
by the previous judgment in Civil Case No. 1892. This being so, it should follow that the trial
judge committed no grave abuse of discretion in deciding the latter case by summary judgment.
DECISION
CRUZ, J p:
Sometime in November 1969, Juan Bayang filed a complaint for quieting of title with damages
against Benigno Biong in the Court of First Instance of Surigao del Norte, Branch I, docketed as
Civil Case No. 1892. 1 In 1970, while the case was pending, Biong succeeded in dispossessing
the plaintiff of the land in question and remained there until January 25, 1978. 2 On February
21, 1972, the case was decided in favor of Biong, but the Court of Appeals on December 8,
1977, reversed the trial court, declaring in the dispositive portion of its decision:
"WHEREFORE, the judgment appealed from is reversed and appellants are hereby declared
owner of the property in litigation, and defendant-appellee are (sic) hereby ordered to pay
appellant the sum of P56.40 as the latter's share in the proceeds from the sale of the copra
derived from the third harvest of coconuts from the same land, and P1,000.00 as attorney's
fees, and costs of litigation." 3
This decision became final on February 2, 1978. cdasia
On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI
of Surigao del Norte, Branch II, seeking to recover from Biong the incomes earned from the
same land from 1970 up to the quarterly incomes from 1978 until the said land was delivered
to the plaintiff. 4 At the pre-trial conference held on July 10, 1978, the counsel for Bayang
admitted that as of January 25, 1978, Biong had already surrendered possession of the land in
question to Bayang. 5 On August 16, 1978, Biong filed a motion for summary judgment,
reiterating the affirmative defense of res judicata raised in his answer dated April 12, 1978,
insofar as it related to the incidents concerning the case prior to January 25, 1978. 6 An
opposition to this motion was duly filed by Bayang. 7
The trial court, after considering the arguments of the parties, granted the motion and
rendered a summary judgment on October 30, 1978. 8 The said decision was sustained by the
Court of Appeals, and Bayang is now before us in this petition for review by certiorari under
Rule 45 of the Rules of Court.
His assignment of errors raises two basic submissions, to wit:
1. Civil Case No. 2589 should not have been decided by summary judgment. cdlex
2. The judgment in CA-G.R. No. 54720-R (appeal from judgment in Civil Case No. 1892)
did not constitute res judicata as to bar Civil Case No. 2589.
Both contentions are incorrect. We rule for the respondents.
In its decision, the Court of Appeals quoted the following excerpt from Singleton v. Philippine
Trust Co. 9 on the nature and functions of the summary judgment:
9
"Summary judgment is one of the methods sanctioned in the present Rules of Court for a
prompt disposition of civil actions wherein there exists no serious controversy. The procedure
may be availed of not only by claimants, but also by defending parties who may be the object
of unfounded claims. A motion for summary judgment assumes that scrutinizing of the facts
will disclose that the issues presented by the pleadings need not be tried because they are so
patently unsubstantial as not to be genuine issues, or that there is no genuine issue as to any
material facts or where the facts appear undisputed and certain from the pleadings,
depositions, admissions and affidavits."
We hold that there was no genuine or triable issue of fact raised by the parties, in view
particularly of the affirmative defense of res judicata invoked by the private respondent. That
defense is sustained. LexLib
A long line of decisions has consistently held that for res judicata to apply: a) the former
judgment must be final; b) it must have been rendered by a court having jurisdiction over the
subject matter and the parties; c) it must be a judgment on the merits; and d) there must be
between the first case and the second case identity of parties, identity of subject matter and
identity of cause of action. 10
The decision in Civil Case No. 1892 became final and executory on February 2, 1978. There is
no dispute that the trial court which rendered that decision had jurisdiction over the subject
matter and the parties to the proceeding. The case was tried on the merits. The parties to Civil
Case No. 1892 and the subsequent Civil Case No. 2589 are the same petitioner and private
respondent now before us.
The petitioner would draw a distinction between the land in dispute in Civil Case No. 1892 and
the income from that land being claimed in Civil Case No. 2589. But that is in our view splitting
hairs to split a cause of action. The subject-matter is essentially the same in both cases as the
income is only a consequence or accessory of the disputed property. We cannot agree that
there are involved here two causes of action calling for two separate cases. The claim for the
income from the land was incidental to, and should have been raised by Bayang in his earlier
claim for, ownership of the land.
We note that while the first case was pending, the private respondent, by the petitioner's own
account, "succeeded in dispossessing" him of the disputed land 11 and that at the pretrial
conference on Civil Case No. 2589, Bayang's counsel admitted that Biong had vacated the said
property as of January 25, 1978. 12 This means that from 1970 to the date the respondent
surrendered the property in 1978, Biong was presumably collecting and enjoying the income
therefrom to the exclusion of the petitioner.
Civil Case No. 1892 was commenced in November 1969 and was finally decided only on
February 2, 1978. The private respondent entered the disputed property in 1970 and left it
only in 1978. For about seven years, therefore, the petitioner made no move at all to amend
his complaint to include a claim for the income supposedly received by the private respondent
during that period.
Under Rule 10, Section 6, of the Rules of Court. liblex
"SECTION 6. Matters subject of supplemental pleadings. Upon motion of a party the
court may, upon reasonable notice and upon such terms as are just, permit him to serve a
supplemental pleading setting forth transactions, occurrence or events which have happened
since the date of the pleading sought to be supplemented. If the court deems it advisable that
the adverse party should plead thereto, it shall so order, specifying the time therefor."
In the case of Jalandoni v. Martin-Guanzon, 13 this Court declared through Justice J.B.L. Reyes:
"As to the value of the plaintiff's share in the products of the land during the time that the
former action was pending (which are the damages claimed under the second cause of action),
their recovery is now barred by the previous judgment. These damages are but the result of
the original cause of action, viz., the continuing refusal by defendants in 1941 to recognize the
plaintiff's right to an interest in the property. In the same way that plaintiffs claimed for their
share of the produce from 1941 to 1947, these later damages could have been claimed in the
first action, either in the original complaint (for their existence could be anticipated when the
first complaint was filed) or else by supplemental pleading. To allow them to be recovered by
subsequent suit would be a violation of the rule against multiplicity of suits, and specifically of
sections 3 and 4 of Rule 2 of the Rules of Court, against the splitting of causes of action, since
these damages spring from the same cause of action that was pleading (sic) in the former case
No. 573 between the same parties (Blossom & Co., Inc. v. Manila Gas Corporation, 55 Phil. 226;
Santos v. Moir, 36 Phil. 350; Pascua v. Sideco; 24 Phil. 26; Bachrach Motor Co. v. Icarangal, 68
Phil. 287)."
And in another case, 14 the same jurist declared:
"Urtula, as defendant in the expropriation case, could have raised the matter of interest before
the trial court even if there had been no actual taking yet by the Republic and the said court
could have included the payment of interest in its judgment but conditioned upon the actual
taking, because the rate of interest upon the amount of just compensation (6%) is a known
factor, and it can reasonably be expected that at some future time, the expropriator would
take possession of the property, though the date be not fixed. In this way, multiple suits would
be avoided. Moreover, nothing prevented appellee from calling the attention of the appellate
courts (even by motion to reconsider before judgment became final) to the subsequent taking
of possession by the condemnor, and asking for allowance of interest on the indemnity since
that followed the taking as a matter of course, and raised no issue requiring remand of the
records to the Court of origin. pred
10
"As the issue of interest could have been raised in the former case but was not raised, res
judicata blocks the recovery of interest in the present case. (Tejedor vs. Palet, 61 Phil. 494; Phil.
Engineering Corp., et al. vs. Ceniza, etc., et al., L-17834, 29 Sept. 1962). It is settled that a
former judgment constitutes a bar, as between the parties, not only as to matters expressly
adjudged, but all matters that could have been adjudged at the time (Rule 39, sec. 49; Corda
vs. Maglinti, L-17476, Nov. 30, 1961; Rodriguez vs. Tan, 48 Off. Gaz. 3330)."

