Civil Procedure Digest
JUDICIAL POWER
CONSTITUTIONAL PROTECTION
PRESCRIBED JURISDICTION i.e. OVER
SUBJECT MATTER, BY LAW
SINDICO V DIAZ
440 SCRA 50
CARPIO-MORALES; October 1, 2004
NATURE
Petition for review on certiorari of a decision of the RTC of Iloilo
FACTS
-Virgilio Sindico, is the registered owner of a parcel of land, which he let
the spouses Eulalio and Concordia Sombrea cultivate, without him sharing
in the produce, as his "assistance in the education of his cousins"
including defendant Felipe Sombrea
-After the death of the Eulalio Sombrea, Felipe continued to cultivate the
lot
-On June 20, 1993, Sindico requested Felipe’s wife for the return of the
possession of the lot but the latter requested time to advise her husband
-Repeated demands for the return of the possession of the lot remained
unheeded, forcing Sindico to file a civil case before the RTC against the
spouses Sombrea for Accion Reivindicatoria with Preliminary Mandatory
Injunction
-The defendants filed a Motion to Dismiss, alleging that the RTC has no
jurisdiction over their person and that as the subject matter of the case is
an agricultural land which is covered by the Comprehensive Agrarian
Reform Program (CARP) of the government, the case is within the
exclusive original jurisdiction of the DARAB in accordance with Section 50
of Republic Act 6657 (THE COMPREHENSIVE AGRARIAN REFORM
LAW OF 1988)
-The plaintiff filed an Opposition alleging that the case does not involve an
agrarian dispute, there being no tenancy relationship or leasehold
agreement with the defendants.
-The RTC of Iloilo granted the Motion to Dismiss
-As their Motion for Reconsideration was denied by the trial court, the
plaintiffs, herein petitioners, lodged the present Petition for Review on
Certiorari
ISSUE
WON the Department of Agrarian Reform Adjudication Board (DARAB)
has original and exclusive jurisdiction over the case at bar
HELD
No.
Ratio. Jurisdiction over the subject matter is determined by the
allegations of the complaint. It is not affected by the pleas set up by the
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Avena
defendant in his answer or in a motion to dismiss, otherwise, jurisdiction
would be dependent on his whims.
Reasoning. The allegations in petitioner’s complaint show that the action
is one for recovery of possession, not one which involves an agrarian
dispute.
-Section 3(d) of RA 6657 or the CARP Law defines "agrarian dispute" over
which the DARAB has exclusive original jurisdiction as:
(d) any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture,
including disputes concerning farmworkers associations or representation
of persons in negotiating, fixing, maintaining, changing or seeking to
arrange terms or conditions of such tenurial arrangements including any
controversy relating to compensation of lands acquired under this Act and
other terms and conditions of transfer of ownership from landowners to
farmworkers, tenants and other agrarian reform beneficiaries, whether the
disputants stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee.
-Since petitioners’ action is one for recovery of possession and
does not involve an agrarian dispute, the RTC has jurisdiction over
it.
Disposition Petition is granted.
JURISDICTION DISTINGUISHED FROM
VENUE
MANILA RAILROAD V ATTY. GENERAL
20 PHIL 523
MORELAND; December 11, 1911
NATURE
Appeal from CFI Tarlac’s judgment dismissing the action before it on
motion of the plaintiff upon the ground that the court had no jurisdiction of
the subject matter
FACTS
- On Dec 1907, Mla Railroad Co. began an action in CFI Tarlac for the
condemnation of 69,910 sq. m. real estate located in Tarlac. This is for
construction of a railroad line "from Paniqui to Tayug in Tarlac," as
authorized by law.
- Before beginning the action, Mla Railroad had caused to be made a
thorough search in the Office of the Registry of Property and of the Tax
where the lands sought to be condemned were located and to whom they
belonged. As a result of such investigations, it alleged that the lands in
question were located in Tarlac.
- After filing and duly serving the complaint, the plaintiff, pursuant to law
and pending final determination of the action, took possession of and
occupied the lands described in the complaint, building its line and putting
the same in operation.
Prof. Victoria A.
- On Oct 4, Mla Railroad gave notice to the defendants that on Oct. 9, a
motion would be made to the court to dismiss the action upon the ground
that the court had no jurisdiction of the subject matter, it having just been
ascertained by the plaintiff that the land sought to be condemned was
situated in the Province of Nueva Ecija, instead of the Province of Tarlac,
as alleged in the complaint. This motion was heard and, after due
consideration, the trial court dismissed the action upon the ground
presented by the plaintiff.
ISSUE/S
1. WON CFI Tarlac has power and authority to take cognizance of
condemnation of real estate located in another province
2. WON Sec. 3771 of the Code of Civil Procedure and Act. No. 1258 are
applicable and so the CFI has no jurisdiction
HELD
1.YES
Ratio Sections 55 and 562 of Act No. 136 of the Philippine Commission
confer perfect and complete jurisdiction upon the CFI of these Islands with
respect to real estate in the Philippine Islands. Such jurisdiction is not
made to depend upon locality. There is no suggestion of limitation. The
1
SEC. 377. Venue of actions . Actions to confirm title to real estate, or to secure a
partition of real estate, or to cancel clouds, or remove doubts from the title to real estate, or
to obtain possession of real estate, or to recover damages for injuries to real estate, or to
establish any interest, right, or title in or to real estate, or actions for the condemnation of
real estate for public use, shall be brought in the province were the lands, or some part
thereof, is situated; actions against executors, administrators, and guardians touching the
performance of their official duties, and actions for account and settlement by them, and
actions for the distribution of the estates of deceased persons among the heirs and
distributes, and actions for the payment of legacies, shall be brought in the province in
which the will was admitted to probate, or letters of administration were granted, or the
guardian was appointed. And all actions not herein otherwise provided for may be brought
in any province where the defendant or any necessary party defendant may reside or be
found, or in any province where the plaintiff, except in cases were other special provision is
made in this Code. In case neither the plaintiff nor the defendant resides within the
Philippine Islands and the action is brought to seize or obtain title to property of the
defendant within the Philippine Islands and the action is brought to seize or obtain title to
property of the defendant within the Philippine Islands, the action shall be brought in the
province where the property which the plaintiff seeks to seize or to obtain title to is situated
or is found: Provided, that in an action for the foreclosure of a mortgage upon real estate,
when the service upon the defendant is not personal, but is by publication, in accordance
with law, the action must be brought in the province where the land lies. And in all cases
process may issue from the court in which an action or special proceeding is pending, to be
enforced in any province to bring in defendants and to enforce all orders and decrees of the
court. The failure of a defendant to object to the venue of the action at the time of entering
his appearance in the action shall be deemed a waiver on his part of all objection to the
place or tribunal in which the action is brought, except in the actions referred to in the first
sixteen lines of this section relating to real estate, and actions against executors,
administrators, and guardians, and for the distribution of estates and payment of legacies.
2
SEC. 55. Jurisdiction of Courts of First Instance . The jurisdiction of Courts of
First Instance shall be of two kinds: 1. Original; and 2. Appellate.
SEC. 56. Its original jurisdiction . Courts of First Instance shall have original
jurisdiction:
2. In all civil actions which involve the title to or possession of real property, or any
interest therein, or the legality of any tax, impost, or assessment, except actions of
forcible entry into, and detainer of lands or buildings, original jurisdiction of which is
by this Act conferred upon courts of justice of the peace.
 Civil Procedure Digest
jurisdiction is universal. It is nowhere suggested, much less provided, that
a CFI of one province, regularly sitting in said province, may not under
certain conditions take cognizance of an action arising in another province
or of an action relating to real estate located outside of the boundaries of
the province to which it may at the time be assigned.
JURISDICTION OVER PERSON OF THE PLAINTIFF
- Procedure does not alter or change that power or authority; it simply
directs the manner in which it shall be fully and justly exercised. To be
sure, in certain cases, if that power is not exercised in conformity with the
provisions of the procedural law, purely, the court attempting to exercise it
loses the power to exercise it legally. This does not mean that it loses
jurisdiction of the subject matter. It means simply that he may thereby lose
jurisdiction of the person or that the judgment may thereby be rendered
defective for lack of something essential to sustain it. There is, of course,
an important distinction between person and subject matter are both
conferred by law. As to the subject matter, nothing can change the
jurisdiction of the court over diminish it or dictate when it shall attach or
when it shall be removed. That is a matter of legislative enactment which
none but the legislature may change. On the other hand, the jurisdiction of
the court over the person is, in some instances, made to defend on the
consent or objection, on the acts or omissions of the parties or any of
them. Jurisdiction over the person, however, may be conferred by
consent, expressly or impliedly given, or it may, by an objection, be
prevented from attaching or removed after it has attached.
2. NO
Ratio Sec. 377 contains no express inhibition against the court. The
prohibition provided therein is clearly directed against the one who begins
the action and lays the venue. The court, before the action is commenced,
has nothing to do with it either. The plaintiff does both. Only when that is
done does the section begin to operate effectively so far as the court is
concerned. The prohibition is not a limitation on the power of the court but
on the rights of the plaintiff. It establishes a relation not between the court
and the subject, but between the plaintiff and the defendant. It relates not
to jurisdiction but to trial. It simply gives to defendant the unqualified right,
if he desires it, to have the trial take place where his land lies and where,
probably, all of his witnesses live. Its object is to secure to him a
convenient trial.
JURISDICTION OVER PERSON OF THE PLAINTIFF
- That it had jurisdiction of the persons of all the parties is indisputable.
That jurisdiction was obtained not only by the usual course of practice -
that is, by the process of the court - but also by consent expressly given,
is apparent. The plaintiff submitted itself to the jurisdiction by beginning
the action. The defendants are now in this court asking that the action be
not dismissed but continued. They are not only nor objecting to the
jurisdiction of the court but, rather, are here on this appeal for the purpose
of maintaining that very jurisdiction over them. Nor is the plaintiff in any
position to asked for favors. It is clearly guilty of gross negligence in the
allegations of its complaint, if the land does not lie in Tarlac as it now
asserts.
A2010
Avena
*DISTINGUISHED FROM VENUE
- The fact that such a provision appears in the procedural law at once
raises a strong presumption that it has nothing to do with the jurisdiction of
the court over the subject matter. It becomes merely a matter of method,
of convenience to the parties litigant. If their interests are best subserved
by bringing in the Court Instance of the city of Manila an action affecting
lands in the Province of Ilocos Norte, there is no controlling reason why
such a course should not be followed. The matter is, under the law,
entirely within the control of either party. The plaintiff's interests select the
venue. If such selection is not in accordance with section 377, the
defendant may make timely objection and, as a result, the venue is
changed to meet the requirements of the law.
- Section 377 of the Code of Civil Procedure is not applicable to actions by
railroad corporations to condemn lands; and that, while with the consent of
defendants express or implied the venue may be laid and the action tried
in any province selected by the plaintiff nevertheless the defendants
whose lands lie in one province, or any one of such defendants, may, by
timely application to the court, require the venue as to their, or, if one
defendant, his, lands to be changed to the province where their or his
lands lie. In such case the action as to all of the defendants not objecting
would continue in the province where originally begun. It would be
severed as to the objecting defendants and ordered continued before the
court of the appropriate province or provinces. While we are of that
opinion and so hold it can not affect the decision in the case before us for
the reason that the defendants are not objecting to the venue and
are not asking for a change thereof. They have not only expressly
submitted themselves to the jurisdiction of the court but are here asking
that that jurisdiction be maintained against the efforts of the plaintiff to
remove it.
Disposition The judgment must be REVERSED and the case
REMANDED to the trial court with direction to proceed with the action
according to law.
JURISDITION VOID
ABBAIN V. CHUA
22 SCRA 748
Sanchez; February 26, 1968
NATURE
Direct appeal to the SC
FACTS
- March 12, 1958: Tongham Chua commenced suit for forcible entry and
illegal detainer against Hatib Abbain with the Justice of the Peace (JOP)
Court of Bongao, Sulu. Chua's averred that he is the owner of a 4-hectare
land together with the improvements thereon mostly coconut trees located
in Maraning, Bongao, Sulu; that this land was donated to him by his
Prof. Victoria A. 2
father, Subing Chua, in 1952 and from that date he has assumed
ownership thereof, taken possession of the land and paid the
corresponding taxes yearly; that from 1952-1958, Abbain has been his
tenant and the two divided the fruits or copra harvested therefrom on 50-
50basis; that in 1957, Abbain by means of force, strategy and stealth
unlawfully entered and still occupies the land in question after Chua have
repeatedly demanded of him to vacate the premises due to his failure to
give chua’s share of the several harvests.
LC: JOP Managula rendered judgment directing Abbain to vacate the
premises and place Chua in possession of the plantation, with costs. This
judgment was predicated upon the findings that sometime before WWII,
Abbain, because of financial hardship, sold for P225 to Subing Chua the
coconut plantation; that after the sale, Abbain became the tenant of Chua,
the harvests of the land divided on a 50-50 basis; that subsequently,
Subing Chua donated the plantation to his son, Tongham Chua, and
Abbain, the same tenant of the father, continued to be the tenant on the
land.
- Abbain filed a petition in the CFI of Sulu against Tongham Chua and
Judge Managula, seeking relief from the judgment of the JOTP Court
anr/or annulment of its decision with preliminary injunction. He averred
that the JOTP Court did not have jurisdiction over the civil case and
that said case was within the exclusive original jurisdiction of the
Court of Agrarian Relations (CAR).
CFI of Sulu: petition dismissed without cause
-“petitioner has not presented any proof or showing of landlord and tenant
relationship between the parties" to bring the case within the jurisdiction of
the CAR, and that upon the allegations of the complaint, the case is
"clearly one of ejectment."
ISSUE
WON the JOTP Court has jurisdiction over the case filed by Chua
HELD
NO
Ratio. Where a judgment or judicial order is void in this sense it may be
said to be a lawless thing, which can be treated as an outlaw and slain at
sight, or ignored wherever and whenever it exhibits its head. And in
Gomez vs. Concepcion, this Court quoted with approval the following
from Freeman on Judgments: "A void judgment is in legal effect no
judgment. By it no rights are divested. From it no rights can be obtained.
Being worthless in itself, all proceedings founded upon it are equally
worthless. It neither binds nor bars any one. All acts performed under it
and all claims flowing out of it are void. The parties attempting to enforce it
may be responsible as trespassers. The purchaser at a sale by virtue of
its authority finds himself without title and without redress."
Since the judgment here on its face is void ab initio, the limited periods for
relief from judgment in Rule 38 are inapplicable. That judgment is
vulnerable to attack "in any way and at any time, even when no appeal
has been taken."
Reasoning. The provisions of Sec. 21 of RA 1199 (approved August 30,
1954), known as the Agricultural Tenancy Act of the Philippines, read:
 Civil Procedure Digest
"SEC. 21. Ejectment; violation; jurisdiction. — All cases involving the
dispossession of a tenant by the landholder or by a third party and/or the
settlement and disposition of disputes arising from the relationship of
landholder and tenant, as well as the violation of any of the provisions of
this Act, shall be under the original and exclusive jurisdiction of such court
as may now or hereafter be authorized by law to take cognizance of
tenancy relations anddisputes."
Sec. 7, RA 1267, creating the First Court of Agrarian Relations, effective
June 14, 1955, as amended by Republic Act 1409 which took effect on
September 9, 1955,provides:
"SEC. 7. Jurisdiction of the Court. — The Court shall have original and
exclusive jurisdiction over the entire Philippines, to consider, investigate,
decide, and settle all questions, matters, controversies or disputes
involving all those relationships established by law which determine the
varying rights of persons in the cultivation and use of agricultural land
where one of the parties works the land."
- Chua's complaint was filed on March 12, 1958 — long after RA’s 1199,
1267 and 1409 were incorporated in our statute books. Chua's complaint
positively averred that Hatib Abbain is his tenant on a 50-50 sharing basis
of the harvest; and that he seeks ejectment of Hatib Abbain "due to his
non-compliance of our agreement of his giving my share of the several
harvests he made." The JOTP Court itself found that Abbain continued to
be the tenant of Chua after the latter became owner of the plantation
which he acquired from his father by virtue of a donation; and that Abbain
refused to give "the share of his landlord of the harvest."
- If both the complaint and the inferior court's judgment have any meaning
at all, it is that the JOTP Court had no jurisdiction over the case. Right at
the outset, the complaint should have been rejected. Failing in this, the
case should have been dismissed during the course of the trial, when it
became all the more evident that a landlord-tenant relationship existed.
The judge had no power to determine the case. Because Chua's suit
comes within the coverage of Sec. 21, R.A. 1199 - that "cases involving
the dispossession of a tenant by the landholder," shall be under the
"original and exclusive jurisdiction of such court as may now or hereafter
be authorized by law to take cognizance of tenancy relations and
disputes", and the broad sweep of Section 7, RA 1267, which lodged with
the CAR "original and exclusive jurisdiction . . . to consider, investigate,
decide, and settle all questions, matters, controversies or disputes
involving all those relationships established by law which determine the
varying rights of persons in the cultivation and use of agricultural land
where one of the parties works the land."
Jurisprudence has since stabilized the jurisdiction of the CAR over cases
of this nature. Such exclusive authority is not divested by a mere
averment on the part of the tenant that he asserts ownership over the
land, "since the law does not exclude from the jurisdiction" of the CAR,
"cases in which a tenant claims ownership over the land given to him for
cultivation by the landlord."
The judgment and proceedings of the Justice of the Peace Court are null
and void.
The judgment of the JOTP Court is not merely a voidable
judgment. It is void on its face. It may be attacked directly or
collaterally . Here, the attack is direct. Abbain sought to annul the
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Avena
judgment. Even after the time for appeal or review had elapsed, appellant
could bring, as he brought, such an action. More, he also sought to enjoin
enforcement of that judgment. In varying language, the Court has
expressed its reprobation for judgments rendered by a court without
jurisdiction. Such a judgment is held to be a dead limb on the judicial
tree, which should be lopped of' or wholly disregarded as the
circumstances require.
Disposition The decision of the JOTP Court of Sulu is annulled.
JURISDICTION BY ESTOPPEL
General rule:
SEAFDEC V NLRC (LAZAGA)
206 SCRA 283
NOCON, February 14, 1994
NATURE
Petition for certiorari to review the decision of the NLRC
FACTS
-SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries Development Center. Private Respondent
Lazaga was hired as a Research Associate and eventually became the
Head of External Affairs Office of SEAFDEC-AQD. However, he was
terminated allegedly due to financial constraints being experienced by
SEAFEC-AQD. He was supposed to receive separation benefits but
SEAFDEC-AQD failed to pay private respondent his separation pay so
Lazaga filed a complaint for non-payment of separation benefits, plus
moral damages and attorney’s fees with the NLRC.
-In their ANSWER WITH COUNTERCLAIM, SEAFDEC alleged that NLRC
has no jurisdiction over the case because: (1) It is an international
organization; (2) Lazaga must first secure clearances from the proper
departments for property or money accountability before any claim for
separation pay will be paid (and clearances has not been paid)
COUNTERCLAIM: Lazaga had property accountability and outstanding
obligation to SEAFDEC-AQD amounting to P27, 532.11 and that Lazaga
was not entitled to the accrued sick leave benefits due to his failure to
avail of the same during his employment
-LA: for Lazaga
-NLRC: affirmed LA, deleted attorney’s fees and actual damages
-SEAFDEC-AQD filed MFR, denied
ISSUES
1. WON SEAFEC-AQD is immune from suit owing to its international
character
2. WON SEAFDEC-AQD is estopped from claiming that the court had no
jurisdiction
Prof. Victoria A. 3
HELD
1. YES
Ratio. Being an intergovernmental organization, SEAFDEC including its
departments enjoys functional independence and freedom from control of
the state in whose territory its office is located.
Reasoning. One of the basic immunities of an international organization
is immunity from local jurisdiction (immune from legal writs and processes
issued by the tribunals of the country where it is found) that the subjection
of such an organization to the authority of the local courts would afford a
convenient medium thru which the host government may interfere in their
operations or even influence or control its policies and decisions of the
organization. Such subjection to local jurisdiction would impair the
capacity of such body to discharge its responsibilities impartially on behalf
of its member-states.
2. NO
Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that has
none over a cause of action. Jurisdiction is conferred by law. Where there
is none, no agreement of the parties can provide one. Settled is the rule
that the decision of a tribunal not vested with appropriate jurisdiction is
null and void.
-The lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal.
-The issue of jurisdiction is not lost by waiver or by estoppel
Exception:
SOLIVEN vs FASTFORMS PHILS.
440 SCRA 389
Sandoval-Gutierrez, October 18, 2004
NATURE
-petition for review on certiorari
FACTS
-Petitioner Marie Antoinette Soliven filed a complaint for P195,155 as
actual damages with P200k as moral damages, P100k as exemplary
damages and P100k as attorney’s fees against respondent Fastform
Phils., with the Makati RTC. It alleged that respondent, through its
president Dr. Escobar, obtained a loan from petitioner (P170k) payable
within 21 days with 3% interest. On the same day, respondent issued a
postdated check for P170k + P5k int. 3 weeks later, Escobar advised
petitioner not to deposit the check as the account from where it was drawn
had insufficient funds and instead proposed that the P175k be rolled-over
with 5% monthly interest, to which the latter agreed. Respondent issued
several checks as payment for interests for 5 months but thereafter
refused to pay its principal obligation despite petitioner’s repeated
demands.
-In its counterclaim, respondent denied obtaining the loan and that it did
not authorize Escobar to secure said loan or issue checks as payment for
interests. After a trial on the merits, the court ordered respondent to pay
 Civil Procedure Digest
the amount of the loan plus interest and attorneys fees, but moral and
exemplary damages as well as the counterclaim were dismissed.
-Respondent filed a MFR questioning the court’s jurisdiction alleging that
since the principal demand (P195,155) did not exceed P200k, the
complaint should have been filed with the MTC, pursuant to RA 7691. The
TC denied the MFR since the totality of the claim exceeded 200k and
since respondent was estopped from questioning jurisdiction. On appeal,
the CA reversed the TC decision on the ground of lack of jurisdiction and
that respondent may assail jurisdiction of the TC anytime even for the first
time on appeal. Petitioner filed an MFR which was denied by the CA,
hence this petition.
ISSUE (Members of religious group)
WON the trial court has jurisdiction over the case
HELD
NO.
Ratio. While it is true that jurisdiction may be raised at any time, this rule
presupposes that estoppel has not supervened. Since respondent actively
participated in all stages of the proceedings before the TC and even
sought affirmative relief, it is estopped from challenging the TC’s
jurisdiction, especially since an adverse judgment had been rendered. A
party cannot invoke the jurisdiction of a court to secure affirmative relief
against his opponent and after obtaining or failing to obtain such relief,
repudiate that same jurisdiction.
Reasoning. Section 3 of RA 7691 provides that where the amount of the
demand in the complaint instituted in Metro Manila does not exceed
P200k, exclusive of interest, damages of whatever kind, atty’s fees,
litigation expenses and costs, the exclusive jurisdiction over the same is
vested in the Metropolitan Trial court, Municipal Trial Court and Municipal
Circuit Trial Court.
-Administrative Circular 09-94 specifies guidelines in the implementation
of RA 7691. Par 2 of the Circular provides that the term “damages of
whatever kind” applies only to cases where damages are merely a
consequence of the main action. In the instant case, the main cause of
action is the collection of the debt amounting to P195k. The damages
being claimed are merely incidental and are thus not included in
determining the jurisdictional amount.
Disposition. WHEREFORE, the instant petition is GRANTED
ONCE ATTACHED, JURISDICTION NOT
OUSTED BY SUBSEQUENT STATUTE
UNLESS SO PROVIDED
SOUTHERN FOOD SALES CORPORATION vs.
SALAS
206 SCRA 333
MEDIALDEA; Feb 18, 1992
A2010 Prof. Victoria A. 4
Avena
NATURE
Petition for certiorari Disposition. The petition is DISMISSED for lack of merit.
FACTS ACQUIRED JURISDICTION OVER THE
- July 1979 – Private respondent Laurente (former sale supervisor of
petitioner corporation) was notified and advised of his immediate
PERSON
termination for gross neglect of duty and/or dishonesty Of the plaintif
- August 1979 - Laurente instituted a civil action for damages against
SFSC and Siao, its manager MANILA RAILROAD V ATTY. GENERAL
- Laurente filed a complaint for illegal dismissal (labor case).
- January 1980 - Petitioners filed a motion to dismiss on Civil Case,
(page 1)
FACTS
claiming that the jurisdiction should be vested with the NLRC.
-Manila Railroad filed an action for condemnation proceedings in CFI of
- February 5, 1980 - it was found that the termination of the complainant
Tarlac when they knew that the lands concerned are found in Nueva Ecija.
was for a just and valid cause
Now they are assailing the jurisdiction of CFI Tarlac.
- February 28, 1980 – The court in Civil Case deferred the determination
of the motion to dismiss until after trial.
ACQUIRED JURISDICTION OVER THE PERSON Of the plaintiff:
- Petitioners filed a motion for reconsideration but it was denied. Thus,
Procedure does not alter or change that power or authority; it simply
this petition for the issuance of a writ of preliminary injunction.
directs the manner in which it shall be fully and justly exercised. To be
sure, in certain cases, if that power is not exercised in conformity with the
ISSUE
provisions of the procedural law, purely, the court attempting to exercise it
WON the respondent judge committed grave abuse of discretion when it
loses the power to exercise it legally. This does not mean that it loses
deferred the determination or resolution of the motion to dismiss
jurisdiction of the subject matter. It means simply that he may thereby lose
questioning the jurisdiction of the court over claims for damages.
jurisdiction of the person or that the judgment may thereby be rendered
defective for lack of something essential to sustain it. There is, of course,
HELD
an important distinction between person and subject matter are both
NO.
conferred by law. As to the subject matter, nothing can change the
Ratio "(t)he rule is that where a court has already obtained and is
jurisdiction of the court over diminish it or dictate when it shall attach or
exercising jurisdiction over a controversy, its jurisdiction to proceed to the
when it shall be removed. That is a matter of legislative enactment which
final determination of the cause is not affected by new legislation placing
none but the legislature may change. On the other hand, the jurisdiction of
jurisdiction over such proceedings in another tribunal. The exception to
the court over the person is, in some instances, made to defend on the
the rule is where the statute expressly provides, or is construed to the
consent or objection, on the acts or omissions of the parties or any of
effect that it is intended to operate as to actions pending before its
them. Jurisdiction over the person, however, may be conferred by
enactment. Where a statute changing the jurisdiction of a court has no
consent, expressly or impliedly given, or it may, by an objection, be
retroactive effect, it cannot be applied to a case that was pending prior to
prevented from attaching or removed after it has attached.
the enactment of the statute." (Bengzon v. Inciong)
- That it had jurisdiction of the persons of all the parties is indisputable.
Reasoning
That jurisdiction was obtained not only by the usual course of practice -
a. Article 217 (a) (4) of the Labor Code as amended by Section 9 of
that is, by the process of the court - but also by consent expressly given,
Republic Act No. 6715 clearly provides that the labor arbiter shall
is apparent. The plaintiff submitted itself to the jurisdiction by beginning
have original and exclusive jurisdiction to hear and decide claims for
the action. The defendants are now in this court asking that the action be
actual, moral, exemplary and other forms of damages arising from
not dismissed but continued. They are not only nor objecting to the
an employer-employee relationship. However, when the civil case
jurisdiction of the court but, rather, are here on this appeal for the purpose
for damages was instituted in 1979, the applicable law then was
of maintaining that very jurisdiction over them. Nor is the plaintiff in any
Article 217 (a) (3) of the Labor Code as amended by Presidential
Decree No. 1367 (May 1, 1978) which provides that Labor Arbiters
position to asked for favors. It is clearly guilty of gross negligence in the
allegations of its complaint, if the land does not lie in Tarlac as it now
shall not entertain claims for moral or other forms of damages.
asserts.
b. To require the private respondent to file a single suit combining his
actions for illegal dismissal and damages in the NLRC would be to
sanction the retroactivity of Republic Act No. 6715 which took effect Of the defendant
on March 21, 1989, where the same law does not expressly so 1. by service of summons
provide, or does not intend to operate as to actions pending before 2. by voluntary appearance
its enactment, hence prejudicial to the orderly administration of
justice.
 Civil Procedure Digest
BOTICANO V CHU, JR
148 SCRA 541
PARAS; March 16, 1987
NATURE
Petition for review on certiorari seeking to reverse and set aside CA ruling
of denying MFR.
FACTS
- Eliseo Boticano is the registered owner of a Bedford truck which is used
in hauling logs for a fee. It was hit at the rear by another Bedford truck
owned by Manuel Chu and driven by Jaime Sigua while loaded with logs
and parked properly by the driver Maximo Dalangin at the shoulder of the
national highway.
- Chu acknowledged ownership and agreed to shoulder the expenses of
the repair, but failed to comply with the agreement. Boticano filed a
complaint at the CFI at Cabanatuan against Chu and Sigua. Summons
were issued but one was returned unserved for Sigua wile the other
served thru Chu’s wife.
- Boticano moved to dismiss the case against Sigua and to declare Chu in
default. The Court granted the motions and adduced from evidence that
Chu is responsible for the fault and negligence of the driver under Art
2180 CC.
- Chu filed with the TC a notice of appeal and an urgent motion for
extension of time to file record on appeal. Court granted the motions.
- Boticano filed a MTD the appeal and for execution, but the appeal was
still approved. The case was brought to the CA. CA set aside the TC
decision for being null and void.
- Boticano filed an MFR with the CA to which CA denied.
ISSUE/S
1. WON the question of jurisdiction of the court over the person of the
defendant cannot be raised for the first time on appeal
2. WON CA erred in holding that Chu did not voluntarily submit himself to
the jurisdiction of the TC despite his voluntary appearance
HELD
1. NO
Ratio The defects in jurisdiction arising from irregularities in the
commencement of the proceedings, defective process or even absence of
process may be waived for failure to make seasonal objections.
Reasoning The circumstances appear to show that there was waiver by
the defendant to allege such defect when he failed to raise the question in
the CFI and at the first opportunity.
2. YES, he voluntarily submitted himself to the court’s jurisdiction.
Ratio Under Sec 23, Rule 14 ROC, the defendant’s voluntary appearance
in court shall be equivalent to service. It has been held by the court that
the defect of summons is cured by the voluntary appearance by the
appearance of the defendant.
Disposition The assailed decision and resolution of CA are reversed and
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set aside. The decision of the CFI (now RTC) is reinstated.
3. by voluntary submission
RODRIGUEZ VS ALIKPALA
57 SCRA 455
CASTRO; June 25, 1974
NATURE
Petition for certiorari
FACTS
-Petitioner Rodriguez filed a case for recovery of the sum of P5,320.00
plus interest, attorney’s fees and cost against Sps. Robellado.
-A writ of preliminary attachment was issued and served to Fe Robellado
at their store in Divisoria. Sps Robellado pleaded to the Rodriguez for time
before the attachment to be effectively enforced. Rodriguez agreed to the
suspension of the judgment on the condition that Fe Robellado’s parents,
the now respondents, Federico & Felisa Tolentino, to bind themselves
jointly and severally with the Robellados, to pay the entire obligation
subject of the suit. Felisa Tolentino, being present, immediately agreed to
this proposal.
-A compromise agreement was then entered to by the parties. The
Rebellados subsequently failed to comply with the terms of the
compromise agreement, thus prompting petitioner Rodriguez to request
the City Court for a writ of execution on the properties of the Robellados
and also of the Tolentinos. The request was granted by the City Court. The
Tolentinos brought an action for certiorari with the Court of First Instance
of Manila. The CFI rendered judgment excluding the Tolentinos from the
effects of the writ of execution. Thus this appeal.
ISSUE
WON the CFI erred in excluding the Tolentinos from the effects of the writ
of execution.
HELD
YES
-The contention of the CFI that the dispositive portion of the judgment of
the City Court does not explicitly enjoin the Tolentinos to pay jointly and
severally with the Rebellados the amount due to the plaintiff, and that the
City Court never acquired jurisdiction over Tolentinos and therefore cannot
be bound by the judgment rendered by said court, is erroneous.
-The dispositive portion of the judgment of the City Court approving the
compromise and enjoining strict compliance thereto by the parties is
adequate for the purpose of execution. Judgment on a compromise need
not specifically name a person to be subject of execution thereof in
obvious avoidance of repetition.
-On lack of jurisdiction of the court over the Tolentinos : the
Tolentinos freely and voluntarily entered into the compromise agreement
which became the basis of judgment of the City Court. Under the
Prof. Victoria A. 5
circumstances, the Tolentinos are estopped the very authority they
invoked. And even assuming that estoppel lies, we cannot set aside the
principle of equity that jurisdiction over a person not originally a
party to a case may be acquired, upon proper conditions, thru the
voluntary appearance of the person before the court. By coming
forward with the original litigants in moving for a judgment on compromise
and by assuming such interest in the final adjudication of the case
together with the Robellados, the Tolentinos effectively submitted
themselves to the jurisdiction of the City Court.
-Jurisdiction over the plaintiff can be acquired by the court upon filing
of the complaint. On the other hand, jurisdiction over the defendants
can be acquired by the court upon service of valid summons and upon
voluntary appearance/submission of a person in court.
ACQUIRED JURISDICTION OVER THE
RES
EL BANCO ESPAÑOL-FILINO v. PALANCA
37 Phil. 921
STREET; March 26, 1918
FACTS
- A mortgage was executed by Palanca, as security for a debt owing to
him to the bank. After the execution of this instrument, Palanca returned to
China where he died.
- As Palanca was a nonresident, it was necessary for the bank to give
notice to him by publication pursuant to section 399 of the Code of Civil
Procedure. An order for publication was accordingly obtained from the
court, and publication was made in due form in a newspaper of the city of
Manila.
- The order of the court was entered directing that publication should be
made in a newspaper, the court directed that the clerk of the court should
deposit in the post office in a stamped envelope a copy of the summons
and complaint directed to Palanca at his last place of residence.
- The cause proceeded in the CFI and Palanca not having appeared,
judgment was taken against him by default. It was ordered that Palanca
should deliver said amount to the clerk of the court to be applied to the
satisfaction of the judgment, and it was declared that in case of failure to
satisfy the judgment, the mortgage property located in the city of Manila
should be exposed to public sale.
- Payment was never made and the court ordered the sale of the property.
The property was brought in by the bank.
- About seven years after the confirmation of this sale, a motion was made
by Vicente Palanca, as administrator of the estate of the original
defendant, wherein the applicant requested the court to set aside the
order.
ISSUE
 Civil Procedure Digest
1. WON the order of default and the judgment rendered thereon were void
because the court had never acquired jurisdiction over the defendant or
over the subject of the action.
2. WON the supposed irregularity in the proceedings was of such gravity
as to amount to a denial of due process of law.
RULING
1. NO.
- The action to foreclose a mortgage is said to be a proceeding quasi in
rem, by which is expressed the idea that while it is not strictly speaking an
action in rem yet it partakes of that nature and is substantially such. The
expression, "action in rem' is, in its narrow application, used only with
reference to certain proceedings in courts of admiralty wherein the
property alone is treated as responsible for the claim or obligation upon
which the proceedings are based. The action quasi in rem differs from the
true action in rem in the circumstance that in the former an individual is
named as defendant, and the purpose of the proceeding is to subject his
interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the
property of the defendant, whether by attachment, foreclosure, or other
form of remedy, are in general way thus designated. The judgment
entered in these proceedings is conclusive only between the parties.
- Several principles: (1) That the jurisdiction of the court is derived from
the power which it possesses over the property; (II) that jurisdiction over
the person is not acquired and is nonessential; (III) that the relief granted
by the court must be limited to such as can be enforced against the
property itself.
- In a foreclosure proceeding against a nonresident owner it is necessary
for the court, as in all cases of foreclosure, to ascertain the amount due,
as prescribed in section 256 of the Code of Civil Procedure, and to make
an order requiring the defendant to pay the money into court. This step is
a necessary precursor of the order of sale. It is clearly intended merely as
compliance with the requirement that the amount due shall be ascertained
and that the defendant shall be required to pay it. As further evidence of
this it may be observed that according to the Code of Civil Procedure a
personal judgment against the debtor for the deficiency is not to be
rendered until after the property has been sold and the proceeds applied
to the mortgage debt (sec. 260)
- Whatever may be the effect in other respects of the failure of the clerk of
the CFI to mail the proper papers to the defendant in China, such
irregularity could in no wise impair or defeat the jurisdiction of the court,
for in our opinion that jurisdiction rests upon a basis much more secure
than would be supplied by any form of notice that could be given to a
resident of a foreign country.
2. NO.
- In a foreclosure case, some notification of the proceedings to the
nonresident owner, prescribing the time within which appearance must be
made, is everywhere recognized as essential. To answer this necessity
the statutes generally provide for publication, and usually in addition
thereto, for the mailing of notice to the defendant, if his residence is
known. It is merely a means provided by law whereby the owner may be
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admonished by his property is the subject of judicial proceedings and that
it is incumbent upon him to take such steps as he sees fit to protect it.
- This mode of notification does not involve any absolute assurance that
the absent owner shall thereby receive actual notice. The idea upon which
the law proceeds in recognizing the efficacy of a means of notification
which may fall short of actual notice is apparently this: Property is always
assumed to be in the possession of its owner, in person or by agent; and
he may be safely held, under certain conditions, to be affected with
knowledge that proceedings have been instituted for its condemnation
and sale.
- Failure of the clerk to mail the notice, if in fact he did so fail in his duty, is
not such as irregularity as amounts to a denial of due process of law; and
hence in our opinion that irregularity, if proved, would not avoid the
judgment in this case. Notice was given by publication in a newspaper and
this is the only form of notice which the law unconditionally requires.
Separate Opinion
MALCOLM; dissent
- The fundamental idea of due process of law is that no man shall be
condemned in his person or property without notice and an opportunity of
being heard in his defense.
- "A judgment which is void upon its face, and which requires only in
inspection of the judgment roll to demonstrate it want of vitality is a dead
limb upon the judicial tree, which should be lopped off, if the power so to
do exists. It can bear no fruit to the plaintiff, but is a constant menace to
the defendant."
DE MIDGELY VS FERANDOS
64 SCRA 23
AQUINO, May 13, 1975
NATURE
Original Actions. Certiorari and contempt.
FACTS
- Quemada, allegedly the illegitimate son of Alvaro Pastor, Sr., was
appointed as special administrator of the latter’s estate by the CFI of
Cebu. As such, he filed a complaint against his half siblings, the spouses
Alvaro Pastor, Jr. and Maria Elena Achaval, and Sofia Midgely, who were
all at that time citizens of Spain and residing in that country. The suit also
named Atlas Mining as co-respondent. The suit was to settle the question
of ownership over certain properties and rights in some mining claims as
Quemada believed that those properties belong to the estate of Alvaro
Pastor, Sr.
- Quemada, on his own, caused extraterritorial service of summons to be
made through the Department of Foreign Affairs and the Philippine
Embassy in Madrid, Spain, which effected the service of the summons
through registered mail upon De Midgely and Pastor, Jr. at their respective
addresses in Alicante and Barcelona.
- Both De Midgely and Pastor entered a special appearance and filed a
Prof. Victoria A. 6
motion to dismiss on the ground of lack of jurisdiction as they are non-
residents. They further alleged that earnest efforts toward a compromise
have not been made as required in the Civil Code in suits between
members of the same family, The motion was denied by Judge Ferandos
and he ruled that the respondents were properly summoned.
- The subsequent motion for reconsideration was denied by Ferandos
indicating in the order that the action of Quemada was for the recovery of
real property and real rights. The respondents were instructed to file their
answer.
- De Midgely filed this action with the Supreme Court.
ISSUE/S
WON Judge Ferandos gravely abused his discretion in denying De
Midgely’s motion to dismissed based on the lack of jurisdiction over her
person.
HELD
NO. The fact that she alleged as a ground for dismissal the lack of
earnest effort to compromise is deemed as abandonment of her special
appearance and as voluntary submission to the courts jurisdiction.
Ratio. When the appearance is by motion for the purpose of objecting to
the jurisdiction of the court over the person, it must be for the sole and
separate purpose of objecting to the jurisdiction of the court. If the motion
is for any other purpose than to object to the jurisdiction of the court over
his person, he thereby submits himself to the jurisdiction of the court,
Reasoning. Even if the lower court did not acquire jurisdiction over De
Midgely, her motion to dismiss was properly denied because Quemada’s
action against her maybe regarded as a quasi in rem where jurisdiction
over the person of a non-resident defendant is not necessary and where
the service of summons is required only for the purpose of complying with
the requirement of due process. Quasi in rem is an action between
parties where the direct object is to reach and dispose of property owed
by the parties or of some interest therein.
- The SC cited the Perkins case as a precedent. In that case, it ruled that
in a quasi in rem action jurisdiction over a non resident defendant is not
essential. The service of summons by publication is required merely to
satisfy the constitutional requirement of due process. The judgment of the
court would settle the title to the properties and to that extent it partakes
of the nature of judgment in rem. The judgment is confined to the res
(properties) and no personal judgment could be rendered against the non
resident. It should be noted that the civil case filed by Quemada is related
to a testamentary proceeding as it was filed for the purpose of recovering
the properties which in the understanding of Quemada, belonged to the
estate of the Late Pastor, Sr. and which were held by De Midgely and her
brother.
Disposition. Petition is dismissed
ACQUIRED JURISDICTION OVER THE
ISSUES
 Civil Procedure Digest
SPS GONZAGA V CA (SPS ABAGAT)
SCRA
CALLEJO SR; October 18, 2004
NATURE
Petition for the Review of the Decision and resolution of CA
FACTS
- October 22, 1991 > Sps Abagat filed complaint against Sps Gonzaga for
recovery of possession of land in Baclaran, Parañaque issued in their
names, as owners. Sps Abagat alleged in their complaint that they were
the owners of a small hut (barong-barong) constructed on the lot, which
was then owned by the government
- February 22, 1961 > Abagat filed an application for sales patent over the
land
- January 26, 1973 > hut was gutted by fire and after that, Sps Gregorio
built a two-storey house on the property without their consent. Sps Abagat
filed a complaint for ejectment against Sps Gregorio but complaint was
dismissed for lack of jurisdiction because in their answer to the complaint,
the Sps Gregorio claimed ownership over the house
- Sps Gregorio sold house to Sps Gonzaga for P100,000 under a deed of
conditional sale, in which Sps Gregorio undertook to secure an award of
the land by the government in favor of Sps Gonzaga. In an MOA, Sps
Gregorio indicated that if they would not secure such, they would return
P90,000 as payment for the house
- January 2, 1986 > Bureau of Lands granted the application of Abagat for
a sales patent over the property. TCT No. 128186 was issued by the
Register of Deeds in his name. Sps Abagat demanded that Sps Gonzaga
vacate the property, but latter refused
- September 29, 1992 > Sps Abagat filed a motion for leave to file a third-
party complaint against the Sps Gregorio. TC no longer resolved the
motion for leave to file a third-party complaint
- Trial Court > October 10, 1994, in favor of Sps Abagat
- CA > December 19, 1997, affirmed the decision of the trial court on. On
the plea of Sps Gonzaga that the TC should have ordered the Sps
Gregorio to refund to them the P90,000.00 the latter had received as
payment for the house, CA ruled that a separate complaint should have
been filed against the Sps Gregorio, instead of appealing the decision of
the TC.
ISSUE
WON RTC and CA erred in not ordering Sps Gregorio to refund to them
the P90,000 they had paid for the house and which the latter promised to
do so under their Memorandum of Agreement
HELD
NO
Ratio The rule is that a party is entitled only to such relief consistent with
and limited to that sought by the pleadings or incidental thereto. A trial
court would be acting beyond its jurisdiction if it grants relief to a party
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beyond the scope of the pleadings. Moreover, the right of a party to
recover depends, not on the prayer, but on the scope of the pleadings, the
issues made and the law.
Reasoning
- Sps Gonzaga failed to file any pleading against Sps Gregorio for the
enforcement of the deed of conditional sale, the deed of final and absolute
sale, and the Memorandum of Agreement executed by them. The
petitioners filed their motion for leave to file a third-party complaint against
the intervenors, Sps Gregorio, and appended thereto their third-party
complaint for indemnity for any judgment that may be rendered by the
court against them and in favor of the respondents. However, Sps
Gonzaga did not include in their prayer that judgment be rendered against
the third-party defendants to refund the P90,000.00 paid by them to the
Sps Gregorio. Sps Gonzaga failed to assail the trial court’s order of denial
in the appellate court. Even after the trial court had granted leave to the
Sps Gregorio to intervene as parties-defendants and the latter filed their
Answer-in-Intervention, Sps Gonzaga failed to file a cross-claim against
the intervenors for specific performance for the refund of the P90,000.00
they had received from the petitioners under their deed of conditional sale,
the deed of final and absolute sale and the memorandum of agreement
and pay filing and docket fees therefor.
Disposition Petition is DENIED DUE COURSE. CA decision and
resolution are AFFIRMED.
SPECIFIC JURISDICTION OF
COURTS
A. SUPREME COURT
Question of law
URBANO V CHAVEZ
183 SCRA 347
GANCAYCO; March 19, 1990
NATURE
Petition to review decision of RTC Pasig
FACTS
- there are 2 cases involved here: a criminal action for violation of the Anti-
Graft and Corrupt Practices Act (RA 3019) and an civil action for damages
arising from a felony (defamation through a published interview whereby
Chavez imputed that Nemesio Co was a close associate (crony?) of
Marcos), both against Solicitor General Francisco Chavez (among others)
- in the criminal case (filed in the Office of the Ombudsman), the Office of
the SolGen (OSG) entered its appearance for Chavez and the other
accused (DILG Sec and 2 sectoral reps) as far as the Prelim Investigation
is concerned. Urbano et. al. filed a special civil action for prohibition in the
SC to enjoin the SolGen and his associates from acting as counsel for
Chavez in the PI. The contention is in the event that an information is filed
Prof. Victoria A. 7
against the accused, the appearance of the OSG in the PI would be in
conflict with its role as the appellate counsel for the People of the Phils
(counsel at the first instance is the provincial/ state prosecutor).