Clearly, then, Civil Case No. 2589 is barred by the previous judgment in Civil Case No. 1892.
This being so, it should follow that the trial judge committed no grave abuse of discretion in
deciding the latter case by summary judgment.

We are not unmindful of the argument that affirmance of the challenged decision of the
respondent court will result in the unjust enrichment of Biong at the expense of Bayang. This
assumes, of course, that the petitioner could have proved his right to the income he now claims
belatedly. The point is that he did not make the proper claim at the proper time and in the
proper proceedings, and he cannot do it now. Whatever right he might have had is now
deemed waived because of his neglect. LLpr

Nemo debet bis vexare pro una et eadem causa. This has to be so if litigants are to be spared
the annoyance, anxiety and expense that could otherwise be inflicted upon them endlessly by
capricious, malicious or vindictive suitors.

WHEREFORE, the petition is dismissed, and the appealed decision is affirmed. Costs against
the petitioner.

SO ORDERED.

11
[G.R. No. 7154. February 21, 1912.]
ELEANOR ERICA STRONG ET AL., plaintiffs-appellees, vs. FRANCISCO GUTIERREZ REPIDE,
defendant-appellant.
Chicote & Miranda and Tirso de Irureta Goyena for appellant
Bruce, Lawrence, Ross & Block for appellees.
SYLLABUS
1. EFFECT OF SATISFACTION OF A JUDGMENT; PRESUMPTION. The satisfaction of a
judgment reaches no further than the terms of the judgment itself. It is to be presumed that
the instrument satisfying the judgment or obligation, manifested in another instrument,
extends no further than the terms of the instrument which manifests the obligation to be
discharged, unless, from the terms of that instrument, it appears that the parties intended
something more.
2. ACTION TO RECOVER SHARES OF STOCK; JUDGMENT FOR RETURN OF STOCK DOES
NOT INCLUDE DIVIDENDS ACCRUING DURING THE ACTION. Where an action is begun for
the recovery of certain shares of stock, alleged to have been obtained by the defendant by
means of false and fraudulent representations, and no mention is made in the complaint of
the dividends upon said stock which shall accrue during the action, and where no proof is made
upon the trial as to the dividends so accruing, a judgment in said action ordering the return of
the stock or, in default thereof, the payment of a specific sum as the market value thereof,
does not include such dividends.
3. SATISFACTION OF JUDGMENT FOR RETURN OF STOCK, NOT A SATISFACTION OF THE
DIVIDENDS. A satisfaction of such a judgment is not a satisfaction of the dividends accruing
during the progress of the action.
4. PLEADING AND PRACTICE; JOINDER OF ALL CAUSES IN ONE COMPLAINT;
MULTIPLICITY OF ACTIONS; TIMELY OBJECTION. A plaintiff, in bringing an action, should join
in one complaint all the causes of action which he may have against the defendant, which can
properly be joined under law. If he does not do so, but begins a second action to recover upon
a cause of action which existed at the time of the beginning of the first action, the defendant
may raise the question by timely objection or plea. Such objection should be made in the trial
court; it can not be raised for the first time in the Supreme Court.
DECISION
MORELAND, J p:
Prior to October 10, 1903, the plaintiff, Eleanor Erica Strong, was the owner of 800 shares of
the capital stock of the Philippine Sugar Estates Development Company, Limited (sociedad
anonima), of the par value of P100 each, evidenced by certificates Nos. 2125 to 2924, inclusive.
On the said 10th day of October, 1903, the defendant, Francisco Gutierrez Repide, by means
subsequently found and adjudged to have been fraudulent, obtained possession of said shares
and thereafter alleged to be the owner thereof. On the 12th day of January, 1904, the plaintiff
commenced an action against the defendant in the Court of First Instance of the city of Manila
(case No. 2365) asking that the fraudulent sale by means of which the defendant obtained
possession of the said shares be declared null and void and that they be returned to her. On
the 29th of April, 1904, the Court of First Instance of the city of Manila rendered its decision,
finding in part as follows:
"Upon the facts stated, the court holds that the sale of these shares was made without the
authority of Mrs. Strong, that she never ratified the sale but repudiated it as soon as she
learned of it, that this sale was induced by fraud on the part of the defendant, and therefore
was a fraudulent sale.
"The court, therefore, declares that the purchase of these shares of stock by the defendant is
fraudulent and void, and it is ordered by the court that the same be set aside and for nothing
held."
This judgment fixed the value of the shares at P138,352.71, awarding judgment in this amount
to the plaintiff and directing that the said judgment might be satisfied by defendant's
delivering to the plaintiff the said shares, in which event the plaintiff should pay to the
defendant $16,000 Mexican currency, or its equivalent in Philippine currency. This judgment
was, on appeal to the Supreme Court of the Philippine Islands, reversed, and plaintiff's
complaint dismissed on the merits. Thereupon plaintiff prosecuted an appeal to the Supreme
Court of the United States, which court, on the 3d of May, 1909, rendered its judgment,
reversing the decision of the Supreme Court of the Philippine Islands and affirming the
judgment of the trial court. On the 27th of July, 1909, the said judgment of April 29, 1904, was
satisfied by defendant's returning to the plaintiff 800 shares of stock of said company,
evidenced by certificates Nos. 1621, 1623, 1624, 1625, 1626, 1628, 1629, and 1630, and the
payment by the plaintiff to the defendant of P14,159.29 Philippine currency, equivalent to
$16,000 Mexican currency. Said satisfaction was effected by means of a stipulation or
agreement entered into between the attorneys for the plaintiff and the defendant, in which
the satisfaction of the judgment was acknowledged by both parties. From the 10th day of
October, 1903, the date of the said fraudulent purchase by the defendant, until the 27th day
of July, 1909, the defendant retained said shares in his possession or under his control and
after the rendition of said judgment of April 29, 1904, collected the dividends earned by said
shares for the years 1905, 1906, 1907, and 1908 at the rate of 6 per cent per annum, amounting
to a total of P19,200, which sum the defendant retained and refused to pay over to the plaintiff.
After demand upon and refusal by the defendant, the plaintiff began this action for the
recovery of said sum. On the 24th of March, 1911, the Court of First Instance of the city of
Manila rendered judgment in favor of the plaintiff for the said sum of P19,200, with interest
12
thereon at the rate of 6 per cent per annum from the date of the filing of the complaint,
allowing to the defendant as an offset interest on P14,159.29 at 6 per cent per annum from
October 10, 1903, to July 27, 1909, being the dates, respectively, of the purchase of the stock
by the defendant and the satisfaction of the judgment in case No. 2365. Both parties excepted
to this judgment and filed motions for a new trial, and the court upon the hearings modified
its judgment by allowing defendant to offset against plaintiff's judgment interest on
P14,159.29 at the rate of 6 per cent per annum from the 10th day of October, 1903, to the
12th day of January, 1904, the latter date being that of plaintiff's tender of repayment to
defendant. From said judgment as modified the defendant prosecutes this appeal. The plaintiff
is satisfied.
The appellant in this case relies for the success of this appeal upon the form of the judgment
of the court below in said action No. 2365. He asserts that judgment is for a sum of money and
not for the rescission of a contract and the return of shares of stock. This being so, he maintains
that the payment of the sum named in the judgment, whether by money or by shares of stock,
was a complete satisfaction of the judgment in that case. The mere fact that it was paid in
shares of stock did not indicate that the judgment of the trial court was for shares of stock but
said judgment was, on the contrary, in reality and in legal effect for a sum of money which
could be paid in shares of stock as well as in coin of the realm. Basing himself upon this
contention appellant asserts that judgment having been satisfied by the payment of the sum
adjudged to be due, a subsequent action for dividends on said stock is in effect an action for
interest on the said sum found to be due, that it affects the subject matter of a judgment
already paid and discharged.
We do not believe that the contention of the appellant is sound. The action begun in the trial
court was to set aside a sale made by the plaintiff to the defendant and for the return of the
shares of stock which were the subject of that sale. The basis of that action was the claim that
the plaintiff had been deprived of the shares of stock in question by false and fraudulent
representations and fraudulent concealment on the part of the defendant, or of his agents,
and that thereby she had been induced to part with those shares without just compensation
and, in reality, without her legal consent. The trial court found in favor of the plaintiff, declaring
the sale of the stock to have been fraudulently obtained and setting aside the sale absolutely,
as is indicated by that portion of its opinion heretofore quoted. On the appeal to the Supreme
Court of the United States the fraudulent character of the representations by which the
plaintiff had been induced to part with her stock was fully affirmed after a thorough
consideration of the facts and circumstances of the case and the judgment of the trial court
setting aside the sale on the ground of fraud was affirmed in every particular. It is a necessary
conclusion, therefore, that the action was in reality for the return of the stock itself, with
appropriate damages in case the return was not made by the defendant. The finding of the
court that the value of the stock was P138,352.71 was not made for the purpose of declaring
the nature of the action to be one for the recovery of money, but rather, for the purpose of
giving to the plaintiff her alternative remedy in case the stock itself should not be returned.
That the same identical shares of stock obtained by the defendant were not, as a matter of
fact, returned to plaintiff is not controlling. They were identical in everything except their
numbers and were tendered and received in fulfillment of the provisions of the judgment. All
of the stock of said company was of the same kind and paid the same dividend.
The judgment of the trial court, as affirmed by the Supreme Court of the United States, set
aside the sale as fraudulent, and, therefore, by necessary result, the title to the shares of stock
in question passed to the plaintiff if it be conceded that the title ever legally passed from her.
The delivery of those shares to her by the defendant under that judgment was an admission
of her title as declared by the court and was a delivery of possession in pursuance of that
declaration of ownership. Under the decisions referred to, as between the parties thereto, the
plaintiff was legally the owner of said stock from the time when she was fraudulently deprived
of it until the time it was returned to her as fully and as completely as she was after the
adjudication of the title and return of the stock itself. Whoever, therefore, during that period
collected the dividends upon the said stock took from the plaintiff something which belonged
to her. While the defendant asserts that he was at no time the owner of said stock, the finding
of the trial court and the finding of the Supreme Court of the United States on appeal were to
the effect that the defendant was the real purchaser of the stock from the plaintiff under the
fraudulent sale, although the negotiations leading up to the sale were carried on by other
persons. The fraudulent sale having been made to him, it is unquestionable that he became
responsible to the plaintiff from that moment forward. So far as the responsibility of the
defendant was concerned, it is of no consequence who actually collected and retained the
dividends. The plaintiff had a right to look to the defendant and to him alone.
Unless, therefore, the plaintiff has, by some act subsequent to obtaining the judgment referred
to, released her rights to recover of the defendant the income of the stock during the time he
held it, that right still subsists. The consideration of this question brings us to the other
contention of the appellant. It is to the effect that when the judgment in question was paid a
stipulation or agreement was entered into between him and the plaintiff by virtue of which
the plaintiff released him from all responsibility in connection with the transaction relating to
the stock. That agreement. translated, reads as follows:
"I, W. H. Lawrence, lawyer, with full authority from the plaintiff in the above-entitled action
for the purpose of this instrument; and I, Eduardo Gutierrez Repide, lawyer, and being also
fully authorized and empowered hereto by the defendant in said action, now, for the purpose
of satisfying the judgment rendered therein, I, W. H. Lawrence, hereby deliver to Eduardo
Gutierrez P14,159.29, and T, Eduardo Gutierrez, on my part deliver to said W. H. Lawrence the
costs of this action and eight certificates of stock of the Philippine Sugar Estates Development
Company, each certificate representing 100 shares, which certificates are of the par value of
P10,000 each, and are numbered 1621, 1623, 1624, 1625, 1626, 1628, 1629, and 1630.
Wherefore, both parties agree and stipulate that, by reason of the said payments hereby
13
mutually made, the judgment in the above-entitled action is entirely paid and the action is
finally settled and terminated, together with all the legal results flowing from said judgment.''
We see nothing in this written discharge which could properly be given the legal effects which
the appellant in this case assigns to it. It is a discharge of a judgment and nothing more. Being
such, it reaches no further than the terms of the judgment itself. It is to be presumed that an
instrument satisfying a debt or obligation manifested in another instrument extends no further
than the terms of the instrument which manifests the obligation to be discharged, unless, from
the terms of that instrument, it is clear that the parties intended something more. So far as