- in the action for damages, the OSG likewise acted as counsel for
Chavez, who was then the SolGen and counsel for PCGG, the agency
responsible for the investigation of graft and corrupt practices of the
Marcoses. The OSG filed for extension of time to file required pleading,
and afterwards filed a motion to dismiss on behalf of Chavez. Petitioner
Co objected to appearance of OSG as counsel, contending that he is
suing Chavez in his personal capacity.
- OSG manifested that it is authorized to represent Chavez or any public
official even if the said official is sued in his personal capacity pursuant to
the unconditional provisions of PD478 which defines the functions of
OSG, as well as EO300 which made OSG an independent agency under
the Office of the President
- RTC denied the petition, thus allowing the appearance of OSG as
counsel. It also denied the MFR. Thus, this petition for review
ISSUE/S
1. WON the OSG has authority to appear for (a) a certain gov’t official in
the PI of their case before the Ombudsman and (b) the SolGen in a suit
for damages arising from a crime
HELD
1. NO
Ratio The OSG is not authorized to represent a public official at ANY
stage of a criminal case or in a civil suit for damages arising from a felony
(applies to all public officials and employees in the executive, legislative
and judicial branches).
Reasoning PD47811 defines the duties and functions of OSG:
SEC1. The OSG shall represent the Gov’t of the Phils, its agencies and
instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of a lawyer. x x x
- the OSG submits that since there is no qualification, it can represent any
public official without any qualification or distinction in any litigation.
- Same argument seems to apply to a similar provision in the Rev Admin
Code (Sec. 1661: As principal law officer of the Gov’t, the SolGen shall
have the authority to act for and represent the Gov’t , its officers and
agents in any official investigation, proceeding or matter requiring the
services of a lawyer). In Anti-Graft League v Ortega, SC interpreted Sec.
1661 to embrace PI. However, should an info be filed after, then OSG can
no longer act as counsel. The rationale given was that public officials are
subjected to numerous suits, and threats of criminal prosecution could
stay the hand of the public official. OSG provides assurance against
timidity in that they will be duly represented by counsel in the PI.
- However, the court declared this ruling abandoned in this case. The
anomaly in this ruling becomes obvious when, in the event of a judgment
of conviction, the case is brought on appeal to the appellate courts. The
OSG, as the appellate counsel of the People, is expected to take a stand
against the accused. More often than not, it does. Accordingly, there is a
clear conflict of interest here, and one which smacks of ethical
considerations, where the OSG, as counsel for the public official, defends
 Civil Procedure Digest
the latter in the PI, and where the same office, as appellate counsel of the
People, represents the prosecution when the case is brought on appeal.
This anomalous situation could not have been contemplated and allowed
by the law. It is a situation which cannot be countenanced by the Court.
- another reason why the OSG can’t represent an accused in a crim case:
the State can speak and act only by law, whatever it says or does is
lawful, and that which is unlawful is not the word or deed of the state. As
such, a public official who is sued criminally is actually sued in his
personal capacity inasmuch as his principal (the State) can never the
author of a wrongful act. The same applies to a suit for damages arising
from a felony, where the public official is held accountable for his act; the
state is not liable.
** Re: Question of Law (copied verbatim. This is all that is mentioned)
-both issues raise pure questions of law inasmuch as there are no
evidentiary matters to be evaluated by this Court. Moreover, if the only
issue is whether or not the conclusions of the trial court are in consonance
with law and jurisprudence, then the issue is a pure question of law
(Torres v Yu). Thus, the Court resolved to consolidate both Petitions and
to treat them as Petitions for certiorari on pure questions of law in
accordance with the provisions of the Rules of Court.
Disposition Petition is granted.
ORTIGAS V. CA
106 SCRA 121
ABAD SANTOS, 1981
NATURE
Petition for review of the decision of the CA
FACTS
-In 1974, Ortigas and Co. filed a complaint for unlawful detainer against
Maximo Belmonte in the Municipal Court of San Juan Rizal, praying that
judgment be rendered 1.) ordering the defendant his successors-in-
interest to vacate and surrender the lot to plaintiff; 2.) declaring the
residential building constructed on the lot by defendant as forfeited in
favor of plaintiff; 3.0 condeming defendant to pay monthly rent of 5,000
from July 18, 1971 up to the time he vacates, together with attorney's fees
and exemplary damages. The Ruled in favor of plaintiff and granted the
relieves prayed for.
-Belmonte filed a motion to dismiss in the Cfi based on lack of jurisdiction
on the part of the MC. CFI denied motion and affirmed in totot the MC
judgment. The said court also issued a writ of execution. Belmonte filed a
petition for certiorari and prohibition with preliminsry injunction in the CA,
assiling the 1.) the jurisdiction of the CFI andf MC; 2.) the propriety of the
judgment on the pleadings rendered by the MC; and 3.) the propriety of
the issuance of the writ of execution issued by the CFI. The Ca ruled in
favor of Belmonte, holding that the MC has no jurisdiction. Hence the
present petition.
ISSUES
1. WON the CA has appellate jurisdiction over this case
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2. WON the MC had jurisdiction to resolve the issues in the original
complaint
HELD
1. NO.
Reasoning. After analyzing the issues raised by Belmonte before the CA,
namely 1.) the jurisdiction of the CFI andf MC; 2.) the propriety of the
judgment on the pleadings rendered by the MC; and 3.) the propriety of
the issuance of the writ of execution issued by the CFI, the SC held that
the same are purely legal in nature. Since appellate jurisdiction over cases
involving purely legal questions is exclusively vested in the SC by Sec. 17
of the Judiciary Act (RA 296), it is apparent that the decision under review
rendered by the CA without jurisdiction should be set aside.
2. NO.
Reasoning. Where a subdivision owner seeks not just to eject the lot
buyer who defaulted in his payments but also prays that the residential
building constructed by the buyer be forfeited in plaintiff's favor, jurisdiction
over the case belongs to the CFI not the MC in an ejectment case. The
issues raised before the inferior court did not only involved the possession
of the lot but also rights and obligations of the parties to the residential
building which under Art. 45 of the CC is real property. Aslo, plaintiff's
claim to the bldg raises question of ownership.
-A CFI cannot assume jurisdiction in a case appealed to it under SECII
Rule 40 where one of the parties objected to its jurisdiction. Since the
original case was decided by the MC without jurisdiction over the subject
matter thereof, the CFI should have dismissed the cases when it was
brought before it on appeal.
Disposition. Without prejudice to the right of Ortigas to file the proper
action in the proper court, the decisions of the CA, CFI and MC of San
Juan Rizal are set aside.
JOSEFA V ZHANDONG
GR 150903
SANDOVAL-GUTIERREZ; December 8, 2003
NATURE
Petition for review on certiorari
FACTS
Tan represented himself to be the owner of hardboards and sold them to
Josefa. Josefa paid all his obligations to Tan. The hardboards apparently
belonged to Zhandong. When Tan failed to pay Zhandong, it sent a
demand letter for the payment of the hardboards to both Tan and Josefa.
Trial Court ruled in favor of Zhandong
The Court of Appeals affirmed the trial court’s Decision.
Petitioner filed a motion for reconsideration but was denied.
Petitioner ascribes to the CA the error in affirming the ruling of the trial
court that Josefa is liabe to Zhandong despite “THE MOUNTAIN OF
EVIDENCE” showing that they had no business transaction with each
Prof. Victoria A. 8
other and that it was Tan who was solely responsible to Zhandong for the
payment of the goods.
ISSUE
1. WON Josefa is liable to Zhandong for the payment of the merchandise
HELD
1. NO
Reasoning. Evidence indicate that Tan bought the hardboards from
Zhandong and, in turn, sold them to petitioner. However, both the trial
court and the Court of Appeals ignored this glaring reality and instead held
that petitioner purchased the boards directly from respondent.
General Rule : Only questions of law may be entertained by the
Supreme Court in a petition for review on certiorari
Exceptions:
(1) the conclusion is grounded on speculations, surmises or conjectures;
(2) the inference is manifestly mistaken, absurd or impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting;
(6) there is no citation of specific evidence on which the factual findings
are based;
(7) the finding of absence of facts is contradicted by the presence of
evidence on record;
(8) the findings of the Court of Appeals are contrary to those of the trial
court;
(9) the Court of Appeals manifestly overlooked certain relevant and
undisputed facts that, if properly considered, would justify a different
conclusion;
(10) the findings of the Court of Appeals are beyond the issues of the
case;
(11) such findings are contrary to the admissions of both parties.
Disposition Petition is granted.
Change of venue
PEOPLE v. MAYOR PABLO SOLA
103 SCRA 393 (1981)
FERNANDO, C.J.
NATURE
Petition for certiorari3
3 The one who filed this appeal which partakes of a nature of certiorari are private prosecutors Francisco Cruz and Renecio
Espiritu. The assertion of the petitioner private prosecutors is that they are instituting the action `subject to the control and
supervision of the Fiscal. (CJ Fernando’s prefatory statement states that the two have no legal standing to raise this petition.
Since Sol Gen Mendoza never bothered to question their legal standing, the Court contented itself with the fact that the Solicitor
General has authority to raise this petition in behalf of the People of the Philippines)
 Civil Procedure Digest
FACTS
-September 15, 1980: acting on the evidence presented by the
Philippine Constabulary commander at Hinigaran, Negros Occidental, the
CFI of that province issued a search warrant for the search and seizure of
the deceased bodies of seven persons believed in the possession of the
accused MAYOR Pablo Sola in his hacienda at Sta. Isabel, Kabankalan,
Negros Occidental.
-September 16, 1980: armed with warrant, elements of the 332nd
PC/INP Company proceeded to the place of Sola. Diggings made in a
canefield yielded two common graves containing the bodies of Fernando
Fernandez, Mateo Olimpos, Alfredo Perez, Custodio Juanica, Arsolo
Juanica, Rollie Callet and Bienvenido Emperado.
-September 23 and October 1, 1980: the PC provincial commander of
Negros Occidental filed seven (7) separate complaints for murder against
the accused Pablo Sola, Francisco Garcia, Ricardo Garcia, Jose
Bethoven Cabral, Florendo Baliscao and fourteen (14) other persons of
unknown names. After due preliminary examination of the complainant's
witnesses and his other evidence, the municipal court found probable
cause against the accused. It thus issued an order for their arrest.
-However, without giving the prosecution the opportunity to prove that the
evidence of guilt of the accused is strong, the court granted them the right
to post bail for their temporary release. The accused Pablo Sola,
Francisco Garcia, and Jose Bethoven Cabral availed themselves of this
right and have since been released from detention.
-In a parallel development, the witnesses in the murder cases informed
the prosecution of their fears that if the trial is held at the Court of First
Instance branch in Himamaylan which is but 10 kilometers from
Kabankalan, their safety could be jeopardized. At least two of the accused
are officials with power and influence in Kabankalan and they have been
released on bail. In addition, most of the accused remained at large.
Indeed, there have been reports made to police authorities of threats
made on the families of the witnesses." The facts alleged argue strongly
for the remedies sought, namely a change of venue and the cancellation
of the bail bonds.
-March 15, 1981: this Court issued the following resolution: "The Court
Resolved to: (A) [Note] the comment of the Solicitor General on the urgent
petition for change of venue and cancellation of bail bonds, adopting the
plea of the petition, namely, (1) the setting aside, by certiorari, of the
order of the Municipal Court of Kabankalan, presided over by Judge
Rafael Gasataya, granting bail to the accused (2) the petition for a change
of venue or place of trial of the same criminal cases to avoid a miscarriage
of justice;
The Solicitor General adopted a two-pronged thrusts in this petition: 1. the setting aside, by certiorari, of the order of the
Municipal Court of Kabankalan, presided over by Judge Rafael Gasataya, granting bail to the accused in the criminal cases
mentioned above, and 2. the petition for a change of venue or place of trial of the same criminal cases to avoid a miscarriage of
justice."
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(B) [Transfer] the venue of the aforesaid criminal cases to Branch V of the
Court of First Instance of Negros Occidental at Bacolod City, presided by
Executive Judge Alfonso Baguio, considering that District Judge
Ostervaldo Emilia of the Court of First Instance, Negros Occidental,
Branch VI at Himamaylan has an approved leave of absence covering the
period from January 12 to March 12, 1981 due to a mild attack of cerebral
thrombosis and that the said Branch V is the nearest court station to
Himamaylan; and
(C) [Await] the comment of respondents on the petition to cancel bail,
without prejudice to the public officials concerned taking the necessary
measures to assure the safety of the witnesses of the prosecution."
THUS, THE ISSUE OF A CHANGE OF VENUE HAS BECOME MOOT
AND ACADEMIC.
-The comments respectively submitted by respondent Florendo Baliscao
on March 5, 1981, respondent Francisco Garcia on March 11, 1981 and
respondent Pablo Sola on March 16, 1981, dealt solely with the question
of the cancellation of the bail bonds. Such comments were considered as
answers, with the case thereafter deemed submitted for decision.
ISSUE
Whether or not the bail bonds of respondents should be cancelled
HELD
YES.
Ratio. There being a failure to abide by the basic requirement that the
prosecution be heard in a case where the accused is charged with a
capital offense, prior to bail being granted, must be decided in favor of
petitioner. The bail bonds must be cancelled and the case remanded to
the sala of Executive Judge Alfonso Baguio for such hearing.
Reasoning. Bail was granted to the accused in the Order of the
Municipal Court without hearing the prosecution. That is to disregard the
authoritative doctrine enunciated in People v. San Diego.
-Justice Capistrano: "The question presented before us is, whether the
prosecution was deprived of procedural due process. The answer is in the
affirmative. We are of the considered opinion that whether the motion for
bail of a defendant who is in custody for a capital offense be resolved in a
summary proceeding or in the course of a regular trial, the prosecution
must be given an opportunity to present, within a reasonable time, all the
evidence that it may desire to introduce before the court should resolve
the motion for bail. If, as in the criminal case involved in the instant special
civil action, the prosecution should be denied such an opportunity, there
would be a violation of procedural due process, and the order of the court
granting bail should be considered void on that ground."
-J. Cardozo: "THE LAW, AS WE HAVE SEEN, IS SEDULOUS IN
MAINTAINING FOR A DEFENDANT CHARGED WITH CRIME
WHATEVER FORMS OF PROCEDURE ARE OF THE ESSENCE OF AN
OPPORTUNITY TO DEFEND. PRIVILEGES SO FUNDAMENTAL AS TO
BE INHERENT IN EVERY CONCEPT OF A FAIR TRIAL THAT COULD
BE ACCEPTABLE TO THE THOUGHT OF REASONABLE MEN WILL BE
KEPT INVIOLATE AND INVIOLABLE, HOWEVER CRUSHING MAY BE
THE PRESSURE OF INCRIMINATING PROOF. BUT JUSTICE, THOUGH
DUE TO THE ACCUSED, IS DUE TO THE ACCUSER ALSO. The
Prof. Victoria A. 9
concept of fairness must not be strained till it is narrowed to a filament.
We are to keep the balance true."
-the very essence of due process as the embodiment of justice requires
that the prosecution be given the opportunity to prove that there is strong
evidence of guilt. It does not suffice, as asserted herein, that the questions
asked by the municipal judge before bail was granted could be
characterized as searching. The fact did not cure an infirmity of a
jurisdictional character.
ON CHANGE OF VENUE: The constitution is quite explicit. The
Supreme Court could order "a change of venue or place of trial to avoid a
miscarriage of justice."
-People v. Gutierrez, J.B.L. Reyes: "…to compel the prosecution to
proceed to trial in a locality where its witnesses will not be at liberty to
reveal what they know is to make a mockery of the judicial process, and
to betray the very purpose for which courts have been established.
-The exercise by this Honorable Court of its above constitutional power in
this case will be appropriate. The witnesses in the case are fearful for their
lives. They are afraid they would be killed on their way to or from
Himamaylan during any of the days of trial. Because of this fear, they may
either refuse to testify or testify falsely to save their lives.
-there may be cases where the fear, objectively viewed, may, to some
individuals, be less than terrifying, but the question must always be the
effect it has on the witnesses who will testify.
-The primordial aim and intent of the Constitution must ever be kept in
mind. In case of doubt, it should be resolved in favor of a change of
venue,
Dispositive. WHEREFORE, the assailed order of judge Rafael Gasataya
granting bail to private respondents is nullified, set aside, and declared to
be without force and effect. Executive Judge Alfonso Baguio of the Court
of First Instance of Negros Occidental, to whose sala the cases had been
transferred by virtue of the resolution of this Court of March 5, 1981, is
directed forthwith to hear the petitions for bail of private respondents, with
the prosecution being duly heard on the question of whether or not the
evidence of guilt against the respondents is strong. This decision is
immediately executory. No costs.
B. COURT OF APPEALS
ST MARTIN FUNERAL HOME VS NLRC
G.R. No. 130866
REGALADO; Sept 16, 1998
NATURE
Petition for certiorari which stemmed from a complaint for illegal dismissal
filed by herein private respondent before the NLRC
 Civil Procedure Digest
FACTS
- . Private respondent alleges that he started working as Operations
Manager of petitioner St. Martin Funeral Home on February 6, 1995.
However, there was no contract of employment executed between him
and petitioner nor was his name included in the semi-monthly payroll. On
January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by
petitioner of its value added tax (VAT) to the Bureau of Internal Revenue
(BIR). Petitioner on the other hand claims that private respondent was not
its employee but only the uncle of Amelita Malabed, the owner of
petitioner St. Martin's Funeral Home. Sometime in 1995, private
respondent, who was formerly working as an overseas contract worker,
asked for financial assistance from the mother of Amelita. Since then, as
an indication of gratitude, private respondent voluntarily helped the mother
of Amelita in overseeing the business.
- In January 1996, the mother of Amelita passed away, so the latter then
took over the management of the business. She then discovered that
there were arrears in the payment of taxes and other government fees,
although the records purported to show that the same were already paid.
Amelita then made some changes in the business operation and private
respondent and his wife were no longer allowed to participate in the
management thereof. As a consequence, the latter filed a complaint
charging that petitioner had illegally terminated his employment.
- Private respondent appealed to the NLRC. On June 13, 1997, the NLRC
rendered a resolution setting aside the questioned decision and
remanding the case to the labor arbiter for immediate appropriate
proceedings. Petitioner then filed a motion for reconsideration which was
denied by the NLRC in its resolution dated August 18, 1997 for lack of
merit, hence the present petition alleging that the NLRC committed grave
abuse of discretion.
ISSUE
WON the SC should entertain the present petition
HELD
NO (should be remanded to CA)
Ratio. All references in the amended Sec 9 of BP No. 129 to supposed
appeals from the NLRC to the SC are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all
such petitions should henceforth be initially filed in the CA in strict
observance of the doctrine on the hierarchy of courts as the appropriate
forum for the relief desired.
Reasoning. It will be noted that paragraph (3), Section 9 of B.P. No. 129
now grants exclusive appellate jurisdiction to the Court of Appeals over all
final adjudications of the Regional Trial Courts and the quasi-judicial
agencies generally or specifically referred to therein except, among
others, "those falling within the appellate jurisdiction of the Supreme Court
in accordance with . . . the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, . . . ." This would necessarily
contradict what has been ruled and said all along that appeal does not lie
from decisions of the NLRC. Yet, under such excepting clause literally
construed, the appeal from the NLRC cannot be brought to the Court of
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Appeals, but to this Court by necessary implication. CENTRAL BANK OF THE PHILIPPINES and HON.
The same exceptive clause further confuses the situation by declaring that
JOSE B. FERNANDEZ, VS CA, JUDGE TEOFILO
the Court of Appeals has no appellate jurisdiction over decisions falling
within the appellate jurisdiction of the Supreme Court in accordance with GUADIZ, JR., PRODUCERS BANK OF THE
the Constitution, the provisions of B.P. No. 129, and those specified cases PHILIPPINES and PRODUCERS PROPERTIES, INC.
in Section 17 of the Judiciary Act of 1948. These cases can, of course, be 208 SCRA 652
properly excluded from the exclusive appellate jurisdiction of the Court of
DAVIDE; May 8, 1992
Appeals. However, because of the aforementioned amendment by
transposition, also supposedly excluded are cases falling within the
NATURE
appellate jurisdiction of the Supreme Court in accordance with the Labor
The common origin of these cases is Producers Bank of the Philippines
Code. This is illogical and impracticable, and Congress could not have
and Producers Properties, Inc. vs CB, Jose B. Fernandez. Jr. and the
intended that procedural gaffe, since there are no cases in the Labor
Monetary Board filed before the Makati RTC.
Code the decisions, resolutions, orders or awards wherein are within the
- the consolidation of the 2 cases was ordered:
appellate jurisdiction of the Supreme Court or of any other court for that
FIRST CASE- a petition for review on certiorari of the decision and the
matter.
resolution of the CA. The impugned decision upheld the Order of
-Incidentally, it was noted by the sponsor therein that some quarters were
respondent Judge Guadiz granting the motion for issuance of a writ of
of the opinion that recourse from the NLRC to the Court of Appeals as an
preliminary injunction enjoining CB, Fernandez and the Monetary Board
initial step in the process of judicial review would be circuitous and would
from implementing Monetary Board Resolutions No. 649 and No. 751, or
prolong the proceedings. On the contrary, as he commendably and
from taking the threatened appropriate alternative action and the Order in
realistically emphasized, that procedure would be advantageous to the
the same case denying petitioners' motion to dismiss and vacate said
aggrieved party on this reasoning: i.e., , to allow these cases to be
injunction. The challenged resolution, on the other hand, denied
appealed to the Court of Appeals would give litigants the advantage to
petitioners' MFR.
have all the evidence on record be reexamined and reweighed after which
SECOND CASE- a petition for review directed principally against the
the findings of facts and conclusions of said bodies are correspondingly
decision of the CA dismissing the petition therein filed and sustained the
affirmed, modified or reversed.
various Orders of the respondent Judge, but directed the plaintiffs therein
-Under such guarantee, the Supreme Court can then apply strictly the
to amend the amended complaint by stating in its prayer the specific
axiom that factual findings of the Court of Appeals are final and may not
amount of damages which Producers Bank of the Philippines (PBP)
be reversed on appeal to the Supreme Court. A perusal of the records will
claims to have sustained as a result of losses of operation and the
reveal appeals which are factual in nature and may, therefore, be
conservator's bank frauds and abuses; the Clerk of Court was also
dismissed outright by minute resolutions.
ordered to determine the amount of filing fees which should be paid by the
-While the SC does not wish to intrude into the Congressional sphere on
plaintiffs within the applicable prescriptive or reglementary period.
the matter of the wisdom of a law, on this score it adds the further
observations that there is a growing number of labor cases being elevated
FACTS
to this Court which, not being a trier of fact, has at times been constrained
- Petitioners claim that during the regular examination of the PBP, CB
to remand the case to the NLRC for resolution of unclear or ambiguous
examiners stumbled upon some highly questionable loans which had
factual findings; that the Court of Appeals is procedurally equipped for that
been extended by the PBP management to several entities. Upon further
purpose, aside from the increased number of its component divisions; and
examination, it was discovered that these loans, totalling approximately
that there is undeniably an imperative need for expeditious action on labor
P300 million, were "fictitious" as they were extended, without collateral, to
cases as a major aspect of constitutional protection to labor.
certain interests related to PBP owners themselves. Said loans were
-This case therefore, reiterate the judicial policy that the Supreme Court
deemed to be anomalous particularly because the total paid-in capital of
will not entertain direct resort to it unless the redress desired cannot be
PBP at that time was only P 140.544 million. This means that the entire
obtained in the appropriate courts or where exceptional and compelling
paid-in capital of the bank, together with some P160 million of depositors'
circumstances justify availment of a remedy within and calling for the
money, was utilized by PBP management to fund these unsecured loans.
exercise of its primary jurisdiction.
- at the height of the controversy surrounding the discovery of the
anomalous loans, several blind items about a family-owned bank in
Disposition. The instant petition for certiorari is hereby REMANDED, and
Binondo which granted fictitious loans to its stockholders appeared in
all pertinent records thereof ordered to be FORWARDED, to the Court of
major newspapers. These news items triggered a bank-run in PBP which
Appeals for appropriate action and disposition consistent with the views
resulted in continuous over-drawings on the bank's demand deposit
and ruling herein set forth, without pronouncement as to costs.
account with the CB. On the basis of the report submitted by the
Supervision and Examination Sector, Department I of the CB, the
C. RTC Monetary Board (MB placed PBP under conservatorship.
 Civil Procedure Digest
- PBP nonetheless requested that the same be lifted by the CB.
Consequently, the MB directed the principal stockholders of PBP to
increase its capital accounts by such an amount that would be necessary
for the elimination of PBP's negative net worth.
- CB senior deputy Governor Gabriel Singson informed PBP that the CB
would be willing to lift the conservatorship under the following conditions:
(a) PBP's unsecured overdraft with the Central Bank will be converted into
an emergency loan, to be secured by sufficient collateral
(b) A comptroller for PBP and any number of bank examiners deemed
necessary to oversee PBP's operations shall be designated by the CB,
under terms of reference to be determined by the Governor;
(c) A letter from the Management of PBP authorizing the CB to
automatically return clearing items that would result in an overdraft in its
CB account shall be submitted to the CB.
- the MB approved the consolidation of PBP's other unsecured obligations
to the CB with its overdraft and authorizing the conversion thereof into an
emergency loan. The same resolution authorized the CB Governor to lift
the conservatorship and return PBP's management to its principal
stockholders upon completion of the documentation and full
collateralization of the emergency loan, but directed PBP to pay the
emergency loan in 5 equal annual installments, with interest and penalty
rates at MRR 180 days plus 48% per annum, and liquidated damages of
5% for delayed payments.
- PBP submitted a rehabilitation plan to the CB. Although said proposal
was explored and discussed, no program acceptable to both the CB and
PPI was arrived at because of disagreements on certain matters such as
interest rates, penalties and liquidated damages. No other rehabilitation
program was submitted by PBP for almost 3 years; as a result thereof, its
overdrafts with the CB continued to accumulate. Consequently, per
Resolution No. 649, the CB Monetary Board decided to approve in
principle what it considered a viable rehabilitation program for PBP.
- There being no response from both PBP and PPI on the proposed
rehabilitation plan, the MB issued Resolution No. 751 on 7 August 1987
instructing CB management to advise the bank that:
a. The CB conservatorship over PBP may be lifted only after PBP shall
have identified the new group of stockholders who will put in new capital in
PBP and after the Monetary Board shall have considered such new
stockholders as acceptable; and
b. The stockholders of PBP have to decide whether or not to accept the
terms of the rehabilitation plan as provided under Resolution
No. 649 within one week from receipt of notice hereof and if such terms
are not acceptable to them, the Central Bank will take appropriate
alternative action on the matter; . . .
- the PBP, without responding to the communications of the CB, filed a
complaint against the CB, the MB and CB Governor Jose B. Fernandez,
Jr. The complaint, alleged that the conservatorship was unwarranted, ill-
motivated, illegal, utterly unnecessary and unjustified; that the
appointment of the conservator was arbitrary; that herein petitioners acted
in bad faith; that the CB-designated conservators committed bank frauds
and abuses; that the CB is guilty of promissory estoppel; and that by
reason of the conservatorship, it suffered losses. It prayed for a judicial
review of the MB Resolutions and the issuance of a TRO.
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- The case was raffled to Branch 147 of Makati RTC court which was then
presided over by respondent Judge.
- respondent Judge issued a TRO; Subsequently, he issued an Order
enjoining defendant-petitioners or any of their agents from implementing
Monetary Board Resolutions Nos. 649 and 751 or from taking the
threatened "appropriate alternative action" including exclusion of plaintiff
bank from settlement of clearing balances at the Central Bank clearing
house or any other action that will disturb the status quo or the viability of
plaintiff bank during the pendency of this case conditioned upon the
posting of a bond in the amount of P2,000,000.00.
- PBP filed the Amended Complaint impleading PPI as an additional
plaintiff. No new allegations or causes of action for said plaintiff were
made. Petitioners filed a Motion to Dismiss the Amended Complaint.
- the respondent Judge handed down an Order denying the motion to
dismiss on the following grounds: (a) the amended complaint alleges
ultimate facts showing that plaintiff has a right and that such a right has
been violated by defendant; the questioned MB Resolutions were issued
arbitrarily and with bad faith, "being a part of a scheme to divest plaintiff's
present stockholders of their control of PBP and to award the same to the
PDIC or its unknown transferees"; and the averments of legality or
illegality of the conservatorship are relevant to the cause of action since
the complaint seeks the lifting of the conservatorship; (b) While it is true
that under Section 28-A of the Central Bank Act the conservator takes
over the management of a bank, the Board of Directors of such bank is
not prohibited from filing a suit to lift the conservatorship and from
questioning the validity of both the conservator's fraudulent acts and
abuses and its principal's (MB) arbitrary action; besides, PPI is now a
party-plaintiff in the action; and (c) plaintiffs have paid the correct filing
fees since "the value of the case cannot be estimated."
FIRST CASE
- Unable to accept the above Order, CB and Fernandez filed with
respondent CA a petition for certiorari with preliminary injunction to annul
the Orders of the respondent Judge, restrain the implementation of the
same and nullify the writ of preliminary injunction. They contend therein
that: 1. The trial court's injunctive order and writ are anomalous and illegal
because they are directed against CB acts and measures which constitute
no invasion of plaintiff's rights; and 2. The complaint filed was, on its face,
dismissible: (a) for failure to state a cause of action, (b) for being
unauthorized by the party in whose name it purports to have been filed,
and (c) for failure of the purported plaintiff to pay the required filing fees.
- CA dismissed the petition for lack of merit, ruling that the CB's sudden
and untimely announcement of the conservatorship over PBP eroded the
confidence which the banking public had hitherto reposed on the bank
and resulted in the bank-run; it then concluded that when the CB
"peremptorily and illtimely announced" the conservatorship, PBP was not
given an opportunity to be heard since the CB arbitrarily brushed aside
administrative due process notwithstanding PBP's having sufficiently
established its inherent corporate right to autonomously perform its
banking activities without undue governmental interference that would in
effect divest its stockholders of their control over the operations of the
bank." It further held that the challenged resolutions of the MB are not just
advisory in character "because the same sought to impose upon the
Prof. Victoria A. 11
respondent bank petitioners' governmental acts that were specifically
designed and executed to devise a scheme that would irreparably divest
from the stockholders of the respondent bank control of the same."
On the issue of the non-payment of the correct docket fees, the said court,
in ruling that the correct amount was paid, said that "the instant case is
incapable of pecuniary estimation because the value of the losses
incurred by the respondent bank cannot be calibrated nor pinned down to
a specific amount in view of the damage that may be caused by the
appointment of a conservator to its goodwill and standing in the
community."
- petitioners filed with this Court the instant petition for review. It is alleged
therein that the respondent Court committed grave abuse of discretion in:
(1) Ignoring petitioners' contention that since PBP did not pay the correct
filing fees, the trial court did not acquire jurisdiction over the case; hence,
pursuant to Manchester Development Corp., et al. vs. Court of Appeals, et
al., the complaint should have been dismissed for lack of jurisdiction on
the part of the court;
(2) . . . ruling on the propriety or impropriety of the conservatorship as a
basis for determining the existence of a cause of action since the
amended complaint does not seek the annulment or lifting of the
conservatorship;
(3) . . . not holding that the amended complaint should have been
dismissed because it was filed in the name of PBP without the authority of
its conservator; and
(4) . . . not setting aside the Order of the trial court granting the issuance
of a writ of preliminary injunction which unlawfully restrained the CB from
exercising its mandated responsibilities and effectively compelled it to
allow the PBP to continue incurring overdrafts with it.
- private respondents argue that the Manchester rule is not applicable in
the case at bar because what is primarily sought for herein is a writ of
injunction and not an award for damages; it is further alleged that an order
denying a motion to dismiss is neither appealable nor be made the proper
subject of a petition for certiorari absent a clear showing of lack of
jurisdiction or grave abuse of discretion.
SECOND CASE
- Pursuant to the powers and authority conferred upon her by the Central
Bank, Atty. Leonida Tansinsin-Encarnacion, in her capacity as
conservator, instituted reforms aimed at making PBP more viable. With
this purpose in mind, she started reorganizing the bank's personnel and
committees.
- In order to prevent her from continuing with the reorganization, PBP filed
an Omnibus Motion asking the trial court for an order:
(a) reinstating PBP officers to their original positions and restoring the
bank's standing committees to their respective compositions prior to said
reorganization; (b) enjoining the lease of any portion of the bank's space
in Producers Bank Centre building to third parties and the relocation of
departments/offices of PBP as was contemplated; and (c) to hold, after an
opportunity to be heard is given her, said conservator in contempt of court
for disobedience of and resistance to the writ of injunction. An opposition
to the contempt charge was later filed by said petitioner.
- respondent Judge issued an Order (a) requiring conservator Tansinsin-
Encarnacion to reinstate PBP officers to their original positions prior to the
 Civil Procedure Digest
reorganization of the bank's personnel and restore PBP's standing
committees to their original compositions, and (b) restraining her from
leasing out to third parties any portion of PBP's space in the Producers
Bank Centre building.
- A second Order directed Tansinsin-Encarnacion to publish the financial
statement of PBP
- On several occasions thereafter, conservator Tansinsin-Encarnacion
caused the publication of PBP's financial statement as required by
regulations, without, however, carrying the items enumerated by the trial
court as "suspense accounts." Consequently, contempt charges were filed
against her, of which she was found guilty. Tansinsin-Encarnacion filed a
petition for certiorari against respondent Judge, Henry L. Co and the law
firm of Quisumbing, Torres and Evangelista. She prays therein for
judgment declaring respondent judge to be without jurisdiction to entertain
both the complaint and amended complaint; declaring null and void all his
orders, specially the contempt orders; and finding respondent Judge and
respondent lawyers guilty of violating their respective oaths of office.
- In her Memorandum submitted to the CA, Tansinsin-Encarnacion alleged
that: (1) respondent Judge has no jurisdiction because the filing of the
case was not authorized by the petitioner or the conservator in violation of
Section 28-A of R.A. No. 265, as amended, it was filed after the ten (10)
day period prescribed by Section 29 of R.A. No. 265, as amended, and
the correct docket fees were not paid; (2) respondent Judge illegally
ordered her to return to PPI the administration of the bank's three (3)
properties, contrary to his own writ of preliminary injunction and earlier
order to make the bank viable, and to publish the alleged "suspense
accounts" contrary to Section 28-A of R.A. No. 265, as amended, the writ
of preliminary injunction and her constitutional right to silence; (3)
respondent Judge erred in declaring her in contempt of court
notwithstanding his lack of jurisdiction over the case and failure to set any
date for the hearing and reception of evidence, in violation of her right to
due process of law; and (4) respondents Judge and lawyers are
administratively liable for their grossly illegal actuations and for depriving
the Government of at least P13.2 million in filing fees.
- In disposing of the issues raised, respondent Court merely adopted with
approval the ruling of the respondent Judge on the question of jurisdiction,
sustaining the respondent Judge's ruling. As to the filing of the complaint
after the lapse of the 10-day period provided for in Section 29 of R.A. No.
265, it ruled that the Section does not apply because the complaint
essentially seeks to compel the conservator to perform his duties and
refers to circumstances and incidents which transpired after said 10-day
period.
- On the issue of lack of jurisdiction for non-payment of correct filing fees,
to which an exception was made in the dispositive portion, the respondent
Court found the same to be "partly" meritorious. It agreed with petitioner
that while the other losses and damages sought to be recovered are
incapable of pecuniary estimation, the damages inflicted on PBP due to
losses of operation and the conservator's bank frauds and abuses were in
fact pegged at P108,479,771.00 in paragraph 26 of the amended
complaint. This specific amount, however, should have been stated in the
prayer of the complaint. It also held that the Manchester case "has been
legally construed in the subsequent case of Sun Insurance Office Ltd. and
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the case of Filipinas Shell Petroleum Corp. to the effect that applying the
doctrine initiated in the case of Manchester, together with said subsequent
thereto (sic), plaintiffs in the original case should be given a reasonable
time to amend their complaint, more particularly, to state in their prayer in
the amended complaint the specific amount of damages . . ."
- On the orders of contempt and the reasons therefor, respondent Court
merely stated:
. . . Generally, when the court has jurisdiction over the subject matter and
of the person, decisions upon or questions pertinent to the cause are
decisions within its jurisdiction, and however, irregular or erroneous they
may be, they cannot be corrected by certiorari.
- Finally, on the administrative liability of the respondent Judge and the
lawyers, the respondent Court declared the claim to be without merit.
ISSUE
WON the respondent Judge committed grave abuse of discretion
amounting to lack of jurisdiction in not dismissing the Civil Case on the
ground of non-payment of the correct amount of docket fee in violation of
the rule enunciated in Manchester Development Corp. vs. Court of
Appeals, et al.
HELD
Ratio The action must be dismissed for failure of the plaintiffs therein to
pay the correct docket fees, pursuant to Manchester. The said case was
decided by this Court on 7 May 1987, exactly 3 months and 20 days
before the filing of the original complaint and 5 months and 18 days before
the filing of the Amended Complaint. It was ruled therein that:
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on the
amounts sought in the amended pleading.
Reasoning The respondent Judge, in ruling that PBP and PPI had paid
the correct docket fee of P102.00, said that "the value of the case cannot
be estimated" since what is sought is an injunction against the
enforcement of the challenged resolutions of the MB; in short, the claim
for damages is merely incidental. Upon the other hand, respondent Court,
in its Resolution, ruled that the case is "incapable of pecuniary estimation"
because the value of the losses incurred by the PBP "cannot be calibrated
nor pinned down to a specific amount in view of the damage that may be
caused by the appointment of a conservator to its goodwill and standing in
the community."
Both conclusions are unfounded and are the result of a misapprehension
of the allegations and causes of action in both the complaint and
amended complaint.
- While PBP cleverly worded its complaint to make it appear as one
principally for injunction, deliberately omitting the claim for damages as a
specific cause of action, a careful examination thereof bears that the
same is in reality an action for damages arising out of the alleged
"unwarranted, ill-motivated and illegal conservatorship," or a
conservatorship which "was utterly unnecessary and unjustified," and the
"arbitrary" appointment of a conservator. Thus, as stated earlier, it devoted
Prof. Victoria A. 12
the bulk of its petition to detailed events, occurrences and transactions in
support thereof and patiently enumerated the losses it sustained and
suffered.
- These are the very damages referred to in the prayer:
“to fully repair the damages inflicted on PBP consisting of losses of
operation and the conservators' bank frauds and abuses”
but not specified therein. To this Court's mind, this was done to evade the
payment of the corresponding filing fees which, as computed by petitioner
on the basis alone of the specified losses of P108,479,771.00, would
amount to about P 437,000.00. The PBP then clearly acted with manifest
bad faith in resorting to the foregoing clever strategy to avoid paying the
correct filing fees. The pronouncements in the Manchester case should
thus be reiterated:
The Court cannot close this case without making the observation that it
frowns at the practice of counsel who filed the original complaint in this
case of omitting any specification of the amount of damages in the prayer
although the amount of over P78 million is alleged in the body of the
complaint. This is clearly intended for no other purpose than to evade the
payment of the correct filing fees if not to mislead the docket clerk in the
assessment of the filing fee. . . .
- The respondent Court itself, confronted by the same issue, but perhaps
unaware of its earlier Resolution, ruled that PBP and PPI are liable for the
filing fees on the claim for damages.
- respondent Court applied the rule laid down in Sun Insurance Office and
Filipinas Shell Petroleum Corp. which were, by then, already overturned
by Manchester. Even granting for the sake of argument that Sun
Insurance and Pilipinas Shell may apply in this case, the Court
categorically stated:
It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject-matter or nature of the action. Where the
filling of the initiatory pleading is not accompanied by payment of the
docket fee, the court may allow the payment of the fee within a
reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
- The prescriptive period therein mentioned refers to the period within
which a specific action must be filed. It means that in every case, the
docket fee must be paid before the lapse of the prescriptive period.
- There can be no question that in the instant case, PBP's claims for
damages arise out of an injury to its rights. Pursuant to Article 1146 of the
Civil Code, the action therefor must be initiated within 4 years from the
time the cause of action accrued. Since the damages arose out of the
alleged unwarranted, ill-motivated, illegal, unnecessary and unjustified
conservatorship, the cause of action, if any, first accrued in 1984 and
continued until 1987, when the original complaint was filed. There is no
showing that PBP paid the correct filing fee for the claim within the
prescribed period. Hence, nothing can save the case from being
dismissed.
DISPOSITION
PREMISES CONSIDERED, the petitions are GRANTED. The decision
and resolution of the CA are REVERSED and SET ASIDE. Respondent
 Civil Procedure Digest
Judge is ordered to dismiss Civil Case. All proceedings undertaken and all
orders issued by respondent Judge are hereby SET ASIDE for being null
and void.
ASCUE v CA (ANTONIO)
GR No. 84330
Padilla; May 8, 1991
NATURE
Petition for review on certiorari
FACTS
- Private respondents Ramon Antonio, Salvador Salenga and Ulipia
Fernandez (lessees) filed a complaint with the MetroTC alleging that
petitioner Ascue (lessor) refused to collect their rentals. Hence, they
sought consignation of the payments with the MetroTC.
- Ascue filed a motion to dismiss complaint on the ground that it is the
RTC not MTC which has jurisdiction over consignation cases, the subject
matter of litigation being incapable of pecuniary estimation. The MetroTC
denied Ascue’s motion to dismiss and held that the inferior court had
jurisdiction since the consigned amount was P5,625 (well below 20K).
- Ascue later appealed to the RTC but the same dismissed the appeal for
being premature. Ascue brought the case to the SC on direct appeal but
the case was referred back to the CA. The CA then dismissed the petition
and ruled that the jurisdiction of a court in consignation cases depends on
the amount consigned, consignation being merely a form of payment and
the opposite of a demand by a creditor for payment.
ISSUE
WON the CA erred in holding that consignation cases fall within the
jurisdiction of the MetroTC and that the amount consigned determines
said jurisdiction
HELD
No.
Ratio In valid consignation cases, where the thing sought to be deposited
is a sum of money, the amount of debt due is determinable, hence, the
subject matter is capable of pecuniary estimation. This amount sought to
be consigned then determines the jurisdiction of the court.
Reasoning petitioner is of the belief that it is the RTC, not the MTC,
which has jurisdiction over the case, inasmuch as the subject matter of
litigation (the amount to be consigned) is incapable of pecuniary
estimation. This is wrong. Consignation is the act of depositing the thing
due with the court or judicial authorities whenever the creditor cannot
accept or refuses to accept payment and it generally requires a prior
tender of payment. Two of the requisites of it valid consignation are (1)
that there is a debt due. and (2) the amount is placed it the disposal of the
court. Thus, where no debt is due and owing, consignation is not proper.
In a valid consignation where the thing sought to be deposited is a sum of
money, the amount of the debt due is determinable. Clearly, the subject
matter (i.e., the amount due) in consignation cases is capable of
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pecuniary estimation. This amount sought to be consigned determines the second, that the maritime contract binding the parties was breached by
jurisdiction of the court. the carrier because through his fault and that of his agents and
- In the case at bar. the amount consigned being P5,625.00, the representatives the cargo became a total loss.
respondent metropolitan trial court correctly assumed jurisdiction over the
same in accordance with Section 33(1) of BP Blg. 129. Disposition Reversed.
Disposition Petition DENIED. CA decision AFFIRMED.
BAITO V SARMIENTO
109 Phil. 148
NEGRE v CABAHUG SHIPPING PADILLA; APR 25, 1960
16 SCRA 655
DIZON; April 29, 1966 NATURE
Appeal from CFI Samar
NATURE
Appeal FACTS
-Lucina Baito filed action for support against her husband Anatalio
FACTS Sarmiento.
- On August 14, 1961, Negre (appellant) filed his complaint against -CFI Samar dismissed her complaint on the ground that it has no
Cabahug Shipping & Co (appellee), a common carrier engaged in the jurisdiction, the amount demanded as support being only P720
business of transporting persons and goods for a price within Philippine
waters, to recover the sum of P3,774.90, representing the value of a cargo ISSUE
of dried fish belonging to him which was loaded on the latter's vessel, and WON the CFI has jurisdiction over an action for support if the amount
which was totally destroyed on board thereof, before it could be claimed or demanded as support is only P720, or not more than P2,000
transported to its place of destination, due to the gross negligence of the (now P5,000)
officers and members of the crew of said vessel
- As Cabahug’s answer admitted liability for the loss of said cargo, but HELD
only up to the amount of P3,733,78, appellant moved for a judgment on Ratio. An action for support does not only involve the determination of the
the pleadings. In replying thereto, however, appellee moved to dismiss the amount to be given as support, but also the relation of the parties, the
case on the ground that the amount of the claim did not fall within the right to support created by the relation, the needs of the claimant, the
jurisdiction of the court. Resolving this motion, the court dismissed the financial resources of the person from whom support is sought, all of
complaint for lack of jurisdiction, without prejudice to the right of appellant which are not capable of pecuniary estimation.
to file the same with the corresponding municipal court. Reasoning. An action for support falls within the original jurisdiction of
- Appellant maintains in this appeal that his action is one in admiralty and Courts of First Instance under section 44(a) of Republic Act No. 296, as
maritime jurisdiction, which, pursuant to the provisions of Section 44 of the amended by Republic Act No. 2613.
Judiciary Act, as amended, falls within the exclusive original jurisdiction of
the courts of first instance, irrespective of the amount or the value of the Disposition The order appealed from is set aside and the case is
goods involved. remanded
ISSUE/S D. METROPOLITAN, MUNICIPAL,
WON the case falls within the jurisdiction of CFI (RTC) MUNICIPAL CIRCUIT TRIAL COURTS
Exclusive original jurisdiction in civil
HELD
YES and estate settlement
Ratio. It has been held that, to give admiralty jurisdiction over a contract, proceedings/over provisional
the same must relate to the trade and business of the sea Admiralty remedies
jurisdiction, it has also been held, extends to all maritime torts.