the record discloses, at the time this satisfaction was executed nothing whatever occurred
between the parties relative to the dividends on the stock which formed the subject-matter of
that judgment, nor did anything transpire as to any other relations between the parties than
those embraced within the judgment itself. There was nothing in the conduct of the parties,
or in their relations or attitudes, from which it could be implied or inferred that they were
dealing with aught else than the judgment itself. There is no basis, then, for the contention of
the appellant unless it be found in the wording of that instrument itself. As we have already
indicated, however, there is nothing in the phraseology of that document which in the
remotest way touches the rights of the parties as to the dividends upon the stock or which
embraces any other matter between the parties than the subject matter of the judgment itself.
The words employed in such an instrument should not be extended beyond the consideration
upon which the instrument was executed as otherwise the courts would be making for the
parties a release which they never intended or contemplated.
Relative to the scope and extent of the satisfaction referred to the trial court said:
"While it may appear from the stipulation entered into when the judgment was satisfied
between the parties interchanging the shares of stock and money, as before stated, that the
plaintiff had no further claim against the defendant, because at that time the plaintiff paid the
defendant a large sum of money without making claim, it also appears that the plaintiff was
not aware that the defendant had collected the dividends before referred to."
In arguing this question plaintiff's counsel devotes himself at some length to sustaining this
finding of fact, and asserts that "even had she been aware of this fact it would make no
difference for the reason that the matter of dividends was not and could not have been
involved in the original suit." It is true that the dividends were not included in the cause of
action set forth in the complaint in cause No. 2365 and were not, therefore, a subject of
adjudication in that action. We are of the opinion, however, that they might have been, at
least in part. The plaintiff in suing for the recovery of shares illegally taken from her by the
defendant had the right to demand their return and with them whatever damages she had
sustained by reason of their retention, which would be in this case the dividends which had
been collected on them by the defendant while they were in his possession. That is, strictly
speaking, what the plaintiff should have demanded in her complaint. Generally speaking, it is
not permitted that a plaintiff sue for the recovery of property which is illegally detained by
another, and, after recovering that property, sue in a separate action for the damages
sustained by that illegal detention. The law seeks to prevent multiplicity of actions, and it is
the duty of every person suing to join in one action every cause of action which he has against
the defendant, to the end that all questions between the parties be litigated in one suit and
multiplicity of actions and resulting expenses prevented. This is a question, however, which
could have been raised in the court below by the defendant. He did not do so. Neither has he
raised the question in this court directly. We, therefore, do not pass upon it or base any finding
upon it. The purpose which we have in referring to it at all is to indicate that the real question
arising from the controversy between the parties relative to this particular assignment of error
really resolves itself into one of multiplicity of actions, that is, of the duty of the plaintiff to join
all her causes of action against the defendant in one complaint, and not the one presented by
the appellant in his argument relative to l the reach which should be given to the document of
satisfaction. We, therefore, disapprove of the contention of the appellant that the satisfaction
of the judgment reaches further than the terms of the judgment itself. It does not embrace
any other relations between the parties than those embraced in the plain wording of the
judgment. While the dividends might, in part, have been included in the cause of action set
forth in the complaint in that action and, as far as possible, should have been incorporated
therein, nevertheless they were not so made and, therefore, formed no part of the judgment
in which that action terminated. When, therefore, after the satisfaction of that judgment,
plaintiff began a separate action to recover the dividends, the only defense available to the
defendant was the plea of multiplicity. That plea not having been made, no question relating
thereto is presented on this appeal.
It is true that plaintiff could have included in her action and recovered at the most only those
dividends which were due at the time judgment in her favor was entered. It happens in this
case that most of the dividends became payable after the plaintiff had secured her judgment.
That being so, they could not have been included by her in the original complaint, nor could
they have been incorporated within the judgment in that action. This, then, furnishes another
reason why the contention of the appellant in this regard cannot be sustained. Under such
circumstances a plea of multiplicity, even if made, would not have been available as to those
dividends which became payable after the judgment was entered in that action.
The remaining question presented by appellant relates to the interest which he was entitled
to recover or the amount due him from the plaintiff. As we have already seen, the judgment
of the court in the first place gave him the interest on said amount from the 10th day of
October, 1903, to the 27th day of July, 1909. On motion made by the plaintiff the court
amended that judgment by giving the defendant interest on said sum from the 10th day of
October, 1903, to the 12th day of January, 1904. The reason for the amendment was the fact,
as disclosed by the proofs, that on the latter date the plaintiff tendered to the defendant said
sum of money and the defendant at that time refused to accept the same. Under such
circumstances, the court properly held that the tender of the sum and its refusal by the
14
defendant stopped the running of interest in favor of the latter and he was not, therefore,
entitled to recover interest from that day forward. The appellant argues in this connection that
he should not be blamed or punished for the refusal to accept the tender of the plaintiff for
the reason that he was not the owner of the stock at the time of such tender and, therefore,
could not accept it. As we have already seen in touching another question raised on this appeal,
the court, in a judgment now final, found that the sale of stock afterwards declared fraudulent
was executed between the plaintiff and the defendant. As to this there can be no question. As
a necessary result the plaintiff need look for her redress no further than the defendant himself
and she could produce all of the legal effects possible in her favor by dealing directly with him,
as she did when she made the tender in question.

For these reasons the judgment appealed from is affirmed, without special finding as to costs.
So ordered.

Torres, Johnson, Carson, and Trent, JJ., concur.

15
G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner,
vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO BINONGCAL & FERNANDO
CALION, respondents.
Lucio A. Dixon for respondent F. Calion.
FERIA, J.:
The Court rules that the application of the totality rule under Section 33(l) of Batas Pambansa
Blg. 129 and Section 11 of the Interim Rules is subject to the requirements for the permissive
joinder of parties under Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or against whom any right to relief in
respect to or arising out of the same transaction or series of transactions is alleged to exist,
whether jointly, severally, or in the alternative, may, except as otherwise provided in these
rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law
or fact common to all such plaintiffs or to all such defendants may arise in the action; but the
court may make such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he may have no
interest.
Petitioner has appealed by certiorari from the order of Judge Heilia S. Mallare-Phillipps of the
Regional Trial Court of Baguio City and Benguet Province which dismissed his complaint for
lack of jurisdiction. Petitioner did not attach to his petition a copy of his complaint in the
erroneous belief that the entire original record of the case shall be transmitted to this Court
pursuant to the second paragraph of Section 39 of BP129. This provision applies only to
ordinary appeals from the regional trial court to the Court of Appeals (Section 20 of the Interim
Rules). Appeals to this Court by petition for review on certiorari are governed by Rule 45 of the
Rules of Court (Section 25 of the Interim Rules).
However, the order appealed from states that the first cause of action alleged in the complaint
was against respondent Ignacio Binongcal for refusing to pay the amount of P11,643.00
representing cost of truck tires which he purchased on credit from petitioner on various
occasions from August to October, 1981; and the second cause of action was against
respondent Fernando Calion for allegedly refusing to pay the amount of P10,212.00
representing cost of truck tires which he purchased on credit from petitioner on several
occasions from March, 1981 to January, 1982.
On December 15, 1983, counsel for respondent Binongcal filed a Motion to Dismiss on the
ground of lack of jurisdiction since the amount of the demand against said respondent was
only P11,643.00, and under Section 19(8) of BP129 the regional trial court shall exercise
exclusive original jurisdiction if the amount of the demand is more than twenty thousand pesos
(P20,000.00). It was further averred in said motion that although another person, Fernando
Calion, was allegedly indebted to petitioner in the amount of P10,212.00, his obligation was
separate and distinct from that of the other respondent. At the hearing of said Motion to
Dismiss, counsel for respondent Calion joined in moving for the dismissal of the complaint on
the ground of lack of jurisdiction. Counsel for petitioner opposed the Motion to Dismiss. As
above stated, the trial court dismissed the complaint for lack of jurisdiction.
Petitioner maintains that the lower court has jurisdiction over the case following the "novel"
totality rule introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or causes of action between the same or
different parties, embodied in the same complaint, the amount of the demand shall be the
totality of the claims in all the causes of action, irrespective of whether the causes of action
arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the jurisdiction of the court is dependent on
the amount involved, the test of jurisdiction shall be the aggregate sum of all the money
demands, exclusive only of interest and costs, irrespective of whether or not the separate
claims are owned by or due to different parties. If any demand is for damages in a civil action,
the amount thereof must be specifically alleged.
Petitioner compares the above-quoted provisions with the pertinent portion of the former rule
under Section 88 of the Judiciary Act of 1948 as amended which reads as follows:
... Where there are several claims or causes of action between the same parties embodied in
the same complaint, the amount of the demand shall be the totality of the demand in all the
causes of action, irrespective of whether the causes of action arose out of the same or different
transactions; but where the claims or causes of action joined in a single complaint are
separately owned by or due to different parties, each separate claim shall furnish the
jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule, the totality rule was
reduced to clarity and brevity and the jurisdictional test is the totality of the claims in all, not
in each, of the causes of action, irrespective of whether the causes of action arose out of the
same or different transactions.
16
This argument is partly correct. There is no difference between the former and present rules
in cases where a plaintiff sues a defendant on two or more separate causes of action. In such
cases, the amount of the demand shall be the totality of the claims in all the causes of action
irrespective of whether the causes of action arose out of the same or different transactions. If
the total demand exceeds twenty thousand pesos, then the regional trial court has jurisdiction.
Needless to state, if the causes of action are separate and independent, their joinder in one