Reasoning. The action was based upon an oral contract for the
transportation of goods by water. Exclusive original jurisdiction in
-Moreover, the allegations of the complaint clearly show: first, that the forcible entry and unlawful detainer
contract entered into between the parties had already been partially cases
performed with the loading of the goods subject-matter thereof on board
appellee's vessel and the acceptance thereof by said appellee, and
 Civil Procedure Digest
LIM V CA (PIZARRO)
00 SCRA 00
GANCAYCO; March 18, 1991
NATURE
Petition to review the decision and resolution of the Court of Appeals
FACTS
- Lim Kieh Tong, Inc. owns a building in Manila. One of the rooms in the
building (Room 301) is occupied by Reginaldo Lim, an MTC judge.
- The original occupant of Room 103 was Lim Eng Piao, the father of
Reginaldo. When Lim Eng Piao died, the occupancy was continued by
Reginaldo. Eventually, Reginaldo was able to acquire a house and lot in
Quezon City but he still used the room where he kept his books,
documents, appliances and other important belongings.
- September 1987 – LKT, Inc. changed the lock of the main door of the
building which was commonly used by all the occupants of the building.
- September 30, 1987 – Reginaldo was unable to enter the building
because he did not have a key to the new lock. He was unable to get his
law books for a case he was working on so he had to purchase new ones
which cost him P1,235.00.
- October 1, 1987 - He requested for a new key from the OIC of the
buiding but his request was not complied with.
- October 2, 1987 – Reginaldo instituted a civil case against Rafael Lim
and Lim Kieh Tong, Inc. before the Metropolitan Trial Court. The
complaint was denominated as an action for damages with injunction but
was subsequently dismissed for lack of jurisdiction.
- October 23, 1987 – Another complaint was instituted in the MTC which
had the same allegations. Reginaldo alleges that he has a clear and
unmistakable right to the use of said room, entitling him to the writ of
preliminary mandatory injunction to command petitioner to provide him the
appropriate key to the lock of the main building; and to pay damages in
the amount of P1,253.00, P5,000.00 attorney's fees and costs of the suit.
- November 2, 1987 - A temporary restraining order was issued by
respondent judge pending trial on the merits, commanding LKT, Inc. to
deliver the appropriate keys to Reginaldo and to allow him to enter the
premises and Room 301 of the building. - November 3, 1987 – LKT, Inc.
instituted the instant petition.
- The Executive Judge issued a temporary restraining order, enjoining the
enforcement of the temporary restraining order earlier issued by
respondent judge and from further taking cognizance of said civil case.
With regard to the issue of possession: Force was used by LKT, Inc.
in depriving Reginaldo of physical possession of the room when the main
door’s lock was changed without the knowledge and consent of
Reginaldo.
- The issue involved is mere physical possession (possession de facto)
and not juridical possession (possession de jure) nor ownership.
- The purpose of forcible entry is that regardless of the actual condition of
the title to property, the party in peaceable and quiet possession shall not
be turned out by strong hand, violence or terror.
- Considering that respondent judge found the applicability of the Rule in
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Summary Procedure, the motion to dismiss was correctly denied, a motion
to dismiss being one of the prohibited pleadings and motions under
Section 15 of the 1983 Rules on Summary Procedure.
With regard to the issue of jurisdiction:
- LKT, Inc. argued that when the amount of damages claimed is not
specifically alleged in the complaint, jurisdiction over the case would fall
under the RTC as the failure to so allege would characterize the subject
matter as one which is incapable of pecuniary estimation.
- In Singson vs. Aragon, the SC held that exemplary damages must be
specified and if not, the municipal trial court could still grant it, if together
with the other money claims, the amount of the total claim does not
exceed P10,000.00 (now P20,000).
ISSUE
WON the action for specific performance in this case falls under the
jurisdiction of the RTC
HELD
NO
Ratio In Vichanco vs. Laurilla, it was held that what confers jurisdiction on
the inferior court in forcible entry and illegal detainer cases is not the
amount of unpaid rentals or damages involved, but rather the nature of
the action because the rents or damages are only incidental to the main
action.
Reasoning
- The suit is one for forcible entry and detainer under Rule 70 of the Rules
of Court. It was through stealth that LKT, Inc. prevented Reginaldo from
using the room.
- Any person deprived of possession of any land or building or part
thereof, may file an action for forcible entry and detainer in the proper
inferior court against the person unlawfully depriving or withholding
possession from him.
- This relief is available to a landlord, vendor and vendee and also to a
tenant or lessee or any other person against whom the possession of any
land or building, or a part of it, is unlawfully withheld, or is otherwise
unlawfully deprived possession within 1 year after such unlawful
deprivation or withholding possession.
Disposition Petition is denied. No costs.
Exclusive original jurisdiction
in civil actions involving title to
or possession of real property
RUSSELL V VESTIL
304 SCRA 738
KAPUNAN; March 17, 1999
NATURE
Petition for Certiorari
Prof. Victoria A. 14
FACTS
- Petitioners filed a complaint against respondents, denominated
"DECLARATION OF NULLITY AND PARTITION," with the RTC of
Mandaue City
- The complaint alleged that petitioners are co-owners of that parcel of
land in Liloan, Cebu. The land was previously owned by the spouses
Casimero Tautho and Cesaria Tautho.
- Upon the death of said spouses, the property was inherited by their legal
heirs, herein petitioners and private respondents. Since then, the lot had
remained undivided until petitioners discovered a public document
denominated "DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION"
- By virtue of this deed, respondents divided the property among
themselves to the exclusion of petitioners.
- The complaint prayed that the document be declared null and void and
an order be issued to partition the land among all the heirs.
- Respondents filed a Motion to Dismiss the complaint on the ground of
lack of jurisdiction over the nature of the case as the action is one for re-
partition and since the assessed value of the property as stated in the
complaint is P5,000.00, then, the case falls within the jurisdiction of the
MCTC of Liloan, Compostela, Cebu
- Petitioners filed an Opposition to the Motion to Dismiss saying that the
complaint is for the annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION," which is clearly one incapable of
pecuniary estimation, thus, cognizable by the RTC
- The respondent judge issued an Order granting the Motion to Dismiss.
- A Motion for Reconsideration of said order was filed by petitioners
- Respondents did not oppose the motion for reconsideration.
- Respondent judge issued another Order denying the motion for
reconsideration.
- Hence, this petition
ISSUE
WON the RTC has jurisdiction to entertain the civil case.
HELD
YES.
Ratio Singsong vs. Isabela Sawmill: In determining whether an action is
one the subject matter of which is not capable of pecuniary estimation this
Court has adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the recovery of a
sum of money, the claim is considered capable of pecuniary estimation,
and whether jurisdiction is in the municipal courts or in the courts of first
instance would depend on the amount of the claim. However, where the
basic issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance Examples of
actions incapable of pecuniary estimation are those for specific
performance, support, or foreclosure of mortgage or annulment of
 Civil Procedure Digest
judgment; also actions questioning the validity of a mortgage, annulling a
deed of sale or conveyance and to recover the price paid and for
rescission, which is a counterpart of specific performance.
While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary
estimation, the law specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of the real property
involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if
located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the
case may be, it is the Regional Trial Courts which have jurisdiction under
Sec. 19(2).
Reasoning The subject matter of the complaint in this case is annulment
of a document denominated as "DECLARATION OF HEIRS AND DEED
OF CONFIRMATION OF PREVIOUS ORAL PARTITION." The main
purpose of petitioners in filing the complaint is to declare null and void the
document in which private respondents declared themselves as the only
heirs of the late spouses Casimero Tautho and Cesaria Tautho and
divided his property among themselves to the exclusion of petitioners who
also claim to be legal heirs and entitled to the property. While the
complaint also prays for the partition of the property, this is just incidental
to the main action, which is the declaration of nullity of the document
above-described. It is axiomatic that jurisdiction over the subject matter of
a case is conferred by law and is determined by the allegations in the
complaint and the character of the relief sought, irrespective of whether
the plaintiff is entitled to all or some of the claims asserted therein.
Disposition The petition was GRANTED.
E. SPECIAL RULES
MANUFACTURER'S DISTRIBUTORS, INC., V
YU SIU LIONG
11 SCRA 680
REYES, JBL; April 29 1966
NATURE
Appeal on points of law from an order of the CFI Manila sustaining and
affirming an order of the MTC Manila dismissing the original complaint for
want of jurisdiction.
FACTS
-Manufacturer's Distributors, Inc. had filed action in MTC Manila, Branch
III, seeking to compel Yu Siu Liong to accept delivery of 74,500 pieces of
plastifilm bags, balance of 100,000 pieces ordered by said Yu Sio Liong
and supplied by the Manufacturer’s Distributors; to pay P3,376.00, the
value of the 100,000 pieces of plastifilm bags ordered by him, plus 12%
interest per annum thereon until fully paid; and to pay the amount of
P844.00, for and as stipulated attorney's fees. Manuufacturer’s
Distributors also prayed for such other reliefs as may be deemed just and
equitable in the premises.
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-Yu Sio Liong filed MTD on the ground that, the subject of the litigation
being specific performance, the same lay within the exclusive jurisdiction
of the CFI. MTC upheld Yu Sio Liong and dismissed the complaint.
-CFI affirmed the order of dismissal with costs, saying: “Manufacturer’s
Distributors's action before the MTC was one for specific performance…
Whether refusal to accept delivery of said plastifilms was justified or not is
not capable of pecuniary estimation and was, therefore, not cognizable by
the Municipal Court."
-Manufacturer’s Distributors contend that the subject of the litigation
were the 100,000 plastifilm bags, contracted for by Yu Sio Liong at a total
price of P3,376.00, and, therefore, it was susceptible of pecuniary
estimation.
ISSUE
WON the issue is incapable of pecuniary estimation, and is therefore not
within the jurisdiction of MTC
HELD
YES.
-There is no controversy, as to the contractual price for the plastifilm bags;
the dispute is whether or not Yu Sio Liong was justified in its refusal to
accept the delivery of the bags. This matter plainly is not capable of
pecuniary estimation, and, therefore, is not within the jurisdiction of the
MTC.
-Speaking of the original jurisdiction of the Justice of the Peace and
Municipal Courts, the Judiciary Act, as amended, in its sec88, after
conferring original jurisdiction in Justice of the Peace and Municipal
Courts over cases where the value of the subject matter or amount of the
demand does not exceed P5,000.00, provides nevertheless in its par2
that "The jurisdiction of a justice of the peace and judge of a municipal
court shall not extend to civil actions in which the subject of litigation is not
capable of pecuniary estimation, except in forcible entry and detainer
cases; nor to those which involve the legality of any tax, impost or
assessment; nor to actions involving admiralty or maritime jurisdiction; nor
to matters of probate, the appointments of trustees or receiver; nor to
actions for annulment of marriages; . . ." Jurisdiction over the classes of
cases thus excluded is conferred on the CFI (Judiciary Act, sec44).
-That Manufacturer’s Distributors's complaint also sought the payment by
Yu Sio Liong of P3,376.00 plus interest and attorney's fees, does not give
a pecuniary estimation to the litigation, for the payment of such amounts
can only be ordered as a consequence of the specific performance
primarily sought. In other words, such payment would be but an incident
or consequence of Yu Sio Liong's liability for specific performance. If no
such liability is judicially declared, the payment cannot be awarded.
Hence, the amounts sought do not represent the value of the subject of
litigation.
-Subject matter over which jurisdiction cannot be conferred by consent,
has reference, not to the res or property involved in the litigation nor to a
particular case, but to the class of cases, the purported subject of
litigation, the nature of the action and of the relief sought.
Prof. Victoria A. 15
-The [Municipal Trial] Court has no jurisdiction of a suit for specific
performance of a contract, although the damages alleged for its breach, if
permitted, are within the amount of which that court has jurisdiction.
-Cruz vs. Tan (87 Phil. 627) is inapplicable. In said case, the plaintiff had
made an alternative prayer: specific performance or payment of the sum
of P644.31. The alternative prayer meant that the payment of the latter
sum was a pecuniary estimation of the specific performance sought, since
it would equally satisfy the claims of the plaintiffs. In the present case, the
payment in money is not an alternative equivalent, but a consequence or
result of the specific performance, and hence can not constitute a
pecuniary estimation thereof.
Disposition CFI order affirmed.
CRUZ V TAN
87 SCRA 627
JUGO; November 27, 1950
NATURE
Original action in the Supreme Court. Certiorari and prohibition with
injunction.
FACTS
- August 3, 1949: respondent Telesfora Yambao filed a complaint against
the petitioner Manuel Cruz, praying that the latter be ordered to finish the
construction of a house mentioned in the complaint, or to pay her the sum
of P644.31.
- Within ten days from the receipt of the summons, the petitioner filed a
motion for a bill of particulars, which was denied by the court.
- September 19, 1949: petitioner filed a motion to dismiss the case on the
ground that the CFI has no jurisdiction over the subject-matter of the suit
—the demand contained in the prayer is only for P644.31, which falls
under the Justice of the Peace or the Judge of the Municipal Court. The
motion to dismiss was denied by the court, and trial for the merits was
also set.
- Order setting the case for trial on October 10, 1949 was received by
petitioner’s counsel on October 12 (two days after). Since the parties did
not appear at the trial, the court dismissed the case for lack of interest of
the parties on October 10, 1949.
- October 12, 1949: respondent Yambao filed a motion praying that the
trial of the case be set for November 14, 1949. The motion was heard on
October 15, 1949, but as the petitioner’s counsel received notice of the
said motion on Oct. 15, he could not appear in the said hearing.
ISSUE
1. WON CFI has jurisdiction over the case.
HELD
NO
Ratio The jurisdiction of the respective courts is determined by the value
of the demand and not the value of the transaction out of which the
demand arose.
 Civil Procedure Digest
Reasoning
- The case comes within the exclusive original jurisdiction of the municipal
court or justice of the peace court.
Judiciary Act of 1948
SEC. 44. Original jurisdiction.—CFI shall have original jurisdiction:
(c) In all cases in which the demand, exclusive of interest, or the value
of the property in controversy, amounts to more than two thousand
pesos.
SEC. 86. Jurisdiction of justices of the peace and judges of municipal
courts of chartered cities.—
(b) Original jurisdiction in civil actions arising in their respective
municipalities, and not exclusively cognizable by the CFI.
SEC. 88. Original Jurisdiction in civil cases.—
Xxx exclusive original jurisdiction where the value of the subject-
matter or amount of the demand does not exceed two thousand
pesos, exclusive of interest and costs.
- The alternative prayer for specific performance is also of the same value,
for the alternative prayers would not have been made in the complaint if
one was more valuable than the other; the specific performance
alternatively prayed for is capable of pecuniary estimation at P644.31.
DISPOSITION
Judge of CFI is declared without jurisdiction to try the case, and is ordered
to stop further proceedings by dismissing the case.
LAPITAN V SCANDIA
24 SCRA 477
REYES, J.B.L., July 31, 1968
FACTS
- Andres Lapitan has appealed directly to this Court against an order of
the CFI of Cebu, dismissing, for lack of jurisdiction, his complaint for
rescission and damages against appellees Scandia, Inc., of Manila and
General Engineering Co. of Cebu. Plaintiff avers that on April 17, 1963 he
purchased from Scandia, Inc., one ABC Diesel Engine; that he bought the
engine for running a rice and corn mill; that defendants had warranted and
assured him that all spare parts for said engine are kept in stock in their
stores, enabling him to avoid loss due to long periods of waiting, and that
defendants would replace any part of the engine that might break within
12 months after delivery.
- The cam rocker arm of the engine broke due to faulty material and
workmanship and it stopped functioning; the sellers were unable to send a
replacement until August 29, 1963; barely six days after replacement the
new part broke again due to faulty casting and poor material, so Lapitan
notified the sellers and demanded rescission of the contract of sale; he
sought return of the price and damages but defendants did not pay.
- Scandia, Inc., moved to dismiss the complaint on the ground that the
total amount claimed was only P8,735.00, and was within the exclusive
jurisdiction of the municipal court, under RA 3828, amending the Judiciary
Act by increasing the jurisdiction of municipal courts to civil cases
involving P10,000.00 or less. The CFI dismissed the action for lack of
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jurisdiction. Lapitan appealed directly to this Court, arguing (1) that
rescission was incapable of pecuniary estimation, and (2) that as he
claimed moral and exemplary damages, besides the price of P3,735.00,
P4,000.00 actual damages, and P1,000.00 attorneys' fees, the value of
his demand exceeded the jurisdiction of the municipal court.
ISSUE
WON CFI had jurisdiction
HELD
YES.
Ratio. In determining whether an action is one the subject matter of which
is not capable of pecuniary estimation, this Court has adopted the criterion
of first ascertaining the nature of the principal action or remedy sought. If it
is primarily for the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the CFI would depend on the amount of the claim.
However, where the basic issue is something other than the right to
recover a sum of money, or where the money claim is purely incidental to,
or a consequence of, the principal relief sought, like in suits to have the
defendant perform his part of the contract and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this Court has
considered such actions as cases where the subject of the litigation may
not be estimated in terms of money, and are cognizable exclusively by
theCFI. Actions for specific performance of contracts have been expressly
pronounced to be exclusively cognizable by the CFI. And no cogent
reason appears why an action for rescission should be differently treated.
We, therefore, rule that the subject matter of actions for rescission of
contracts are not capable of pecuniary estimation.
THE GOOD DEVELOPMENT CORPORATION V
TUTAAN
73 SCRA 189
CONCEPCION; September 30, 1976
NATURE
Petition for certiorari
FACTS
- A complaint was filed before the CFI of Rizal against private respondents
Guillermo delos Reyes and Marcelina Marcelo for the recovery of the sum
of P1520 plus interest and the sum equivalent to 25% of the total amount
due as attorney’s fees, and in default of payment thereof, to order the
foreclosure of the chattel mortgage (worth P15,340) executed by the said
respondents. Gregorio Emperado and Leonarda de la Cruz were made
party defendants since they were co-makers of the promissory note.
- Private respondents, in their answer claims that the loaned sued upon is
only one of five loans secured by them from the petitioner wherein they
were charged usurious interest. They claim that the balance due is only
P1260.
- For failure to plead, Emperado was declared in default while the case
Prof. Victoria A. 16
against de la Cruz was dismissed w/o prejudice.
- Respondents file a motion to dismiss for lack of jurisdiction since the
petitioner only prays for P1520. It therefore comes under the jurisdiction of
the original jurisdiction of the municipal court. Also, since the petitioner
prays for foreclosure of chattel in Bulacan, it should have been filed there
where the deed of chattel mortgage is located. The CFI dismissed the
case. Motion for reconsideration was likewise denied.
ISSUE/S
1. WON the city court has jurisdiction
HELD
1. YES.
Ratio Although the purpose of the action is to recover an amount plus
interest which comes within the original jurisdiction of the Justice of the
Peace Court, yet when said action involves foreclosure of chattel
mortgage covering properties valued at more than P10,000, the action
should be instituted before the CFI.
Reasoning In the case at bar, the amount sought to be recovered is
P1520 plus interest and costs, and chattel mortgage of properties valued
at P15340. It is therefore within the jurisdiction of the CFI.
Disposition Petition granted
1997 RULES OF CIVIL PROCEDURE
SCOPE AND CONSTRUCTION
UNIFORM PROCEDURE
ACTIONS
NATURE
Real/personal/mixed
HERNANDEZ V. RURAL BANK OF LUCENA
81 SCRA 75
AQUINO, 10 Jan. 1978
FACTS
-This case is about the propriety of a separate action to compel a
distressed rural bank, which is under judicial liquidation, to accept a check
in payment of a mortgage debt.
-Spouses Francisco S. Hernandez and Josefa U. Atienza obtained from
the Rural Bank of Lucena, Inc. a loan of P6,000 secured by a mortgage
on their two lots situated in Cubao, Quezon City. Three months after that
loan was obtained, the Lucena bank became a distressed bank.
-Before the expiration of the one year term of the loan, or on August 22,
1961, Hernandez went to the Lucena bank and offered to pay the loan by
means of a check for P6,000 which was drawn against the bank by a
depositor, the San Pablo Colleges, and which was payable to Hernandez.
 Civil Procedure Digest
As the bank's executive vice-president was not available, the payment
was not consummated. At the time that the check was issued, the San
Pablo Colleges had a deposit in the Lucena bank amounting to
P11,890.16. Instead of withdrawing P6,000 from that deposit, the San
Pablo Colleges chose to issue a check for that amount to Hernandez. He
sent to the bank by registered mail a photostat of the check and a letter
inquiring whether the bank would honor the check and when he could go
personally to the bank for that purpose. That letter was received by the
bank. The executive vice-president wrote to Hernandez and informed him
that the check could not be honored for the time being because of
adverse events that had disrupted the bank's operations. What the vice-
president meant was that by reason of the letter of the Central Bank
Governor dated June 16, 1961 the operations of the Lucena bank were
suspended. The vice-president explained that because there was a run on
the bank its assets were exhausted, and so the check sent by Hernandez,
which check was drawn against the Lucena bank, could not be accepted.
The vice-president said that when Hernandez presented the check, the
Lucena bank was no longer in a position to honor withdrawals and that
had Hernandez paid cash, his payment would have been accepted. To
honor the check would have been tantamount to allowing a depositor (San
Pablo Colleges) to make a withdrawal but the Lucena bank could not
entertain withdrawals without the consent of the Central Bank examiners.
Payment by check was a disbursement.
Apparently, the vice-president did not take the trouble of asking the
Central Bank examiners whether the payment by check made by
Hernandez could be accepted. Hernandez himself who should have
known that the bank was a distressed bank which had suspended
operations and which was under the supervision of Central Bank
examiners, did not bother to take up his problem with the said examiners.
-Hernandez again asked the bank when he could deliver the check. The
executive vice-president told Hernandez that the bank could not yet honor
the check because it had not resumed its banking operations; that it was
awaiting the outcome of a case filed by the bank against the Central Bank;
that it might reopen in January, 1962, and that, anyway, the loan would not
be due until March 21, 1962.
Hernandez sent another letter and enclosed the original check (duly
endorsed) with his letter to the bank sent by registered mail and special
delivery. Letter was returned to Hernandez because the bank's manager
was allegedly in Manila. Undeterred, Hernandez again mailed the check to
the bank with the request that his mortgage be cancelled.
-Monetary Board had decided to liquidate the Lucena bank. To implement
the resolution of the Monetary Board for the Liquidation of the Lucena
bank, the Central Bank, pursuant to section 29 of its charter and on the
assumption that the Lucena bank was insolvent, filed with the Court of
First Instance of Manila a petition dated March 27, 1962 for assistance
and supervision in the liquidation of the Lucena bank. Court of First
Instance of Manila issued an order directing the Lucena bank to turn over
its assets to the Central Bank's authorized representative.
-Among the accounts receivable of the Lucena bank inventoried by the
Central Bank's representative was the account of Hernandez. In a letter
dated October 29, 1963 Hernandez informed the Central Bank that he had
sent to the Lucena bank on April 25, 1962 the check for P6,000. He again
A2010
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requested that his mortgage be cancelled. The Associate Superintendent
of Banks in his answer returned the check to Hernandez and informed him
that, according to the Lucena bank's executive vice-president, the check
could not be applied to the payment of Hernandez' loan because the bank
was already closed when he received the check. Moreover, the check was
drawn against the current deposits of the San Pablo Colleges in the
Lucena bank which was in the process of liquidation. Hernandez was
advised to settle his account by paying cash or by means of a check
drawn against a bank other than the Lucena bank.
-Disregarding that suggestion, Hernandez announced to the Associate
Superintendent of Banks in his letter that he was going to deposit the said
check in the Court of First Instance of Lipa City on or before December
26, 1963.
-Instead of filing a consignation complaint. Hernandez enclosed the check
with his letter to the clerk of court of the Court of First Instance at Lipa
City. Hernandez wrote a letter dated January 11, 1964 informing the
Associate Superintendent of Banks of the judicial deposit of the check.
Copies of that letter were furnished the Lucena bank and the San Pablo
Colleges.
- Hernandez and his wife filed an action in the Court of First Instance at
Lipa City to compel the Rural Bank of Lucena, Inc., the Central Bank as
liquidator, and Jose S. Martinez as receiver, to accept the check and to
execute the cancellation of the real estate mortgage. The Hernandez
spouses also asked for moral damages in the amount of P10,000 and
attorney's fees of P3,000.
- Central Bank filed a motion to dismiss. It contended that there was
improper venue because, as the action allegedly involved title to real
property, it should have been instituted in Quezon City where the
encumbered lots are situated. It further contended that since the Lucena
bank is under liquidation and is in the hands of a receiver, its properties
and assets are in custodia legis and may, therefore, be reached only by
motion or petition in Civil Case No. 50019 of the Court of First Instance of
Manila. The motion was denied.
-Counsel for the Lucena bank on January 30, 1967 offered to compromise
the case by stipulating that the Central Bank would apply the check in
question to the mortgage debt of Hernandez if the balance of the deposit
of the San Pablo Colleges would be enough to cover the amount of the
check of P6,000 and that, by virtue of that compromise, the complaint and
counterclaim would be dismissed.That conditional and equivocal
compromise offer fizzled out because the lawyers of Hernandez and the
Central Bank did not assent to it.
-Lower court ordered the Lucena bank or the Central Bank, as liquidator,
to accept and honor the check, to cancel the mortgage, and to pay the
Hernandez spouse P25,000 as moral damages (not P10,000 as prayed
for in the complaint) plus P1,000 as attorney's fees.
-The Lucena bank, the Central Bank and its employee, the receiver,
appealed to the SC.
ISSUE/S
1. WON the action of the Hernandez spouses to compel them to honor the
check in question and to cancel the mortgage on their two lots is a real
action affecting title to real property which should have been filed in the
Prof. Victoria A. 17
Court of First Instance of Rizal at Quezon City where the mortgaged lots
are situated.
2. WON Lucena bank had not lost its juridical personality after it was
placed under liquidation thus making it not fall under the jurisdiction of the
liquidation court
HELD
1. No it is a personal action.
Section 2(a), Rule 4 of the Rules of Court provides that "actions affecting
title to, or for recovery of possession, or for partition or condemnation of,
or foreclosure of mortgage on, real property, shall be commenced and
tried in the province where the property or any part thereof lies"
Note that the rule mentions an action for foreclosure of a real estate
mortgage but does not mention an action for the cancellation of a real
mortgage. In the instant case, the action is primarily to compel the
mortgagee to accept payment of the mortgage debt and to release the
mortgage.
That action, which is not expressly included in the enumeration
found in section 2(a) of Rule 4, does not involve the title to the
mortgage lots. It is a personal action and not a real action. The
mortgagee has not foreclosed the mortgage. Plaintiffs' title is not
in question. They are in possession of the mortgaged lots.
Hence, the venue of plaintiffs' personal action is the place where the
defendant or any of the defendants resides or may be found, or where the
plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Sec.
2[b], Rule 4).
The plaintiffs in their brief confound a real action with an action in rem and
a personal action with an action in personam. They argue that their action
is not an action in rem and, therefore, it could be brought in a place other
than the place where the mortgaged lots are located.
A real action is not the same as an action in rem and a personal
action is not the same as an action in personam.
In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of
damages. In a real action, the plaintiff seeks the recovery of real
property, or, as indicated in section 2(a) of Rule 4, a real action is
an action affecting title to real property or for the recovery of
possession, or for partition or condemnation of, or foreclosure of a
mortgage on, real property.
An action in personam is an action against a person on the basis
of his personal liability, while an action in rem is an action against
the thing itself, instead of against the person (1 C. J. S. 943-4),
Hence, a real action may at the same time be an action, in
personam and not necessarily an action in rem. In this case, the
plaintiffs alleged in their complaint that they were residents of San
Juan, Batangas, which in their brief they characterize as their
legal residence and which appears to be their domicile of origin.
On the other hand, it is indicated in the promissory note and mortgage
signed by them and in the Torrens title covering the mortgaged lots that
their residence is at 11 Chicago Street, Cubao, Quezon City, which
apparently is the place where the said lots are located. The plaintiffs did
 Civil Procedure Digest
not testify during the trial, So, they have no testimony in the records as to
their actual residence.
We hold that the trial court should have dismissed the action
because the venue thereof was improperly laid in Batangas. The
term "resides" in section 2[b] of Rule 4 refers to the place of actual
residence or the place of abode and not necessarily to the legal
residence or domicile (Dangwa Transportation Co., Inc. vs.
Sarmiento, L-22795, January 31, 1977, 75 SCRA 124, 128). (Of
course, the actual residence may also in some cases be the legal
residence or domicile.).
San Juan, Batangas might be the place where the plaintiffs have their
domicile or legal residence but there is no question that 11 Chicago
Street, Cubao, Quezon City is their place of abode or the place where
they actually reside. So, the action in this case, which is a personal action
to compel the defendants to honor the check in question and to cancel the
mortgage, should have been filed in Quezon City if the plaintiffs intended
to use their residence as the basis for their choice of venue.
The Central Bank points out that the redemption action of the Hernandez
spouses would ultimately affect the funds and property of the Lucena
Bank. Hence, the liquidation court is the competent tribunal to pass upon
the issue as to whether the Hernandez spouses could validly pay their
mortgage debt by means of the check of the San Pablo Colleges.
2. No. The liquidation court or the Manila court has exclusive jurisdiction to
entertain the claim of the Hernandez spouses.
At the time the Hernandez spouses filed in 1964 their consignation
complaint the Lucena bank was already under liquidation. The Manila
court in its order of March 28, 1963 had ordered the officers of the Lucena
bank to turn over to the Central Bank or to the receiver, the
Superintendent of Banks, all of its assets, properties and papers. Among
the assets turned over to the receiver was the outstanding or unpaid
account of the Hernandez spouses which appears in the inventory as:
"393. Hernandez, Francisco S., 11 Chicago St., Cubao, Q. C.
And among the papers or obligations turned over to the receiver was
Ledger No. 056 evidencing the deposit of the San Pablo Colleges in the
Lucena bank in the sum of P11,890.16, against which the check for
P6,000 was drawn. It was that check which the Hernandez spouses had
issued to pay their mortgage debt to the Lucena bank.
Under section 29 of the Central Bank Act, Republic Act No. 265, when the
Monetary Board, upon information submitted by the Superintendent of
Banks, finds a bank to be insolvent, it shall forbid the bank to do business
and it shall take care of its assets according to law.
In that case, if the Monetary Board finds out that the insolvent bank
cannot resume business with safety to its creditors, it shall through the
Solicitor General, file a petition in the Court of First Instance, praying for
the assistance and super vision of the court in the liquidation of the bank's
affairs. Thereafter, the Superintendent of Banks, upon order of the
Monetary Board and under the supervision of the court, shall convert to
money the bank's assets. "Sabido es que uno de los deberes primordiales
de un depositario es hacerse cargo inmediatamente de todo el activo y
pasivo de un banco" (Luy Lam & Co. vs. Mercantile Bank of China, 71
Phil. 573, 576).
A2010
Avena
The fact that the insolvent bank is forbidden to do business, that
its assets are turned over to the Superintendent of Banks, as a
receiver, for conversion into cash, and that its liquidation is
undertaken with judicial intervention means that, as far as lawful
and practicable, all claims against the insolvent bank should be
filed in the liquidation proceeding.
The judicial liquidation is intended to prevent multiplicity of actions against
the insolvent bank. The lawmaking body contemplated that for
convenience only one court, if possible should pass upon the claims
against the insolvent bank and that the liquidation court should assist the
Superintendent of Banks and control his operations.
In the course of the liquidation, contentious cases might arise wherein a
full-dress hearing would be required and legal issues would have to be
resolved. Hence, it would be necessary in justice to all concerned that a
Court of First Instance should assist and supervise the liquidation and
should act as umpire and arbitrator in the allowance and disallowance of
claims.
The judicial liquidation is a pragmatic arrangement designed to
establish due process and orderliness in the liquidation of the
bank, to obviate the proliferation of litigations and to avoid
injustice and arbitrariness.
DispositioN. WHEREFORE, the trial court judgment is reversed and set
aside. The case is dismissed without prejudice to the right of the
Hernandez spouses to take up with the liquidation court the settlement of
their mortgage obligation. Costs against the plaintiffs appellees. SO
ORDERED.
In personam/ in rem/ quasi in rem
DE MIDGELY VS FERANDOS
(SUPRA)
FACTS
Half-brother appointed as administrator, caused the extraterritorial service
of summons to half siblings living in Spain to settle the question of
ownership over certain properties and rights in some mining claims as
Quemada believed that those properties belong to the estate of Alvaro
Pastor, Sr. De Midgely and Pastor both filed a motion to dismiss on the
ground of lack of jurisdiction BUT further alleged that earnest efforts
towards a compromise have not been made
ON ACTIONS IN REM
Even if the lower court did not acquire jurisdiction over De Midgely, her
motion to dismiss was properly denied because Quemada’s action against
her maybe regarded as a quasi in rem where jurisdiction over the person
of a non-resident defendant is not necessary and where the service of
summons is required only for the purpose of complying with the
requirement of due process. Quasi in rem is an action between parties
where the direct object is to reach and dispose of property owed by the
parties or of some interest therein.
Prof. Victoria A. 18
-in a quasi in rem action jurisdiction over a non resident defendant is not
essential. The service of summons by publication is required merely to
satisfy the constitutional requirement of due process. The judgment of the
court would settle the title to the properties and to that extent it partakes
of the nature of judgment in rem. The judgment is confined to the res
(properties) and no personal judgment could be rendered against the non
resident.
COMMENCEMENT OF ACTION
CB V. CA
(supra)
FACTS
Consolidated cases. Issue was regarding the payment of the correct
docket fee.
RULING ON COMMENCEMENT OF ACTION
-It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject-matter or nature of the action. Where the
filling of the initiatory pleading is not accompanied by payment of the
docket fee, the court may allow the payment of the fee within a
reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
- The prescriptive period therein mentioned refers to the period within
which a specific action must be filed. It means that in every case, the
docket fee must be paid before the lapse of the prescriptive period.
GO V TONG
G.R. No. 151942.
PANGANIBAN; November 27, 2003
NATURE
Petition for review on Certiorari
FACTS
- Petitioner Juana Go purchased a cashier’s check of P500K from the Far
East Bank and Trust Company (FEBTC), private respondent Tong. On
Go’s instruction, the cashier’s check bore the words ‘Final
Payment/Quitclaim’ after the name of payee Tong allegedly to insure that
Tong would honor his commitment that he would no longer ask for further
payments for his interest in the ‘informal business partnership’ which he
and she had earlier dissolved. Tong deposited it with the words ‘Final
Payment/Quitclaim’ already erased, hence, it was not honored.
- Tong’s lawyer requested that the check be replaced with another payable
to ‘Johnson Tong-Final Settlement/Quitclaim’ with same amount, the bank
charges to be paid by his client-Tong, which was denied by FEBTC. So,
Tong filed complaint against FEBTC and Go at RTC Manila. FEBTC and
 Civil Procedure Digest
Go answered that erasure was intentional, which justified the dishonor
and refusal to replace check.
- Case pending, Go’s son, George, filed a criminal complaint against Tong
falsification of the check. The criminal complaint was dismissed.
- Tong filed ‘Motion for Leave to File a Supplemental Complaint and to
Admit the Attached Supplemental Complaint’ which Supplemental
Complaint alleged that Sps. Go’s ‘used’ their son to file the criminal
complaint against him which caused damages, hence, the prayer for an
increase in the amount of MD and ED sought to be recovered from P2.5M
to P55M and praying for the award of AD of P58K. RTC granted the
motion and admitted the Supplemental Complaint.
- Go filed a Manifestation of Deposit and deposited to the RTC Clerk of
Court P500K representing the amount of the check, ‘subject to the
condition that it shall remain deposited until the disposition of the case.’
MFRs of FEBTC and Go were denied.
- One of the defenses of FEBTC and Go: Tong cannot prosecute his
Supplemental Complaint, and the same should be dismissed, unless the
corresponding docket fee and legal fees for the monetary claims of P55M
are paid for.
- On Feb. 5, 1999, RTC, acting on the verbal motion of Tong’s counsel,
allowed the release of petitioners’ P500K deposit to Tong. Later, RTC, in
the interest of justice and because of the huge amount of outlay involved
(the Court considers the business climate and the peso crunch prevailing),
allowed Tong to first deposit P25K on or before Dec.15, 1999 and P20K
every month thereafter until the full amount of docket fees is paid, and
“only then shall the deposits be considered as payment of docket fees.”
FEBTC and Go filed MFR but was denied. Hence, this case.
ISSUE
WON respondent judge and the CA erred in allowing private respondent to
pay the docket fee on a staggered basis.
HELD
NO
Ratio Docket fees should be paid upon the filing of the initiatory
pleadings. However, for cogent reasons to be determined by the trial
judge, staggered payment thereof within a reasonable period may be
allowed. Unless grave abuse of discretion is demonstrated, the discretion
of the trial judge in granting staggered payment shall not be disturbed.
Reasoning An action commences from the filing of the original complaint
and the payment of the prescribed docket fees. However, where the filing
of the initiatory pleading is not accompanied by payment of the docket fee,
the court may allow payment of the fee within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period. (Sun
Insurance Office Ltd. V Asuncion) In other words, while the payment of the
prescribed docket fee is a jurisdictional requirement, even its nonpayment
at the time of filing does not automatically cause the dismissal of the case,
as long as the fee is paid within the applicable prescriptive or
reglementary period; more so when the party involved demonstrates a
willingness to abide by the rules prescribing such payment.
Disposition Petition is DENIED.
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Avena
HEIRS OF HINOG V MELICOR
G.R. No. 140954
AUSTRIA-MARTINEZ; April 12, 2005
NATURE
Petition for certiorari and prohibition
FACTS
- Private respondents Custodio, Rufo, Tomas and Honorio, all surnamed
Balane own a 1,399- square meter parcel of land situated in Malayo
Norte, Cortes, Bohol, designated as Lot No. 1714. Sometime in March
1980, they allowed Bertuldo Hinog to use a portion of the said property for
a period of ten years and construct thereon a small house of light
materials at a nominal annual rental of P100.00 only, considering the
close relations of the parties. After the expiration of the ten-year period,
they demanded the return of the occupied portion and removal of the
house constructed thereon but Bertuldo refused and instead claimed
ownership of the entire property by virtue of a Deed of Absolute Sale
dated July 2, 1980, executed by one Tomas Pahac with the knowledge
and conformity of private respondents.
- Accordingly, private respondents filed a complaint for “Recovery of
Ownership and Possession, Removal of Construction and Damages”
against Bertuldo.
- Trial ensued but on June 24, 1998, Bertuldo died without completing his
evidence. Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as
his services were terminated by petitioner Bertuldo Hinog III. Atty.
Veronico G. Petalcorin then entered his appearance as new counsel for
Bertuldo.
- On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the
ground that private respondents failed to specify in the complaint the
amount of damages claimed so as to pay the correct docket fees; and
that under Manchester Development Corporation vs. Court of Appeals,
non-payment of the correct docket fee is jurisdictional. It was further
alleged that the private respondents failed to pay the correct docket fee
since the main subject matter of the case cannot be estimated as it is for
recovery of ownership, possession and removal of construction.
- Private respondents opposed the motion to expunge on the following
grounds: (a) said motion was filed more than seven years from the
institution of the case; (b) Atty. Petalcorin has not complied with Section
16, Rule 3 of the Rules of Court which provides that the death of the
original defendant requires a substitution of parties before a lawyer can
have legal personality to represent a litigant and the motion to expunge
does not mention of any specific party whom he is representing [this was
later on complied with by Atty. Petalcorin]; (c) collectible fees due the court
can be charged as lien on the judgment; and (d) considering the lapse of
time, the motion is merely a dilatory scheme employed by petitioners.
- In their Rejoinder, petitioners manifested that the lapse of time does not
vest the court with jurisdiction over the case due to failure to pay the
correct docket fees. As to the contention that deficiency in payment of
docket fees can be made as a lien on the judgment, petitioners argued
Prof. Victoria A. 19
that the payment of filing fees cannot be made dependent on the result of
the action taken.
- On January 21, 1999, the trial court ordered the complaint to be
expunged from the records and the nullification of all court proceedings
taken for failure to pay the correct docket fees.
- On January 28, 1999, upon payment of deficiency docket fee, private
respondents filed a manifestation with prayer to reinstate the case.
Petitioners opposed the reinstatement but on March 22, 1999, the trial
court issued the first assailed Order reinstating the case.
- On July 14, 1999, petitioners manifested that the trial court having
expunged the complaint and nullified all court proceedings, there is no
valid case and the complaint should not be admitted for failure to pay the
correct docket fees; that there should be no case to be reinstated and no
case to proceed as there is no complaint filed.
- After the submission of private respondents’ opposition and petitioners’
rejoinder, the trial court issued the second assailed Order on August 13,
1999, essentially denying petitioners’ manifestation/rejoinder. The trial
court held that the issues raised in such manifestation/rejoinder are
practically the same as those raised in the amended motion to expunge
which had already been passed upon in the Order dated January 21,
1999. Moreover, the trial court observed that the Order dated March 22,
1999 which reinstated the case was not objected to by petitioners within
the reglementary period or even thereafter via a motion for
reconsideration despite receipt thereof on March 26, 1999.
- On August 25, 1999, petitioners filed a motion for reconsideration but the
same was denied by the trial court in its third assailed Order dated
October 15, 1999. Hence, this petition.
ISSUE
WON grave abuse of discretion was committed by the trial court in
reinstating the complaint upon the payment of deficiency docket fees
HELD
NO
- The unavailability of the writ of certiorari and prohibition in this case is
borne out of the fact that petitioners principally assail the Order dated
March 22, 1999 which they never sought reconsideration of, in due time,
despite receipt thereof on March 26, 1999. Instead, petitioners went
through the motion of filing a supplemental pleading and only when the
latter was denied, or after more than three months have passed, did they
raise the issue that the complaint should not have been reinstated in the
first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
- After recognizing the jurisdiction of the trial court by seeking affirmative
relief in their motion to serve supplemental pleading upon private
respondents, petitioners are effectively barred by estoppel from
challenging the trial court’s jurisdiction. If a party invokes the jurisdiction of
a court, he cannot thereafter challenge the court’s jurisdiction in the same
case. To rule otherwise would amount to speculating on the fortune of
litigation, which is against the policy of the Court.
- It must be clarified that the said order is but a resolution on an incidental
matter which does not touch on the merits of the case or put an end to the
 Civil Procedure Digest
proceedings. It is an interlocutory order since there leaves something else
to be done by the trial court with respect to the merits of the case. The
remedy against an interlocutory order is generally not to resort forthwith to
certiorari, but to continue with the case in due course and, when an
unfavorable verdict is handed down, to take an appeal in the manner
authorized by law. Only when the court issued such order without or in
excess of jurisdiction or with grave abuse of discretion and when the
assailed interlocutory order is patently erroneous and the remedy of
appeal would not afford adequate and expeditious relief will certiorari be
considered an appropriate remedy to assail an interlocutory order. Such
special circumstances are absolutely wanting in the present case.
- Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not
automatically cause the dismissal of the case, as long as the fee is paid
within the applicable prescriptive or reglementary period, more so when
the party involved demonstrates a willingness to abide by the rules
prescribing such payment. Thus, when insufficient filing fees were initially
paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply. Under the peculiar
circumstances of this case, the reinstatement of the complaint was just
and proper considering that the cause of action of private respondents,
being a real action, prescribes in thirty years, and private respondents did
not really intend to evade the payment of the prescribed docket fee but
simply contend that they could not be faulted for inadequate assessment
because the clerk of court made no notice of demand or reassessment.
They were in good faith and simply relied on the assessment of the clerk
of court.
- While the docket fees were based only on the real property valuation, the
trial court acquired jurisdiction over the action, and judgment awards
which were left for determination by the court or as may be proven during
trial would still be subject to additional filing fees which shall constitute a
lien on the judgment. It would then be the responsibility of the Clerk of
Court of the trial court or his duly authorized deputy to enforce said lien
and assess and collect the additional fees.
CAUSE OF ACTION, DEFINED
FELIPE V LEUTERIO
91 Phil 482
Bengzon; May 30, 1952
NATURE
Original Action in the Supreme Court. Certiorari
FACTS:
In an oratorical contest held in Naga, Camarines' Sur, first honor was
given by the board of five judges to Nestor Nosce, and second honor to
Emma Imperial. Six days later, Emma asked the court of first instance of
that province to reverse the award, alleging that one of the judges had
fallen into error in grading her performance. After a hearing, and over the
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objection. of the other four judges of the contest, the court declared Emma
Imperial winner of the first place
ISSUE
WON the courts have the authority to reverse the award of the board of
judges of an oratorical competition
HELD
No.
Reasoning.. The Court held: “We observe that in assuming jurisdiction
over the matter, the respondent judge reasoned out that where there is a
wrong there is a remedy and that courts of first instance are courts of
general jurisdiction.
The flaw in his reasoning lies in the assumption that Imperial suffered
some wrong at the hands of the board of judges. If at all, there was error
on the part of one judge, at most. Error and wrong do not mean the same
thing. "Wrong" as used in the aforesaid legal principle is the deprivation or
violation of a right. As stated before, a contestant has no right to the prize
unless and until he or she is declared winner by the board of referees or
judges
Granting that Imperial suffered some loss or injury, yet in law there are
instances of "damnum absque injuria". This is one of them. If fraud or
malice had been proven, it would be a different proposition. But then her
action should be directed against the individual judge or judges who
fraudulently or maliciously injured her. Not against the other judges
Disposition. The judiciary has no power to reverse the award of the
board of judges of an oratorical contest. For that matter it would not
interfere in literary contests, beauty contests and similar competitions
SANTIAGO V BAUTISTA
32 SCRA 188
BARREDO : MARCH 30, 1970
NATURE
Appeal from the order of the Court of First Instance of Cotabato
dismissing, on a motion to dismiss, its Civil Case No. 2012 for certiorari,
injunction and damages on the ground that the complaint therein states no
cause of action, and from the subsequent order of the court a quo denying
the motion for the reconsideration of the said order of dismissal.
FACTS
-Appellant Teodoro Santiago, Jr. was a pupil in Grade Six at the Sero
Elementary School in Cotabato City.