complaint is permissive and not mandatory, and any cause of action where the amount of the
demand is twenty thousand pesos or less may be the subject of a separate complaint filed with
a metropolitan or municipal trial court.
On the other hand, there is a difference between the former and present rules in cases where
two or more plaintiffs having separate causes of action against a defendant join in a single
complaint. Under the former rule, "where the claims or causes of action joined in a single
complaint are separately owned by or due to different parties, each separate claim shall
furnish the jurisdictional test" (Section 88 of the Judiciary Act of 1948 as amended, supra). This
was based on the ruling in the case of Vda. de Rosario vs. Justice of the Peace, 99 Phil. 693. As
worded, the former rule applied only to cases of permissive joinder of parties plaintiff.
However, it was also applicable to cases of permissive joinder of parties defendant, as may be
deduced from the ruling in the case of Brillo vs. Buklatan, thus:
Furthermore, the first cause of action is composed of separate claims against several
defendants of different amounts each of which is not more than P2,000 and falls under the
jurisdiction of the justice of the peace court under section 88 of Republic Act No, 296. The
several claims do not seem to arise from the same transaction or series of transactions and
there seem to be no questions of law or of fact common to all the defendants as may warrant
their joinder under Rule 3, section 6. Therefore, if new complaints are to be filed in the name
of the real party in interest they should be filed in the justice of the peace court. (87 Phil. 519,
520, reiterated in Gacula vs. Martinez, 88 Phil. 142, 146)
Under the present law, the totality rule is applied also to cases where two or more plaintiffs
having separate causes of action against a defendant join in a single complaint, as well as to
cases where a plaintiff has separate causes of action against two or more defendants joined in
a single complaint. However, the causes of action in favor of the two or more plaintiffs or
against the two or more defendants should arise out of the same transaction or series of
transactions and there should be a common question of law or fact, as provided in Section 6
of Rule 3.
The difference between the former and present rules in cases of permissive joinder of parties
may be illustrated by the two cases which were cited in the case of Vda. de Rosario vs. Justice
of the Peace (supra) as exceptions to the totality rule. In the case of Soriano y Cia vs. Jose (86
Phil. 523), where twenty-nine dismissed employees joined in a complaint against the
defendant to collect their respective claims, each of which was within the jurisdiction of the
municipal court although the total exceeded the jurisdictional amount, this Court held that
under the law then the municipal court had jurisdiction. In said case, although the plaintiffs'
demands were separate, distinct and independent of one another, their joint suit was
authorized under Section 6 of Rule 3 and each separate claim furnished the jurisdictional test.
In the case of International Colleges, Inc. vs. Argonza (90 Phil. 470), where twenty-five
dismissed teachers jointly sued the defendant for unpaid salaries, this Court also held that the
municipal court had jurisdiction because the amount of each claim was within, although the
total exceeded, its jurisdiction and it was a case of permissive joinder of parties plaintiff under
Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they do not fall under the Labor
Code) would be under the jurisdiction of the regional trial court. Similarly, in the abovecited
cases of Brillo vs. Buklatan and Gacula vs. Martinez (supra), if the separate claims against the
several defendants arose out of the same transaction or series of transactions and there is a
common question of law or fact, they would now be under the jurisdiction of the regional trial
court.
In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants,
under Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test.
Needless to state also, if instead of joining or being joined in one complaint separate actions
are filed by or against the parties, the amount demanded in each complaint shall furnish the
jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional test is subject to the
rules on joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules
of Court and that, after a careful scrutiny of the complaint, it appears that there is a misjoinder
of parties for the reason that the claims against respondents Binongcal and Calion are separate
and distinct and neither of which falls within its jurisdiction.
WHEREFORE, the order appealed from is affirmed, without pronouncement as to costs.
SO ORDERED.
17
[G.R. No. L-24106. October 31, 1967.]
INSURANCE COMPANY OF NORTH AMERICA, plaintiff-appellant, vs. WARNER, BARNES & CO.,
LTD., REPUBLIC OF THE PHILIPPINES and/or BUREAU OF CUSTOMS and/or CUSTOMS
ARRASTRE SERVICE, defendants-appellees.
William H . Quasha for plaintiff-appellant.
The Solicitor General for defendant-appellee.
SYLLABUS
1. ACTION; IMMUNITY OF GOVERNMENT FROM SUIT. The Bureau of Customs is
neither a natural nor a juridical person nor an entity authorized by law to be sued. Hence, even
if it engages in arrastre service, which is a proprietary function, it cannot be made a party
defendant in a suit (Equitable Insurance & Casualty Co., Inc. vs. Smith, Bell & Co., [Philippines]
Inc., G.R. No. L-24383, August 26, 1967).
2. JURISDICTION; SEVERAL CAUSES OF ACTION FALLING WITHIN THE JURISDICTION OF
DIFFERENT COURTS; WHERE ACTION SHOULD BE FILED. Where the cause of action against