-When the school year was about to end the "Committee On The Rating
Of Students For Honor" was constituted by the teachers concerned at said
school for the purpose of selecting the "honor students" of its graduating
class. The above-named committee deliberated and finally adjudged
Teodoro C. Santiago, Jr. as third honor. The school's graduation exercises
were thereafter set for May 21, 1965; but three days before that date, the
"third placer" Teodoro Santiago, Jr., represented by his mother, and with
Prof. Victoria A. 20
his father as counsel, sought the invalidation of the "ranking of honor
students" thus made, by instituting the civil case in the Court of First
Instance of Cotabato, against the committee members along with the
District Supervisor and the Academic Supervisor of the place.
SANTIAGOs alleged that: (1) Plaintiff-petitioner Teodoro C. Santiago,
Jr. is a sixth grader at the Sero Elementary School in Cotabato City
scheduled to be graduated on May 21st, 1965 with the honor rank of third
place, which is disputed; (2) That the teachers of the school had been
made respondents as they compose the "Committee on the Rating of
Student for Honor", whoserave abuse of official discretion is the subject of
suit, while the other defendants were included as Principal, District
Supervisor and Academic Supervisor of the school; (3) That Teodoro
Santiago, Jr. had been a consistent honor pupil from Grade I to Grade V
of the Sero Elementary School, while Patricia Liñgat (second placer in the
disputed ranking in Grade VI) had never been a close rival of petitioner
before, except in Grade V wherein she ranked third; (4) That Santiago, Jr.
had been prejudiced, while his closest rival had been so much benefited,
by the circumstance that the latter, Socorro Medina, was coached and
tutored during the summer vacation of 1964 by Mrs. Alpas who became
the teacher of both pupils in English in Grade VI, resulting in the far lead
Medina obtained over the other pupil; (5) That the committee referred to in
this case had been illegally constituted as the same was composed of all
the Grade VI teachers only, in violation of the Service Manual for Teachers
of the Bureau of Public Schools which provides that the committee to
select the honor students should be composed of all teachers in Grades V
and VI; (6) That there are direct and circumstantial matters, which shall be
proven during the trial, wherein respondents have exercised grave abuse
of discretion and irregularities, such as the changing of the final ratings on
the grading sheets of Socorro Medina and Patricia Liñgat; (7) That there
was a unanimous agreement and understanding among the respondent
teachers to insult and prejudice the second and third honors by rating
Socorro Medina with a perfect score, which is very unnatural; (8) That the
words "first place" in petitioner's certificate in Grade I was erased and
replaced with the words "second place", which is an instance of the unjust
and discriminating abuses committed by the respondent teachers in the
disputed selection of honor pupils they made; (9) That petitioner
personally appealed the matter to the School Principal, to the District
Supervisor, and to the Academic Supervisor, but said officials "passed the
buck to each other" to delay his grievances, and as to appeal to higher
authorities will be too late, there is no other speedy and adequate remedy
under the circumstances; and, that petitioner and his parents suffered
mental and moral damages in the amount of P10,000.00; and (10) The
petitioners prayed to the Court to set aside the final list of honor students
in Grade VI of the Sero Elementary School for that school year 1964-
1965, and, during the pendency of the suit, to enjoin the respondent
teachers from officially and formally publishing and proclaiming the said
honor pupils in Grade VI in the graduation exercises the school was
scheduled to hold on the 21st of May of that year 1965.
LC: denied injunction
-As scheduled, the graduation exercises of the Sero Elementary School
for the school year 1964-1965 was held on May 21, with the same
protested list of honor students.
 Civil Procedure Digest A2010 Prof. Victoria A. 21

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The Court then required the respondents to answer the petition within 10 G.R. L-3756 Ratio If defendant-appellant is liable at all, its obligations, must arise from
days but respondents moved for the dismissal of the case instead on the any of the four sources of obligations, namley, law, contract or
LABRADOR; June 30, 1952
grounds (1) that the action for certiorari was improper, and (2) that even quasi-contract, crime, or negligence. (Article 1089, Spanish Civil
assuming the propriety of the action, the question brought before the court Code.)
NATURE
had already become academic. This was opposed by petitioner. Reasoning Defendant-appellant is not guilty of any offense at all,
Action to recover piece of property
The motion to dismiss was granted. because it entered the premises and occupied it with the
Upon receipt of a copy of the above-quoted order, the petitioner moved for permission of the entity which had the legal control and
FACTS
the reconsideration thereof, but the same was dismissed. administration thereof, the Alien Property Administration. Neither
- The land belongs to the plaintiff, in whose name the title was registered
Petitioners appealed was there any negligence on its part. There was also no privity (of
before the war. During the Japanese occupation, the land was acquired by
contract or obligation) between the Alien Property Custodian and
a Japanese corporation, Taiwan Tekkosho, for the sum of P140,000, and
ISSUE/S the Taiwan Tekkosho, such that the Alien Property Custodian or its
thereupon title thereto issued in its name. After liberation, the Alien
WON the said committee of teachers does falls within the category of the permittee (defendant-appellant) may be held responsible for the
Property Custodian of the United States of America took possession,
tribunal, board, or officer exercising judicial functions contemplated by supposed illegality of the occupation of the property by the said
control, and custody thereof under section 12 of the Trading with the
Rule 65 Taiwan Tekkosho. The Alien Property Administration had the
Enemy Act, for the reason that it belonged to an enemy national. During
control and administration of the property not as successor to the
the year 1946 the property was occupied by the Copra Export
HELD: interests of the enemy holder of the title, the Taiwan Tekkosho, but
Management Company under a custodianship agreement with United
1. NO (therefore, no cause of action exists) by express provision of law. Neither is it a trustee of the former
States Alien Property Custodian, and when it vacated the property it was
Reasoning. In this jurisdiction certiorari is a special civil action instituted owner, the plaintiff-appellee herein, but a trustee of then
occupied by the defendant herein. The defendant was authorized to repair
against 'any tribunal, board, or officer exercising judicial functions.' A Government of the United States, in its own right, to the exclusion
the warehouse on the land, and actually spent thereon the repairs the
judicial function is an act performed by virtue of judicial powers; the of, and against the claim or title of, the enemy owner. From
sum of P26,898.27.
exercise of a judicial function is the doing of something in the nature of the August, 1946, when defendant-appellant took possession, to the
- Plaintiff brought an action in court to annul the sale of property of Taiwan
action of the court. In order that a special civil action of certiorari may be late of judgment on February 28, 1948, Alien Property
Tekkosho, and recover its possession. The case did not come for trial
invoked in this jurisdiction the following circumstances must exist: (1) that Administration had the absolute control of the property as trustee
because the parties presented a joint petition in which it is claimed by
there must be a specific controversy involving rights of persons or of the Government of the United States, with power to dispose of it
plaintiff that the sale in favor of the Taiwan Tekkosho was null and void
property and said controversy is brought before a tribunal, board or officer by sale or otherwise, as though it were the absolute owner.
because it was executed under threats, duress, and intimidation, and it
for hearing and determination of their respective rights and obligations; (2) Therefore, even if defendant-appellant were liable to the Alien
was agreed that the title issued in the name of the Taiwan Tekkosho be
the tribunal, board or officer before whom the controversy is brought must Property Administration for rentals, these would not accrue to the
cancelled and the original title of plaintiff re-issued.
have the power and authority to pronounce judgment and render a benefit of the plaintiff-appellee, the owner, but to the United States
- The present action is to recover the reasonable rentals from August,
decision on the controversy construing and applying the laws to that end; Government.
1946, the date when the defendant began to occupy the premises, to the
(3) the tribunal, board or officer must pertain to that branch of the Disposition Wherefore, the part of the judgment appealed from, which
date it vacated it.
sovereign power which belongs to the judiciary, or at least, which does not sentences defendant-appellant to pay rentals from August, 1946, to
belong to the legislative or executive department. February 28, 1949, is hereby reversed. In all other respects the judgment
ISSUE/S
- It is evident, upon the foregoing authorities, that the so called committee is affirmed. Costs of this appeal shall be against the plaintiff-appellee.
1. WON defendant is liable for rent of the said period
on the rating of students for honor whose actions are questioned in this
case exercised neither judicial nor quasi judicial functions in the MA-AO SUGAR CENTRAL CO V BARRIOS
HELD
performance of its assigned task. Before a tribunal board, or officer may
1. No 79 PHIL 666
exercise judicial or quasi judicial acts, it is necessary that there be a law
that give rise to some specific rights of persons or property under which FERIA; December 3, 1947
adverse claims to such rights are made, and the controversy ensuing
therefrom is brought, in turn, before the tribunal, board or officer clothed NATURE
with power and authority to determine what that law is and thereupon Petition for certiorari to set aside the order of the respondent judge
adjudicate the respective rights of the contending parties. denying the motion to dismiss the complaint of respondents
- There is nothing on record about any rule of law that provides that when
teachers sit down to assess the individual merits of their pupils for FACTS
purposes of rating them for honors, such function involves the - respondents filed a complaint seeking to recover amounts of money due
determination of what the law is and that they are therefore automatically to them from the petitioner before the outbreak of the war.
vested with judicial or quasi judicial functions. - the ground of the motion to dismiss filed by the petitioners is that the
complaint of the respondents does not state facts sufficient to constitute a
Dispositive. The judgment appealed from is affirmed, with costs against cause of action, because the plaintiffs have no right to demand the
appellant. payment of the defendants’ debts until after the termination or legal
cessation of the moratorium provided in EO No. 32: Enforcement of
payment of payments of all debts and other monetary obligations payable
SAGRADA V NATIONAL COCONUT CORP.
 Civil Procedure Digest
within the Philippines, except debts and other monetary obligations,
entered into in any area after declaration by Presidential Proclamation,
that such area has been freed from enemy occupation and control, is
temporarily suspended pending action by the Commonwealth
Government.
ISSUE/S
1. WON complain of the respondents states facts sufficient to constitute a
cause of action
HELD
1. NO
Ratio. A cause of action is an act or omission of one party in violation of
the legal rights of another, and its essential elements are: 1. legal right of
plaintiff, 2. correlative obligation of the defendant, and 3. act or omission
of defendant in violation of said legal right.
Reasoning. In this case, there was no omission on the part of the
defendant in vilation of the legal rights of the plaintiffs to be paid, because
EO No. 32 said debts are not yet payable or their payment cannot be
enforced until the legal cessation of the moratorium, which is still in force.
***BUT (not related to topic Cause of Action): even if the complaint of
the plaintiffs respondents states no cause of action, the SC holds that the
facts stated in the petition for certiorari and prohibition filed in the present
case do NOT entitle the petitioner to said reliefs. Because judge HAD
jurisdiction and did not exceed it or act with grave abuse of discretion in
denying the petitioner’s motion to dismiss. This Court, in actions of
certiorari, can only determine WON the court acted without or in excess of
its jurisdiction or with grave abuse of discretion. So… disposition:
Disposition Petition is denied.
DANFOSS V. CONTINENTAL CEMENT
CORPORATION
G.R. NO. 143788
CORONA; SEPT. 9 2005
NATURE
This is a petition for review on certiorari under Rule 45 of the 1997 Rules
on Civil Procedure of the decision of the Court of Appeals and its
resolution denying petitioner’s motion for reconsideration.
FACTS
- On November 5, 1998, respondent Continental Cement Corporation
(CCC) filed a complaint for damages against petitioner DANFOSS and
Mechatronics Instruments and Controls, Inc. (MINCI) before the RTC of
QC, Branch 80, alleging that:
(1) CCC purchased from MINCI two Danfoss Brand Frequency
Converter/Inverter for use in the Finish Mill of its Cement Plant. The said
purchase is covered by a Purchase Order which indicated the delivery
date to be within eight (8) to ten (10) weeks from the opening of the letter
of credit. CCC executed and opened a letter of credit under in favor of
DANFOSS INDUSTRIES PTE. LTD; (2) CCC through a letter dated 7
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November 1997, reiterated its demand that every delay in the shipment of
the two (2) unit Frequency Converter/Inverter will cause substantial losses
in its operations and requested for the early work out and the immediate
shipment of the frequency converter to avoid further loss to the company;
However, on 9 November 1997, DANFOSS, informed the other MINCI
through fax transmission, copy furnished plaintiff CCC, that the reason
why DANFOSS has delivery problems was that some of the supplied
components for the new VLT 5000 series did not meet the agreed quality
standard. That means that their factory was canvassing for another
supplier. And at that moment, there was no clear message when normal
production will resume.
-Due to this information received, CCC surmised that defendants MINCI
and DANFOSS could not be able to deliver the two (2) unit Frequency
Converter within the maximum period of ten (10) weeks period from the
opening of the Letter of Credit, as one of the conditions in the Purchase
Order. Thereafter, no definite commitment was received by plaintiff CCC
from defendants MINCI and DANFOSS for the delivery of the two unit
Frequency Converter.
-By reason of the delay to deliver, CCC informed MINCI in a letter dated
13 November 1997, of the plaintiff’s intention to cancel the said order. As
a consequence thereof, CCC has suffered an actual substantial
production losses in the amount P8,064,000.00 due to the time lost and
delay in the delivery of the said two (2) unit Frequency Converter/Inverter.
Likewise, plaintiff CCC was compelled to look for another supplier.
- On February 17, 1999, DANFOSS filed a motion to dismiss the
complaint on the ground that it did not state a cause of action.
- The court a quo denied the motion to dismiss in its order[4] dated May
28, 1999.
- Danfoss filed a motion for reconsideration of the order but it was denied.
On appeal to the CA, the latter also denied Danfoss’ petition for lack of
merit. The CA likewise denied petitioner’s motion for reconsideration,
hence, this appeal.
ISSUE
WON the CA erred in affirming the denial by the court a quo of petitioner’s
motion to dismiss the complaint for damages on the ground that it failed to
state a cause of action.
HELD
YES.
Ratio. In order to sustain a dismissal on the ground of lack of cause of
action, the insufficiency must appear on the face of the complaint. And
the test of the sufficiency of the facts alleged in the complaint to constitute
a cause of action is whether or not, admitting the facts alleged, the court
can render a valid judgment thereon in accordance with the prayer of the
complaint. For this purpose, the motion to dismiss must hypothetically
admit the truth of the facts alleged in the complaint.
Reasoning. After a careful perusal of the allegations in respondent’s
complaint for damages against petitioner, we rule that the same failed to
state a cause of action. When respondent sued petitioner for damages,
petitioner had not violated any right of respondent from which a cause of
action had arisen. Respondent only surmised that petitioner would not be
Prof. Victoria A. 22
able to deliver the two units frequency converter/inverter on the date
agreed upon by them. Based on this apprehension, it cancelled its order
six days prior to the agreed date of delivery. How could respondent hold
petitioner liable for damages (1) when petitioner had not yet breached its
obligation to deliver the goods and (2) after respondent made it impossible
for petitioner to deliver them by cancelling its order even before the
agreed delivery date?
-Section 1 (g), Rule 16 of the 1997 Revised Rules on Civil
Procedure provides that:
Section 1. Grounds – Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made
on any of the following grounds:
xxx xxx xxx
(g) That the pleading asserting the claim states no cause of action;
-ON CAUSE OF ACTION: A cause of action is defined under Section 2,
Rule 2 of the same Rules
Sec. 2. Cause of action, defined. – A cause of action is the act or omission
by which a party violates a right of another.***
- It is the delict or wrongful act or omission committed by the
defendant in violation of the primary right of the plaintiff.
- Disposition . WHEREFORE, we hereby GRANT the petition. The
assailed decision of the CA dated February 11, 2000 and its resolution
dated June 7, 2000 are REVERSED and SET ASIDE. Civil Case pending
before the RTC of Quezon City, Branch 80, is hereby DISMISSED.
MISJOINDER
UNION GLASS V SEC (Hofileña)
126 SCRA 32
ESCOLIN; November 28, 1983
NATURE
Petition for certiorari and prohibition seeking to annul and set aside the
order of the Securities and Exchange Commission (SEC)
FACTS
- Carolina Hofileña is a stockholder of Pioneer Glass Manufacturing
Corporation, a domestic corporation engaged in the operation of silica
mines and the manufacture of glass and glassware. Since 1967, Pioneer
Glass had obtained various loan accommodations from the Development
Bank of the Philippines [DBP], and also from other local and foreign
sources which DBP guaranteed. The proceeds were used in the
construction of a glass plant in Rosario, Cavite, and the operation of
seven silica mining claims owned by the corporation.
- As security, Pioneer Glass mortgaged and/or assigned its assets to the
DBP in addition to the mortgages executed by some of its corporate
officers over their personal assets. Through the conversion into equity of
the accumulated unpaid interests on the various loans DBP was able to
gain control of the outstanding shares of common stocks of Pioneer
 Civil Procedure Digest
Glass, and to get three regular seats in the corporation's board of
directors.
- When Pioneer Glass suffered serious liquidity problems such that it
could no longer meet its financial obligations with DBP, it entered into a
dacion en pago agreement with the latter, whereby all its assets
mortgaged to DBP were ceded to the latter in full satisfaction of the
corporation's obligations in the total amount of P59 million. Part of the
assets transferred to the DBP was the glass plant in Rosario, Cavite,
which DBP leased and subsequently sold to Union Glass and Container
Corporation.
- Hofileña filed a complaint before the SEC against the DBP, Union Glass
and Pioneer Glass. Hofileña prayed that the dacion en pago be declared
null and void and the assets of the Pioneer Glass taken over by DBP
particularly the glass plant be returned.
- Of the five causes of action pleaded, only the first cause of action
concerned Union Glass as transferee and possessor of the glass plant.
Union Glass moved for dismissal of the case on the ground that the SEC
had no jurisdiction over the subject matter or nature of the suit.
Respondent Hofileña filed her opposition to said motion, to which Union
Glass filed a rejoinder.
- SEC Hearing Officer Eugenio Reyes granted the MTD for lack of
jurisdiction. However, upon a MFR, he reversed his original order. Unable
to secure a reconsideration of the Order as well as to have the same
reviewed by the Commission En Banc, Union Glass filed this petition in
the SC.
ISSUE
1. WON the SEC has jurisdiction over the case and not the regular courts
HELD
1. NO.
Ratio In order that the SEC can take cognizance of a case, the
controversy must pertain to any of the following relationships: [a] between
the corporation, partnership or association and the public; [b] between the
corporation, partnership or association and its stockholders, partners,
members, or officers; [c] between the corporation, partnership or
association and the state in so far as its franchise, permit or license to
operate is concerned; and [d] among the stockholders, partners or
associates themselves.
Reasoning While the Rules of Court, which applies suppletorily to
proceedings before the SEC, allows the joinder of causes of action in one
complaint, such procedure however is subject to the rules regarding
jurisdiction, venue and joinder of parties. Since Union Glass has no intra-
corporate relationship with Hofileña, it cannot be joined as party-defendant
in said case as to do so would violate the rule on jurisdiction. Hofileña's
complaint against Union Glass for cancellation of the sale of the glass
plant should therefore be brought separately before the regular court.
- Such action, if instituted, shall be suspended to await the final outcome
of the SEC case, for the issue of the validity of the dacion en pago posed
in the SEC case is a prejudicial question, the resolution of which is a
logical antecedent of the issue involved in the action against Union Glass.
Thus, Hofileña's complaint against the latter can only prosper if final
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judgment is rendered in SEC Case No. 2035, annulling the dacion en
Pago executed in favor of the DBP.
NOTE: The jurisdiction of the SEC is delineated, by Sec 5 of PD 902-A:
SEC. 5. In addition to the regulatory and adjudicative function of the
Securities and Exchange Commission over corporations, partnerships and
other forms of associations registered with it as expressly granted under
existing laws and devices, it shall have original and exclusive jurisdiction
to hear and decide cases involving:
a) Devices and schemes employed by or any acts, of the board of
directors, business associates, its officers or partners, amounting to fraud
and misrepresentation which may be detrimental to the interest of the
public and/or the stockholders partners, members of associations or
organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between any
or all of them and the corporation, partnership or association of which they
are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns
their individual franchise or right to exist as such entity;
c) Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnerships or associations.
Disposition Petition GRANTED. Questioned orders of SEC, set aside.
PARTIES
Who may be parties
JUASING HARDWARE V MENDOZA
115 SCRA 783
GUERRERO; July 30, 1982
NATURE
Special Civil Action for certiorari
FACTS
- Juasing Hardware, alleging to be a single proprietorship duly organized
and existing under and by virtue of the laws of the Philippines and
represented by its manager Ong Bon Yong, filed a complaint for the
collection of a sum of money against Pilar Dolla.
- In her Answer, defendant stated that she "has no knowledge about
plaintiff's legal personality and capacity to sue as alleged in the
complaint."
- After plaintiff had completed the presentation of its evidence and rested
its case, defendant filed a Motion for Dismissal of Action (Demurrer to
Evidence) based on plaintiff's lack of legal capacity to sue. Defendant
contended that Juasing Hardware is a single proprietorship, not a
corporation or a partnership duly registered in accordance with law, and
therefore is not a juridical person with legal capacity to bring an action in
court. Plaintiff filed an Opposition and moved for the admission of an
Amended Complaint.
Prof. Victoria A. 23
- Judge Mendoza dismissed the case and denied admission of the
Amended Complaint. MFR was likewise denied
ISSUES
WON the lower court committed grave abuse of discretion when it
dismissed the case and refused to admit the Amended Complaint
HELD
YES
Ratio A defect in the designation of the parties may be summarily
corrected at any stage of the action provided no prejudice is caused
thereby to the adverse party. (Sec. 4, Rule 10, Revised Rules of Court)
Reasoning
- The complaint in the court below should have been filed in the name of
the owner of Juasing Hardware. The allegations in the body of the com.
plaint would show that the suit is brought by such person AS proprietor or
owner of the business conducted under the name and style Juasing
Hardware". The descriptive words "doing business as Juasing Hardware' "
may be added in the title of the case, as is customarily done.
- Rule 3 of the Revised Rules of Court , Sec. 1. Who may be parties.-Only
natural or juridical persons or entities authorized by law may be parties in
a civil action
- Petitioner is definitely not a natural person; nor is it a juridical person as
defined in the New Civil Code of the Philippines. 4 The law does not vest
juridical or legal personality upon the sole proprietorship nor empower it to
file or defend an action in court.
- However, the defect of the complaint is merely formal, not substantial.
Substitution of the party plaintiff would not constitute a change in the
Identity of the parties.
- The courts should be liberal in allowing amendments to pleadings to
avoid multiplicity of suits and in order that t he real controversies between
the parties are presented and the case decided on the merits without
unnecessary delay. This rule applies with more reason and with greater
force when the amendment sought to be made refers to a mere matter of
form and no substantial rights are prejudiced.
Dispositive Petition is GRANTED.
SEPARATE OPINION
AQUINO [concurring]
- It should appear in the amended complaint (a copy which was not
attached to the petition) that the plaintiff is Ong Hua or Huat, doing
4 Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as
they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality,
separate and distinct from that of each shareholder, partner or member.
 Civil Procedure Digest
business under the tradename, Juasing Hardware, and in the body of the
complaint the personal circumstances of Ong Hua should be stated.
Parties in interest
CARILLO, GUYOT, SENOY, RISONAR, GONZALES
V. CA (DABON AND DABON)
GR No. 121165
QUISUMBING; September 26, 2006
NATURE
Review on certiorari of decision of Court of Appeals
FACTS
- Gonzales filed complaint (action for specific performance) against Manio
sps, seeking execution of deed of sale of property she bought fr Priscilla
Manio. Gonzales said she pd downpayment to Priscilla because she had
an SPA from her son Aristotle, the owner of the land.
- TC ruled in favor of Gonzales. Gonzales deposited balance w/ the court
and filed motion for execution, w/c was w/drawn bec decision wasn’t
served on defendants. Sheriff finally served a copy at an ungodly hour of
12 mn.
- TC’s decision became final and executory.
- The Dabons, claiming to have bought the land fr Aristotle, filed before the
CA a petition for annulment of judgment and orders of the TC. They
alleged that the decision was void for lack of jurisdiction over their persons
as the real parties in interest. CA issued resolution restraining TC from
implementing its decision. Hence, this petition by Gonzales.
ISSUE/S
1. WON there was basis to annul the decision of the TC.
2. WON the Dabons can seek annulment of the TC judgment
HELD
1. YES.
Ratio
An action should be brought against the real party in interest. The real
party in interest is the one who would be benefited or injured by the
judgment or is the one entitled to the avails of the suit.
Reasoning
- Named petitioners herein are Carillo (Presiding Judge), Guyot (Clerk of
Court), Senoy (Deputy Sheriff), Risonar (Registrar of Deeds), and
Gonzales. Carillo, Guyot, Senoy and Risonar are not interested parties
because they would not benefit from the affirmative reliefs sought. Only
Gonzales remains as genuine party-petitioner in this case.
- Gonzales insists that the Dabons have no right to seek annulment of the
TC’s judgment bec they’re not parties to the specific performance case.
But the Dabons insist that they are parties in interest bec they are buyers,
owners and possessors of the contested land.
- The specific performance case brought by Gonzales to the TC named
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Priscilla Manio and husband as defendants. However, the lot is owned by
Aristotle, their son. Priscilla had no interest on the lot and can have no
interest in the judgment of the TC. Failure to implead Aristotle Manio
renders the proceedings in the specific performance case null and void.
2. YES.
Ratio
A person need not be a party to the judgment sought to be annulled.
What is essential is that he can prove that the judgment was obtained by
fraud and he would be adversely affected thereby.
Reasoning
Although the Dabons are not parties to the specific performance case, any
finding of extrinsic fraud would adversely affect their ownership and could
be basis of annulment of judgment. In this case, Gonzales knew of the
sale of lot by Aristotle Manio to the Dabons yet Gonzales did not include
the Dabons in her petition. This is extrinsic fraud.
Disposition Petition is denied.
DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL,
ARMIDA SIGUION REYNA, et al. v. PCGG, EXEC.
SEC. CATALINO MACARAIG, JR. & PCGG
CHAIRMAN MATEO A.T. CAPARAS
225 SCRA 568
BELLOSILLO/ August 24, 1993
NATURE: Special Civil Action for Prohibition and Mandamus with
Prayer for Preliminary Injunction and/or Restraining Order seek to
enjoin the Presidential Commission on Good Government (PCGG) from
proceeding with the scheduled auction sale by Christie’s (of NY) of the Old
Masters Paintings and 18th and 19th century silverware seized from
Malacañang and the Metropolitan Museum of Manila and placed in the
custody of the Central Bank.
FACTS:
- Pres. Aquino, through Exec. Sec. Macaraig, Jr., authorized Chairman
Caparas to sign the Consignment Agreement allowing the auction sale of
82 Old Masters Paintings and antique silverware seized from Malacañang
and the Metropolitan Museum of Manila alleged to be part of the ill-gotten
wealth of the late President Marcos, his relatives and cronies.
- According to the agreement, PCGG shall consign to CHRISTIE'S for sale
at public auction the 82 Old Masters Paintings then found at the
Metropolitan Museum of Manila as well as the silverware contained in 71
cartons in the custody of the Central Bank of the Philippines, and such
other property as may subsequently be identified by PCGG and accepted
by CHRISTIE'S to be subject to the provisions of the agreement.
- PCGG through its new Chairman David M. Castro, wrote Pres. Aquino
defending the Consignment Agreement and refuting the allegations of
COAudit Chairman Domingo (that the authority of former PCGG Chairman
Caparas to enter into the Consignment Agreement was of doubtful
legality;
Prof. Victoria A. 24
the contract was highly disadvantageous to the government; PCGG had a
poor track record in asset disposal by auction in the U.S.; and, the assets
subject of auction were historical relics and had cultural significance,
hence, their disposal was prohibited by law.
- Director of National Museum Gabriel S. Casal issued a certification that
the items subject of the Consignment Agreement did not fall within the
classification of protected cultural properties and did not specifically
qualify as part of the Filipino cultural heritage. Hence, this petition.
- After the oral arguments of the parties, the application for preliminary
injunction to restrain the scheduled sale of the artworks was DENIED on
the ground that petitioners had not presented a clear legal right to a
restraining order and that proper parties had not been impleaded.
- The sale at public auction proceeded as scheduled and the proceeds of
$13,302,604.86 were turned over to the Bureau of Treasury.
- On motion of petitioners, 12 more were joined as additional petitioners
and Catalino Macaraig, Jr., in his capacity as former Executive Secretary,
the incumbent Executive Secretary, and Chairman Mateo A.T. Caparas
were impleaded as additional respondents.
ISSUE:
WON the instant petition complies with the legal requisites for this Court to
exercise its power of judicial review over this case.
HELD: NO. The paintings and silverware, which were taken from
Malacañang and the Metropolitan Museum of Manila and transferred to
the Central Bank Museum (the ownership of these paintings legally
belongs to the foundation or corporation or the members thereof.)
- The confiscation of these properties by the Aquino administration
however should not be understood to mean that the ownership of these
paintings has automatically passed on the government without complying
with constitutional and statutory requirements of due process and just
compensation. If these properties were already acquired by the
government, any constitutional or statutory defect in their acquisition and
their subsequent disposition must be raised only by the proper parties -
the true owners thereof -whose authority to recover emanates from their
proprietary rights which are protected by statutes and the Constitution.
Having failed to show that they are the legal owners of the artworks or that
the valued pieces have become publicly owned, petitioners do not
possess any clear legal right whatsoever to question their alleged
unauthorized disposition.
REASONING:
- Dumlao v. Comelec: The rule is settled that no question involving the
constitutionality or validity of a law or governmental act may be heard and
decided by the court unless there is compliance with the legal requisites
for judicial inquiry, namely: that the question must be raised by the proper
party; that there must be an actual case or controversy; that the question
must be raised at the earliest possible opportunity ; and, that the decision
on the constitutional or legal question must be necessary to the
determination of the case itself. But the most important are the first two
(2) requisites.
 Civil Procedure Digest
- SC: we have held that one having no right or interest to protect cannot
invoke the jurisdiction of the court as party-plaintiff in an
action. (Sustiguer v. Tamayo, G.R. No. L-29341)
- This is premised on Sec. 2, Rule 3, of the Rules of Court, which
provides that every action must be prosecuted and defended in the
name of the real party-in-interest, and that all persons having interest
in the subject of the action and in obtaining the relief demanded shall
be joined as plaintiffs.
- The Court will exercise its power of judicial review only if the case is
brought before it by a party who has the legal standing to raise the
constitutional or legal question. "Legal standing" means a personal
and substantial interest in the case such that the party has sustained
or will sustain direct injury as a result of the governmental act that is
being challenged. The term "interest" is material interest, an interest
in issue and to be affected by the decree, as distinguished from mere
interest in the question involved, or a mere incidental interest (House
International Building Tenants Association, Inc. v. Intermediate
Appellate Court, G.R. No. L-75287)
- Moreover, the interest of the party plaintiff must be personal and not
one based on a desire to vindicate the constitutional right of some
third and related party.
- Tañada v. Tuvera : There are certain instances however when this Court
has allowed exceptions to the rule on legal standing, as when a citizen
brings a case for mandamus to procure the enforcement of a public duty
for the fulfillment of a public right recognized by the Constitution, and
(Pascual v. Secretary of Public Works) when a taxpayer questions the
validity of a governmental act authorizing the disbursement of public
funds.
-AS regards Mandamus: it does not fulfill the criteria for a mandamus suit.
Legaspi v. Civil Service Commission : a writ of mandamus may be issued
to a citizen only when the public right to be enforced and the concomitant
duty of the state are unequivocably set forth in the Constitution.
-In the case at bar, petitioners are not after the fulfillment of a positive duty
required of respondent officials under the 1987 Constitution. What they
seek is the enjoining of an official act because it is constitutionally
infirmed. Moreover, petitioners' claim for the continued enjoyment and
appreciation by the public of the artworks is at most a privilege and is
unenforceable as a constitutional right in this action for mandamus.
-As regards Taxpayer’s Suit: Neither can this petition be allowed as a
taxpayer's suit. Not every action filed by a taxpayer can qualify to
challenge the legality of official acts done by the government.
- A taxpayer's suit can prosper only if the governmental acts being
questioned involve disbursement of public funds upon the theory
that the expenditure of public funds by an officer of the state for the
purpose of administering an unconstitutional act constitutes a
misapplication of such funds, which may be enjoined at the request
of a taxpayer.
- -Obviously, petitioners are not challenging any expenditure involving
public funds but the disposition of what they allege to be public
properties. It is worthy to note that petitioners admit that the
paintings and antique silverware were acquired from private
sources and not with public money.
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DISPOSITIVE: The petition for prohibition and mandamus
is DISMISSED .
OPOSA V FACTORAN
224 SCRA 792
DAVIDE JR; JULY 30, 1993
NATURE
Special civil action for certiorari of the dismissal order
FACTS
The controversy has its genesis in Civil Case No. 90-777 which was filed
before Branch 66 (Makati, Metro Manila) of the Regional Trial Court
(RTC), National Capital Judicial Region. The principal plaintiffs therein,
now the principal petitioners, are all minors duly represented and joined by
their respective parents. Impleaded as an additional plaintiff is the
Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and
non-profit corporation organized for the purpose of, inter alia, engaging in
concerted action geared for the protection of our environment and natural
resources. The original defendant was the Honorable Fulgencio S.
Factoran, Jr., then Secretary of the Department of Environment and
Natural Resources (DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon
proper motion by the petitioners. The complaint was instituted as a
taxpayers' class suit and alleges that the plaintiffs "are all citizens of the
Republic of the Philippines, taxpayers, and entitled to the full benefit, use
and enjoyment of the natural resource treasure that is the country's virgin
tropical rainforests." The same was filed for themselves and others who
are equally concerned about the preservation of said resource but are "so
numerous that it is impracticable to bring them all before the Court." The
minors further asseverate that they "represent their generation as well as
generations yet unborn." Consequently, it is prayed for that judgment be
rendered:
". . . ordering defendant, his agents, representatives and other persons
acting in his behalf to —
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing,
renewing or approving new timber license agreements."
and granting the plaintiffs ". . . such other reliefs just and equitable under
the premises."
-The original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss
the complaint based on two (2) grounds, namely: (1) the plaintiffs have no
cause of action against him and (2) the issue raised by the plaintiffs is a
political question which properly pertains to the legislative or executive
branches of Government. In their Opposition to the Motion, the petitioners
maintain that (1) the complaint shows a clear and unmistakable cause of
action, (2) the motion is dilatory and (3) the action presents a justiciable
question as it involves the defendant's abuse of discretion.
Prof. Victoria A. 25
-Subsequently, respondent Judge issued an order granting the
aforementioned motion to dismiss. In the said order, not only was the
defendant's claim — that the complaint states no cause of action against
him and that it raises a political question — sustained, the respondent
Judge further ruled that the granting of the reliefs prayed for would result
in the impairment of contracts which is prohibited by the fundamental law
of the land.
-Plaintiffs thus filed the instant special civil action for certiorari under Rule
65 of the Revised Rules of Court and ask this Court to rescind and set
aside the dismissal order on the ground that the respondent Judge
gravely abused his discretion in dismissing the action. Again, the parents
of the plaintiffs-minors not only represent their children, but have also
joined the latter in this case.
ISSUE
WON Civil Case No. 90-777 is a class suit
HELD
YES. The subject matter of the complaint is of common and general
interest not just to several, but to all citizens of the Philippines.
Consequently, since the parties are so numerous, it becomes
impracticable, if not totally impossible, to bring all of them before the court.
We likewise declare that the plaintiffs therein are numerous and
representative enough to ensure the full protection of all concerned
interests. Hence, all the requisites for the filing of a valid class suit under
Section 12, Rule 3 of the Revised Rules of Court are present both in the
said civil case and in the instant petition, the latter being but an incident to
the former.
-This case, however, has a special and novel element. Petitioners minors
assert that they represent their generation as well as generations yet
unborn. We find no difficulty in ruling that they can, for themselves, for
others of their generation and for the succeeding generations, file a class
suit. Their personality to sue in behalf of the succeeding generations can
only be based on the concept of intergenerational responsibility insofar as
the right to a balanced and healthful ecology is concerned. Such a right,
as hereinafter expounded, considers the "rhythm and harmony of nature."
Nature means the created world in its entirety. Such rhythm and harmony
indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the country's forest, mineral,
land, waters, fisheries, wildlife, off-shore areas and other natural
resources to the end that their exploration, development and utilization be
equitably accessible to the present as well as future generations.
Needless to say, every generation has a responsibility to the next to
preserve that rhythm and harmony for the full enjoyment of a balanced
and healthful ecology. Put a little differently, the minors' assertion of their
right to a sound environment constitutes, at the same time, the
performance of their obligation to ensure the protection of that right for the
generations to come.
Dispositive Petition granted. Challenged order set aside.
 Civil Procedure Digest
KINDS OF PARTIES
Compulsory joinder of indispensable
parties
ARCELONA V. CA (FARNACIO)
G.R. No. 102900
PANGANIBAN; Oct. 2, 1997
NATURE
Petition for review
FACTS
-Olanday, et al. (petitioners) are co-owners pro-indiviso of a fishpond
which they inherited from their deceased parents.
-A contract of lease over the fishpond was executed between Cipriano
Tandoc and Olanday, et al.
-Private Respondent Moises Farnacio was appointed in turn by Tandoc as
caretaker-tenant of the same fishpond.
-After the termination of the lease contract, the lessee (Tandoc)
surrendered possession of the leased premises to the lessors, Olanday, et
al.
-Three days thereafter, Farnacio instituted Civil Case for "peaceful
possession, maintenance of security of tenure plus damages, with motion
for the issuance of an interlocutory order" against Olanday, et al., before
Respondent Regional Trial Court. The case was intended to maintain
private respondent as tenant of the fishpond.
-RTC ruled in favor of Farnacio
-IAC affirmed with slight modification
-SC sustained IAC
-Petitioners filed with CA a petition for annulment of the aforesaid
judgment. CA said to implead RTC
-Dissatisfied, petitioners lodged this petition for review
ISSUES
1. WON a final judgment may be annulled on the ground of lack of
jurisdiction (over the subject matter and/or over the person of
indispensable parties) and denial of due process, aside from extrinsic
fraud?
2. WON all the co-owners pro-indiviso of a real property indispensable
parties?
HELD
1. YES.
Ratio. Under the present procedure, aside from the reliefs provided in
these two sections (Secs. 1 & 2, Rule 38), there is no other means
whereby the defeated party may procure final and executory judgment to
be set aside with a view to the renewal of the litigation, unless (a) the
judgment is void for want of jurisdiction or for lack of due process of law,
or (b) it has been obtained by fraud.' (I Moran's Rules of Court 1950 Ed.,
p. 697, citing Anuran v. Aquino, 38 Phil. 29; Banco Español-Filipino v.
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Palanca, 37 Phil. 921). Reason of public policy which favors the stability of
judicial decisions are (sic) mute in the presence of fraud which the law
abhors (Garchitorena vs. Sotelo, 74 Phil. 25).
Reasoning Jurisdiction is conferred by law. Its exercise must strictly
comply with the legal requisites; otherwise, a challenge on the ground of
lack of jurisdiction may be brought up anytime. Such jurisdiction normally
refers to jurisdiction over the subject.
2. YES.
Ratio Co-owners in an action for the security of tenure of a tenant are
encompassed within the definition of indispensable parties; thus, all of
them must be impleaded.
Reasoning As held by the Supreme Court, were the courts to permit an
action in ejectment to be maintained by a person having merely an
undivided interest in any given tract of land, a judgment in favor of the
defendants would not be conclusive as against the other co-owners not
parties to the suit, and thus the defendant in possession of the property
might be harassed by as many succeeding actions of ejectment, as there
might be co-owners of the title asserted against him. The purpose of this
provision was to prevent multiplicity of suits by requiring the person
asserting a right against the defendant to include with him, either as co-
plaintiffs or as co-defendants, all persons standing in the same position,
so that the whole matter in dispute may be determined once and for all in
one litigation.
Disposition PETITION GRANTED.
CEREZO V. TUAZON
G.R. No. 141538
CARPIO; March 23, 2004
NATURE
Petition for review on certiorari
FACTS
-Country Bus Lines passenger bus with plate number NYA 241 collided
with a tricycle.
-tricycle driver Tuazon filed a complaint for damages against Mrs. Cerezo,
as owner of the bus line, her husband Attorney Juan Cerezo ("Atty.
Cerezo"), and bus driver Danilo A. Foronda ("Foronda").
-Mrs. Cerezo asserts that the trial court could not validly render judgment
since it failed to acquire jurisdiction over Foronda, an indispensable party.
Mrs. Cerezo points out that there was no service of summons on Foronda.
ISSUE
1. WON Fronda is an indispensable party
HELD
1. NO.
Ratio COMPULSORY JOINDER OF INDISPENSABLE PARTIES.
An indispensable party is one whose interest is affected by the court’s
Prof. Victoria A. 26
action in the litigation, and without whom no final resolution of the case is
possible
Reasoning Mrs. Cerezo’s liability as an employer in an action for a quasi-
delict is not only solidary, it is also primary and direct. Foronda is not an
indispensable party to the final resolution of Tuazon’s action for damages
against Mrs. Cerezo. The responsibility of two or more persons who are
liable for a quasi-delict is solidary. Where there is a solidary obligation on
the part of debtors, as in this case, each debtor is liable for the entire
obligation. Hence, each debtor is liable to pay for the entire obligation in
full. There is no merger or renunciation of rights, but only mutual
representation. Where the obligation of the parties is solidary, either of the
parties is indispensable, and the other is not even a necessary party
because complete relief is available from either. Therefore, jurisdiction
over Foronda is not even necessary as Tuazon may collect damages from
Mrs. Cerezo alone.
Disposition PETITION DENIED.
Permissive Joinder
FLORES V MALLARE-PHILLIPS
144 SCRA 377
FERIA; September 24,1986
NATURE
Appeal by certiorari from the order of the RTC of Baguio
FACTS
-Petitioner Remedio Flores filed a complaint with the RTC of Baguio: his
first cause of action 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.
 Civil Procedure Digest
-RTC dismissed the complaint for lack of jurisdiction.
-Petitioner appealed by certiorari to the SC
ISSUE
WON the application of the totality rule in Sec 33(1) 5 of BP 129 and
Section 116 of the interim rules is subject to permissive joinder of parties
under Sec 67 of Rule 3
HELD
Petitioner maintains that the RTC has jurisdiction over the case following
the "novel" totality rule introduced in Section 33(l) of BP129 and Section
11 of the Interim Rules.
-Petitioner compares the above-quoted provisions with 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.
-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.
-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 joined in a single complaint.
-Under the former rule, "where the claims or causes of action joined in a
5 FERIA; May 30, 1986
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. ...
6
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.
7 - Initial complaint: Private respondents, incorporated associations of
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
aconnection with any proceedings in which he may have no interest.
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single complaint are separately owned by or due to different parties, each
separate claim shall furnish the jurisdictional test.” 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.
-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.
-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 .
Disposition
The order appealed from is affirmed.
Class suit
NEWSWEEK V IAC (NFSPI et. al.)
142 SCRA 171
NATURE
Special action for certiorari, prohibition with preliminary injunction
FACTS
- Petitioner, NEWSWEEK, Inc. seeks to annul the decision of the IAC
sustaining the Order of the CFI Bacolod City. CFI denied Newsweek’s
Motion to Dismiss complaint for libel. (Question as to whether the printed
article sued upon its actionable or not is a matter of evidence.)
sugarcane planters in Negros Occidental claiming to have 8,500 members
and several individual sugar planters, filed in their own behalf and/or
as a class suit in behalf of all sugarcane planters in the province
of Negros Occidental, against petitioner and two of petitioners' non-
resident correspondents/reporters Fred Bruning and Barry Came.
Prof. Victoria A. 27
- It was alleged that they committed libel by the publication of the article
"An Island of Fear" in the Feb 23, 1981 issue of petitioner's weekly
news magazine Newsweek. It supposedly portrayed their island as a
place dominated by big landowners who not only exploited the
impoverished and underpaid sugarcane workers, but also brutalized and
killed them.
- Complainants therein alleged that said article, taken as a whole,
showed a deliberate and malicious use of falsehood, slanted
presentation and/or misrepresentation of facts.
- They prayed that defendants be ordered to pay them PlM as actual and
compensatory damages, and such amounts for moral, exemplary and
corrective damages as the court may determine.
- NEWSWEEK filed a motion to dismiss on the grounds that ---
(1) the printed article sued upon is not actionable in fact and in law; and
(2) the complaint is bereft of allegations that state, much less support a
cause of action. It pointed out the non-libelous nature of the article and,
consequently, the failure of the complaint to state a cause of action.
- NO CAUSE OF ACTION because no allegation that anything contained
in the article regarding sugarcane planters referred specifically to any one
of the private respondents; that libel can be committed only against
individual reputation; and that in cases where libel is claimed to have been
directed at a group, there is actionable defamation only if the libel can be
said to reach beyond the mere collectivity to do damage to a specific,
individual group member's reputation.
ISSUE
1. WON respondents failed to state a cause of action
2. WON this case is a class suit
HELD
1. YES
Ratio Defamatory matter which does not reveal the Identity of the person
upon whom the imputation is cast, affords no ground of action unless it be
shown that the readers of the libel could have identified the personality of
the individual defamed. It is evident that the larger the collectivity, the
more difficult it is for the individual member to prove that the defamatory
remarks apply to him.
2. NO
Ratio It is not a case where one or more may sue for the benefit of all
(Mathay vs. Consolidated Bank and Trust Co.) or where the
representation of class interest affected by the judgment or decree is
indispensable to make each member of the class an actual party (Borlaza
vs. Polistico). We have here a case where each of the plaintiffs has a
separate and distinct reputation in the community . They do not have a
common or general interest in the subject matter of the controversy.
CLASS SUIT
- Where the defamation is alleged to have been directed at a group or
class, it is essential that the statement must be so sweeping or all-
embracing as to apply to every individual in that group or class , or
sufficiently specific so that each individual in the class or group can
 Civil Procedure Digest
prove that the defamatory statement specifically pointed to him, so that he
can bring the action separately, if need be.
Disposition The decision of the Intermediate Appellate Court is reversed
and the complaint in Civil Case No. 15812 of the CFI Negros Occidental is
dismissed, without pronouncement as to costs.