one of the defendants is one admiralty, and hence is within the jurisdiction of the Court of First
Instance, and that against another defendant is an ordinary civil suit, which if standing alone,
would fall within the jurisdiction of the municipal court by reason of the amount of the demand,
the two may be joined in one action which must be filed with the Court of First Instance, (Rizal
Surety and Insurance Company vs. Manila Railroad Company, et al., G.R. No. L-20875, April 30,
1966).
DECISION MAKALINTAL, J p:
The present appeal was taken by plaintiff Insurance Company of North America from the order
of the Court of First Instance of Manila of December 7, 1964, dismissing the complaint for lack
of jurisdiction over the defendants (Republic of the Philippines, the Bureau of Customs and the
Customs Arrastre Service) and over the subject-matter of the suit. cdasia
The facts are not disputed. On or about September 23, 1963 Ford Motor Co., Ltd., London,
shipped a quantity of merchandise on board the SS "Saikyo Maru", consigned to the order of
Security Bank and Trust Company, Manila, with arrival notice to Manila Trading and Supply
Company, Manila. The shipment consisted of auto parts, bodies, chassis, frames and other
parts for trucks, covered by Bill of Lading No. 46 and insured with the plaintiff.
The vessel arrived at the port of Manila on or about November 2, 1963 and allegedly
discharged the shipment into the custody of the Bureau of Customs as arrastre operator. The
goods were then delivered to the consignee in damaged condition.
Claims were filed both with the Bureau of Customs and with the insurer, on the strength of
which the latter paid to the consignee the amount of P2,243.92. Then as subrogee of the rights
of the consignee the plaintiff sued, as alternative defendants, Warner, Barnes & Co., Ltd.,
operator of SS "Saikyo Maru", and the Republic of the Philippines and/or Bureau of Customs
and/or Customs Arrastre Service. The defendants other than Warner, Barnes & Co., Ltd. moved
for the dismissal of the complaint on the ground that the court had no jurisdiction over them
and over the subject matter of the suit. The trial court granted the motion as aforesaid, holding
that the Bureau of Customs being an agency of the government, cannot be sued without its
consent and that the amount of the claim was below the limit cognizable by the Court of First
Instance.
1. On the first ground the order of dismissal is correct. A long line of decisions has
affirmed the non-suability of the Bureau of Customs in a case like the present. Thus in Equitable
Insurance & Casualty Co., Inc. vs. Smith, Bell & Co., (PHILIPPINES) Inc., G.R. No. L-24383, August
26, 1967, we held:
"By all means, the question thus raised is not untrodden ground. We have heretofore declared
that the Bureau of Customs cannot be a party defendant in a suit. Because, it is neither a
natural nor a juridical person nor an entity authorized by law to be sued. An arm of the
Department of Finance, it has no personality of its own, apart from the national government.
Arrastre service, it is true, is a proprietary function. But just the same, it is a necessary incident
to the primary governmental job of assessing and collecting lawful duties, fees, charges, fines,
and penalties. Thus, regardless of the merits of plaintiff's case, obvious reasons of public policy
dictate that the present action should not be allowed standing in court - it is a claim for money
against the State itself. And the State has not consented to the suit.
Statutory provisions waiving State immunity are construed in strictissimi juris. For, waiver of
immunity is in derogation of sovereignty. And, this claim should have been lodged with the
Auditor General, upon the procedure delineated in Commonwealth Act 327.
So it is that we have ruled, upon situations parallel to the present, that action against the
Bureau of Customs must be dismissed. There is by now impressive unanimity of jurisprudence
on this point (Mobil Philippines Exploration, Inc. vs. Customs Arrastre Service, L- 23139,
December 17, 1966; North British & Mercantile Insurance Co., Ltd. vs. Isthmian Lines, Inc., L-
26237, July 10, 1967; Insurance Company of North America vs. Republic, L-26532, July 10,
1967; Insurance Company of North America vs. Republic, L-24520, July 11, 1967; Insurance
Company of North America vs. Republic, L-25662, July 21, 1967; Manila Electric Company vs.
Customs Arrastre Service, L- 25515, July 24, 1967; Shell Refining Co., (Phil.) Inc. vs. Manila Port
Service, L-24930, July 31, 1967; The American Insurance Company vs. Macondray & Co., Inc.,
L-24031, August 19, 1967). No new argument has been advanced which would give cause or
reason for us to override our previous decisions. We do not propose to depart from the ruling
therein expressed." pred
18
Many other similar decisions have since then been promulgated. Concepcion, C.J ., Reyes, J.B.L., Dizon, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and
Fernando, JJ ., concur.
2. On the question of the lower court's jurisdiction over the subject matter of the suit
the appeal must be sustained. The cause of action against Warner, Barnes Co., Ltd., as operator
of the carrying vessel is one of admiralty and hence is within the jurisdiction of the Court of
First Instance. Although the claim against the Bureau of Customs as arrastre operator is an
ordinary civil suit which would be outside such jurisdiction by virtue of the amount involved,
the two may be joined in one action alone. In Rizal Surety and Insurance Company vs. Manila
Railroad Company, et al., G.R. No. L-20875, April 30, 1966, we said:

"At the time the complaint was filed, plaintiff did not know at what precise stage of the series
of transactions the loss complained of occurred. If the loss took place in transit, C.F. Sharp &
Co., Inc. would be liable therefor; but if the loss occurred after the goods were loaded and
discharged from the carrying vessel, the Manila Port Service would bear such loss. Hence, the
joinder of causes of action and parties defendants in the alternative which is permitted by
Section 5 of Rule 2 of the Rules of Court, quoted hereunder:

'SECTION 5. Joinder of causes of action. Subject to rules regarding jurisdiction, venue

and joinder of parties, a party may in one pleading state, in the alternative or otherwise, as
many causes of action as he may have against an opposing party (a) if the said causes of action
arise out of the same contract, transaction or relation between the parties, or (b) if the causes
of action are for demands for money, or are of the same nature and character.'

'In the cases falling under clause (b) the jurisdiction shall be determined by the aggregate
amount of the demands, if for money, or by their nature and character, if otherwise.' cdlex

"And since one of the causes of action is cognizable by the Court of First Instance the suit
should be filed, as was correctly done by the plaintiff, in said court, notwithstanding that the
other cause of action - if standing alone - would fall within the jurisdiction of the municipal
court, by reason of the amount of the demand. (Sapico vs. Manila Oceanic Lines, L-18776,
January 30, 1964) In International Harvester Co. of the Philippines vs. Judge Aragon, (Supra,
note 1.) where a similar action was filed with the municipal court, we held that the municipal
court lacked jurisdiction over the case inasmuch as one of the alternative causes of action,
against the shipping firm, was an action in admiralty, cognizable by Court of First Instance."
(See also Hanover Insurance Company vs. Manila Port Service and Manila Railroad Company,
G.R. No. L-20976, January 23, 1967.)

In any event, since the action was properly dismissed with respect to the defendants Republic
of the Philippines and the Bureau of Customs as operator of the arrastre service, the same may
proceed as against the other defendant. The case is therefore remanded for further
proceeding only insofar as Warner Barnes & Co., Ltd. is concerned. No pronouncement as to
costs.

19