MANILA INTERNATIONAL AIRPORT AUTHORITY v
RIVERA VILLAGE LESSEE HOMEOWNERS
ASSOCIATION,INC .
00 SCRA 00
Tinga, September 30, 2005
NATURE
Petition for Review on Certiorari filed by the MIAA assailing the Decision
of the CA which directed the issuance of a writ of preliminary injunction
restraining petitioner from evicting the homeowners of Rivera Village from
their dwellings.
FACTS
-The then Civil Aeronautics Administration (CAA) was entrusted with the
administration, operation, management, control, maintenance and
development of the Manila International Airport (MIA), now the NAIA. The
CAA entered into individual lease contracts with its employees for the
lease of portions of a 4-hectare lot situated in Rivera Village, Barangay
199 and 200 in Pasay City. The leases were for a 25-year period to
commence on May 25, 1965 up to May 24, 1990 at P20 per annum as
rental.
- Thereafter, EO 778 was issued (later amended by EO 903), creating
MIAA, transferring existing assets of the MIA to MIAA, and vesting the
latter with the power to administer and operate the MIA.
- MIAA stopped issuing accrued rental bills and refused to accept rental
payments from the lessees. As a result, respondent homeowners
association, purportedly representing the lessees, requested MIAA to sell
the subject property to its members, invoking the provisions of PD 1517 or
the Urban Land Reform Act and PD 2016. The MIAA denied the request,
claiming that the subject property is included in its Conceptual
Development Plan intended for airport-related activities.
- Respondent filed a petition for mandamus and prohibition with prayer for
the issuance of a preliminary injunction against MIAA and the National
Housing Authority (NHA) with the RTC of Pasay. The petition sought to
restrain the MIAA from implementing its Conceptual Development Plan
insofar as Rivera Village is concerned and to compel MIAA to segregate
Rivera Village from the scope of the Conceptual Development Plan and
the NHA to take the necessary steps for the disposition of the property in
favor of the members of the homeowners association.
- After the preliminary, the RTC denied the prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction and
dismissed the petition for lack of merit. The trial court held, among others,
that the petition failed to state a cause of action inasmuch as respondent
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homeowners association is not the real party-in-interest, the individual
members of the association being the ones who have possessory rights
over their respective premises. Moreover, the lease contracts have
already expired.
- Upon appeal, the CA annulled and set aside the order of the trial court
and remanded the case for further proceedings. A writ of preliminary
injunction was issued restraining and preventing respondent MIAA from
evicting the members of Rivera Village Association from their respective
lots in the Rivera Village. The CA ruled that the case can be construed as
a class suit instituted by the Rivera Village lessees. The homeowners
association, considered as the representative of the lessees, merely
instituted the suit for the benefit of its members. It does not claim to have
any right or interest in the lots occupied by the lessees, nor seek the
registration of the titles to the land in its name.
- MIAA argues that the petition filed by the homeowners association with
the trial court fails to state a cause of action because the homeowners
association is not the real party-in-interest in the suit. Allegedly, the Board
Resolution presented by respondent shows that it was only the board of
directors of the association, as distinguished from the members thereof,
which authorized respondent to act as its representative in the suit.
ISSUE
WON the petition filed by respondent with the trial court states a cause of
action against petitioner/ WON respondent has personality to sue
HELD
YES
The 1997 Rules of Civil Procedure requires that every action must be
prosecuted or defended in the name of the real party-in-interest, i.e., the
party who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit. A case is dismissible for lack of
personality to sue upon proof that the plaintiff is not the real party-in-
interest, hence grounded on failure to state a cause of action.
The petition before the trial court was filed by the homeowners
association, represented by its President, Panfilo R. Chiutena, Sr., upon
authority of a Board Resolution empowering the latter to file "All necessary
action to the Court of Justice and other related acts necessary to have our
Housing Project number 4 land be titled to the members of the
Association."
Obviously, the petition cannot be considered a class suit under Sec. 12,
Rule 3 of the Rules of Court, the requisites therefor not being present in
the case, notably because the petition does not allege the existence and
prove the requisites of a class suit, i.e., that the subject matter of the
controversy is one of common or general interest to many persons and
the parties are so numerous that it is impracticable to bring them all before
the court, and because it was brought only by one party.
In Board of Optometry v. Colet, it was held that courts must exercise
utmost caution before allowing a class suit, which is the exception to the
requirement of joinder of all indispensable parties. For while no difficulty
may arise if the decision secured is favorable to the plaintiffs, a quandary
would result if the decision were otherwise as those who were deemed
Prof. Victoria A. 28
impleaded by their self-appointed representatives would certainly claim
denial of due process.
There is, however, merit in the appellate courts pronouncement that the
petition should be construed as a suit brought by the homeowners
association as the representative of the members thereof under Sec. 3,
Rule 3 of the Rules of Court, which provides:
Sec. 3. Representatives as parties. Where the action is allowed to be
prosecuted or defended by a representative or someone acting in a
fiduciary capacity, the beneficiary shall be included in the title of the case
and shall be deemed to be the real party in interest. A representative may
be a trustee of an express trust, a guardian, an executor or administrator,
or a party authorized by law or these Rules. An agent acting in his own
name and for the benefit of an undisclosed principal may sue or be sued
without joining the principal except when the contract involves things
belonging to the principal.
It is a settled rule that every action must be prosecuted or defended in the
name of the real party-in-interest. Where the action is allowed to be
prosecuted or defended by a representative acting in a fiduciary capacity,
the beneficiary must be included in the title of the case and shall be
deemed to be the real party-in-interest. The name of such beneficiaries
shall, likewise, be included in the complaint.
Moreover, Sec. 4, Rule 8 of the Rules of Court provides that facts
showing the capacity of a party to sue or be sued, or the authority of a
party to sue or be sued in a representative capacity must be averred in
the complaint. In order to maintain an action in a court of justice, the
plaintiff must have an actual legal existence, that is, he or she or it must
be a person in law and possessed of a legal entity as either a natural or
an artificial person. The party bringing suit has the burden of proving the
sufficiency of the representative character that he claims. If a complaint is
filed by one who claims to represent a party as plaintiff but who, in fact, is
not authorized to do so, such complaint is not deemed filed and the court
does not acquire jurisdiction over the complaint. It must be stressed that
an unauthorized complaint does not produce any legal effect.
In this case, the petition filed with the trial court sufficiently avers that the
homeowners association, through its President, is suing in a
representative capacity as authorized under the Board Resolution
attached to the petition. Although the names of the individual members of
the homeowners association who are the beneficiaries and real parties-in-
interest in the suit were not indicated in the title of the petition, this defect
can be cured by the simple expedient of requiring the association to
disclose the names of the principals and to amend the title and averments
of the petition accordingly.
Essentially, the purpose of the rule that actions should be brought or
defended in the name of the real party-in-interest is to protect against
undue and unnecessary litigation and to ensure that the court will have
the benefit of having before it the real adverse parties in the consideration
of a case. This rule, however, is not to be narrowly and restrictively
construed, and its application should be neither dogmatic nor rigid at all
times but viewed in consonance with extant realities and practicalities. As
correctly noted by the CA, the dismissal of this case based on the lack of
personality to sue of petitioner-association will only result in the filing of
multiple suits by the individual members of the association.
 Civil Procedure Digest
Disposition
The instant petition is GRANTED. The decision of the CA is REVERSED
and SET ASIDE. The civil case in the RTC of Pasay City is ordered
DISMISSED.
DEL CASTILLO VS. JAYMALIN, ET AL.
112 SCRA 629
MELENCIO-HERRERA, March 17, 1982
NATURE
Direct appeal from the decision of the CFI which dismiss the case for
Damages due to the death of plaintiff
FACTS
1960: Deaf-mute Mario del Castillo fell upon alighting the bus of the
respondents and died.
1962: Action for recovery of damages was filed by Severo del Castillo, the
father of the victim, against the driver, conductor, and the owner
companies.
1966: Severo died. Counsel for Motion for Annulment Proceedings after
having learned that plaintiff Severo already died without resting his case.
Court ordered plaintiff’s counsel to verify existence of heirs willing to be
substituted as parties-plaintiffs. Allegedly, a “Deed of Assignment” was
executed by Severo in favor of his son-in-law Wenceslao Haloc of all his
rights in the proceedings in 1960 so plaintiff filed a Motion to Admit
Amended Complaint, substituting Wenceslao as party-plaintiff. Amended
Complaint was admitted by the court.
CFI: dismissed original and amended complaints due to the death of
Severo. Wenceslao had no personality to continue the case, not being a
heir of Severo.
ISSUE
1. WON the complaint should be dismissed due to the death of the
plaintiff, even if he had already assigned his rights before he died
2. WON damages should have been awarded
HELD
1. NO
Ratio. Where an assignable right has been transferred before action
brought, the proceeding ought to be instituted in the name of the
assignee; and where an assignment is effected pendente lite, it is proper
to have the assignee substituted for the original plaintiff. If such
substitution should not be effected and the transfer of the right of action
should not be brought to the attention of the court, the original plaintiff, if
successful in the litigation, would hold the fruits of the action as a sort of
trustee for the use and benefit of his assignee.
Reasoning. This is not a case where the provisions of Section 17, Rule 3
of the Rules of Court on "death of a party" are applicable. Rather, it is a
situation where plaintiff, while alive, had assigned his rights to another, in
which case, the proper procedure would have been for the transferee to
have been substituted for the transferor as plaintiff. The rights of Severo to
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claim damages for his son were transferable. Severo had transferred his
rights as plaintiff to Wenceslao Haloc but after the assignment the case
continued in Severo's name and there was no immediate and formal
substitution of party plaintiff. This is but a formality, however, and the fact
remains that, after the assignment, the substantial plaintiff and real party
in interest became Haloc, with Severo as a sort of trustee of whatever
fruits the litigation would bring.
2. YES
Reasoning. Articles 1764 and 2206 of the Civil Code. Failure to exercise
extraordinary care for the safety of its passengers even after being
apprised of the fact that the victim was a deaf-mute. Should have been
remanded to CA for determination of amount of damages but due to
pendency of case for 13 years + put an end to controversy, Court imposed
P12,000 for death of victim, plus P2,000 atty’s fees
Disposition. WHEREFORE, the judgment appealed from is hereby
reversed, and defendants hereby ordered jointly and severally, to pay
Wenceslao Haloc, the amount of P12,000.00 as damages for death,
without interest, and P2,000.00 as attorney's fees. No costs. SO
ORDERED.
GOJO V GOYALA
35 SCRA 557
Barredo, J.: Oct. 30, 1970
NATURE
Appeal from a decision of the CFI of Sorsogon
FACTS
-Appellee Segundo Goyala, with his now deceased wife Antonina sold to
Gojo a 2.5 hectare parcel of agricultural land for P750 by a “Deed of Pacto
de Retro Sale”, the repurchase to be made within one year, as stated in
the deed. The deed also indicates that the vendee paid another P100 in
addition to the purchase price. 10 years after the execution of said
document, Gojo filed a case with the CFI against Goyala by way of a
petition for consolidation of ownership of said land. Gojo alleged that the
period for repurchasing had expired and ownership had become
consolidated in him and that for purposes of recording the consolidation in
the Registry of Property, it was necessary that a judicial order be issued to
that effect.
-Goyala filed an answer to the petition, alleging that they had obtained a
cash loan of P810 from Gojo payable w/in one year w/o interest and that
to guarantee payment, Goyala executed a mortgage in favor of the
petitioner on the parcel of land in question. Hence, although the deed was
executed in the form of a pacto de retro sale, the true intention of the
parties was for it to be a mere mortgage to secure payment. Goyala
further claimed that he and his wife attempted to pay the debt but
petitioner refused to receive the sum and cancel the mortgage. By way of
counterclaim, Goyala prayed that petitioner receive the P810 and that the
document of mortgage be declared so, and not a pacto de retro sale. He
Prof. Victoria A. 29
further prayed for P1800 per annum until the final termination of the case
for the fruits of said property and in the case that the instrument be
deemed a true pacto de retro sale, that petitioner be ordered to execute a
deed of resale in favor of respondents in accordance with A1606CC.
-Counsel for Goyala filed a manifestation informing the TC that the named
defendant, Antonina, had died, prompting the TC to issue an order
requiring counsel for the plaintiff to submit an amended Complaint
substituting Antonina with one of her successors in interest as party
defendants. Goyala filed a motion to dismiss the petition on the ground
that notwithstanding the lapse of 43 days after appellant’s receipt of a
copy of the said TC order, said appellant failed and neglected to submit
the amended complaint required of him. Appellant opposed the motion but
the TC dismissed the complaint.
-Appellee filed a motion to declare appellant in default in respect of said
appellee’s counterclaim, which was granted by the TC, which further
required Goyala to submit his evidence before the Clerk of Court. TC
rendered favorable judgment on appellee’s counterclaim, declaring the
Deed of Pacto de Retro Sale an equitable mortgage and ordering Gojo to
receive the P810 and to restore possession to the defendants and
allowing them to redeem the same.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ISSUES
Parties: Re contractual money claims / Dismissal by claimant /
Compulsory counterclaim/ Answer: Defenses
WON TC erred in declaring plaintiff in default with respect to defendant’s
counterclaim
HELD
YES. The appellant contends that there is no occasion for the TC to
declare him in default in respect of appellee’s counterclaim as said
counterclaim falls within the category of compulsory counterclaim which
does not call for an independent answer as the complaint already denies
its material allegations. It is now settled that a plaintiff who fails or chooses
not to answer a compulsory counterclaim may not be declared in default,
principally because the issues raised in the counterclaim are deemed
automatically joined by the allegations of the complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored is a
void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the estate
of a deceased person. In Barrameda vs Barbara, the SC held that an
order to amend the complaint, before the proper substitution of parties as
directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and imposes upon
the plaintiff no duty to comply therewith to the end that an order dismissing
the said complaint, for such non-compliance, would similarly be void. It
was further held in Ferriera vs Gonzales that the continuance of a
 Civil Procedure Digest
proceeding during the pendency of which a party thereto dies, without
such party having been validly substituted in accordance with the rules,
amounts to lack of jurisdiction.
WHEREFORE, the decision appealed from is set aside
VENUE
PEOPLE v. MAYOR PABLO SOLA
(page 8)
FACTS
-Bodies found in Mayor Sola’s hacienda. Information filed against Mayor,
Chief of Police and other accused. Accused were granted bail. Witnesses
fear for their lives because the trial was to be held near the town where
the accused were powerful. Also, the witnesses had been receiving
threats on their lives. Relevance: Change in venue
ON CHANGE OF VENUE: The constitution is quite explicit. The
Supreme Court could order "a change of venue or place of trial to avoid a
miscarriage of justice."
-People v. Gutierrez, J.B.L. Reyes: "…TO COMPEL THE PROSECUTION
TO PROCEED TO TRIAL IN A LOCALITY WHERE ITS WITNESSES
WILL NOT BE AT LIBERTY TO REVEAL WHAT THEY KNOW IS TO
MAKE A MOCKERY OF THE JUDICIAL PROCESS, AND TO BETRAY
THE VERY PURPOSE FOR WHICH COURTS HAVE BEEN
ESTABLISHED."
-The exercise by this Honorable Court of its above constitutional power in
this case will be appropriate. The witnesses in the case are fearful for their
lives. They are afraid they would be killed on their way to or from
Himamaylan during any of the days of trial. Because of this fear, they may
either refuse to testify or testify falsely to save their lives.
-there may be cases where the fear, objectively viewed, may, to some
individuals, be less than terrifying, but the question must always be the
effect it has on the witnesses who will testify.
-The primordial aim and intent of the Constitution must ever be kept in
mind. In case of doubt, it should be resolved in favor of a change of venue
TIME, INC. vs. REYES
39 SCRA 303
REYES, J.B.L.; May 31, 1971
NATURE
Petition for certiorari and prohibition, with preliminary injunction, to annul
certain orders of the respondent Court of First Instance of Rizal, issued
and to prohibit the said court from further proceeding with the said civil
case.
FACTS
- Antonio J. Villegas and Juan Ponce Enrile (Mayor of Manila and
Undersecretary of Finance and concurrently Acting Commissioner of
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Customs, respectively, with offices in the City of Manila) filed a civil action
in the Court of First Instance of Rizal seeking to recover from the herein
petitioner damages upon an alleged libel arising from a publication of
Time (Asia Edition) magazine, in its issue of 18 August 1967, of an essay,
entitled "Corruption in Asia", wherein the defendants allegedly impute to
plaintiffs the commission of the crimes of graft and corruption and
nepotism.
- Petitioner Time, Inc., is an American corporation with principal offices at
Rockefeller Center, New York City, N. Y., and is the publisher of "Time", a
weekly news magazine.
PROCEDURE
- Villegas and Enrile filed a Motion for leave to take the depositions "of
Mr. Anthony Gonzales, Time-life International", and "Mr. Cesar B.
Enriquez, Muller & Phipps (Manila) Ltd.", in connection with the activities
and operations in the Philippines of the petitioner. It was granted by
Judge Reyes and he also issued a writ of attachment on the real and
personal estate of Time, Inc.
- Time Inc. filed a motion to dismiss the complaint for lack of jurisdiction
and improper venue, relying upon the provisions of Republic Act 4363
(According to this law, 'The criminal and civil action for damages in cases of written
defamations. . .where one of the offended parties is a public officer whose office is in
the City of Manila at the time of the commission of the offense, the action shall be
filed in the Court of First Instance of the City of Manila or of the city or province
where the libelous article is printed and first published, and in case such public
officer does not hold office in the City of Manila, the action shall be filed in the Court
of First Instance of the province or city where he held office at the time of the
commission of the offense or where the libelous article is printed and first published).
- Respondent court deferred the determination of the motion to dismiss
until after trial of the case on the merits, the court having considered that
the grounds relied upon in the motion do not appear to be indubitable.
- Petitioner moved for reconsideration of the deferment; The respondent
judge issued an order re affirming the previous order of deferment for the
reason that "the rule laid down under Republic Act No. 4363, amending
Article 360 of the Revised Penal Code, is not applicable to actions against
non-resident defendants, and because questions involving harrasments
and inconvenience, as well as disruption of public service do not appear
indubitable . . ."
- Petitioner filed the instant petition for certiorari and prohibition. (Subject
of the petition: The orders for the taking of the said depositions, for
deferring determination of the motion to dismiss, and for re affirming the
deferment, and the writ of attachment are sought to be annulled in the
petition.)
ISSUES
1. Whether or not, under the provisions of Republic Act No. 4363 the
respondent Court of First Instance of Rizal has jurisdiction to take
cognizance of the civil suit for damages arising from an allegedly libelous
publication, considering that the action was instituted by public officers
whose offices were in the City of Manila at the time of the publication;
2. If it has no jurisdiction, whether or not its erroneous assumption of
jurisdiction may be challenged by a foreign corporation by writ of certiorari
or prohibition; and
Prof. Victoria A. 30
HELD
1. No. The proper venue is the CFI of Manila.
Ratio: Under Article 360 of the Revised Penal Code, as amended by
Republic Act No. 4363, actions for damages by public officials for libelous
publications against them can only be filed in the courts of first instance of
the city or province where the offended functionary held office at the time
of the commission of the offense, in case the libelous article was first
printed or published outside the Philippines.
Reasoning:
a. (Intent of the law) The assertion that a foreign corporation or a non-
resident defendant is not inconvenienced by an out-of-town suit is
irrelevant and untenable, for venue and jurisdiction are not dependent
upon convenience or inconvenience to a party; and moreover, venue was
fixed under Republic Act No. 4363, pursuant to the basic policy of the law
that is, as previously stated, to protect the interest of the public service
when the offended party is a public officer, by minimizing as much as
possible any interference with the discharge of his duties.
b. (Textual and strict interpretation of the law) The rule is that where a
statute creates a right and provides a remedy for its enforcement, the
remedy is exclusive; and where it confers jurisdiction upon a particular
court, that jurisdiction is likewise exclusive, unless otherwise provided.
Hence, the venue provisions of Republic Act No 4363 should be deemed
mandatory for the party bringing the action, unless the question of venue
should be waived by the defendant, which was not the case here.
2. Yes.
Ratio: The action of a court in refusing to rule, or deferring its ruling, on a
motion to dismiss for lack of jurisdiction over the subject matter, or for
improper venue, is in excess of jurisdiction and correctible by writ of
prohibition or certiorari sued out in the appellate Court, even before trial
on the merits is had.
Reasoning
It would be useless and futile to go ahead with the proceedings if the court
had no jurisdiction.
DISPOSITION
The writs applied for are granted: the respondent Court of First Instance of
Rizal is declared without jurisdiction to take cognizance of its Civil Case
No. 10403; and its orders issued in connection therewith are hereby
annulled and set aside. Respondent court is further commanded to desist
from further proceedings in Civil Case No. 10403 aforesaid.
The writ of preliminary injunction heretofore issued by this Supreme Court
is made permanent.
PILIPINO TELEPHONE V TECSON
00 SCRA 00
VITUGJ; May 7, 2004
NATURE
Special civil action of certiorari
 Civil Procedure Digest
FACTS
- On various dates in 1996, Delfino C. Tecson applied for six (6) cellular
phone subscriptions with petitioner Pilipino Telephone Corporation
(PILTEL), which applications were each approved and covered, by six
mobiline service agreements.
- On 05 April 2001, respondent filed with the RTC of Iligan City, Lanao Del
Norte, a complaint against petitioner for a "Sum of Money and Damages."
Petitioner moved for the dismissal of the complaint on the ground of
improper venue, citing a common provision in the mobiline service
agreements to the effect that -
"Venue of all suits arising from this Agreement or any other suit directly or
indirectly arising from the relationship between PILTEL and subscriber
shall be in the proper courts of Makati, Metro Manila. Subscriber hereby
expressly waives any other venues."
- In an order, the RTC denied petitioner's MTD and required it to file an
answer within 15 days from receipt thereof.
- PILTEL filed a MFR, through registered mail, of the order of the trial
court. In its subsequent order, TC denied the MFR.
- Petitioner filed a petition for certiorari under Rule 65 of the Revised
Rules of Civil Procedure before the CA.
- CA saw no merit in the petition and affirmed the assailed orders of the
TC. Petitioner moved for a reconsideration, but the appellate court denied
the motion.
ISSUE/S
WON parties may stipulate on the venue of any litigation between them
HELD
YES
Ratio Section 4, Rule 4, of the Revised Rules of Civil Procedure allows
the parties to agree and stipulate in writing, before the filing of an action,
on the exclusive venue of any litigation between them. Such an
agreement would be valid and binding provided that the stipulation on the
chosen venue is exclusive in nature or in intent, that it is expressed in
writing by the parties thereto, and that it is entered into before the filing of
the suit.
Reasoning. The provision contained in paragraph 22 of the "Mobile
Service Agreement," a standard contract made out by petitioner PILTEL to
its subscribers, apparently accepted and signed by respondent. The
added stipulation that the subscriber "expressly waives any other venue"
should indicate, clearly enough, the intent of the parties to consider the
venue stipulation as being preclusive in character.
The appellate court, however, would appear to anchor its decision on the
thesis that the subscription agreement, being a mere contract of adhesion,
does not bind respondent on the venue stipulation. But such an
agreement is not per se inefficacious. The rule instead is that, should
there be ambiguities in a contract of adhesion, such ambiguities are to be
construed against the party that prepared it. If, however, the stipulations
are not obscure, but are clear and leave no doubt on the intention of the
parties, the literal meaning of its stipulations must be held controlling.
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A contract duly executed is the law between the parties, and they are
obliged to comply fully and not selectively with its terms. A contract of
adhesion is no exception.
Disposition WHEREFORE, the instant petition is GRANTED.
PLEADINGS
In General: Manner of making
allegations in pleadings
Actionable document
SANTIAGO VS DE LOS SANTOS
61 SCRA 146
FERNANDO; November 22, 1974
FACTS
Santiago applied for registration of a parcel of land located in San Mateo,
Rizal. The application is opposed by the Director of Lands, Director of
Forestry and by Mrs. Pacita V. de los Santos on the ground that the
property applied for is part of the public domain. Subsequently, motions
to dismiss the application were filed by the oppositor Pacita V. de los
Santos and the Director of Forestry which motions are principally based
on the allegation that the property applied for is a portion of the public
domain which was leased to Mrs. Pacita de los Santos under Pasture
Lease Agreement No. 1305.
The motion to dismiss was granted based on the documents attached to
their motion by Judge Cecilia Muñoz Palma, now an Associate Justice of
this Court, dismissed the suit. In this appeal, Santiago seeks for the
decision to be reversed. His new counsel, the firm of Luna and Manalo, is
thorough and comprehensive.
ISSUE
WON the order of the lower court should be reversed.
HELD
NO.
Even the most cursory reading of the order of dismissal can lead to no
other conclusion except that it should be affirmed. Notwithstanding the
vigor with which the appeal is being prosecuted by new counsel, it cannot
suffice for a reversal. The infirmity of the case is incurable.
The pleading left no choice to the then Judge Muñoz Palma except to
dismiss the case, which wrote: “... the portion of the said parcel of land
subject of this registration which was claimed as part of the public forest
has already been released by the Honorable Secretary of Agriculture and
Natural Resources for agricultural purposes as evidenced by its order
dated August 10, 1961.” Attached to such pleading were the documents,
which, in the language of the then Judge Palma, "show that the land
object of this registration proceeding is part of the public domain. Former
counsel ought to have realized the fatal effect on his client's case of such
an admission. If it were his intention to demolish entirely the pretension of
Prof. Victoria A. 31
plaintiff to the claim that he had been in open, public, uninterrupted,
peaceful and adverse possession in the concept of owner from July 26,
1894 up to the present, he could not have succeeded any better.
What was so categorically therein set forth as to such parcel
of land being a part of a public forest, although thereafter released by the
Secretary of Agriculture and Natural Resources for agricultural purposes,
is conclusive and binding. It would clearly appear that Santiago could not
in truth show that there was such an open, uninterrupted, peaceful and
adverse possession in the concept of owner
It is a familiar doctrine," according to Justice J.B.L. Reyes in Joe's Radio
& Electrical Supply v. Alto Electronics Corp., 5 "that an admission made in
the pleadings cannot be controverted by the party making such admission
and are conclusive as to him, and that all proofs submitted by him contrary
thereto or inconsistent therewith, should be ignored, whether objection is
interposed by the party or not ... ." 6 Even if there had been a full hearing
on the case, therefore, the result would not have been any different. There
was no choice then for the lower court except to dismiss the complaint.
The present counsel of Santiago tries to extricate himself
from a predicament of his own making by arguing that the motion to
dismiss of Pacita de los Santos is not entitled to recognition as there was
a general order of default except as to the Bureau of Lands and the
Bureau of Forestry, not lifted as to her and that she has no interest to
oppose the application although admittedly there was a claim on her part
under a pasture lease agreement in her favor. But in the motion to
dismiss of de los Santos, it was alleged that the son of Santiago, Juanito
was one time the lessee of the timber area sought to be registered by
Santiago. There was no denial of such allegation. It is quite obvious then
that the facts, no less than the law, call for precisely the conclusion
reached by the then Judge Muñoz Palma.
"Rules of pleading are intended to secure a method by which the issues
may be properly laid before the court. When those issues are already
clear before the court, the deficiency in the observance of the rules should
not be given undue importance. What is important is that the case be
decided upon the merits and that it should not be allowed to go off on
procedural points. Technicalities, in the appropriate language of Justice
Makalintal, "should give way to the realities of the situation." 13 Well could
Justice Cardozo observe: "A system of procedure is perverted from its
proper function when it multiplies impediments to justice without the
warrant of clear
necessity."
Dispositive. WHEREFORE, the appealed order of November 17, 1961 of
the then Judge Muñoz Palma is affirmed. Costs against appellant Luis R.
Santiago
The Claim
Counterclaim/cross-claim after
answer
 Civil Procedure Digest
NAMARCO v. FEDERACION
49 SCRA 238
ANTONIO; January 31, 1972
NATURE
Appeal by defendantfrom a decision of the Court of First Instance ordering
said defendant to pay the plaintiff
FACTS
- NAMARCO is a GOCC organized and existing under and by virtue of RA
1345. FEDERATION is a non-stock corporation duly organized and
existing under and by virtue of the laws of the Philippines.
- They entered into a Contract of Sale which says that the Management of
NAMARCO was authorized to import items worth $2,001,031.
FEDERATION deposited P200,000 as partial payment and the balance
shall be paid on cash basis upon delivery of the duly indorsed negotiable
shipping document covering the same and
- To insure payment, the NAMARCO accepted three domestic letters of
credit for the account of the FEDERATION.
- The FEDERATION and some of its members filed a complaint against
the NAMARCO for specific performance and damages, alleging that after
the NAMARCO had delivered a great portion of the goods listed in the
Contract of Sale, it refused to deliver the other goods mentioned in the
said contract.
- CFI ordered the NAMARCO to specifically perform its obligation in the
Contract of Sale, by delivering to the FEDERATION the undelivered
goods.
- SC: The Contract of Sale was valid."
- NAMARCO: FEDERATION'S act or omission in refusing to satisfy the
former's valid, just and demandable claim has compelled it to file the
instant action; and praying that the FEDERATION be ordered to pay the
NAMARCO the costs of merchandise plus damages.
- FEDERATION moved to dismiss the complaint on the ground that the
cause of action alleged therein is barred forever, pursuant to section 6 of
Rule 10 of the Rules of Court. In support thereof, the FEDERATION
alleged it filed a case for specific performance to enforce compliance with
the contract of sale; that said contract is also the basis NAMARCO's
present complaint; that when NAMARCO filed its answer to the complaint,
it did not set up any counterclaim therein; that the CFI promulgated the
decision in said case ordering, among others, the NAMARCO to
specifically perform its obligation under the contract of sale by delivering
to the FEDERATION the goods subject-matter of the contract as are
involved in the complaint.
- NAMARCO opposed the motion to dismiss contending that its claim for
the recovery of the cost of merchandise delivered to the FEDERATION is
not necessarily connected for specific performance and, therefore, does
not fall under the category of compulsory counterclaim; that NAMARCO's
failure to set it up as a counterclaim in its answer does not constitute res
judicata; that the deliveries of the merchandise were effected through the
fault or negligence of one of its personnel, Juan T. Arive, who was
administratively charged therefor, found guilty and accordingly dismissed.;
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Avena
that the present claim is not necessarily connected with the transaction or
occurrence that is the subject matter of Civil Case No. 42684, as the same
evidence would not support or refute both.
- The FEDERATION filed a rejoinder reiterating that the requirements on
the rule of compulsory counterclaim are present; that the first requirement
that the counterclaim arises out of or is necessarily connected with the
contract of sale subject-matter of NAMARCO's cause of action is evident
from the face of the complaint itself.
- LC issued an order holding "in abeyance" action on the motion to
dismiss till after the trial on the merits.
- FEDERATION filed its answer to the NAMARCO's complaint admitting
some material averments of the complaint, specifically denying other
allegations and consistently with its position averred as affirmative
defense that NAMARCO's failure to assert its claim against the
FEDERATION before judgment in Civil Case No. 42684 on October 15,
1960 constituted a bar to the institution of the present action. By way of
counterclaim, the FEDERATION sought P50,000.00 as attorney's fees
and other expenses of litigation, as well as P17,000.00 as damages for
improper issuance of a writ of attachment which writ, evidently had been
issued earlier by the court.
- NAMARCO filed an answer to the FEDERATION'S counterclaim
specifically denying the material averments thereof and maintaining that
the present action is not barred by Civil Case No. 42684.
ISSUE
WON this action of NAMARCO for the collection of the payment of the
merchandise delivered to, but not yet paid by, the FEDERATION, is
already barred as a consequence of the failure of NAMARCO to set it up
as a counterclaim in the previous case, (Civil Case No. 42684).
HELD
- A counterclaim has been held to be compulsory if there is a logical
relationship between it and the main claim.
- But even assuming for the nonce that NAMARCO's present claim is
logically related to the claim of the FEDERATION in the previous case,
NAMARCO's claim having accrued or matured after the service of its
answer in the earlier case is in the nature of an after-acquired
counterclaim which under the rules is not barred even if it is not set up in
the previous case as a counterclaim. An after-acquired counterclaim, is
one of the recognized exceptions to the general rule that a counterclaim is
compulsory and must be asserted if it arises out of the same transaction
as the opposing party's claim.
- The party need not assert a counterclaim that has not matured at the
time he serves his pleading. This is derived from the language in the rule
limiting its application to claims the pleader has 'at the time of serving the
pleading.' A counterclaim acquired by defendant after he has answered
will not be considered compulsory, even if it arises out of the same
transaction as does plaintiff's claim. Similarly, a counterclaim acquired by
plaintiff after he has replied to a counterclaim by defendant is not
compulsory under Rule 13(a). However, if a party should acquire a
matured counterclaim after he has pleaded, Rule 13(e) provides that he
Prof. Victoria A. 32
may obtain the court's permission to include it in a supplemental pleading
under Rule 15(d)."
- A counterclaim may be asserted under Rule 13(e) only by leave of court,
which usually will be granted in order to enable the parties to litigate all the
claims that they have against each other at one time thereby avoiding
multiple actions. However, Rule 13,(e) is permissive in character. An after-
acquired counterclaim, even if it arises out of the transaction or
occurrence that is the subject matter of the opposing party's claim, need
not be pleaded supplementally; the after-acquired claim is not considered
a compulsory counterclaim under Rule 13(a) and a failure to interpose it
will not bar its assertion a later suit.
- The counterclaim must be existing at the time of filling the answer,
though not at the commencement of the action for under Section 3 of the
former Rule 10, the counterclaim or cross-claim which a party may aver in
his answer must be one which he may have "at the time" against the
posing party. That phrase can only have reference to the time of the
answer. Certainly a premature counterclaim cannot be set up in the
answer. This construction is not only explicit from the language of the
aforecited provisions but also serves to harmonize the aforecited sections
of Rule 10, with section 4 of the same rule which provides that "a
counterclaim . . . which either matured or was acquired by a party after
serving his pleading may, with the permission of the court, be presented
as a counterclaim . . . by supplemental pleading before judgment."
- Thus a party who fails to interpose a counterclaim although arising out of
or is necessarily connected with transaction or occurrence of the plaintiff's
suit but which did not exist or mature at the time said party files his answer
is not thereby barred from interposing such claim in a future litigation.
However such claim may with the court's permission be included in the
same case by way of supplemental pleading before judgment under
Section 4 of former Rule 10 of the Rules (now Sec. 9 Rule 6). And the
same may be allowed unless the case has progressed so far that it may
be inconvenient or confusing to allow the additional claim to be pleaded.
- We therefore rule that NAMARCO's present action, is not barred by its
failure to assert it as a counterclaim the previous case.
BARREDO, dissenting:
- Namarco's present claim arise out of or was necessarily connected with
the transaction or occurrence that was the subject matter of the
Federation's action in Civil Case No 42684 within the contemplation of the
rule on compulsory counterclaims.
- It was the element of time herein involved that somehow induced me at
the beginning to be inclined, albeit reluctantly, to sustain Namarco's
position in this appeal. At the precise time that Namarco filed its answer in
Civil Case No. 42684, it was not yet certain that the Federation would not
pay or that payment of its sight drafts would not be effected by the bank.
In other words, from that point of view, Namarco's cause of action had not
yet matured then. It is also clear, however, that said cause of action
accrued before judgment was rendered by the trial court.
- Under Section 4 of Rule 10 of the old rules, now Section 9 of Rule 6, a
counterclaim which either matured or was acquired by a defendant after
serving his answer may be set up in a supplemental pleading later before
judgment. Since this may be done or not in the case of counterclaims not
 Civil Procedure Digest
arising out of the same transaction or occurrence, the question that arises
is, must it have to be done in the case of counterclaims that do arise from
the same transaction or occurrence, such that if not interposed, they must
be deemed barred?
- I agree that the Court rule for the present that for a counterclaim to be
considered as barred, under the above provisions, the cause of action
thereof must have already accrued at the time the answer is filed by the
defendant, although I, for one, would prefer supplemental counterclaims,
the defendant should just the same be compelled to allege it in such a
supplemental pleading in those cases where his claim accrues before trial
has began or at the latest, before the defendant has started presenting his
evidence. Otherwise stated, my position is that the claim of Namarco in
this case did arise out of the same transaction or occurrence that was the
subject matter of the Federation's anterior action, but inasmuch as, on the
hypothesis that the contract were binding, the formers' cause of action
could not have been considered as already matured when it filed its
answer, there would have been no need for it to file this counterclaim.
- The whole trouble with Namarco's pose in this a appeal lies, however, in
the fact that in its answer to the Federation's complaint, it pleaded the
defense of illegality or nullity of the contract. From that point of view, it was
immaterial to Namarco's recovery of the purchase price of goods it had
already delivered under the contract that there was in said contract any
term for the payment thereof. As far as Namarco was concerned, those
goods had been delivered illegally and should have been immediately
returned unless their value had been paid for, (Article 1412 (2), Civil Code)
or Namarco was in pari delicto (Article 1411, id). Such being the case, it is
quite evident that when Namarco filed its answer to the Federation's
action, its cause of action for the recovery of the price of the delivered
goods was already existing and could have been the subject of a
counterclaim. This means that as of the time Namarco filed its answer
contesting the legality or validity of the contract, it was incumbent upon it
to then and there seek recovery of whatever it had delivered thereunder.
Amended and Supplemental
pleadings
YOUNG VS SPOUSES SY
GR No. 157745
AUSTRIA- MARTINEZ, September 26, 2006
NATURE
Consolidated petitions for review on Certiorari
FACTS
- Petitioner filed a complaint for nullification of Second Supplemental
Extra-judicial settlement, mortgage, foreclosure sale, and tax declaration
against respondents on May 20, 2000. The complained alleged that the
questioned partition which was executed by her mother was
unenforceable since at the time of the execution the petitioner was only 15
years old and that no court approval was secured. Her mother obtained a
loan from the spouses respondents and used the property as security
A2010
Avena
(mortgage). Due to non-payment the property was foreclosed and sold to
respondents as highest bidders. The deed of sale has been filed with the
Register of Deed and the respondents obtained n their name a tax
declaration over the property.
- Petitioner subsequently filed with the same RTC a Motion to Admit
Supplemental Complaint to invoke her right to exercise legal redemption
over the property. This supplemental motion was denied by the RTC on
December 28, 2000. Petitioner filed a Petition for Certiorari and
Mandamus under Rule 65 of the Rules of Court with the CA. The CA
dismissed the petition on the ground that the cause of action in the
Supplemental complaint is entirely different from the original complaint,
that the said complaint did not merely supply its deficiencies, and that, at
any rate, in the event the trial court issues an adverse ruling, the petitioner
can still the same. Petitioner filed this Petition for review on certiorari
under Rule 45 with the SC.
- With regard the original action, the RTC dismissed the case upon motion
of the respondents on the ground of failure to prosecute. Apparently, the
petitioner had asked for postponements opening the door for a claim by
the respondents of non-suit. (This is where it becomes more interesting)
Petitioner filed two appeals with the CA. Both appeals raised essentially
the same issues. One of the appeals an ordinary appeal and the other is a
Petition for Certiorari under Rule 65 filed four months after the first. The
CA ruled in favor of the petitioner under the ordinary appeal but a motion
for reconsideration was filed by the respondents and the CA has yet to
rule on this reconsideration motion. The other appeal was dismissed on
the ground that judgment of the RTC can only be appealed via an ordinary
appeal and not by certiorari. Hence this petition for review under Rule 45
with the SC.
ISSUE/S
1. WON the denial of the Motion to admit supplemental Complaint is valid
2. WON the dismissal of the petition for certiorari with regard the original
action is proper
HELD
1. No. As its very name denotes, a supplemental pleading only serves to
bolster or add something to the primary pleading. A supplement exists
side by side with the original. It does not replace that which it supplement.
Moreover, a supplemental pleading assumes that the original pleading is
to stand and that the issues jpined with the original pleading remained an
issue to be tried in the action. It is but a continuation of the complaint. Its
usual office is to set up new facts which justify, enlarge or change the kind
of relief with respect to the same subject matter as the controversy
referred to in the original complaint. In this case, the consolidation of the
title over the property in the name of the respondent, Manuel Sy, and the
issue as to whether it precluded petitioner as alleged co-owner from
exercising the right of legal redemption, are new matters that occurred
after the filing of the original complaint. The relief prayd for in the
Supplemental complaint, which is the exercise of the right of legal
redemption accorded to co-owners of property, is germane to and
intertwined with the cause of action in the Complaint for the nullification.
The right of legal redemption as co-owner is conferred by law and is
Prof. Victoria A. 33
merely a natural consequence of co-ownership. Hence petitioner’s cause
of action for legal redemption as embodied in the supplemental complaint
stems directly from and is an extension of her rights as co-owner of the
property subject of the complaint. Also as petitioner correctly pointed out,
even if the trial court decides in her favor, the redemption period would
have lapsed already and would not form part of the decision since it is not
prayed for, much less alleged in the original complaint. In such a case, the
respondents could oppose the exercise since it would not have been
included in the decision over the original complaint.
2. Yes. The petitioner is guilty of forum shopping. Forum shopping
consists of filling multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, the the purpose of
obtaining a favorably judgment. There is forum shopping where there
exist: (a) identity of parties, or at least such parties as represent the same
interests in both actions; (b) identity of rights asserted and relief prayed
for, the relief being founded on the same facts; (c) the identity of the two
preceding particulars is such that any judgment rendered in the pending
case, regardless of which party is successful would amount to res
judicata. The decision of the RTC is dismissing the case is a final order
and the proper remedy against such final order is appeal and not
certiorari. As a general rule, a writ of certiorari sill not issue where the
remedy of appeal is available to the aggrieved party. The remedies of
appeal in the ordinary course of law and that of certiorari under Rule 65
are mutually exclusive and not alternative or cumulative. hence the
special civil action of certiorari under Rule 65 cannot be a substitute for an
appeal where the latter remedy is available. This is a firm judicial policy.
Disposition
Petition for the non-suit is denied. Petition for the admission of the
supplemental order is granted. The trial court is directed to admit said
complaint.
Third Party Complaint, etc.
REPUBLIC V CENTRAL SURETY & INSURANCE
COMPANY
26 SCRA 741
CASTRO; October 26, 1968
NATURE
FACTS
- October 23, 1959 > Republic of the Philippines filed suit against the
Central Surety & Insurance Company and Mangoba, manager of the bond
department stating that Po Kee Kam who was the subject of deportation
proceedings in whom the bond was made in favor of, did not appear in
such proceedings despite notice to the Surety. This constituted a violation
of the conditions of the bond causing the forfeiture of the bond made by
the Surety in favor of the government. Republic claims P5,000 (amount
of bond) and P1,000 (atty’s fees)
 Civil Procedure Digest
- July 5, 1963 > Surety filed its answer: (1) that its bond cannot be made
liable beyond the amount of P5,000; (2) that it is not liable for attorney's
fees in the absence of any stipulation to that effect; (3) that the court has
no jurisdiction over the case as the amount involved is only P5,000; and
(4) that the Republic has no cause of action.
- July 30, 1963 > Surety filed a third-party complaint, with leave of court,
against Po Kee Kam and Tony Go alleging that for consideration of the
bond, the third-party defendants, executed an indemnity agreement in
favor of the Surety to indemnify it for damage, loss, expenses etc and that
in the event judgment is rendered against it, the third party defendants be
ordered to reimburse
- September 7, 1963 > the third-party defendants answer: defense that the
case is premature as the main case has not yet been terminated.
- December 2, 1963 > upon verbal motion of the third party defendants,
the trial court dismissed the third-party complaint for lack of jurisdiction
that the third-party complaint was filed after the passage of RA 3828
conferring original jurisdiction on the Municipal Court in civil cases
involving not more than P10,000.00, and that the third-party complaint
refers to a claim of only P6,000.00
- December 3, 1963 > TC ordered surety to pay the Republic P5,000, with
interest
- CA: Surety interposed its appeal from the order dismissing its third-party
complaint and from the decision ordering it to pay the Republic the
amount of P5,000, contending that the trial court erred in (1) not declaring
itself without jurisdiction over the subject-matter of the action, and (2)
dismissing the third-party complaint. But it certified the case to SC
pursuant to Sec 2 Article VIII of the Constitution and Sec 17(3) of RA 296
where jurisdiction of TC is in issue
ISSUES
1. WON the trial court had jurisdiction over the subject-matter of the main
action
2. WON the trial court had jurisdiction over the third-party complaint
HELD
1. YES
- Even though the total amount involved is only P6,000 (P5,000 under the
bond and P1,000 as attorney's fees) and a court of first instance is vested
with jurisdiction only over cases in which the demand, exclusive of
interest, or the value of the property in controversy, exceeds P10,000,
pursuant to section 44 of Republic Act 296, as amended by Republic Act
3828 which took effect on June 22, 1963, the present action having been
filed on June 20, 1963 (two days before the effectivity of Republic Act
3828 which broadened the jurisdiction of municipal and city courts to
include cases in which the demand, exclusive of interest, or the value of
the property in controversy, does not exceed P10,000) it is cannot be
argued that the court's jurisdiction over the case was lost on June 22,
1963, when Republic Act 3828 took effect, and therefore the case should
have been remanded to the municipal court.
- It is not disputed that the trial court acquired jurisdiction over the subject-
matter on June 20, 1963 when the complaint was filed with it. It is of no
moment that summons was served and that the case was heard and
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Avena
decided after the effectivity of Republic Act 3828, because the rule is
firmly entrenched in our law that jurisdiction once acquired continues until
the case is finally terminated
2. YES
- It is true that the third-party complaint was filed after the effectivity date
of RA3828. It is likewise true that the demand therein made does not
exceed P10,000, and, therefore, is not within the jurisdiction of the Court
of First Instance if it were an independent action. But the third-party
complaint is an ancillary suit which depends on the jurisdiction of the court
over the main action. Since the trial court had acquired jurisdiction over
the complaint, it necessarily follows that it likewise had jurisdiction over
the third-party complaint which is but an incident thereof. This must be so
because jurisdiction over the main case embraces all incidental matters
arising therefrom and connected therewith. A contrary rule would result in
"split jurisdiction" which is not favored, and in multiplicity of suits, a
situation obnoxious to the orderly administration of justice.
-
Talisay-Silay Milling Co., et al. vs. CIR, et al: The third-party
complaint is but a continuation of the main action, its purpose being
merely to seek "contribution, indemnity, subrogation or any other relief, in
respect of his opponent's claim." (Rule 6, See. 12.) The aim is to avoid the
actions which should be tried together to save the time and cost of a
reduplication of evidence, to obtain consistent results from identical or
similar evidence, and to do away with the serious handicap to a defendant
of a time difference between a judgment against him and a judgment in
his favor against the third party defendant. Petitioners urge that a rule
similar to the rule on counterclaim be adopted. But a third-party complaint
cannot be likened to a counterclaim which must be within the jurisdiction
of the court trying the main case, because unlike a third-party complaint, a
counterclaim "need not diminish or defeat the recovery sought by the
opposing party, but may claim itself exceeding in amount or different in
kind from that sought in the opposing party's claim" (Rule 6, Sec. 6). A
third-party complaint may likewise be likened to a cross claim under Rule
9, section 5. ... The principle is at once apparent, namely, that where an
action is ancillary to a main action over which a court has jurisdiction, no
independent jurisdiction is needed to enable the court to take cognizance
of the ancillary action.
Disposition the order dated December 2, 1963 dismissing the third-party
complaint is set aside; the decision dated December 3, 1963 is modified in
the sense that the third-party defendants are hereby ordered to pay to the
Surety whatever sums the latter will pay to the Republic by virtue of the
judgment appealed from.
ASIAN CONSTRUCTION V CA (MONARK
EQUIPMENT)
00 SCRA 00
CALLEJO; May 17, 2005
NATURE
Petition for review on certiorari decision of CA
FACTS
Prof. Victoria A. 34
- Asian contruction leased from Monark Equipment several pieces of
equipment which it failed to pay for, despite demands. Monark then filed in
the RTC an action to recover a sum of money amounting to P5 million
plus 12% interest. Asian filed a motion to file and admit answer with 3 rd
party complaint against Becthel Overseas Corp. Asian, although admitting
the its indebtedness to Monark, claimed that it used the leased equipment
to perform services in favor of Becthel, which in turn failed to pay Asian for
the same. Asian claims that it needs to implead Becthel for “contribution,
indemnity, subrogation, or other reliefs to off-set or to pay the amount of
money” claimed by Monark. Monark in turn filed a motion for summary
judgment, contending that there were no genuine issues raised.
- RTC: Motion of Asian for leave to file a 3 rd part complaint was denied, but
motion of Monark for summary judgment granted (RTC considered this as
motion for judgment on the pleadings). Judgment ordered Asian to pay
Monark P5 million plus interest
- Asian appealed to CA. CA affirmed, sustaining the disallowance of the 3 rd
party complaint on the ground that the transaction between the said
parties did not arise out of the same transaction on which Monark’s claim
was based. MFR was also denied.
ISSUE/S
1. WON a 3rd-party complaint is proper
2. WON judgment on the pleadings is proper
HELD
1. NO
Ratio Section 11, Rule 6 provides: “3rd (fourth, etc.)-party complaint. – A
3rd (fourth, etc.) – party complaint is a claim that a defending party may,
with leave of court, file against a person not a party to the action, called
the 3rd (fourth, etc.) – party defendant, for contribution, indemnity,
subrogation or any other relief, in respect of his opponent’s claim.”
Reasoning Purpose of the rule: permit a defendant to assert an
independent claim against a 3rd-party which he, otherwise, would assert in
another action, thus preventing multiplicity of suits. This is a rule of
procedure and does not create a substantial right. Neither does it
abridge, enlarge, or nullify the substantial rights of any litigant. This right to
file a 3rd-party complaint against a 3rd-party rests in the discretion of the
trial court. The 3rd-party complaint is actually independent of, separate
and distinct from the plaintiff’s complaint, such that were it not for the rule,
it would have to be filed separately from the original complaint.
- Prerequisite to the exercise of right: some substantive basis for a 3rd-
party claim is found to exist, whether the basis be one of indemnity,
subrogation, contribution or other substantive right. Bringing of a 3rd-party
defendant is proper if he would be liable to plaintiff, defendant or both for
all or part of the plaintiff’s claim against the original defendant, although
the 3rd-party defendant’s liability arises out of another transaction.
- The defendant may implead another as 3rd-party defendant (a) on an
allegation of liability of the latter to the defendant for contribution,
indemnity, subrogation or any other relief; (b) on the ground of direct
liability of the 3rd-party defendant to the plaintiff; or (c) the liability of the
3rd-party defendant to both the plaintiff and the defendant.
 Civil Procedure Digest
- There must be a causal connection between the claim of the plaintiff in
his complaint and a claim for contribution, indemnity or other relief of the
defendant against the 3rd-party defendant.
- Capayas v. CFI: Court made out the ff tests: (1) whether it arises out of
the same transaction on which the plaintiff’s claim is based; or whether the
3rd-party claim, although arising out of another or different contract or
transaction, is connected with the plaintiff’s claim; (2) whether the 3rd-party
defendant would be liable to the plaintiff or to the defendant for all or part
of the plaintiff’s claim against the original defendant, although the 3rd-party
defendant’s liability arises out of another transaction; and (3) whether the
3rd-party defendant may assert any defenses which the 3rd-party plaintiff
has or may have to the plaintiff’s claim.
- 3rd-party complaint does not have to show with certainty that there will be
recovery against the 3rd-party defendant; sufficient that pleadings show
possibility of recovery. In determining the sufficiency of the 3rd-party
complaint, the allegations in the original complaint and the 3rd-party
complaint must be examined. A 3rd-party complaint must allege facts
which prima facie show that the defendant is entitled to contribution,
indemnity, subrogation or other relief from the 3rd-party defendant.
- In this case, the claims of Monark against Asian arose out of the
contracts of lease and sale; such transactions are different and separate
from those between Becthel and Asian where the equipment leased from
Monark was used by the petitioner. There is no showing in the proposed
3rd-party complaint that Becthel knew or approved the use of the leased
equipment by Asian for the said project
- fact that Asian used the equipment it leased from Monark in connection
with its project with Becthel does not provide a substantive basis for the
filing of a 3rd-party complaint against the latter. There is no causal
connection between the claim of Monark, and the failure of Becthel to pay
the balance of its account to Asian after the completion of the project.
2. YES
Ratio Section 1, Rule 34: “Judgment on the pleadings . – Where an
answer fails to tender an issue, or, otherwise, admits the material
allegations of the adverse party’s pleading, the court may, on motion of
that party, direct judgment on such pleading. However, in actions for
declaration of nullity or annulment of marriage or for legal separation, the
material facts alleged in the complaint shall always be proved.”
Reasoning The denial of the petitioner’s motion with leave to file a third-
party complaint against Becthel is without prejudice to its right to file a
separate complaint against the latter.
- Considering that the petitioner admitted its liability for the principal claim
of the respondent in its Answer with Third-Party Complaint, the trial court
did not err in rendering judgment on the pleadings against it.
Disposition Petition is denied.
COMPULSORY COUNTERCLAIM/CROSS-
CLAIM
CALO appellant, vs.AJAX INTERNATIONAL, INC,
defendant-appellee
A2010 Prof. Victoria A. 35
Avena
22 SCRA 996 Reasoning The rule that a compulsory counterclaim not set up is barred,
when applied to the municipal court, presupposes that the amount
BENGZON, March 13, 1968
involved is within the said court's jurisdiction. Otherwise, as this Court had
already noted in Yu Lay v. Galmes we would come to the absurd situation
NATURE
where a claim must be filed with the municipal court which it is prohibited
Petition for certiorari, prohibition and mandamus on decision of CFI of
from taking cognizance of, being beyond its jurisdiction. Besides, the
Agusan dismissing the complaint of Calo
reason underlying the rule, which is to settle all related controversies in
one sitting only, does not obtain. For, even if the counterclaim in excess of
FACTS
the amount cognizable by the inferior court is set up, the defendant cannot
-Sometime on May 7, 1959, plaintiff-appellant Calo ordered from
obtain positive relief. The Rules allow this only for the defendant to
defendant-appellee Ajax International, Inc., 1,200 ft. of John Shaw wire
prevent plaintiff from recovering from him. This means that should the
rope at P2.85 per foot. The transaction was evidenced by Charge Order
court find both plaintiff's complaint and defendant's counterclaim (for an
No. 37071, for P3,420.00. According to plaintiff Calo, when the wire rope
amount exceeding said court's jurisdiction) meritorious, it will simply
was delivered to Butuan City, the same was found short of 300 ft. Plaintiff
dismiss the complaint on the ground that defendant has a bigger credit.
then wrote two letters to defendant asking for either completion of delivery
Since defendant still has to institute a separate action for the remaining
or account adjustment of the alleged undelivered 300 ft. of wire rope.
balance of his counterclaim, the previous litigation did not really settle all
-On November 20, 1961, a complaint docketed as Civil Case No. IV-
related controversies.
93062 was filed in the Municipal Court of Manila by one Adolfo Benavides
who claimed to have acquired the outstanding credit account of Calo from
Disposition Plaintiff Calo's claim of P12,000.00 not being a compulsory
defendant Ajax International, Inc. Charge Order No. 37071 was among
counterclaim in Civil Case No. VI-93062, it need not be filed there. The
those included in the assigned account. Subsequently, a judgment by
pendency then of said civil case could not be pleaded in abatement of
default was entered, and a writ of execution issued, against plaintiff Calo.
Civil Case No. 860. Consequently, the lower court erred in dismissing
-On January 23, 1962, plaintiff Calo, assisted by her husband, Marcos
plaintiff's complaint.
Calo, filed in the Court of First Instance of Agusan a complaint against
defendant asking (1) that the latter either effect complete delivery of
GOJO V GOYALA
Charge Order No. 37071 or that she be relieved from paying P855.00 and
Page 26
(2) that the latter indemnify her for P12,000 as attorney's fees, damages
NATURE
and expenses of litigation.2 The case was docketed as Civil Case No.
Appeal from a decision of the CFI of Sorsogon
860.
-Instead of filing an answer, defendant moved for the dismissal of Civil
FACTS
Case 860 on the ground, inter alia, that the subject thereof was involved
and intimately related to that in Civil Case No. IV-93062 of the Municipal -allegedly a pacto de retro sale (the other party alleged it was a
mortgage), Gojo the buyer alleged that the period for redemption has
Court of Manila. The court a quo sustained the motion and dismissed the
already lapsed so he filed a petition for consolidation of ownership.
case. Plaintiff-appellant moved for reconsideration and new trial. When
-Goyala’s, the buyers who were alleging that they had obtained a cash
this failed, she instituted the present appeal.
loan from Gojo and the land allegedly sold to Gojo was only a security to
-The dismissal of Civil Case No. 860 by the court a quo because of the
the loan, and that they tried to pay their debt to Gojo but Gojo refused.
pendency of Civil Case No. IV-93062 in the municipal court of Manila is
Goyala’s filed a counterclaim for Gojo to receive the amount due, for the
predicated on the supposition that plaintiff's claim is a compulsory
document to be declared a mortgage and not a pacto de retro sale, for
counter-claim that should be filed in the latter case. There is no question
P1800 per annum for the fruits of said property and that, if ever the
that it arises out of the same transaction which is the basis of the
document be deemed a pacto de retro sale, for Gojo to be ordered to
complaint in Civil Case No. IV-93062 and does not require the presence of
execute a deed of resale in favor of the Goyalas.
third parties over whom the municipal court of Manila could not acquire
-Goyala’s spouse died, TC ordered Gojo to amend the Complaint to
jurisdiction.
substitute the spouse with one of her successors in interest as party.
Notwithstanding the lapse of 43 days after receipt of copy of TC order,
ISSUE
Gojo allegedly failed to submit the amended complaint so Goyala filed a
WON plaintiff's claim is a compulsory counter-claim that should be filed in
the earlier case motion to dismiss the petition. TC dismissed complaint, Gojo was also
declared in default in re Goyala’s counterclaim. TC ruled in favor of
HELD Goyala.
-Appellant appealed to the CA, which upon finding that the said appeal
No. Plaintiff's claim is not a compulsory counterclaim in Civil Case No. IV-
93062 for the simple reason that the amount thereof exceeds the involves purely questions of law, certified the same to the SC.
jurisdiction of the municipal court.
ON COMPULSORY COUNTERCLAIM
 Civil Procedure Digest
The appellant contends that there is no occasion for the TC to declare him
in default in respect of appellee’s counterclaim as said counterclaim falls
within the category of compulsory counterclaim which does not call for an
independent answer as the complaint already denies its material
allegations. It is now settled that a plaintiff who fails or chooses not to
answer a compulsory counterclaim may not be declared in default,
principally because the issues raised in the counterclaim are deemed
automatically joined by the allegations of the complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored is a
void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the estate
of a deceased person. In Barrameda vs Barbara, the SC held that an
order to amend the complaint, before the proper substitution of parties as
directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and imposes upon
the plaintiff no duty to comply therewith to the end that an order dismissing
the said complaint, for such non-compliance, would similarly be void. It
was further held in Ferriera vs Gonzales that the continuance of a
proceeding during the pendency of which a party thereto dies, without
such party having been validly substituted in accordance with the rules,
amounts to lack of jurisdiction.
Disposition WHEREFORE, the decision appealed from is set aside
Barred if not set up
CHAVEZ V SANDIGANBAYAN
G.R. No. 91391
GUTIERREZ, JR; January 24, 1991
FACTS
- July 31, 1987, the Republic of the Philippines, through the Presidential
Commission on Good Government (PCGG) with the assistance of
Solicitor General Francisco Chavez filed with the respondent
Sandiganbayan a complaint docketed as Civil Case No. 0033 against
Eduardo Cojuangco, Jr. and Juan Ponce Enrile, among others, for
reconveyance, reversion and accounting, restitution and damages.
-After the denial of his motion to dismiss, respondent Enrile filed his
answer with compulsory counterclaim and cross-claim with damages.
On January 30, 1989, respondent Sandiganbayan issued a resolution
which deferred The resolution of the Motion to Dismiss the Counterclaim
against the Plaintiff government until after trialRespondent Enrile then
requested leave from the Sandiganbayan to implead the petitioner and the
PCGG officials as party defendants for lodging this alleged "harassment
suit" against him.
The motion praying for leave to implead additional parties(Chavez et al) to
his counterclaim was granted in a resolution dated June 8, 1989, without
prejudice to the defenses which said defendants may put forth individually
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or in common, in their personal capacities or otherwise.
In a later resolution dated November 2, 1989, respondent Sandiganbayan
denied a motion to reconsider the June 8, 1989 resolution.
Thereafter, all the PCGG officials filed their answer to the counterclaims
invoking their immunity from suits as provided in Section 4 of Executive
Order No. 1.
Instead of filing an answer, the petitioner comes to this Court assailing the
resolutions as rendered with grave abuse of discretion amounting to lack
of jurisdiction.
Petitioner’s claim
-no counter-claim can be filed against him in his capacity as Solicitor
General since he is only acting as counsel for the Republic. He cites the
case of Borja v. Borja,8
- since he is simply the lawyer in the case, exercising his duty under the
law to assist the Government in the filing and prosecution of all cases
pursuant to Section 1, Executive Order No. 14, he cannot be sued in a
counterclaim in the same case.
ISSUES
1.WON Chavez (SolGEn)is immune from suit
2.WON it is proper to implead Chavez (as SolGen) petitioner as additional
party defendant in the counterclaim filed by respondent Enrile
HELD
1.No.
The general rule is that public officials can be held personally accountable
for acts claimed to have been performed in connection with official duties
where they have acted ultra vires or where there is a showing of bad faith.
Moreover, the petitioner's argument that the immunity proviso under
Section 4(a) of Executive Order No. 1 also extends to him is not well-
taken. A mere invocation of the immunity clause does not ipso facto result
in the charges being automatically dropped.
Immunity from suit cannot institutionalize irresponsibility and non-
accountability nor grant a privileged status not claimed by any other
official of the Republic. (id., at page 586)
Where the petitioner exceeds his authority as Solicitor General acts in bad
faith, or, as contended by the private respondent, "maliciously conspir(es)
with the PCGG commissioners in persecuting respondent Enrile by filing
against him an evidently baseless suit in derogation of the latter's
constitutional rights and liberties" (Rollo, p. 417), there can be no question
that a complaint for damages may be filed against him. High position in
government does not confer a license to persecute or recklessly injure
8
The appearance of a lawyer as counsel for a party and his participation in a case as such counsel does not make
him a party to the action. The fact that he represents the interests of his client or that he acts in their behalf will not hold
him liable for or make him entitled to any award that the Court may adjudicate to the parties, other than his
professional fees. The principle that a counterclaim cannot be filed against persons who are acting in representation of
another ? such as trustees ? in their individual capacities (Chambers v. Cameron, 2 Fed. Rules Service, p. 155; 29 F.
Supp. 742) could be applied with more force and effect in the case of a counsel whose participation in the action is
merely confined to the preparation of the defense of his client. Appellant, however, asserted that he filed the
counterclaim against said lawyer not in his individual capacity but as counsel for the heirs of Quintin de Borja. But as
we have already stated that the existence of a lawyer-client relationship does not make the former a party to the action,
even this allegation of appellant will not alter the result We have arrived at (at pp. 924-925)
Prof. Victoria A. 36
another. The actions governed by Articles 19, 20, 21, and 32 of the Civil
Code on Human Relations may be taken against public officers or private
citizens alike.
2. No. Senator Enrile has to file a separate and distinct civil action for
damages against the Solicitor General.
-The charges pressed by respondent Enrile for damages under Article 32
of the Civil Code arising from the filing of an alleged harassment suit with
malice and evident bad faith do not constitute a compulsory counterclaim.
In the case of Tiu Po v. Bautista, (103 SCRA 388 [1981]), we ruled that
damages claimed to have been suffered as a consequence of an action
filed against the petitioner must be pleaded in the same action as a
compulsory counterclaim. We were referring, however, to a case filed by
the private respondent against the petitioners or parties in the litigation. In
the present case, the counterclaim was filed against the lawyer, not
against the party plaintiff itself.
-To allow a counterclaim against a lawyer who files a complaint for his
clients, who is merely their representative in court and not a plaintiff or
complainant in the case would lead to mischievous consequences.
-The problem is particularly perplexing for the Solicitor General. As
counsel of the Republic, the Solicitor General has to appear in
controversial and politically charged cases. It is not unusual for high
officials of the Government to unwittingly use shortcuts in the zealous
desire to expedite executive programs or reforms. The Solicitor General
cannot look at these cases with indifferent neutrality. His perception of
national interest and obedience to instructions from above may compel
him to take a stance which to a respondent may appear too personal and
biased. It is likewise unreasonable to require Government Prosecutors to
defend themselves against counterclaims in the very same cases they are
prosecuting.
LUALHATI A. COJUANGCO vs. PURIFICACION
VILLEGAS
184 SCRA 374
FERNAN,
NATURE
The instant petition for certiorari and prohibition raises the ultimate issue
of whether or not the execution of a final judgment in an ejectment case
may be stayed by a co-equal court in order that the right of indemnification
and retention of an alleged builder in good faith may not be rendered
meaningless or illusory in an independent civil action for specific
performance.
FACTS
Petitioner Lualhati Aldaba Cojuangco is the widow of Don Juan
Cojuangco, the registered owner of the disputed parcel of residential land
containing an area of 585 square meters and situated at San Agustin,
Malolos, Bulacan. Many years back (about sixty years, according to the
municipal trial court) the parents of private respondent Purificacion
Villegas, with the acquiescence of Don Juan Cojuangco, constructed a
 Civil Procedure Digest
residential house and later a structure housing a bakery on the aforesaid
lot. It was understood that they could remain on the land with his
blessings and without paying rentals on condition that they would vacate
the premises when needed by the owner.
After her parent's death, Villegas remained in the property, renovating the
same and spending P300,000.00 in the process. She also leased out a
portion of the land to Siapno Appliances at P600.00 a month without the
knowledge and consent of Don Juan Cojuangco. This latter act apparently
destroyed her congenial relations with the landowner because soon
thereafter, Don Juan Cojuangco, through his attorney in fact, demanded
that she leave the property. Despite his repeated written demands for her
to surrender possession of the property, Villegas refused, prompting
Cojuangco to institute ejectment proceedings against her before the
Municipal Trial Court (MTC) of Malolos, Bulacan, Branch I on August 23,
1978.
On February 5, 1979, Don Juan Cojuangco died intestate. In the trial
court's order of October 22, 1979, his wife Lualhati, herein petitioner,
together with nephews and nieces, were substituted as parties-plaintiffs.
In its decision dated June 30, 1983, the inferior court dismissed the action
for ejectment for lack of jurisdiction. It cited the unassailable fact that
Villegas and her predecessors-in-interest had been in actual possession
of the subject land for no less than sixty years and that in addition,
Villegas asserted an adverse claim of ownership, thus transforming the
suit into an "accion publiciana" which is properly cognizable by courts of
first instance (now regional trial courts).
On appeal to the then Court of First Instance (CFI) of Malolos, Branch XV,
the inferior court was reversed insofar as it had erroneously denied
jurisdiction over the ejectment case. The trial court then ordered Villegas
to vacate the premises and to surrender possession thereof to herein
petitioner Cojuangco.
The case was elevated to the appellate court and to the Supreme Court
and in both instances, herein petitioner Cojuangco's right of possession
over the land was upheld. After entry of judgment was made on November
20, 1985, herein petitioner went to the Regional Trial Court of Malolos,
Branch XV, where she filed a motion for execution of the judgment, which
the court granted on June 30, 1986. On July 29, 1986, a writ of demolition
was issued against Villegas, who did not oppose the ordered demolition
but instead asked the lower court to give her more time (forty days from
August 7, 1986) to effect the transfer of her personal properties and to
remove the improvements on the subject lot to which motion the court
acceded.
On September 16, 1986, before the lapse of the grace period, Villegas
filed a separate civil action docketed as Civil Case No. 9094-M against
petitioner Cojuangco and the provincial sheriff "for specific performance
with urgent prayer for issuance of a temporary restraining order and
preliminary injunction." This case, instead of being referred to Branch XV
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which had earlier issued the writ of demolition, was raffled to another
Malolos branch of the Bulacan Trial Court, specifically Branch XVII which
issued on the same day, September 16, 1986, a temporary restraining
order enjoining Cojuangco and particularly the sheriff "from enforcing or
implementing the Order of Demolition issued in Civil Case No. 7042-
M . . ." This was followed by another order dated October 6, 1986
granting a writ of preliminary injunction. The twin orders are now the
subject of the instant petition for certiorari on the ground that they have
been issued with grave abuse of discretion amounting to lack of
jurisdiction.
ISSUES
1. Whether or not the respondent court validly issued an injunction
2. Whether or not Villegas can successfully raise an independent action to
assert that she and her predecessors are builders in good faith and that
they are entitled to recover the value of improvements on the lot.
HELD
1. NO.
Ratio. As early as 1922 in the case of Cabigao v. Del Rosario, this Court
laid down the doctrine that "no court has power to interfere by injunction
with the judgments or decrees of a court of concurrent or coordinate
jurisdiction having power to grant the relief sought by injunction."
Reasoning. The various branches of the court of first instance of a
province or city, having as they have the same or equal authority and
exercising as they do concurrent and coordinate jurisdiction, should not,
cannot and are not permitted to interfere with their respective cases, much
less with their orders or judgments. A contrary rule would obviously lead to
confusion and seriously hamper the administration of justice.
2. NO
Ratio. Rule 9, Section 4 of the Revised Rules of Court on compulsory
counterclaim provides the answer. It states:
"A counterclaim or cross-claim not set up shall be barred if it arises out of
or is necessarily connected with, the transaction or occurrence that is the
subject-matter of the opposing party's or co-party's claim and does not
require for its adjudication the presence of third parties of whom the court
cannot acquire jurisdiction.
Reasoning. Villegas' claim to recover compensation for improvements
made on the land is essentially in the nature of a counterclaim since it is
interwoven with the fact of possession. Said claim for compensation
should have been presented as a counterclaim in the ejectment suit. It is
deemed barred if not raised on time and the party in error is precluded
from setting it up in a subsequent litigation.
-The rule on compulsory counter-claim is designed to enable the
disposition of the entire conflict at one time and in one action. The
philosophy of the rule is to DISCOURAGE MULTIPLICITY OF SUITS.
-According to Villegas, the reason why the counterclaim for
indemnification was not made in the original action was because it
became a "ripe issue" only after the ejectment proceedings. Villegas
contended that the estoppel of judgment could only extend to those facts
Prof. Victoria A. 37
and conditions existing at the time the judgment was rendered and not to
those which supervened before the second suit.
-The argument is untenable. In her pleadings, Villegas repeatedly
stressed that the residential house which her parents had constructed was
already there on the questioned lot for as long as she could remember,
that she herself has lived there all her life and that in the honest belief that
the land had been "donated" to her parents by her "Aunt Tecla", she made
various improvements and renovation thereon. Obviously, such
declarations on the part of Villegas completely negate her absurd claim
that the factual basis for her subsequent action arose after the ejectment
suit became final.
-Thus, Villegas should have set forth, simultaneously with the assertion
that she was entitled to the parcel of land by right of inheritance, the
alternative claim that assuming she was not legally entitled to the disputed
lot, at least as a builder in good faith, she has the right to the value of the
buildings and improvements which she and her parents had introduced on
the land.
-And while it may be argued that the defense of being a builder in good
faith would have been inconsistent with her claim of ownership, in the
case of Castle Bros., Wolf and Sons v. Go-Juno, the Court held that a
party may set forth as many defenses and counterclaims as he may have,
whatever be their nature. These may even be inconsistent with each other
because what is sufficient is that each is consistent with itself.
-Since Villegas failed to set up such alternative defense (i.e. a builder in
good faith is entitled to recover the value of improvements) and instead
relied on the sole defense that she inherited the land from her parents, the
rejection thereof was a complete resolution of the controversy between
the parties which bars a later case based upon the unpleaded defense.
The adjudication of the issue joined by the parties in the earlier case
constitutes res judicata, the theory being that what is barred by prior
judgment are not only the matters actually raised and litigated upon, but
also such other matters as could have been raised but were not. 13
-It bears emphasizing that in ejectment cases, the rule is explicit that the
judgment must be executed immediately when it is in favor of the plaintiff
to prevent further damages to him arising from the loss of possession.
The sense of urgency is more pronounced in the case at bar where the
ejectment case in favor of Cojuangco was decided in 1978 and
subsequently appealed all the way to the Supreme Court. But the final
victory continues to elude Cojuangco to this day due to a large extent to
the legal maneuvers utilized by Villegas to forestall the inevitable.
-For its part, respondent trial court has attempted to justify its writ of
injunction by stating that the impending demolition of Villegas' house and
other buildings on the disputed property would render inutile her right as a
builder in good faith. We cannot agree. The loss to Villegas is not
sufficient to warrant a blatant disregard of established precedents
especially when it is borne in mind that for more than half a century,
Villegas and her family have enjoyed the fruits of the land without paying a
single centavo in return. Surely, the equities are more in favor of
Cojuangco, the landowner.
Dispositive WHEREFORE, the petition is granted. The respondent court
is hereby ordered to DISMISS Civil Case No. 9094-M and all proceedings
 Civil Procedure Digest
held therein are declared null and void. The Regional Trial Court of
Malolos, Bulacan, Branch XV is ordered to immediately execute the
decision in the ejectment case. Civil Case No. 7042-M. Costs against
private respondent Villegas. This decision is immediately executory.
CARPENA VS MANALO
GR No. 74262
PARAS; October 29, 1987
NATURE
Action to recover possession
FACTS
Lot 74 of the Calamba Cadastre was co-owned Beatriz Manalo and her
common-law husband, Luciano Manalo. On November 5, 1947 Beatriz
sold her one-half interest therein to the spouses Demetrio Carpena and
Salud Catindig for the sum of P5,000.00. To keep the transaction from
Luciano, the sale was made in the neighboring town of Sta. Rosa,
Laguna, and the parties agreed that Beatriz would remain in possession
of the property but with the obligation of paying the land taxes due
thereon. On May 22, 1948 Beatriz and Luciano were married, but she died
three months thereafter.
On August 30, 1948 the deed of the sale was registered and, as a result,
TCT No. 16833 was cancelled and TCT No. 2004 was issued in the name
of the Carpena spouses for the portion purchased by them, which was
identified as Lot No. 74-B of subdivision plan Psd-23230. Upon the death
of their vendor, the Carpenas notified Luciano of the sale and besides
demanded of him the possession of lot 74-B, but the latter, instead of
acquiescing thereto, filed an action against them to annul the sale made in
their favor by Beatriz and to have himself declared owner of the property
subject matter thereof (Civil Case No. 9194). Defendant's answer in said
case alleged, as defense, that the sale in their favor was valid and that by
virtue of the same they became owners of the property subject matter
thereof. Consequently, they prayed for the dismissal of the case and for
damages. The case was dismissed by the lower court after a trial on the
merits and on appeal, the Court of Appeals affirmed the dismissal.
It appears that in 1945 a barong-barong was erected on Lot 74-B by a
tenant occupying the same. Two years thereafter the building was sold to
Beatriz Manalo for P200.00, and thereafter said improvement, with an
assessed value of P150.00, was declared in her name for taxation
purposes. After her death, Luciano Manalo and their children continued to
occupy said house, making considerable improvements thereon in the
years 1952 and 1953, but in December 1954 Luciano Manalo sold it to
Pelagia Cailles Vda. de Unson and Beronica Capareda who began
occupying the same on April 2, 1955.
The present action was commenced on April 11, 1955 in the Court of First
Instance of Laguna by the Carpena spouses against Luciano Manalo,
Pelagia Cailles Vda. de Unson and Beronica Capareda to recover the
possession of Lot 74-B and the house erected thereon as well as
reasonable rental for its use and occupancy from August 1, 1948.
Appellees herein alleged in their answer that the sale executed by Beatriz
A2010
Avena
Manalo in favor of appellants covered only Lot 74-B and not the house
erected thereon.
While the case was pending in the lower court, or more specifically on
April 17, 1955, appellees, without the consent of appellants, moved the
house in question to the adjoining lot, which compelled the latter to file a
supplemental complaint to recover from the former the sum of P2,500.00
representing the value of the house, plus attorney's fees.
As appellees had already vacated Lot 74-B, the lower court, after trial on
the merits, rendered judgment declaring appellant the owners of the
house in question and sentencing appellees to pay appellants the sum of
P1,000.00 representing the fair market value thereof. Appellants' claim for
damages for the use and occupancy of the premises was, however,
dismissed for not having been set up in Civil Case No. 9194, the same
being compulsory counterclaim. The present is their appeal from this
portion of the decision of the lower court
ISSUE
WON the action filed by Luciano Manalo is a compulsory counterclaim
HELD
Yes. As stated above, the purpose of the action filed by Luciano Manalo
(Civil Case No. 9194 of the Court of First Instance of Laguna) was to
annul the sale made by his wife, Beatriz Manalo, in favor of the Carpena
spouses and to recover ownership of the property subject matter thereof.
The rents which appellants now seek to collect from appellees were for
the occupancy of said property and of the house constructed thereon. Had
the sale been annulled, it would have meant that the Carpenas, appellants
herein, had no right to collect rents from the occupants of the lot and of
the house aforesaid, while if the court sustained the validity of the sale,
they would have had such right. It is thus obvious that the claim which
they seek to enforce now as, to say the least, a matter necessarily
connected with the transaction or occurrence subject matter of the
complaint filed against them in Civil Case No. 9194. It follows that the
same constituted a compulsory counterclaim which they should have
pleaded in their answer filed in the aforesaid case.
In Berses vs. Villanueva, 25 Phil. 473, it was held that in an action for the
recovery of a parcel of land, the defendant must set up a counterclaim for
the value of improvements made or introduced by him on the property,
otherwise his claim would be barred. That this ruling applies to the present
case can not be disputed because the only difference between both cases
is that in the one before us the counterclaim is for rents for the occupancy
of the land sought to be recovered and of the house constructed thereon,
instead of being ? as in the Berses case ? for the recovery of the value of
improvements made on the property
Appellants, however, argue that even assuming that their claim constituted
a mandatory counterclaim in relation to Civil Case No. 9194, still they
could not have pleaded it as such in said case because it was not within
the jurisdiction of the Court of First Instance of Laguna where the case
was pending. In this connection they contend that their counterclaim
against Luciano Manalo and his co-plaintiffs would have been for unlawful
detainer and the collection of one month rent only, because when the
action was commenced Manalo had been in possession of the lot and
Prof. Victoria A. 38
house involved therein only for one month. This is not entirely correct. The
record on appeal filed by Manalo in the aforesaid ease shows that the
defendants (appellants herein) filed an answer in which they alleged that
they were "the true and lawful owners of the parcel of land" subject matter
of the action by virtue of the deed of sale executed in their favor by Beatriz
Manalo, upon the registration of which a transfer certificate of title was
issued in their name. Their answer also interposed a counterclaim which
they incorporated all the allegations made in their answer and further
alleged that the plaintiffs had filed the action against them maliciously,
thus causing them damages in the sum of P2,000.00. Said answer prayed
not only for the dismissal of the complaint but also for judgment declaring
said defendants as true and lawful owners of the property in question"
(Exhibit C, pp. 18-23). It is obvious therefore that, for all legal purposes,
appellants had, by way of counterclaim, filed an accion reivindicatoria
which, of course, necessarily included the question of possession. This
notwithstanding, they failed to claim rents or compensation for the use
and occupancy of the lot and house subject matter of the complaint filed
against them. The right to collect these rents or reasonable compensation
being merely incidental to the counterclaim, it seems clear that the fact
that the amount thereof was less than the jurisdictional amount for the
Court of First Instance of Laguna did not deprive said court of authority to
take cognizance of the same.
Lastly, appellants contend that there was absolutely no mutuality of claims
because the plaintiffs in Civil Case No. 9194 were Luciano Manalo and
the heirs of his deceased wife, whereas the claim for rents in the present
case is directed, jointly and severally, against Luciano Manalo, Pelagia
Cailles Vda. de Unson and Beronica Capareda. This is likewise untenable
because a party may not evade the effect of the doctrine of res judicata by
simply including additional parties, in the subsequent litigation or by not
including as parties in the latter persons who were parties in the previous
suit
Disposition. Decision affirmed
CABAERO VS CANTOS
G.R. No. 102942
PANGANIBAN; April 18, 1997
NATURE
Petition filed under Rule 65 assailing the Orders of respondent Judge for
being contrary to law and for having been issued in excess of his
jurisdiction and with grave abuse of discretion tantamount to lack of
jurisdiction.
The Order of July 1, 1991, reads:
"THE Answer with Counterclaim filed by the accused through counsel,
dated February 12, 1991, as well as the Opposition thereto; the
Memorandum filed by the Private Prosecutor, in Support of Motion to
Expunge from the Records And/Or to Dismiss Answer with Counterclaim;
the Supplement; and Comment on Supplement, are all ordered expunged
from the Records, considering that this is a criminal case wherein the civil
liability of the acused (sic) is impliedly instituted therein."
 Civil Procedure Digest
Petitioners pleaded for reconsideration of said Order but respondent
judge, in the Order of August 21, 1991, denied their motion, thus:
"ACTING on the Motion for Reconsideration dated July 17, 1991, of the
accused through counsel, this Court finds no merit therein, such that said
motion is hereby denied."
FACTS
- This petition emanated from a criminal case in the RTC of Manila. Said
case commenced on October 18, 1990, with the filing of an Information
against petitioners charging them with estafa for allegedly defrauding
private respondent Epifanio Ceralde of the sum of P1,550,000.00. The
accusatory portion of the Information reads as follows:
"... the said accused induced and succeeded in inducing the said
EPIFANIO CERALDE to advance the total amount of P1,550,000.00 to be
paid to M.C. Castro Construction, Co. representing the purchase price of 6
parcels of land located in Pangasinan which the Aqualand Ventures &
Management Corporation, a joint business venture organized by accused
AMADO F. CABAERO and the said EPIFANIO CERALDE, purchased
from the said company, with the understanding that the said amount would
be returned to the said EPIFANIO CERALDE as soon as the loan for
P1,500,000.00 applied for by the said Aqualand Ventures & Management
Corporation with Solid Bank, of which said accused AMADO F. CABAERO
is the Senior Vice-President, is released, but both accused, once the said
loan had been approved by the bank, in furtherance of their conspiracy
and falsely pretending that accused CARMEN C. PEREZ had been
authorized by the said Aqualand Ventures & Management Corporation to
receive the check for P1,500,000.00 for and in its own behalf, succeeded
in inducing the cashier of said Solid Bank to release the same to accused
CARMEN C. PEREZ, thereby enabling her to encash the aforesaid check,
and instead of turning over the said amount to the said EPIFANIO
CERALDE; accused failed and refused, and still fail and refuse, to do so
despite repeated demands made to that effect, and with intent to defraud,
misappropriated, misapplied and converted the said amount to their own
personal use and benefit...”
- petitioners entered a plea of not guilty.
- Atty. Ambrosio Blanco entered his appearance as private prosecutor.
- The Presiding Judge of the RTC of Manila, Hon. Elisa R. Israel, inhibited
herself "out of delicadeza" from further hearing the case "considering that
the complainant is a relative by affinity of a nephew of her husband."
Thereafter, the case was re-raffled to Branch VII presided over by
respondent Judge Alfredo Cantos.
- On April 2, 1991, petitioners filed an Answer with Counterclaim alleging
that the money loaned from Solidbank mentioned in the Information was
duly applied to the purchase of the 6 parcels of land in Pangasinan, and
that the filing of said Information was unjustified and malicious. Petitioners
included the following prayer:
"WHEREFORE, it is respectfully prayed that after trial judgment be
rendered:
1. Dismissing, or quashing the information, and the civil action
impliedly instituted in the criminal action;
2. Ordering the complaining witness Ceralde to pay to the accused the
following amounts:
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(a) P1,500,000.00 as moral damages;
(b) P500,000.00 as exemplary damages;
(c) P100,000.00 as attorney's fees; and
(d) P20,000.00, as litigation expenses.
Accused pray for such other reliefs, legal and equitable in the premises."
- During the initial hearing on April 15, 1991, the prosecution verbally
moved that the answer with counterclaim be expunged from the records
and/or be dismissed. The respondent judge gave the contending parties
time to submit a Memorandum and Comment or Opposition, respectively.
- The Memorandum of the private prosecutor justified his Motion to
Expunge the answer with counterclaim for two reasons: (1) the trial court
had no jurisdiction over the answer with counterclaim for non-payment of
the prescribed docket fees and (2) the "compulsory counterclaim
against complainant is barred for failure to file it before
arraignment."
- In their Opposition, petitioners argued that this Court in Javier vs. IAC
laid down, for "procedural soundness," the rule that a counterclaim should
be permitted in a criminal action where the civil aspect is not reserved.
Further, inasmuch as petitioners' counterclaim was compulsory in nature,
they were not required to pay docket fees therefor. Additionally, the Rules
do not specifically provide for the period for filing of counterclaims in
criminal cases, whereas Section 3 of Rule 9 and Section 9 of Rule 6 allow
the filing, with leave of court, of a counterclaim at any time before
judgment. Thus, petitioners contended that their filing was within the
proper period.
- respondent Judge Cantos granted the prosecution's motion to expunge
and denied the petitioners' motion for reconsideration.
- - Petitioners invoke Section 1, Rule 111 of the Rules on Criminal
Procedure. They contend that it is not only a right but an "outright duty" of
the accused to file an answer with counterclaim since failure to do so shall
result in the counterclaim being forever barred.
- Petitioners argue that under Rule 136 of the Rules of Court, particularly
Section 8 thereof, clerks of court are instructed to "keep a general docket,
each page of which shall be numbered and prepared for receiving all the
entries in a single case, and shall enter therein all cases x x x." Thus,
respondent Judge Cantos allegedly erred in expunging all records with
respect to the Answer with Counterclaim for, on appeal, "if the records
elevated x x x are incomplete and inaccurate, there arises a grave danger
that the ends of justice and due process shall not be served and instead
frustrated."
- Petitioners further allege that the Order failed to resolve the legal issues
raised by the parties as it neglected to state the legal basis therefor
ISSUE
WON the respondent judge committed grave abuse of discretion,
amounting to lack or excess of jurisdiction in ordering that the answer with
counterclaim of the petitioners in the criminal case, together with all
pleadings filed in relation thereto, be expunged from the records. (WON
the accused-petitioners who were charged with estafa may file an answer
with counterclaim for moral and exemplary damages plus attorney's fees
and litigation expenses against the private complainant in the same
criminal action.)
Prof. Victoria A. 39
Preliminary Matters
Litis Pendentia as a Defense
- Private respondent belatedly interposes litis pendentia to defeat the
petition alleges that the present petition is barred by the cross-claim of the
petitioners against Aqualand Ventures and Management Corporation, of
which petitioners are stockholders and officers, in Civil Case No. 90-
53035 (filed against both petitioners and the private respondent by
Solidbank).
- SC said : Considerations of due process prevent us from taking
up the merits of this argument in favor of private respondent. This
cross-claim was never raised in the trial court -- certainly not in
the Memorandum dated April 19, 1991, submitted to the court a
quo in support of respondent Ceralde's motion to expunge the
answer with counterclaim. The Rules require that "(a) motion
attacking a pleading or a proceeding shall include all objections
then available, and all objections not so included shall be deemed
waived." Consequently and ineluctably, the ground of litis
pendentia which was not argued in the court a quo is deemed
waived.
The Payment of Filing Fees
- The Court agrees with petitioners that inasmuch as the counterclaim is
compulsory, there is no necessity to pay such fees, as the Rules do not
require them (as clarified in Sun Insurance Office, Ltd. vs. Asuncion).
Main Issue
HELD NO. (NO)
As held in Javier, counterclaim is compulsory and is considered barred if
not set up where the following circumstances are present: (1) that it arises
out of, or is necessarily connected with the transaction or occurrence that
is the subject matter of the opposing party's claim; (2) that it does not
require for its adjudication the presence of third parties of whom the court
cannot acquire jurisdiction, and (3) that the court has jurisdiction to
entertain the claim.
As categorically recognized in the case of Javier, a claim for malicious
prosecution or "grossly unfounded suit" as a compulsory counterclaim has
no appropriate venue other than the same criminal case which is alleged
to be a malicious suit. The counterclaim stands on the same footing and is
to be tested by the same rules as if it were an independent action. A
counterclaim is defined as any claim for money or other relief which a
defending party may have against an opposing party. Compulsory
counterclaim is one which at the time of suit arises out of, or is necessarily
connected with, the same transaction or occurrence that is the subject
matter of plaintiff's complaint. It is compulsory in the sense that if it is
within the jurisdiction of the court, and does not require for its adjudication
the presence of third parties over whom the court cannot acquire
jurisdiction, it must be set up therein, and will be barred in the future if not
set up.
- In justifying his Order, Judge Cantos ruled that "this is a criminal case
wherein the civil liability of the accused is impliedly instituted therein." This
justification begs the question. Basically, that is the reason why petitioners
 Civil Procedure Digest
herein filed their answer with counterclaim for, apparently, in hiring a
private prosecutor, Ceralde intended to prosecute his civil claim together
with the criminal action. Hence, as a protective measure, petitioners filed
their counterclaim in the same case. Since under Section 1 Rule 111, the
civil action which is deemed impliedly instituted with the criminal action, if
not waived or reserved, includes recovery of indemnity under the RPC,
and damages under Art.32, 33, 34 and 2176 of the Civil Code arising from
the same act or omission of the accused, should not the accused have the
right to file a counterclaim in the criminal case? Obviously, the answer is in
the affirmative, as was held in Javier.
Some Reservations in the Application of Javier
- The logic and cogency of Javier notwithstanding, some reservations and
concerns were voiced out by members of the Court during the
deliberations on the present case. These were engendered by the obvious
lacuna in the Rules of Court, which contains no express provision for the
adjudication of a counterclaim in a civil action impliedly instituted in a
criminal case. The following problems were noted:
1) While the rules on civil procedure expressly recognize a defendant's
entitlement to plead his counterclaim and offer evidence in support
thereof, the rules on criminal procedure which authorize the implied
institution of a civil action in a criminal case are, in contrast, silent on this
point and do not provide specific guidelines on how such counterclaim
shall be pursued.
2) A judgment in a criminal action is not required to provide for the award
of a counterclaim.
3) Allowing and hearing counterclaims (and possibly cross-claims and
third-party complaints) in a criminal action will surely delay the said action.
The primary issue in a criminal prosecution that is under the control of
state prosecutors is the guilt of the accused and his civil liability arising
from the same act or omission. Extending the civil action arising from the
same act or omission to counterclaims, cross-claims and third-party
complaints, and allowing the accused and other parties to submit
evidence of their respective claims will complicate the disposition of the
criminal case.
4) Adjudication of compulsory counterclaims and/or related claims or
pleadings logically includes the application of other rules which, by their
very nature, apply only to civil actions. The following matters may be
invoked in connection with the filing of an answer with a counterclaim: the
genuineness and due execution of an actionable document which are
deemed admitted unless specifically denied under oath; affirmative
defenses like res judicata, prescription and statute of frauds which are
deemed waived by failure to interpose them as affirmative defenses in an
answer; and the failure of a defendant to file an answer seasonably may
result in his default in the civil aspect but not in the criminal. As a
consequence of these matters, the entry of plea during arraignment will no
longer signal joinder of issues in a criminal action.
5) In an impliedly instituted civil action, an accused is not sufficiently
apprised of the specific basis of the claims against him. An accused learns
of the implied institution of a civil action from the contents of an
information. An information, however, is filed in behalf of the People of the
Philippines. Hence, it does not contain the ultimate facts relating to the
civil liability of the accused.
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6) Because an accused is not sufficiently apprised of the specific basis of
the civil action against him, he may file a motion for bill of particulars or
take advantage of discovery procedures. The end result, in any case, will
be delay and complication in the criminal action and even confusion
among the parties.
7) The Rules of Court does not specify the reckoning date for the filing of
an answer in an impliedly instituted civil action.
8) An accused can file his answer with counterclaim only after the initial
hearing, because the private complainant may still reserve his civil action
at any time before the prosecution commences to present evidence. On
the other hand, an answer in an ordinary civil action should be filed before
the start of hearing, because hearing commences only after the issues
have been joined, i.e., after the responsive pleadings have been filed.
9) Confusion in the application of the rules on civil procedure will certainly
encourage litigants to challenge before appellate courts interlocutory
incidents of the impliedly instituted civil action.
10) Some members of the Court believe that a cause of action for
malicious prosecution may be premature because there is as yet no
finding of such wrongful prosecution. This fact is precisely what the trial
court still has to determine.
--By the foregoing discussion, we do not imply any fault in Javier.
The real problem lies in the absence of clear-cut rules governing
the prosecution of impliedly instituted civil actions and the
necessary consequences and implications thereof. For this
reason, the counter-claim of the accused cannot be tried together
with the criminal case because, as already discussed, it will
unnecessarily complicate and confuse the criminal proceedings.
Thus, the trial court should confine itself to the criminal aspect and
the possible civil liability of the accused arising out of the crime.
The counter-claim (and cross-claim or third party complaint, if any)
should be set aside or refused cognizance without prejudice to
their filing in separate proceedings at the proper time. At balance,
until there are definitive rules of procedure to govern the
institution, prosecution and resolution of the civil aspect (and the
consequences and implications thereof) impliedly instituted in a
criminal case, trial courts should limit their jurisdiction to the civil
liability of the accused arising from the criminal case.
Disposition WHEREFORE, premises considered, the questioned Orders
are hereby MODIFIED. The counterclaim of the accused is hereby set
aside without prejudice. The Respondent RTC of Manila is DIRECTED to
proceed with the trial of the criminal action and the civil action arising from
the criminal offense that is impliedly instituted therein, with all judicious
dispatch.
CHAN V CA (CU)
G.R. 109020
DAVIDE; MARCH 3, 1994
NATURE
Review on certiorari
Prof. Victoria A. 40
FACTS
- On Feb.1, 1983, petitioner Felisa Chan and private respondent Grace
Cu, entered into a contract of lease, the terms of which were:
>>Cu will occupy Room 401 and rooftop of Room 442 of a bldg in
Urbiztondo owned by Chan.
>>Term of lease is 1 year at a monthly rental of P2,400.
>>The premises shall be used as a learning center.
- The contract was renewed for the succeeding 2 years or up to Feb.1,
1986, after which date, no written contract of lease was executed although
Cu continued to occupy the premises. Increasing every year, the monthly
eventually came to P3, 484.80 in Jan. 1989.
- Nov. 1989: Chan locked the way to the rooftop. In the ensuing exchange
of communication, Cu insisted that she be allowed to use the rooftop of
Rm.442, while Chan maintained that only Rm.401 was leased and that the
use of the rooftop was merely tolerated, adding that the use of the rooftop
posed danger to the students. Chan eventually terminated the lease,
refused to collect the rental for Dec.1989 (turned down a check tendered
by Cu) and gave Cu only until Jan.1990 to vacate the premises.
- Cu’s lawyer tendered the payment in cash with notice to Chan that in
case of non-acceptance, the same will be deposited in court by way of
consignation. At this point, Chan gave Cu up to March, 1990
- Jan.15, 1990: Cu filed a civil case for consignation with the MTC. Chan
answered with a counterclaim for ejectment. The MTC’s decision:
>>declared that the rooftop is included in the lease
>>fixed the term of the lease until June 30, 1992
>>held valid and legal the consignation by Cu
- Both parties appealed to the RTC. Cu maintained that the MTC should
have fixed a longer period while Chan contended that the MTC erred in
extending the term of the lease and in upholding the validity of the
consignation. RTC later affirmed the MTC. Cu then went to the CA on
petition for review, with the same allegation that that the RTC erred in not
fixing a longer period of extension of the lease. The CA reversed and set
aside the decisions of the MTC and RTC and dismissed, for lack of merit,
the complaint for consignation. The CA held that Chan had justifiable
cause (Cu’s overstay) to refuse to accept the payment. It ruled that the
MTC and RTC erred in passing upon the issue of ejectment raised in
Chan’s counterclaim since an action for ejectment can only be initiated
through a verified complaint, not a counterclaim. Chan’s MFR was denied
by the CA and so she filed this instant petition.
ISSUE
WON Chan’s action for ejectment set up in a counterclaim was proper
HELD
YES.
Reasoning Sec.7, Rule 6 of the Rules of Court provides that the answer
may contain any counterclaim which a party may have against the
opposing party provided that the court has jurisdiction to entertain the
claim and can, if the presence of third parties is essential for its
adjudication, acquire jurisdiction of such parties. Under Sec. 2 of Rule 9, a
counterclaim not set up shall be barred if it arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of
 Civil Procedure Digest
the opposing party's claim and does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction. A
counterclaim may be compulsory or permissive.
- Chan's counterclaim for ejectment is a compulsory counterclaim
because it is necessarily connected with the transaction or occurrence
which is the subject matter of Cu's complaint, viz., the lease contract
between them. Consequently, the CA erred when it held that Chan's
cause of action for ejectment could not be set up in a counterclaim.
- The case of Ching Pue vs. Gonzales is inapplicable because in Ching
Pue the consignation cases were filed with the CFI which did not have
jurisdiction over ejectment cases; necessarily, no counterclaim for
ejectment could have been interposed therein. The ratio of the said case
is that consignation is not proper where the refusal of the creditor to
accept tender of payment is with just cause. In the instant case, the
ejectment was set up as a counterclaim in the MTC which has jurisdiction
over it and Cu joined that issue and the incidents thereto by her answer to
the counterclaim, and the counterclaim to the counterclaim.
- The CA therefore should have confined itself to the principal error raised
in Cu's petition in (the duration of the extended term of the lease fixed in
the decision of the MTC and affirmed by the RTC). As fixed, the term of
the lease was extended to June 30, 1992. That period had expired six
months before the CA promulgated its challenged decision. Considering
that Chan did not file any petition for the review of the RTC decision and
was, therefore, deemed to have agreed to the extension; and considering
further that Cu did not come to us on a petition for review to seek reversal
of the decision therein and should thus be considered to have agreed to
the dismissal of her consignation case, the parties must be deemed
bound by the extended term, which has, nevertheless, already lapsed.
**On Counterclaims
- A counterclaim is any claim for money or other relief which a defending
party may have against an opposing party. It need not diminish or defeat
the recovery sought by the opposing party, but may claim relief exceeding
in amount or different in kind from that sought by the opposing party's
claim. Counterclaims are designed to enable the disposition of a whole
controversy of interested parties conflicling claims, at one time and in one
action, provided all the parties can be brought before the court and the
matter decided without prejudicing the rights of any party. A counterclaim
"is in itself a distinct and independent cause of action, so that when
properly stated as such, the defendant becomes, in respect to the matter
stated by him, an actor, and there are two simultaneous actions pending
between the same parties, wherein each is at the same time both a
plaintiff and a defendant . . . . A counterclaim stands on the same footing
and is to be tested by the same rules, as if it were an independent action.
In short, the defendant is a plaintiff with respect to his counterclaim.
Disposition petition GRANTED. CA decision SET ASIDE.
The Answer
Defenses
GOJO V GOYALA
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Page 26
FACTS
-allegedly a pacto de retro sale (the other party alleged it was a
mortgage), Gojo the buyer alleged that the period for redemption has
already lapsed so he filed a petition for consolidation of ownership.
-Goyala’s, the buyers who were alleging that they had obtained a cash
loan from Gojo and the land allegedly sold to Gojo was only a security to
the loan, and that they tried to pay their debt to Gojo but Gojo refused.
Goyala’s filed a counterclaim for Gojo to receive the amount due, for the
document to be declared a mortgage and not a pacto de retro sale, for
P1800 per annum for the fruits of said property and that, if ever the
document be deemed a pacto de retro sale, for Gojo to be ordered to
execute a deed of resale in favor of the Goyalas.
-Goyala’s spouse died, TC ordered Gojo to amend the Complaint to
substitute the spouse with one of her successors in interest as party.
Notwithstanding the lapse of 43 days after receipt of copy of TC order,
Gojo allegedly failed to submit the amended complaint so Goyala filed a
motion to dismiss the petition. TC dismissed complaint, Gojo was also
declared in default in re Goyala’s counterclaim. TC ruled in favor of
Goyala.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ON DEFENSES
Rule 8, allegations deemed admitted
TEC BI & CO v CHARTERED BANK OF INDIA,
AUSTRALIA AND CHINA
41 Phil 596
CARSON; Feb 5, 1916
FACTS:
- on the 7th of November 1912, the plaintiff sold to the "La Urania Cigar
Factory (Ltd.)," a quantity of leaf tobacco.
- on 16th January, 1913, the "La Urania Cigar Factory (Ltd.)," pledged to
the defendant corporation as security for the payment of an indebtedness
of P25,000 the bales of tobacco. The bales of tobacco thus pledged were
stored in the bodega of a third person, Messrs. Sprungli & Co., situated at
No. 42 (now No. 214) of Calle David, Manila.
- on or about the 1st day of February, 1913, the defendant corporation
demanded and obtained from Messrs. Sprungli & Co. the keys to the said
bodega, and discovered that of the 436 bales of tobacco there remained
only those set forth in paragraph 4 of the answer. (I have no idea how
many. Sorry.)
- the defendant bank did not know and had been unable to ascertain
whether "La Urania Cigar Factory (Ltd.)," misrepresented the quantity of
the tobacco in the said warehouse at the time of the execution of said
Prof. Victoria A. 41
document of pledge, or whether the difference between the amount
described in the document of pledge and that found on hand on the 1st of
February, 1913, and in the meantime been disposed of by "La Urania
Cigar Factory (Ltd.)," in collusion with Messrs. Sprungli & Co., but that if
such disposition was made it was without the knowledge or consent of the
defendant bank.
- from said 1st day of February, 1913, the defendant corporation had been
in the absolute and exclusive possession of the tobacco, until the 15th of
May, 1913, when same was sold under and by virtue of the document of
pledge by the defendant bank for the sum of P12,722.36 which was
applied on account of said loan, the entire amount of which was then past
due and unpaid, leaving a large balance thereof still due and unpaid.
- on the 22nd day of April, 1913, the plaintiff Tec Bi & Co., filed a complaint
in the Court of First Instance of Manila against "La Urania Cigar Factory
(Ltd.)," claiming the payment of the sum of P11,572.96 as the balance of
the unpaid purchase price of the tobacco
- on the 5th day of May, 1913, Tec Bi & Co. asked for and obtained from
the Court of First Instance an attachment against the said bales of
tobacco, but inasmuch as the bodega was locked and the sheriff was
informed that the keys were in the possession of the bank, he demanded
the delivery thereof from the latter, which demand was refused by the
bank, alleging that it held possession of the tobacco under a pledge.
- the sheriff notified it that the bales of tobacco were attached subject to
the results of the complaint filed by Tec Bi & Co. against "La Urania Cigar
Factory (Ltd.),”
- on 8th day of May, 1913, the bank answered the notification of the
sheriff, confirming the fact that it had in its possession the bales of
tobacco specified in the notification, as security for the payment of a loan
and that it intended to sell the same; that the sheriff communicated the
answer of the bank to the attorneys to Tec Bi & Co., who replied insisting
upon the levy of the attachment.
- on the 19th day of May, 1913, the Court of First Instance rendered
judgment in said case against "La Urania Cigar Factory (Ltd.)," in favor of
Tec Bi & Co., for the sum of P11,572.96, with legal interest from April 22,
1913, and costs.
- on the 22d day of May, 1913, the sheriff attempted to execute the
judgment upon the bales of tobacco attached and in the possession of the
defendant corporation, but was unable to do so due to the statement of
the agent of said corporation, that the tobacco had been sold and that the
proceeds of the sale had been applied upon the payment of the amount
due to from "La Urania Cigar Factory (Ltd.),"
- Court of First Instance found that the plaintiff's claim was a preferred
credit under the provisions of paragraph 1 of article 1922 of the Civil
Code; that the pledge executed by "La Urania Cigar Factory (Ltd.)," in
favor of the defendant corporation was not binding upon the plaintiff for
the reason that it was not set forth in a public instrument as required by
article 1865 of the Civil Code in order to be effective against, third person,
and rendered judgment in favor of the plaintiff and against the defendant
for the amount of the former's judgment against "La Urania Cigar Factory
(Ltd.)," with interest and costs.
ISSUE:
 Civil Procedure Digest
WON the court erred in holding that the plaintiff did not waive any defect in
the private instrument of pledge by expressly admitting its genuineness
and the correctness of its date by stipulation, and by failure to object to its
introduction in evidence.
NOTE: the case dealt with a pledgor-pledgee [credit] relationship. The
discussion here is limited to that pertaining to civil provision. Please see
case re issues on credit.
HELD:
A general admission of the truth of the allegations set forth in a pleading is
not an admission of the truth of an impossible conclusion of fact drawn
from other facts set out in the pleading, nor of a wrong conclusion of law
based on the allegations of fact well pleaded, nor of the truth of a general
averment of facts contradicted by more specific averments. Thus, if a
pleader alleges that two pesos were borrowed on one day and two more
borrowed on another making five Pin all, a stipulation of the truth of the
allegations in the pleading does not amount to an admission by the
opposing party that twice two make five. Again if a pleader alleges that
one hundred pesos were loaned without interest for one year and had not
been paid, and that the borrower is indebted to the lender in the sum of
one hundred and ten pesos, that being the amount of the capital together
with interest for the year for which the money was loaned, a stipulation as
to the truth of the allegation set forth in the pleadings is not an admission
of the truth of the conclusion of law as to the interest due by the borrower.
These elementary principles have been quite fully developed in a great
variety of cases arising on demurrers, and sufficiently dispose of the
attempt of counsel to fix the attention of the court upon this single
averment of the answer, apart from the context and to the exclusion of the
specific allegations of fact, the truth of which, as stipulated by the parties,
cannot be questioned.
DISPOSITION: Judgment affirmed
PHIL ADVERTISING COUNSELORS V. CA, HON.
PEDRO REVILLA, SOUTHERN INDUSTRIAL
PROJECTS
GRN L 31869
ANTONIO; AUG 8 1973
NATURE
Appeal from the decision of the CA
FACTS
-Southern Industrial Projects (SIP) hired Philippine Advertising Counselors
(PAC) to promote SIP’s products. SIP accumulated unpaid accounts.
-PAC filed complaint. Attached w/ the complaint were two letters (Annexed
A&B) from SIP’s lawyer, saying that it would not be possible for SIP to
settle in full its account of P97,952 08 in one payment and suggested that
it (SIP) be allowed to settle its account by "periodic amortization"; and that
SIP had included PAC in its list of creditors "to whom payments are
A2010
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regularly scheduled."
- SIP filed answer stating:
1. That it admits the allegations in paragraph 1 insofar
as its personality is concerned but is w/o sufficient information to
form a belief as to the truth of the rest of the allegations.
2. That defendant is w/o sufficient knowledge or
information to form a belief as to the truth, correctness or accuracy
of the allegations set forth in paragraphs 2 to 6 of plaintiffs
complaint."
- PAC filed a motion for judgment on the pleadings as the answer failed
to tender an issue or "otherwise admits the material allegations of the
complaint”. SIP did not oppose to this motion. Judge Revilla denied the
motion and set the case for pre-trial. Then the case was set for trial on
the merits.
- PAC presented its case and filed memoranda saying that SIP’s
answer failed to tender an issue as said party "could not have denied
knowledge of the account in the face of its written admissions," hence,
judgment on the pleadings was proper.
- SIP presented its case and filed memoranda saying that under
Section 10, Rule 8 of the Rules of Court, its answer had sufficiently
denied the allegations of the complaint and placed them in issue, so
that it became incumbent upon petitioner to prove its allegations… ;
and that a denial for "lack of sufficient knowledge or information to form
a belief as to the truth" of the averments of the complaint is a specific
denial and as such places in issue the allegations of the complaint so
denied.
- TC declared that said answer really failed to tender any issue and
that the claims alleged in the complaint are, therefore, deemed
admitted. TC ordered SIP to pay PAC the sum of P89,100.03 with legal
interest, attorney's fees, and the costs of suit.
- SIP filed motion for reconsideration. PAC filed an opposition to the
MFR on the grounds that the decision was in accordance with law and
the evidence. Judge Revilla granted MFR "in the interest of justice” and
set the case for hearing on the merits.
- PAC filed an omnibus motion for reconsideration and for execution,
contending that the MFR being pro forma, did not interrupt the running
of the period for appeal, and since SIP received notice of the decision,
the judgment became final and executory, and consequently it could no
longer be modified, or set aside. Judge Revilla denied the omnibus
motion.
-PAC filed petition for certiorari, prohibition and mandamus, w/ prayer
for preliminary injunction w/ the CA, which gave due course to the
petition and issued a writ of preliminary injunction. CA later dismissed
the petition and dissolved the writ of preliminary injunction. CA said that
Prof. Victoria A. 42
private respondent could do no more than claim in its motion for
reconsideration that the judgment of the trial court was contrary to Rule
8, Section 10, of the Rules of Court
ISSUE (for this topic)
1. WON respondent’s answer constitute denial (allegation not deemed
admitted)
HELD
1 NO
-The rule authorizing an answer to the effect that the defendant has no
knowledge or information sufficient to form a belief as to the truth of an
averment and giving such answer the effect of a denial, does not apply
where the fact as to which want of knowledge is asserted is so
plainly and necessarily within the defendant's knowledge that his
averment of ignorance must be palpably untrue (as held in Capitol
Motors Corporation v. Yabut)
- "an unexplained denial of information and belief of a matter of records,
the means of information concerning which are within the control of the
pleader, or are readily accessible to him, is evasive and is insufficient to
constitute an effective denial."
Reasoning: The rule that a mere allegation of ignorance of the facts
alleged in the complaint is insufficient to raise an issue, for the defendant
must aver positively or state how it is that he is ignorant of the facts so
alleged, must be applied in this case, for petitioner's complaint explicitly
averred that the letters (AnnexA&B) were written by private respondent,
albeit thru its lawyer. Whether or not the said averments in the complaint
were true, could not conceivably be unknown to private respondent. As a
matter of fact it has never been denied by private respondent that it was
indebted to petitione. It has not been asserted that the letters attached as
Annexes "A" and "B" to the complaint which were sent to petitioner by the
counsel of private respondent were not authorized by the latter. There was
thus a failure on private respondent's part to deny the material averments
of the complaint. Consequently, the same, including the contents of
Annexes "A" and "B", which formed part of the complaint, and in which the
existence and validity of petitioner's claim were unequivocally conceded,
must be deemed to have been admitted. Although sanctioned by the
rules, the form of denial adopted by private respondent must be availed of
in good faith and with sincerity and not resorted to merely for the purpose
of delay or to confuse the adverse party as to what averments in the
complaint are actually put in issue.
Disposition Appealed judgment reversed and set aside, and Southern
Industrial Projects, Inc. to pay Philippine Advertising Counselors, Inc. the
amount of P89,100.03, with legal interest until fully paid, plus 10% of the
principal amount due by way of attorney's fees, and costs.
LIAM LAW V OLYMPIC SAWMILL
129 SCRA 439
 Civil Procedure Digest
MELENCIO-HERRERA; May 28, 1984
NATURE
Appeal from a Decision rendered by the Court of First Instance of Bulacan
FACTS
- Law loaned P10,000 to Olympic Sawmill without interest. The loan
became due on January 31, 1960 but was not paid on that date. The
debtors asked for an extension of 3 months (April 30, 1960).
- March 17, 1960 – Another loan document was drawn up wherein the
obligation was increased by P6,000 (to answer or attorney’s fees, legal
interest and other costs). Defendants failed to pay their dues by April and
when a action was instituted against them by Law in September, they
claimed that the additional interest as usurious.
- A writ of attachment was then executed on real and personal properties
of the defendant.
- TC: ordered Olympic Sawmill to pay Liam Law P10,000 plus the P6,000
interest.
ISSUE
WON the decision of the trial court was correct
HELD
YES
Ratio Sec. 9 of the Usury Law envisages a complaint filed against
an entity which has committed usury, for the recovery of the
usurious interest paid. In that case, if the entity sued shall not file
its answer under oath denying the allegation of usury, the
defendant shall be deemed to have admitted the usury. The
provision does not apply to a case, as in the present, where it is
the defendant, not the plaintiff, who is alleging usury.
Reasoning
- Sec. 9 of the Usury Law states: “The person or corporation sued shall file
its answer in writing under oath to any complaint brought or filed against
said person or corporation before a competent court to recover the money
or other personal or real property, seeds or agricultural products, charged
or received in violation of the provisions of this Act. The lack of taking an
oath to an answer to a complaint will mean the admission of the facts
contained in the latter.”
- For sometime, usury has been legally nonexistent. Interest can now be
charged as tender and borrower may agree upon.4 The Rules of Court in
regards to allegations of usury, procedural in nature, should be considered
repealed with retroactive effect.
Disposition Judgment affirmed
How to contest document
PHILIPPINE BANKING CORPORATION V CA
(AMALIO L. SARMIENTO)
A2010
Avena
SCRA
CORONA; January 13, 2004
NATURE
Petition for review
FACTS
- Amalio L. Sarmiento, registered owner of A.L. Sarmiento Construction,
applied for a loan from Philippine Banking Corporation in the sum of
P4,126,000, evidenced by promissory note no. 626-84.
- Pursuant thereto, Sarmiento obligated himself to pay the amount with
interest at the rate of 29% per annum. Additionally, it was stipulated that if
payment was not made upon maturity of the loan, penalty charges of 1%
per month and 25% of the total amount due would be charged against
him.
- Sarmiento signed the aforesaid promissory note together with the
disclosure statement on loan/credit transaction provided by the bank.
- Sarmiento failed to pay the obligation on maturity, prompting PBC to
send him a letter of demand. Despite the demand, however, Sarmiento
still failed to settle his indebtedness.
- PBC filed a complaint for a sum of money against him. In his answer,
Sarmiento denied that he received the proceeds of the loan transaction
and prayed that the case against him be dismissed.
- The trial court rendered its decision finding that plaintiff miserably failed
to prove its case by preponderance of evidence. The case was
dismissed.
- PBC filed a motion for new trial which the trial court subsequently
granted despite the opposition of Sarmiento.
- The trial court rendered a decision finding the evidence adduced by the
bank to be insufficient to substantiate its claim. The trial court reinstated
its earlier dismissal of the case against Sarmiento and denied Philippine
Banking Corporation’s subsequent motion for reconsideration.
- PBC appealed to the CA
- CA affirmed with modification the trial court’s by deleting the trial court’s
award of attorney’s fees.
- Hence, the instant petition
ISSUE
WON no proof was required of petitioner to establish the contents of the
said documents because such judicial admissions of respondent created
a prima facie case in petitioner’s favor
HELD
NO.
- It is undisputed that respondent Sarmiento signed the promissory note
and the accompanying disclosure statement on loan/credit transaction.
But said pieces of evidence proved only the existence of such documents.
There was even no question as to that because respondent Sarmiento
himself admitted the due execution thereof.
- The important issue was whether or not respondent Sarmiento actually
received the proceeds of the subject loan so as to make him liable
therefor, a matter which should have been ventilated before the trial court.
Prof. Victoria A. 43
- The trial court did in fact make a finding that the documentary evidence
of petitioner failed to prove anything showing that respondent indeed
received the proceeds of the loan. The Court of Appeals affirmed the
conclusions of the trial court and declared:
A pre-existing obligation, it may be conceded, constitutes value and may, of and by itself,
serve as valuable and sufficient consideration for a contract such as the loan sued upon.
As an essential element of a contract, however, the same should have been satisfactorily
proved by the appellant – particularly when, as in the instant case, the absence of
consideration was precisely put in issue by the pleadings and was buttressed by both oral
and documentary evidence. Having failed in this material respect, the appellant’s
withdrawal of the amount supposedly credited to the appellee’s account was
understandably interpreted by the court a quo as a termination/cancellation of the loan the
latter applied for. Considering further that contracts without consideration do not exist in
contemplation of law and produce no effect whatsoever (Article 1352, Civil Code of the
Philippines), the trial, likewise, correctly dismissed the appellant’s case.
- A statement in a written instrument regarding the payment of
consideration is merely in the nature of a receipt and may be contradicted.
Respondent Sarmiento denied having received the proceeds of the loan
and in fact presented evidence showing that on the day petitioner claimed
to have credited the subject amount, it was again debited or withdrawn by
petitioner, admittedly upon the instruction of the officials from petitioner’s
head office.
- Petitioner attempted to controvert this fact by claiming that the proceeds
of the loan were applied to respondent’s previous obligations to the bank.
But there is nothing in the records showing that respondent had other
obligations to which the proceeds of the loan could or should have been
applied. Moreover, petitioner failed to explain just exactly what said
obligations were or to what extent the purported proceeds were applied in
satisfaction thereof. What appeared clearly was that the proceeds of the
loan were deposited then withdrawn the same day by petitioner itself, thus
negating its claim that respondent actually received it. Petitioner therefore
failed to establish its case against respondent Sarmiento.
- Be that as it may, the general rule is that only questions of law may be
raised in a petition for review on certiorari. Barring a showing that the
findings of fact complained of are totally devoid of support in the records,
such determination must stand for the Court is neither expected nor
required to examine or refute the oral and documentary evidence
submitted by the parties.
Disposition Petition DENIED.
Defense/objection waived
9
KATON V PALANCA
G.R. No. 151149
9 For other footnotes in this case:
[14] The said section provides that “[t]hese rules shall apply in all courts, except as otherwise provided by the Supreme
Court.”
[35] §1(g) of Rule 16 of the Rules of Court.
[37] §2 of Rule 3 of the Rules of Court reads:
“SEC. 2. Parties in interest.- A real party in interest is the party who stands to be benefited or injured by the judgment in the suit,
or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted
or defended in the name of the real party in interest.”
 Civil Procedure Digest A2010 Prof. Victoria A. 44

Avena
PANGANIBAN; September 7, 2004 homestead application for the island; that Gabriel Mandocdoc never review on different grounds. Verily, the dismissal of such cases
undertook the inspection and survey of the island; that he is not a mere appropriately ends useless litigations.
overseer of Katon because he was acting for himself in developing his
NATURE
own area and not as anybody’s caretaker. 1. This is not the first time that petitioner has taken issue with the propriety
Petition for Review under Rule 45 of the Rules of Court, assailing CA
-Respondents aver that they are all bona fide and lawful possessors of of the CA’s ruling on the merits. He raised it with the CA when he moved
decision, and resolution denying MFR.
their respective portions, have declared such for taxation purposes and for reconsideration of CA’s Dec8, 2000 Decision. The CA even corrected
have been faithfully paying taxes thereon for twenty years. They contend itself in its Nov20, 2001 Resolution.
FACTS
that Katon has no legal capacity to sue insofar as the island is concerned -That should have been enough to settle the issue. The CA’s Resolution
-August 2, 1963: George Katon filed a request with the District Office of
(an action for reconveyance can only be brought by the owner and not a on this point has rendered petitioner’s issue moot. There is no need to
the Bureau of Forestry in Puerto Princesa, Palawan, for the re-
mere homestead applicant) and that petitioner is guilty of estoppel by discuss it further. Suffice it to say that the appellate court indeed acted
classification (forestagricultural land) of a piece of real property known
laches for his failure to assert his right over the land for an unreasonable ultra jurisdictio in ruling on the merits of the case when the only issue that
as Sombrero Island (~18has).
and unexplained period of time. could have been, and was in fact, raised was the alleged grave abuse of
-BFDO Puerto Princesa ordered the inspection, investigation and survey
-After filing their Answer with Special and/or Affirmative Defenses and discretion committed by the trial court in denying Katon’s MFR.
of the land, and thereafter for George Katon to apply for a homestead
Counterclaim, respondents also filed a Motion to Dismiss on the ground of -Settled is the doctrine that the sole office of a writ of certiorari is the
patent.
the alleged defiance by Katon of the RTC’s order to amend his Complaint correction of errors of jurisdiction. Such writ does not include a review of
-Gabriel Mandocdoc (now retired Land Classification Investigator)
(substitution by the legal heirs of the deceased Gapilango). MTD was the evidence,[10] more so when no determination of the merits has yet
undertook the investigation, inspection and survey of the area in the
granted. Katon’s MFR was denied. been made by the trial court, as in this case.
presence of George, his brother Rodolfo (deceased) and his cousin,
-Katon filed petition for certiorari before CA. Instead of limiting itself to the
Manuel Palanca, Jr., (respondent). During said survey, there were no
allegation of grave abuse of discretion, CA ruled on the merits & held that 2. NO
actual occupants on the island but there were some coconut trees claimed
while Katon had caused the reclassification of Sombrero Island from forest -CA’s “residual prerogatives” under Sec1 of Rule9 of the Rules of Court is
to have been planted by George and Palanca (alleged overseer of
to agricultural land, he never applied for a homestead patent under the different from the “residual jurisdiction” of TC over cases appealed to CA.
George) who went to the island from time to time to undertake
Public Land Act. Hence, he never acquired title to that land. Also, granting -RESIDUAL PREROGATIVES: Sec 1 of Rule 9 of the Rules of Court:
development work, like planting of additional coconut trees.
arguendo that Katon had the exclusive right to apply for a patent to the defenses and objections not pleaded either in a motion to dismiss or in
-The application for conversion of the whole Sombrero Island was
land in question, he was already barred by laches for having slept on his the answer are deemed waived, except when
favorably endorsed by BFDO Puerto Princesa to its main office in Manila
right for almost 23 years from the time Palanca’s title had been issued (1) lack of jurisdiction over the subject matter,
for appropriate action. The names of Felicisimo Corpuz, Clemente
-On MR, CA acknowledged that it had erred when it ruled on the merits of (2) litis pendentia,
Magdayao and Jesus Gapilango and Juan Fresnillo were included in the
the case. It agreed with Katon that the TC had acted without jurisdiction in (3) res judicata and
endorsement as co-applicants of George. Authorities noted that since the
perfunctorily dismissing his Sept10, 1999 MFR, on the erroneous ground (4) prescription
subject land was no longer needed for forest purposes, the same is
that it was a third and prohibited motion when it was actually only his first are evident from the pleadings or the evidence on record. In the four
therefore certified and released as agricultural land for disposition under
motion. Nonetheless, the complaint was dismissed motu proprio by the excepted instances, the court shall motu proprio dismiss the claim or
the Public Land Act.
CA – with two justices dissenting – pursuant to its “residual prerogative” action.
-George Katon says: the whole Sombrero Island had been classified from
under Sec. 1 of Rule 9 of the Rules of Court. CA said that from the -RESIDUAL JURISDICTION: Sec 9 of Rule 41 of the Rules of Court 10:
forest land to agricultural land and certified available for disposition upon
allegations of the complaint, Katon clearly had no standing to seek The “residual jurisdiction” of trial courts is available at a stage in which the
his request and at his instance.
reconveyance of the disputed land, because he neither held title to it nor court is normally deemed to have lost jurisdiction over the case or the
-However land investigators of the Puerto Princesa District Land Office,
even applied for a homestead patent. It reiterated that only the State subject matter involved in the appeal. This stage is reached upon the
later favorably endorsed the request of respondents Manuel Palanca Jr.
could sue for cancellation of the title issued upon a homestead patent, perfection of the appeals by the parties or upon the approval of the
and Lorenzo Agustin, for authority to survey vacant portions of Sombrero
and for reversion of the land to the public domain. It also ruled that records on appeal, but prior to the transmittal of the original records or the
Island consisting of 5hectares each.
prescription had already barred the action for reconveyance. records on appeal. In either instance, the TC still retains its so-called
-Subsequently, respondents filed their own homestead patent
residual jurisdiction to issue protective orders, approve compromises,
applications: Lorenzo Agustin (4.3has), Juan Fresnillo (8.5has), and
ISSUES
Jesus Gapilango (??has). Manuel Palanca, Jr. was issued a Homestead
1. WON CA was correct in resolving the petition for certiorari based on an
Patent No. and OCT for 6.84 hectares of Sombrero Island. 10Rule41.“SEC. 9. Perfection of appeal; effect thereof. – A party’s appeal by notice of appeal is deemed perfected as to him
issue not raised in the petition (WON CA was correct in ruling on the
-Katon filed Complaint for “Nullification of Applications for Homestead and upon the filing of the notice of appeal in due time.
merits)
Original Certificate of Title No. G-7089 and for Reconveyance of Title” and “A party’s appeal by record on appeal is deemed perfected as to him with respect to the subject matter thereof upon the approval
2. WON CA was correct in invoking its alleged ‘residual prerogative’ under
prayed for reconveyance of the whole island in his favor, arguing that the of the record on appeal filed in due time.
Section 1, Rule 9 of the 1997 Rules of Civil Procedure in resolving the
homestead patents and original certificates of title covering certain “In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and
Petition on an issue not raised in the Petition (and eventually dismissing
portions of Sombrero Island issued in favor of respondents were invalid for the expiration of the time to appeal of the other parties.
the case for prescription and lack of jurisdiction)
having been obtained through fraud. “In appeals by record on appeal, the court loses jurisdiction only over the subject matter thereof upon the approval of the records

Respondent’s arguments: on appeal filed in due time and the expiration of the time to appeal of the other parties.
HELD
-Manuel Palanca asserts that he himself requested for the reclassification “In either case, prior to the transmittal of the original record or the record on appeal, the court may issue orders for the protection
Where prescription, lack of jurisdiction or failure to state a cause of action
of the island in dispute; that about the time of such request, Fresnillo, and preservation of the rights of the parties which do not involve any matter litigated by the appeal, approve compromises, permit
clearly appear from the complaint filed with the TC, the action may be
Gapilango and himself already occupied their respective areas and appeals of indigent litigants, order execution pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the
dismissed motu proprio by the CA, even if the case has been elevated for
introduced numerous improvements; that Katon never filed any appeal.”
 Civil Procedure Digest
permit appeals of indigent litigants, order execution pending appeal, and
allow the withdrawal of the appeal.
-CA’s motu proprio dismissal of petitioner’s Complaint could not have
been based on residual jurisdiction under Rule 41. Such order of dismissal
was not one for the protection and preservation of the rights of the parties,
pending the disposition of the case on appeal. What the CA referred to as
residual prerogatives were the general residual powers of the courts to
dismiss an action motu proprio upon the grounds mentioned in Section 1
of Rule 9 of the Rules of Court and under authority of Section 2 of Rule 1
of the same rules.
-Jurisdiction over the subject matter is conferred by law and is determined
by the allegations in the complaint and the character of the relief sought.
Katon prayed, among others, for a judgment (1) nullifying the homestead
patent applications of Respondents Agustin, Fresnillo and Gapilango as
well as Homestead Patent No. 145927 and OCT No. G-7089 in the name
of Respondent Palanca; and (2) ordering the director of the Land
Management Bureau to reconvey the Sombrero Island to petitioner.
-Q: did the Complaint sufficiently allege an action for declaration of nullity
of the free patent and certificate of title or, alternatively, for reconveyance?
Or did it plead merely for reversion?
-Ans: The complaint did not sufficiently make a case for any of such
actions, over which the TC could have exercised jurisdiction.
-In an action for nullification of title or declaration of its nullity, the
complaint must contain the following allegations:
1) that the contested land was privately owned by the plaintiff prior to the
issuance of the assailed certificate of title to the defendant; and
2) that the defendant perpetuated a fraud or committed a mistake in
obtaining a document of title over the parcel of land claimed by the
plaintiff.
-In these cases, the nullity arises not from fraud or deceit, but from the fact
that the director of the Land Management Bureau had no jurisdiction to
bestow title; hence, the issued patent or certificate of title was void ab
initio.
-In an alternative action for reconveyance, the certificate of title is also
respected as incontrovertible, but the transfer of the property or title
thereto is sought to be nullified on the ground that it was wrongfully or
erroneously registered in the defendant’s name. The complaint must
allege two facts that, if admitted, would entitle the plaintiff to recover title to
the disputed land:
(1) that the plaintiff was the owner of the land, and
(2) that the defendant illegally dispossessed the plaintiff of the property.
-In the present case, nowhere in the Complaint did petitioner allege that
he had previously held title to the land in question. On the contrary, he
acknowledged that the disputed island was public land, that it had never
been privately titled in his name, and that he had not applied for a
homestead under the provisions of the Public Land Act.
-Reversion? No. Section 101 of the Public Land Act categorically declares
that only the solicitor general or the officer in his stead may institute such
an action. A private person may not bring an action for reversion or any
other action that would have the effect of canceling a free patent and its
derivative title, with the result that the land thereby covered would again
form part of the public domain.
A2010
Avena
-The dismissal of the Complaint is proper not only because of lack
of jurisdiction, but also because of the utter absence of a cause of
action, a defense raised by respondents in their Answer.
-Assuming that petitioner is the proper party to bring the action for
annulment of title or its reconveyance, the case should still be dismissed
for being time-barred.
A. 1977, Feb21: a homestead patent and an OCT was issued to Palanca
1988, Oct6: filing of the complaint, way past ten years from the date of
the issuance of the Certificate, the prescriptive period for reconveyance of
fraudulently registered real property.
B. Palanca’s title attained the status of indefeasibility one year from the
issuance of the patent and the Certificate of Title in February 1977. It is no
longer open to review on the ground of actual fraud.
Trial courts have authority and discretion to dismiss an action on the
ground of prescription when the parties' pleadings or other facts on record
show it to be indeed time-barred; and it may do so
-on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or
-an answer which sets up such ground as an affirmative defense (Sec. 5,
Rule 16), or
-even if the ground is alleged after judgment on the merits, as in a motion
for reconsideration; or
-even if the defense has not been asserted at all, as where no statement
thereof is found in the pleadings; or
-where a defendant has been declared in default.
What is essential only is that the facts demonstrating the lapse of the
prescriptive period be otherwise sufficiently and satisfactorily apparent on
the record; either in the averments of the plaintiff's complaint, or otherwise
established by the evidence.
Disposition Petition denied. CA resolution affirmed. Complaint dismissed
on the grounds of lack of jurisdiction, failure to state a cause of action and
prescription. Costs against petitioner.
COMMON PROVISIONS
Re parts of pleading
FIL-ESTATE GOLF AND DEVELOPMENT, INC. V CA
(CABUCO-ANDRES)
265 SCRA 614
KAPUNAN; December 16, 1996
NATURE
Petition for review on certiorari of a decision of the CA.
FACTS
- Petitioner Fil-Estate Golf and Development, Inc. (FEGDI) is the
developer of the Manila Southwoods golf course and residential
subdivision project which partly covers lands located in Biñan, Laguna.
- December 29, 1992: Felipe Layos filed a Complaint for Injunction and
Damages with Application for Preliminary Injunction against Fil-Estate
Realty Corporation (FERC) with the RTC of Biñan. It alleged that Felipe
Prof. Victoria A. 45
Layos is the legal owner and possessor of thwo parcels of land having a
total area of 837,695 sq. m. located in Biñan, Laguna known as Lots 1 & 2
of Plan Psu-201. Layos claimed that the Southwoods project encroached
upon the aforecited lands and thus his rights of ownership and possession
were violated when FERC brought in men and equipment to begin
development of the said properties.
- February 2, 1993: FERC filed an Opposition to Application for Writ of
Preliminary Injunction and explicitly stated therein that the developer is its
sister company, FEGDI.
- March 29, 1993: Judge Sultan of RTC Biñan issued an order denying
the prayer for preliminary injunction in view of Layos’ inability to
substantiate his right.
- June 25, 1993: Layos along with his wife and other individuals filed
another case for Injunction and Damage with Prayer for Preliminary
Injunction with the RTC of San Pedro, this time against FEGDI. The
complaint is basically identical to that filed in the Biñan case, except for
changes in the number of party-plaintiffs and party-defendants and in the
area size of the claimed landholdings.
- FEGDI moved to dismiss the San Pedro case on grounds of litis
pendentia, forum-shopping, lack of cause of action and lack of jurisdiction.
FEGDI argues that a similar complaint was previously filed with the RTC
Biñan court. FEGDI also averred that the documents relied upon by the
private respondents are of doubtful veracity and that they failed to pay the
correct filing fees.
- Judge Cabuco-Andres of San Pedro RTC denied FEGDI’s motion to
dismiss, as well as the Motion for Reconsideration. FEGDI filed a Petition
for Certiorari and Prohibition with Application for Preliminary Injunction
with the CA. CA ordered an RTO enjoining Cabuco-Andres.
- January 25, 1994: RTC Biñan case was dismissed without prejudice on
grounds of forum-shopping.
ISSUES
1. WON Layos is guilty of forum-shopping.
2. WON the San Pedro case has cause of action.
HELD
1. YES
Ratio
Reasoning Private respondents have indeed resorted to forum-shopping
in order to obtain a favorable decision. The pattern is undisputably
revealed by the fact that after Felipe Layos instituted in 1992 a case for
injunction and damages with application for preliminary injunction in the
RTC of Biñan, and after his prayer was denied in March 1993, he (and
other individuals) filed an identical complaint for injunction and damages
with preliminary injunction in June 1993, this time with RTC San Pedro. An
examination would show that the San Pedro complains is simply an
improved version of the Biñan complaint.
- Respondents content that there is no identity of part-defendants since it
was FERC in the Biñan case and FEGDI in the San Pedro case. This is
unmeritorious, because FEGDI voluntarily submitted to the court’s
jurisdiction by filing its answer and expressly stating that it is the developer
 Civil Procedure Digest
of Southwoods, and not FERC. The Biñan court expressly recognized
FEGDI as the defendant in the said case.
- The willful attempt by private respondent to obtain a preliminary
injunction in another court after it failed to acquire the same from the
original court constitutes grave abuse of the judicial process.
SC-Administrative Circular 04-94:
Revised Circular 29-91 applies to and governs the filing of petitions
in the Supreme Court and the Court of Appeals and is intended to
prevent the multiple filing of the petitions or complaints involving the
same issues in other tribunals.
The following requirements xxx shall be strictly complied with
in the filing of the complaints, petitions, applications or other
initiatory pleadings in all courts and agencies other than the SC xxx.
The complaint and other initiatory pleadings referred to and
subject of this Circular are the original civil complaint, counter-claim,
cross-claim, third (fourth, etc) party complaint, or complaint-in-
intervention, petition, or application wherein a party asserts his
claim for relief.
2. NO
Ratio In the determination of WON the complaint states a cause of action,
the annexes attached to the complaint may be considered, they being
parts of the complaint.
Reasoning The San Pedro case also did not state a cause of action. In
determining WON a complaint states a cause of action, only the
allegations in the complaint must be considered. The test if sufficiency of
the facts is WON admitting the facts alleged the court can render a valid
judgment upon the same in accordance with the prayer thereof.
- There is no cause of action because Layos’ claim on the land in question
is based on a fabricated document. The affidavit of self-adjudication is a
vital part of the complaint that should be considered in the determination
of whether or not a cause of action exists.
- The land Psu-201 is an original survey for J. Reed located in Malate,
Manila, and Si-14769 is a survey number for the plan of a land parcel
situated in Bo. Bessang, Cagayan in the name of Gregorio Blanco
- However the CA and RTC limited itself to the allegations in the complaint
proper of the San Pedro case in concluding that said complaint stated a
cause of action. This is erroneous.
- In the case of Marcopper Mining v Garcia, the RTC had the opportunity
to examine the merits of the complaint, the answer with counterclaim, the
petitioner’s answer to the counterclaim and its answer to the request for
admission. It was but logical for said court to consider all of these
pleadings in determining WON there was a sufficient cause of action in
the petitioner’s complaint.
- Regalado: The exception is provided in Sec. 2 Rule 9. It as also been
held that under this ground the trial court can consider all the pleadings
filed, including annexes, motions and the evidence on record.
DISPOSITION
The petition for review on certiorari is granted. Respondents’ complaint is
dismissed.
A2010
Avena
DBP v CA
G.R. No. 147217
October 7, 2004
NATURE
petition for review on certiorari assailing the Resolution of the CA
dismissing the petition for certiorari filed by the DBP and Atty. Nilo
Galorport
FACTS
- Bibiana Guerra de Azarcon, herein private respondent, and her late
husband Inocentes Azarcon, obtained a loan from PNB. As collateral, they
mortgaged 2 lots with the bank. But they could not pay their loan.
Asuncion Calceta told Bibiana that she is willing to pay their loan if Bibiana
would mortgage the lots to her. Private respondents agreed. Asuncion
Calceta then made an initial payment of P273,000.00 to the PNB. The
bank extended the redemption period to allow Asuncion to apply with the
DBP a loan of P3.5M to be paid to the PNB. Private respondents executed
a simulated deed of sale of their lots in her favor to enable her to
mortgage the same with the DBP.
- When the proceeds of the loan were released, Asuncion paid the PNB
P900,000.00 representing the unpaid balance of respondents’ loan.
However, she failed to pay her loan with the DBP, prompting the bank to
foreclose the mortgage covering the 2 lots. After hearing private
respondents’ application for preliminary injunction, the RTC issued an
Order enjoining the DBP and Atty. Nilo Galorport, the bank’s deputized
special sheriff, from proceeding with the auction sale of the lots pending
the final determination of the civil case wherein private respondents
prayed for annulment of the contract and the TCTs transferring title over
the lots to Asuncion Calceta.
- DBP and Atty. Galorport filed an MFR but were denied by the RTC.
Hence, they filed with the CA a petition for certiorari alleging that in
granting the injunctive relief in favor of private respondents, the RTC acted
with grave abuse of discretion. The CA dismissed the petition for certiorari
for failure of one of the petitioners, Atty. Nilo Galorport to sign the
certification against forum shopping. The CA denied petitioners’ MFR,
holding that Atty. Demosthenes Demecillo, Branch Manager of the DBP at
Tagbilaran City, failed to show that he is the bank’s authorized
representative to file the petition for certiorari.
ISSUE
WON the CA acted with grave abuse of discretion in dismissing the
petition for certiorari
HELD
NO
Ratio
The certification against forum shopping is fatally defective, not having
been duly signed by both petitioners. This procedural flaw warrants the
dismissal of the petition for certiorari. The certification against forum
shopping must be signed by the principal parties.
Prof. Victoria A. 46
Reasoning
The petitioners before the CA were the DBP, represented by Atty.
Demosthenes Demecillo, the bank’s Branch Manager at Tagbilaran City,
and Atty. Nilo Galorport, DBP’s deputized special sheriff. The certification
against forum shopping was signed by Atty. Demecillo only. Petitioners
explained in their MFR that in the verification of the petition for certiorari,
Atty. Demecillo stated under oath that he is the DBP’s incumbent Branch
Head and its duly authorized officer. They submitted a copy of a resolution
passed by the DBP Board of Governors, authorizing Branch Heads of the
DBP to sign the verification and certification against forum shopping of all
initiatory pleadings of the bank. What petitioners failed to explain,
however, is their failure to attach a certified true copy of the resolution to
their petition. Their omission is fatal to their case. Courts are not expected
to take judicial notice of corporate board resolutions or a corporate
officer’s authority to represent a corporation. Petitioners’ failure to submit
proof that Atty. Demecillo has been authorized by the DBP to file the
petition is a "sufficient ground for the dismissal thereof." Atty. Galorport
contends that the signature of Atty. Demecillo, representing the DBP, is
sufficient since he and DBP are being sued jointly, they having a common
interest in the lots under litigation. His contention lacks merit. DBP is being
sued as a mortgagee, while he is impleaded as the bank’s deputized
special sheriff who conducted the extra-judicial foreclosure of the
mortgage. Their interests are not the same. The certification against forum
shopping should be signed by all the petitioners in a case, and the signing
by only one of them is insufficient.
Disposition
Petition is DENIED
WEE V GALVEZ
436 SCRA 96
QUISUMBING; August 11, 2004
NATURE
Petition for review on certiorari
FACTS
- Petitioner Rosemarie Wee and respondent Rosario D. Galvez are
sisters. Rosemarie lives with husband Manuel in Bataan. Rosario lives in
New York, USA
- They entered into an agreement whereby Rosario would send
Rosemarie US$20,000, half of said amount to be deposited in a savings
account while the balance could be invested in the money market. The
interest to be earned therefrom would be given to Rosario's son, Manolito
Galvez, as his allowance
- In accordance with her agreement with Rosario, Rosemarie gave
Manolito his monthly allowance ranging from P2,000 to P4,000 a month
from 1993 to January 1999. However, sometime in 1995, Rosario asked
for the return of the US$20,000 and for an accounting. Rosemarie
promised to comply with the demand but failed to do so. A written demand
was sent to her. When Rosemarie did not comply, Rosario filed a suit
against her.
 Civil Procedure Digest
- The Wees moved to dismiss the case based on the following grounds:
(1) the lack of allegation in the complaint that earnest efforts toward a
compromise had been made in accordance with Article 1515 of the Family
Code; (2) failure to state a valid cause of action, the action being
premature in the absence of previous earnest efforts toward a
compromise; and (3) the certification against forum shopping was
defective, having been executed by an attorney-in-fact and not the
plaintiff.
- Rosario amended her complaint to add that “Earnest efforts towards
have been made but the same have failed” (mali talaga yung sinulat nila).
The trial court accepted the amended complaint and dismissed the Wee’s
motion to dismiss. Wee moved for an MFR. It was also denied.
- The Wee couple brought the matter to the Court of Appeals via a special
civil action for certiorari, prohibition, and mandamus. It was also denied.
The Court of Appeals held that the complaint, as amended, sufficiently
stated a cause of action. It likewise held that the questioned certification
against forum shopping appended thereto was not so defective as to
warrant the dismissal of the complaint. An MFR was filed but was likewise
denied.
ISSUE/S
1. WON the certification of non-forum shopping executed by the
plaintiff’s atty-in-fact is defective
2. WON the amended complaint before the RTC states a cause of action
HELD
1. No
Reasoning The Special Power of Attorney executed by her in favor of
Grace Galvez, if subjected to careful scrutiny would clearly show that the
authority given to the latter is not only broad but also all encompassing
that it includes the power and authority to institute both civil and criminal
actions. Corollary with this power is the authority to sign all papers,
documents, and pleadings necessary for the accomplishment of the said
purpose.
The SPA includes:
1. To ask, demand and claim any sum of money that is duly [due] from any
person natural, juridical and/or corporation in the Philippines;
2. To file criminal and/or civil complaints before the courts of justice in the
Philippines to enforce my rights and interest[s];
3. To attend hearings and/or Preliminary Conference[s], to make
stipulations, adjust claims, to settle and/or enter into Compromise
Agreement[s], to litigate and to terminate such proceedings; [and]
4. To sign all papers, documents and pleadings necessary for the
accomplishment of the above purposes.
2. YES
Ratio It is true that the lead sentence of paragraph 9-A, may be
incomplete or even grammatically incorrect as there might be a missing
word or phrase, but to our mind, a lacking word like "compromise" could
be supplied by the rest of the paragraph.
Reasoning Petitioners submit that the amended complaint violates Rule
A2010
Avena
8, Section 133 of the 1997 Rules of Civil Procedure, as there is no plain
and direct statement of the ultimate facts on which the plaintiff relies for
her claim. Specifically, petitioners contend that the allegation in paragraph
9-A of the amended complaint that "Earnest efforts towards have been
made but the same have failed" is clearly insufficient. The sentence is
incomplete, thus requires the reader of the pleading to engage in
deductions or inferences in order to get a complete sense of the cause of
action, according to petitioners.
-Respondent rebuts by stating that the amended complaint as well as the
annexes attached to the pleadings should be taken in their entirety. Thus
taken together, in their entirety, the amended complaint and the
attachments to the original complaint, clearly show that a sufficient cause
of action as it is shown and stated that earnest efforts towards a
compromise have been made, according to respondent.
-A paragraph is "a distinct section or subdivision of a written or printed
composition that consists of from one to many sentences, forms a
rhetorical unit. As a "short composition consisting of a group of sentences
dealing with a single topic," a paragraph must necessarily be construed in
its entirety in order to properly derive the message sought to be conveyed.
In the instant case, paragraph 9-A of the Amended Complaint deals with
the topic of efforts made by the respondent to reach a compromise
between the parties. Hence, it is in this light that the defective lead
sentence must be understood or construed.
-Having examined the Amended Complaint in its entirety as well as the
documents attached thereto, following the rule that documents attached to
a pleading are considered both as evidence and as part of the pleading,
we find that the respondent has properly set out her cause of action.
Disposition Petition is denied.
BAGUIARO V. BARRIOS
00SCRA 00
FERIA, 30 Aug. 1946
FACTS
-Complaint filed on January 7, 1945, in the Court of First Instance of Iloilo
by Emiliana Tupas Vda. de Atas against Baguiaro.
-De Atas is the exclusive and absolute and registered owner of the
following described property, situated in the City of Iloilo. The above lot,
without the improvements which were burned during the war, is assessed
at P4,680.
-That sometime in the month of July, 1946, Baguiaro verbally solicited the
permission of herein de Atas to construct a house of light materials on the
lot of some three brazas wide and three brazas long just enough for them
to sleep, at a monthly rental of twenty pesos (P20), payable in advance,
and de Atas told Baguiaro that she would think the matter; she found out
that defendant had already begun the construction of a nipa and bamboo
house with no approval from her;
-Instead of constructing a house of three brazas by three brazas as above
Baguiaro has built additions after additions to the house such that the
present house constructed is twenty-eight and one-half feet on the front
Prof. Victoria A. 47
and forty-two and one-half feet on the side, and has rented a part thereof
to other persons, and that when plaintiff discovered this anomaly and
violations of their verbal and initial agreement, defendant was told
sometime on October, 1945, to pay a monthly rental of fifty pesos (P50) a
month, or vacate the lot in question. For the month of October, Baguiaro
paid only the sum of P25, leaving a balance of P25, and for subsequent
months Baguiaro has refused and still refuses to pay the said rentals of
fifty pesos (P50), or vacate the premises, in spite of repeated demands.
-Prayer: defendant to pay to plaintiff the sum of fifty pesos (P50) as
monthly rentals for the lot occupied by him of the property of herein
plaintiff, beginning with the month of October, 1945, or to vacate the lot in
question, with costs against the defendant, and for such other and for
such other and further relief as this Honorable Court shall deem just and
equitable.
-Baguiaro filed motion to dismiss on the ground that the Court has no
jurisdiction over the subject matter of the complaint or suit, the action
being either for the collection of rentals of a real estate which do not reach
to two hundred pesos (P200) or for ejectment from the premises in
jurisdiction over the subject of the litigation.
-CFI motion to dismiss denied and sentencing Baguiaro either to pay two
hundred fifty pesos (P250) or to vacate the lot in question.
-Petition for Certiorari on the ground the respondent judge acted without
jurisdiction over the subject matter in trying and deciding the case, and at
the same time asked this Court to enjoin the respondent judge from taking
further action in the case during the pendency of this petition.
ISSUE
WON the court acted without jurisdiction
HELD
Yes, court acted without jurisdiction. It is an axiom, in civil procedure that if
the relief demanded is not the proper one which may be granted under the
law, it does not characterize or determine the nature of the plaintiff's
action, and that the relief to which the plaintiff is entitled based on the
facts alleged by him in his complaint, although it is not the relief
demanded, is what determines the nature of the action. And that is the
reason why it is generally added to prayers for relief, though not
necessary, the words "and for such other relief as the law warrants," or
others to the same effect. So if a plaintiff alleges, for instance, that the
defendant owes the former a certain amount of money and did not pay it
at the time stipulated, and prays that the defendant be sentenced to return
a certain personal property to the plaintiff, such prayer will not make or
convert the action of recovery, of debt into one of recovery of personal
property, and the court shall grant the proper relief, or sentence the
defendant to pay his debt to the plaintiff.
The attorney of the plaintiff, in his opposition to the defendant's motion to
dismiss filed in the court below, and in his answer to the petition for
certiorari in this Court, contends that the plaintiff's principal action is for
breach of contract, and therefore within the jurisdiction of the Court of First
Instance, because it is not capable of pecuniary estimation. There is no
such kind of action. Breach of contract may be the cause of action, but not
the action or relief itself. According to our Civil Code, a breach of contract
 Civil Procedure Digest
is accuse of action, either for specific performance, or performance, or
rescission of the contract. As the plaintiff is entitled is entitled only to one
of the two reliefs, if he prays that the defendants be sentenced to perform
the obligations imposed upon him by the contract the action is specific
performance, and if he prays that the contract be rescind the plaintiff's
action is rescission. In contracts of lease of a real estate, if the lessee
violates the terms of the contract by his failure to pay the rent due or to
comply with the conditions of the lease, and refuses to vacate or return
the possession of the property leased to the lessor notwithstanding
demand to do so, the action is illegal detainer if filed within one year, and
recovery or restoration of possession if filed after one year, from the
demand.
That the prayer of relief in the complaint seems to convey the idea that the
plaintiff would agree to let the defendant continue in possession if he pays
the rents or damages demanded by the plaintiff, does not change the
nature of the action, since the court may only grant the proper relief
according to law, that is, the ejectment of the defendant and the payment
by the latter of the damages due for the occupation of the land, though the
plaintiff is free to condone said payment. It is evident that the court can not
authorize the defendant petitioner to continue in possession the land as
lessee if he pays the rents or damages demanded by the plaintiff since
such continuation depends not only upon the plaintiff's will but also upon
that of the defendant. A judgment authorizing the defendant to continue as
lessee for a certain and definite period of time after the judgment, will not
bind the plaintiff to grant such lease nor the defendant to continue as
lessee paying the monthly rental fixed by the court. A court cannot make
and impose a contract upon the parties.
Even assuming, arguendo, that the complaint may contain two
alternatives or independent actions, one of forcible entry and another for
recovery of rents or damages, the Court of First Instance of Iloilo has no
jurisdiction to entertain either one or both. It has no jurisdiction over the
action of forcible entry, for it is within the exclusive jurisdiction of the
justice of the peace; nor over that of recovery of rents or damages,
because the amount claimed by the plaintiff in his complaint, which
determines the court jurisdiction, is less than two hundred pesos (P200).
According to the complaint, the petitioner had occupied the lot in question
during the months of October, November, December and January when
the complaint was filed, and the total amount of rents or damages claimed
as due for that occupation at the rate of fifty pesos (P50) a month, minus
the sum of twenty-five pesos (P25) which was paid on account of the rent
for October, aggregate only one hundred and seventy-five pesos (P175).
The fact that, in its judgment, the lower court has awarded the plaintiff the
sum of P250, including the rent for February, and not the P25 paid on
account by the petitioner for the month of October as alleged in the same
complaint, did not confer upon the court jurisdiction over the case. If the
court has no jurisdiction over the subject matter according to the
allegations in the complaint, it can not acquire it just because the rents
claimed and those that may accrue during the pendency of the suit may
amount to a sum within its jurisdiction. To hold otherwise would lead to the
absurdity that the jurisdiction of the court depends not upon the
allegations in the complaint, but upon a contingency which may or may
not arise or occur. As the damages claimed in the complaint amounted to
A2010
Avena
one hundred and seventy-five pesos (P175), could the lower court have
sentenced the defendant to pay the amount claimed had the latter made a
confession of judgment?
Disposition
The respondent judge's decision in this case is set aside; with costs
against the respondent Emiliana Tupas Vda. de Atas. So ordered.
PARAS, J., dissenting:
- The willingness of the plaintiff to let the defendant, herein petitioner
Manuel Baguioro, retain possession of the land upon payment of the rent
(which, plaintiff alleges, should be P50) is plainly repugnant to the theory
that the principal purpose of the action is ejectment of the defendant or, in
the language of section 1 of Rule 72, "the restitution of possession."
Upon the other hand, giving such reasonable intendments to the
allegations of the complaint as are consistent with and implied by the relief
sought, the action may be one for the enforcement of a lease contract —
implied or otherwise — in which the court is asked to fix the amount of the
rent for want of corresponding stipulation. The claim that the rent ought to
be P50, when considered with the prayer "for such other and further relief
as this Honorable Court shall deem just and equitable," merely invokes
the discretion and judgment of the court regarding the righteousness of
said claim.
-While the complaint may be treated ;as one for simple ejectment, in the
light of some of its averments, the circumstance nevertheless does not
prevent it from being an action — its denomination immaterial — that may
be filed originally in the Court of First Instance, in view of the other
allegations and the prayer. In the latter situation, matters contained in the
pleading which are not necessary to, or are incompatible with, the
jurisdiction of the Court of First Instance may be considered surplusage.
The complaint might have been awkwardly drafted, but unless the
defendant was actually misled to his surprise or injury, it should be held
sufficient. (Lizarraga Hermanos vs. Yap Tico, 24 Phil., 504.) It is needless
to state that the nature of an action is determined by its allegations and
prayer. As long as the complaint makes out a case cognizable by the
Court of First Instance, the latter's jurisdiction will not be altered or taken
away simply because the action cannot prosper. The judgment in this
case was rendered after the defendant had been declared in default.
HILADO, J., dissenting:
-Liberally construed, as it should be (Rule 15, section 17), the plaintiff's
complaint is susceptible of two constructions: as a complaint in ejectment,
and as one aimed at invoking the general jurisdiction of the Court of First
Instance in actions for possession of real property, as regards the
plaintiff's land under section 56, paragraph 2, of Act No. 136. In choosing
between these two constructions in justice to the learning and intelligence
of counsel for the plaintiff, it seems to me that the court should have had
no difficulty in concluding that he meant and intended to resort to the latter
procedure, as he should be presumed to know such an elemental rule as
that which confers upon the municipal or justice of the peace court
exclusive original jurisdiction of forcible entry and unlawful detainer cases
within the first year following the accrual of the cause of action.
Prof. Victoria A. 48
-Even where the defendant employs, e. g., violence in taking possession
of the plaintiff's land, the law does not compel the latter to resort to the
summary remedy y furnished by Rule 72, section 1, just as it does not
compel the plaintiff to file a criminal complaint for any criminal offense
which the defendant may have committed with the use of such violence.
The law grants the plaintiff of remedies, as well as a choice of courts, so
long as he lays before the court of his choice the facts calling for a proper
exercise of its jurisdiction. So that an undisputed owner of land who, as
such, is by law entitled to its possession, and who is deprived thereof, e..
g., by force, while entitled to the summary remedy afforded by Rule 72,
section 1, which according to said section he may resort to, is neither
compelled to bring his case thereunder, alleging the characteristic
circumstance of violence, lodging his action in the proper inferior court,
nor forbidden to seek redress from the proper Court of First Instance by
bringing his case under its general jurisdiction "in all civil actions which
involve . . . the possession of real property . . .", waiving the effects of the
violence committed by the defendant as well as the summary remedy to
which such characteristic circumstance may entitled, had simply alleging,
as his cause of action, his ownership of the land, his right to its
possession and the fact that he has been deprived of such possession by
the defendant, regardless of the manner employed in such deprivation.
The same law which does not compel the owner to bring a criminal action
by reason of such violence does not compel him to bring a forcible entry
suit by reason thereof. And it would be to my mind scandalous to affirm in
a government of laws that in such circumstances the owner will be
prevented from bringing his case under the general jurisdiction of the
Court of First Instance of the province without invoking the characteristic
circumstance of violence. Of course, in an ordinary action commenced in
the Court of First Instance, he will not be entitled to the summary
proceedings, such as the immediate execution of the judgment, etc.,
provided for in Rule 72. So long as the plaintiff does not rely on any of the
specific circumstances characterizing the action as one of forcible entry or
unlawful detainer, it cannot be said to be within the exclusive original
jurisdiction of the municipal or justice of the peace court, even within the
first year following the accrual of the cause of action.
CHINA BANKING CORP V MONDRAGON
INTERNATIONAL
G.R. No. 164798
PUNO; November 17, 2005
NATURE
Petition for certiorari
FACTS
- In 1994, respondent Mondragon International Philippines, Incorporated
(MIPI), entered into a Lease Agreement with Clark Development
Corporation (Clark)to develop the 232-hectare Mimosa Leisure Estate.
They also entered into supplemental lease agreements to develop other
additional areas. Part of the funds used for these projects was generated
from loans obtained from petitioner China Banking Corporation (CBC). To
 Civil Procedure Digest
secure these loans, MIPI executed promissory notes in favor of CBC. In
addition, respondent Antonio U. Gonzales executed a Surety Agreement
in favor of CBC in the amount of P100M. In 1997, the Asian financial crisis
transpired. The ensuing shock to the Philippine economy affected MIPI’s
ability to pay its obligations to CBC.
- In 2000, CBC filed a complaint for a sum of money with RTC Makati City
against MIPI and Mr. Gonzales. The certification of forum shopping was
attached to the complaint. It was to the effect that: MERCEDES E.
GERMAN, the Manager of Loans & Discounts Dept of the China Banking
Corp certified that the defendant China Bank has not commenced any
other action or proceeding involving the same issues in the SC, CA or
before any other tribunal or agency, and that to the best of her knowledge,
no such action or proceeding is pending, and that if a similar action or
proceeding has been filed or is pending before SC, CA or any other
tribunal or agency, she undertakes to report that fact within five (5) days.
- In 2001, MIPI and Gonzales filed MTD on the ff. grounds: [1] the
complaint failed to comply with the requirements set forth under SC
Administrative Circular No. 04-94 and Section 5, Rule 7 of the 1997 Rules
of Civil Procedure as regards certifications against forum shopping; and
[2] there was noncompliance with a condition precedent for the filing of the
case and/or the same failed to state a cause of action or was premature
- RTC denied MTD and MFR of MIPI and Gonzales. CA granted the
petition for certiorari and reversed RTC. CA ruled that CBC failed to
comply with the requirements of Section 5, Rule 7 of the 1997 Rules of
Civil Procedure as there was nothing in the records showing that the
signatory of the certification against forum shopping was authorized by
CBC. It referred to the Corporation Code and jurisprudence which state
that corporations exercise their corporate powers through their board of
directors and no person can bind the corporation without authority from
the latter. CA denied CBC’s MFR. Hence, the present petition.
ISSUE
WON CBC’s failure to attach the requisite board resolution making Ms.
German an authorized signatory of certifications against forum shopping
was a fatal error and cannot be rectified by subsequent submission
thereof.
HELD
NO
Ratio The Court has relaxed, under justifiable circumstances, the rule
requiring the submission of these certifications and has applied the rule of
substantial compliance under justifiable circumstances with respect to the
contents of the certification. If the belated filing of the certification against
forum shopping for compelling reasons in previous rulings is allowed, with
more reason should the Court sanction the timely submission of such
certification though the proof of the signatory’s authority was submitted
thereafter.
Reasoning The court has used the doctrine of stare decisis to enunciate
this principle. The ff. cases were cited as authority: Shipside Incorporated
v. CA, Ateneo De Naga University v. Manalo, and, Pascual & Santos Inc
v. Tramo Wakas Neighborhood Association . At the meeting of CBC’s
Board of Directors, the Board, in a resolution, approved, confirmed and
A2010
Avena
ratified Ms. German’s authority. Though the wording of the board
resolution leaves much to be desired, it remains equally susceptible of
interpretation in favor of Ms. German’s preexisting status as an authorized
signatory.
Disposition Petition is GRANTED.
CRUZ-AGANA V LAGMAN
G.R. No. 139018
CARPIO; April 11, 2005
NATURE
Petition for certiorari
FACTS
- On 18 March 1996, petitioner filed a Complaint for annulment of title with
prayer for preliminary mandatory injunction against respondent. Petitioner
claims that as the sole heir of one Teodorico Cruz, she is the sole owner
of a lot covered by Transfer Certificate of Title No. T-3907. Petitioner
further claims that the lot was fraudulently sold to Eugenio Lopez, Jr. who
later on transferred the lot to respondent.
- Respondent seasonably filed its Answer with compulsory counterclaim.
Petitioner moved to dismiss respondent’s counterclaim for lack of a
certificate of non-forum shopping.
- In an Order dated 11 March 1999, the trial court denied petitioner’s
motion to dismiss respondent’s counterclaim. The trial court reasoned
that respondent’s counterclaim is compulsory and therefore excluded from
the coverage of Section 5, Rule 7 of the Rules of Court. Petitioner moved
that the trial court reconsider its Order invoking the mandatory nature of a
certificate of non-forum shopping under Supreme Court Administrative
Circular No. 04-94. On 25 May 1999, the trial court reversed its 11 March
1999 Order and dismissed respondent’s counterclaim for lack of a
certificate of non-forum shopping.
- Respondent seasonably filed a motion for reconsideration arguing that
Administrative Circular No. 04-94 does not apply to compulsory
counterclaims following the ruling in Santo Tomas University Hospital v.
Surla. On 4 June 1999, the trial court again reversed itself and recalled its
Order dismissing respondent’s counterclaim. The trial court ruled that the
filing of a compulsory counterclaim does not require a certificate of non-
forum shopping.
ISSUE
WON a compulsory counterclaim pleaded in an Answer can be dismissed
on the ground of a failure to accompany it with a certificate of non-forum
shopping
HELD
NO
- Santo Tomas clarified the scope of Administrative Circular No. 04-94 with
respect to counterclaims. The Court pointed out that this circular is
intended primarily to cover “an initiatory pleading or an incipient
application of a party asserting a claim for relief.” The distinction between
Prof. Victoria A. 49
a compulsory and a permissive counterclaim is vital in the application of
the circular. The Court explained:
It should not be too difficult, the foregoing rationale of the circular
aptly taken, to sustain the view that the circular in question has not,
in fact, been contemplated to include a kind of claim which, by its
very nature as being auxiliary to the proceedings in the suit and as
deriving its substantive and jurisdictional support therefrom, can
only be appropriately pleaded in the answer and not remain
outstanding for independent resolution except by the court where
the main case pends. Prescinding from the foregoing, the proviso in
the second paragraph of Section 5, Rule 8 of the 1997 Rules of Civil
Procedure, i.e., that the violation of the anti-forum shopping rule
“shall not be curable by mere amendment xxx but shall be cause for
the dismissal of the case without prejudice,” being predicated on the
applicability of the need for a certification against forum-shopping,
obviously does not include a claim which cannot be independently
set up.
- The Court reiterated this ruling in Ponciano v. Judge Parentela, Jr.
- Administrative Circular No. 04-94 does not apply to compulsory
counterclaims. The circular applies to initiatory and similar pleadings. A
compulsory counterclaim set up in the answer is not an “initiatory” or
similar pleading. The initiatory pleading is the plaintiff’s complaint. A
respondent has no choice but to raise a compulsory counterclaim the
moment the plaintiff files the complaint. Otherwise, respondent waives the
compulsory counterclaim. In short, the compulsory counterclaim is a
reaction or response, mandatory upon pain of waiver, to an initiatory
pleading which is the complaint.
- Petitioner’s counsel fails or simply refuses to accept the distinction
between a permissive counterclaim and a compulsory counterclaim. This
distinction was the basis for the ruling in Santo Tomas and Ponciano.
The sole issue for resolution in the present case is whether respondent’s
counterclaim is compulsory or permissive. If it is a permissive
counterclaim, the lack of a certificate of non-forum shopping is fatal. If it
is a compulsory counterclaim, the lack of a certificate of non-forum
shopping is immaterial.
- A compulsory counterclaim is any claim for money or other relief, which a
defending party may have against an opposing party, which at the time of
suit arises out of, or is necessarily connected with, the same transaction
or occurrence that is the subject matter of plaintiff’s complaint.[9] It is
compulsory in the sense that it is within the jurisdiction of the court, does
not require for its adjudication the presence of third parties over whom the
court cannot acquire jurisdiction, and will be barred in the future if not set
up in the answer to the complaint in the same case. Any other
counterclaim is permissive.
- Respondent’s counterclaim as set up in its answer states:
3. That because of the unwarranted, baseless, and unjustified acts
of the plaintiff, herein defendant has suffered and continue to suffer
actual damages in the sum of at least P400,000,000.00 which the
law, equity, and justice require that to be paid by the plaintiff and
further to reimburse the attorney’s fees of P2,000,000.00;
- It is clear that the counterclaim set up by respondent arises from the
filing of plaintiff’s complaint. The counterclaim is so intertwined with the
 Civil Procedure Digest
main case that it is incapable of proceeding independently. The
counterclaim will require a re-litigation of the same evidence if the
counterclaim is allowed to proceed in a separate action. Even petitioner
recognizes that respondent’s counterclaim is compulsory. A compulsory
counterclaim does not require a certificate of non-forum shopping because
a compulsory counterclaim is not an initiatory pleading.
Disposition The decision petition is denied.
Re manner of making allegations
PERPETUAL SAVINGS V FAJARDO
223 SCRA 720
FELICIANO; June28,1993
FACTS:
-J.J. Mining and Exploration Corporation ("J.J. Mining") executed and
delivered to petitioner Perpetual Savings ("Bank") a promisory note in the
amount of P750.000.00 payable in one lump sum upon maturity with
interest at 23% per annum. The note also contained, inter alia, a clause
providing for penalty interest at the rate of 3% , nor month on the amount
due, compounded monthly. The promisory note was executed for J.J.
Mining by respondents Jose Oro B. Fajardo and Emmanuel F. Del
Mande. Messrs. Fajardo and Del Mundo are said to be officers of J.J.
Mining.
Upon maturity of the promissory note, neither J.J. Mining nor anyone else
paid the amount of the indebtedness, notwithstanding petitioner's
repeated written demands for payment.
-petitioner Bank filed a complaint with the Regional Trial Court, Makati,
against J.J; Mining, Jose Emmanuel Jalandoni and herein respondents
Fajardo and Del Mundo, for collection of the amounts due under the
promissory note
-Defendant's Fajardo and Del Mundo were impleaded as agents/or
representatives of Defendant Corporation who were signatories in the
Promissory Note or alternatively, in their personal capacities “if it be
shown that they contracted the loan fully knowing that the Defendant
Corporation would be unable to pay the same upon maturity, and/or that
they used the proceeds of the loan foe their own personal benefit”
-Respondent Fajardo and Del Mundo filed a Motion to Dismiss on the
ground that the complaint had failed to stated cause of action against
them. RTC denied motion to dismiss. Fajardo and Del Mundo raised the
case to the SC but SC referred case to CA. Respondents Fajardo and Del
Mundo, basically alleged that petitioner Bank's complaint did not set forth
any cause of action as against them personally, and that Section 13, Rule
3 of the Rules of Court on alternative defendants was not applicable to the
case at bar. CA granted motion of Fajardo and Del Mundo
ISSUE
WON complaint of Perpetual Savings stated a cause of action against
respondents Fajardo and Del Mundo, as distinguished from J.J. Mining,
on whose behalf they had purported to act.
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HELD
YES.
Reasoning. In Rava Development Corporation v. Court of Appeals, the
Court elaborated on this established standard in the following manner:
'The rule is that a defendant moving to dismiss a complaint on the ground
of lack of cause of action is regarded as having hypothetically admitted all
the averments thereof. The test of the sufficiency of the facts found in a
petition as constituting a cause of action is whether or not, admitting the
facts alleged, the court can render a valid Judgment upon the same in
accordance with the prayer thereof.
- In its Decision, CA said, among other the that petitioner Bank's
complaint did not state a cause of action against respondents Fajardo and
Del Mundo in their personal and individual capacities for the reason that.
no evidence had been presented to support such alleged liability on the
"so called alternative cause of action."
-The SC held that the CA was in reversible error. It was quite premature
for the Court of Appeals to consider evidence (or lack of evidence) outside
the complaint since the trial had not yet started. The allegations made by
the bank could be proven on trial.
WEE V GALVEZ
(supra)
FACTS
-this is regards the sisters, one in US and one in RP who is taking care of
the son of the sister in US. Allowance issues…
ON MANNER OF MAKING ALLEGATIONS
etitioners submit that the amended complaint violates Rule 8, Section 133
of the 1997 Rules of Civil Procedure, as there is no plain and direct
statement of the ultimate facts on which the plaintiff relies for her claim.
Specifically, petitioners contend that the allegation in paragraph 9-A of the
amended complaint that "Earnest efforts towards have been made but the
same have failed" is clearly insufficient. The sentence is incomplete, thus
requires the reader of the pleading to engage in deductions or inferences
in order to get a complete sense of the cause of action, according to
petitioners.
-Respondent rebuts by stating that the amended complaint as well as the
annexes attached to the pleadings should be taken in their entirety. Thus
taken together, in their entirety, the amended complaint and the
attachments to the original complaint, clearly show that a sufficient cause
of action as it is shown and stated that earnest efforts towards a
compromise have been made, according to respondent.
-A paragraph is "a distinct section or subdivision of a written or printed
composition that consists of from one to many sentences, forms a
rhetorical unit. As a "short composition consisting of a group of sentences
dealing with a single topic," a paragraph must necessarily be construed in
its entirety in order to properly derive the message sought to be conveyed.
In the instant case, paragraph 9-A of the Amended Complaint deals with
the topic of efforts made by the respondent to reach a compromise
Prof. Victoria A. 50
between the parties. Hence, it is in this light that the defective lead
sentence must be understood or construed.
-Having examined the Amended Complaint in its entirety as well as the
documents attached thereto, following the rule that documents attached to
a pleading are considered both as evidence and as part of the pleading,
we find that the respondent has properly set out her cause of action.
Re Efect of Failure to Plead
CEREZO V. TUAZON
(supra)
NATURE
Petition for review on certiorari
FACTS
-Bus collided with tricycle
EFFECT OF FAILURE TO PLEAD
When a party has another remedy available to him, which may either be a
motion for new trial or appeal from an adverse decision of the trial court,
and he was not prevented by fraud, accident, mistake or excusable
negligence from filing such motion or taking such appeal, he cannot avail
himself of this petition. Indeed, relief will not be granted to a party who
seeks avoidance from the effects of the judgment when the loss of the
remedy at law was due to his own negligence; otherwise the petition for
relief can be used to revive the right to appeal which has been lost thru
inexcusable negligence.
Reasoning there was no fraud, accident, mistake, or excusable
negligence that prevented Mrs. Cerezo from filing an appeal, a motion for
new trial or a petition for certiorari. It was error for her to avail of a petition
for relief from judgment.After the SC’s resolution denying Mrs. Cerezo’s
petition for relief became final and executory, Mrs. Cerezo, in her last ditch
attempt to evade liability, filed before the Court of Appeals a petition for
annulment of the judgment of the trial court. Annulment is available only
on the grounds of extrinsic fraud and lack of jurisdiction. If based on
extrinsic fraud, a party must file the petition within four years from its
discovery, and if based on lack of jurisdiction, before laches or estoppel
bars the petition. Extrinsic fraud is not a valid ground if such fraud was
used as a ground, or could have been used as a ground, in a motion for
new trial or petition for relief from judgment. Mrs. Cerezo insists that lack
of jurisdiction, not extrinsic fraud, was her ground for filing the petition for
annulment of judgment. However, a party may avail of the remedy of
annulment of judgment under Rule only if the ordinary remedies of new
trial, appeal, petition for relief from judgment, or other appropriate
remedies are no longer available through no fault of the party. Mrs.
Cerezo could have availed of a new trial or appeal but through her own
fault she erroneously availed of the remedy of a petition for relief, which
was denied with finality. Thus, Mrs. Cerezo may no longer avail of the
remedy of annulment.
Disposition PETITION DENIED.
 Civil Procedure Digest
SPOUSES DELOS SANTOS VS RTC (HON.
EMMANUEL C. CARPIO)
G.R. NO. 153696
AUSTRIA-MARTINEZ: September 11, 2006
NATURE:
Petition for review on certiorari under Rule 45 of the Rules of Court
FACTS:
- On January 3, 2001, Metropolitan Bank and Trust Company (or
"Metrobank") filed a complaint for sum of money against spouses
Humberto and Carmencita delos Santos (or "petitioners") before the
Regional Trial Court of Davao City.
- On January 22, 2001, petitioners were served with the summons,
together with a copy of the complaint. As petitioners failed to file an
answer within the reglementary period, Metrobank, on February 8, 2001,
filed a motion to declare them in default. The motion was set for hearing
on February 16, 2001.
- Acting on the motion, the lower court, presided over by Hon.
Emmanuel C. Carpio (or "respondent judge"), issued an order dated
February 12, 2001 declaring petitioners in default and setting the ex-parte
presentation of Metrobank?s evidence on March 7, 2001.
- On February 15, 2001, petitioners filed an opposition to Metrobank’s
motion to declare them in default, claiming that upon receipt of the
summons, they immediately sought the services of Atty. Philip Pantojan
but it was only on February 12, 2001 that they were able to meet with Atty.
Pantojan. Petitioners alleged that not being "learned in law", they were
unaware "of the consequences of delay in the filing of their answer."
- On the same date, February 15, 2001, petitioners filed a motion to
admit answer, as well as the answer. In an order dated February 16, 2001,
respondent judge disregarded petitioners’ opposition to Metrobank’s
motion for default
- On February 19, 2001, Metrobank filed an opposition to petitioners’
motion to admit answer, arguing that said motion was rendered moot and
academic by the February 12, 2001 order. Metrobank also chided
petitioners for violating the three-day notice rule under Sec. 4, Rule 15 of
the 1997 Rules of Civil Procedure. In an order dated February 20, 2001,
the motion to admit answer was denied.
- On February 27, 2001, petitioners filed a motion to lift the order of
default; Metrobank opposed the motion.
- On March 2, 2001, respondent judge issued an order holding in
abeyance the ex-parte reception of evidence pending resolution of
petitioners’ motion to lift the order of default.
- On March 5, 2001, respondent judge issued an order denying
petitioners’ motion to lift the order of default and setting the reception of
Metrobank’s evidence on March 7, 2001, as previously scheduled. On that
date (March 7, 2001), Metrobank presented its evidence and the case was
submitted for decision. Petitioners moved for reconsideration of the March
5, 2001 order but their motion was denied.
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- Petitioners filed a Petition for Certiorari with the CA ascribing grave
abuse of discretion committed by the trial court amounting to lack of
jurisdiction in issuing the Orders, declaring them in default and denying
their Opposition to Metropolitan Bank and Trust Company’s (Metrobank)
Motion to Declare them in Default; and the Orders denying their Motion to
Lift the Order of Default and their Motion for Reconsideration.
- CA denied the petition for lack of merit and accordingly dismissed the
same. The CA did not find the excuse proffered by petitioners. It also ruled
that for an order of default to be set aside, petitioners must have a
meritorious defense or that something could be gained by having the
order of default set aside
- The CA further found unmeritorious the contention of petitioners that
they were declared in default without giving them ample time to file an
opposition to Metrobank’s Motion to Declare them in Default; that under
Section 3, Rule 9 of the Rules of Court, it is provided that the court shall,
upon motion of the claiming party with notice to the defending party in
default, and proof of such failure, declare the defending party in default;
and that since it is clear from the records that the reglementary period for
filing an answer had expired with no responsive pleading filed by
petitioners, the trial court had properly declared them in default. The CA
further declared that even assuming that the trial court committed a
procedural lapse in declaring petitioners in default before the scheduled
hearing of Metrobank’s motion, such error is not so serious as to
constitute grave abuse of discretion.
ISSUE:
1. WON LITIS PENDENTIA raised by petitioners as an affirmative defense
is a meritorious defense.
HELD:
1. YES
Reasoning Section 3, Rule 9 of the Rules of Court provides:
Sec. 3. Default; declaration of If the defending party fails to answer within
the time allowed therefor, the court shall, upon motion of the claiming
party with notice to the defending party, and proof of such failure, declare
the defending party in default. Thereupon, the court shall proceed to
render judgment granting the claimant such relief as his pleading may
warrant, unless the court in its discretion requires the claimant to submit
evidence. Such reception of evidence may be delegated to the clerk of
court.
- Clearly, there are three requirements which must be complied with by
the claiming party before the court may declare the defending party in
default, to wit: (1) the claiming party must file a motion asking the court to
declare the defending party in default; (2) the defending party must be
notified of the motion to declare him in default; (3) the claiming party must
prove that the defending party has failed to answer within the period
provided by the Rule.
- In filing motions, Section 4, Rule 15 of the Rules of Court, specifically
provides:
Sec. 4. Hearing of motion. Except for motions which the court may act
upon without prejudicing the rights of the adverse party, every written
motion shall be set for hearing by the applicant.
Prof. Victoria A. 51
- Prior to the present rule on default introduced by the 1997 Rules of
Civil Procedure, as amended, Section 1 of the former Rule 18 on default is
silent on whether or not there is need for a notice of a motion to declare
defendant in default. The Court then ruled that there is no need. However,
the present rule expressly requires that the motion of the claiming party
should be with notice to the defending party. The purpose of a notice of a
motion is to avoid surprises on the opposite party and to give him time to
study and meet the arguments. The notice of a motion is required when
the party has the right to resist the relief sought by the motion and
principles of natural justice demand that his right be not affected without
an opportunity to be heard.
- Therefore, as the present rule on default requires the filing of a motion
and notice of such motion to the defending party, it is not enough that the
defendant failed to answer the complaint within the reglementary period to
be a sufficient ground for declaration in default.
Disposition. Petition for review is GRANTED. The Decision of the Court
of Appealsis REVERSED and SET ASIDE. The Order of Default of the
Regional Trial Court is SET ASIDE and the Answer filed by petitioners is
deemed ADMITTED. The trial court is DIRECTED to continue with
deliberate speed with the proceedings in the case below.
SPOUSES DELOS SANTOS VS RTC (HON. EMMANUEL C.
CARPIO)
G.R. NO. 153696
AUSTRIA-MARTINEZ: September 11, 2006
NATURE:
Petition for review on certiorari under Rule 45 of the Rules of Court
FACTS:
- On January 3, 2001, Metropolitan Bank and Trust Company (or
"Metrobank") filed a complaint for sum of money against spouses
Humberto and Carmencita delos Santos (or "petitioners") before the
Regional Trial Court of Davao City.
- On January 22, 2001, petitioners were served with the summons,
together with a copy of the complaint. As petitioners failed to file an
answer within the reglementary period, Metrobank, on February 8, 2001,
filed a motion to declare them in default. The motion was set for hearing
on February 16, 2001.
- Acting on the motion, the lower court, presided over by Hon.
Emmanuel C. Carpio (or "respondent judge"), issued an order dated
February 12, 2001 declaring petitioners in default and setting the ex-parte
presentation of Metrobank?s evidence on March 7, 2001.
- On February 15, 2001, petitioners filed an opposition to Metrobank’s
motion to declare them in default, claiming that upon receipt of the
summons, they immediately sought the services of Atty. Philip Pantojan
but it was only on February 12, 2001 that they were able to meet with Atty.
Pantojan. Petitioners alleged that not being "learned in law", they were
unaware "of the consequences of delay in the filing of their answer."
 Civil Procedure Digest
- On the same date, February 15, 2001, petitioners filed a motion to
admit answer, as well as the answer. In an order dated February 16, 2001,
respondent judge disregarded petitioners’ opposition to Metrobank’s
motion for default
- On February 19, 2001, Metrobank filed an opposition to petitioners’
motion to admit answer, arguing that said motion was rendered moot and
academic by the February 12, 2001 order. Metrobank also chided
petitioners for violating the three-day notice rule under Sec. 4, Rule 15 of
the 1997 Rules of Civil Procedure. In an order dated February 20, 2001,
the motion to admit answer was denied.
- On February 27, 2001, petitioners filed a motion to lift the order of
default; Metrobank opposed the motion.
- On March 2, 2001, respondent judge issued an order holding in
abeyance the ex-parte reception of evidence pending resolution of
petitioners’ motion to lift the order of default.
- On March 5, 2001, respondent judge issued an order denying
petitioners’ motion to lift the order of default and setting the reception of
Metrobank’s evidence on March 7, 2001, as previously scheduled. On that
date (March 7, 2001), Metrobank presented its evidence and the case was
submitted for decision. Petitioners moved for reconsideration of the March
5, 2001 order but their motion was denied.
- Petitioners filed a Petition for Certiorari with the CA ascribing grave
abuse of discretion committed by the trial court amounting to lack of
jurisdiction in issuing the Orders, declaring them in default and denying
their Opposition to Metropolitan Bank and Trust Company’s (Metrobank)
Motion to Declare them in Default; and the Orders denying their Motion to
Lift the Order of Default and their Motion for Reconsideration.
- CA denied the petition for lack of merit and accordingly dismissed the
same. The CA did not find the excuse proffered by petitioners. It also ruled
that for an order of default to be set aside, petitioners must have a
meritorious defense or that something could be gained by having the
order of default set aside
- The CA further found unmeritorious the contention of petitioners that
they were declared in default without giving them ample time to file an
opposition to Metrobank’s Motion to Declare them in Default; that under
Section 3, Rule 9 of the Rules of Court, it is provided that the court shall,
upon motion of the claiming party with notice to the defending party in
default, and proof of such failure, declare the defending party in default;
and that since it is clear from the records that the reglementary period for
filing an answer had expired with no responsive pleading filed by
petitioners, the trial court had properly declared them in default. The CA
further declared that even assuming that the trial court committed a
procedural lapse in declaring petitioners in default before the scheduled
hearing of Metrobank’s motion, such error is not so serious as to
constitute grave abuse of discretion.
ISSUE:
1. WON LITIS PENDENTIA raised by petitioners as an affirmative defense
is a meritorious defense.
HELD:
1. YES
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Reasoning Section 3, Rule 9 of the Rules of Court provides:
Sec. 3. Default; declaration of If the defending party fails to answer within
the time allowed therefor, the court shall, upon motion of the claiming
party with notice to the defending party, and proof of such failure, declare
the defending party in default. Thereupon, the court shall proceed to
render judgment granting the claimant such relief as his pleading may
warrant, unless the court in its discretion requires the claimant to submit
evidence. Such reception of evidence may be delegated to the clerk of
court.
- Clearly, there are three requirements which must be complied with by
the claiming party before the court may declare the defending party in
default, to wit: (1) the claiming party must file a motion asking the court to
declare the defending party in default; (2) the defending party must be
notified of the motion to declare him in default; (3) the claiming party must
prove that the defending party has failed to answer within the period
provided by the Rule.
- In filing motions, Section 4, Rule 15 of the Rules of Court, specifically
provides:
Sec. 4. Hearing of motion. Except for motions which the court may act
upon without prejudicing the rights of the adverse party, every written
motion shall be set for hearing by the applicant.
- Prior to the present rule on default introduced by the 1997 Rules of
Civil Procedure, as amended, Section 1 of the former Rule 18 on default is
silent on whether or not there is need for a notice of a motion to declare
defendant in default. The Court then ruled that there is no need. However,
the present rule expressly requires that the motion of the claiming party
should be with notice to the defending party. The purpose of a notice of a
motion is to avoid surprises on the opposite party and to give him time to
study and meet the arguments. The notice of a motion is required when
the party has the right to resist the relief sought by the motion and
principles of natural justice demand that his right be not affected without
an opportunity to be heard.
- Therefore, as the present rule on default requires the filing of a motion
and notice of such motion to the defending party, it is not enough that the
defendant failed to answer the complaint within the reglementary period to
be a sufficient ground for declaration in default.
Disposition. Petition for review is GRANTED. The Decision of the Court
of Appealsis REVERSED and SET ASIDE. The Order of Default of the
Regional Trial Court is SET ASIDE and the Answer filed by petitioners is
deemed ADMITTED. The trial court is DIRECTED to continue with
deliberate speed with the proceedings in the case below.
STRIKING OUT PLEADINGS
DAUDEN-HERNAEZ V ANGELES, HOLLYWOOD
FAR EAST PRODUCTIONS, INC., and VALENZUELA
27 SCRA 1276
REYES, J.B.L.; April 30, 1969
Prof. Victoria A. 52
NATURE
Petition for a writ of certiorari to set aside certain orders of the CFI
dismissing a complaint for breach of contract and damages, denying
reconsideration, refusing to admit an amended complaint, and declaring
the dismissal final and unappealable.
FACTS
- Petitioner, actress Dauden-Hernaez, files a complaint to recover P14,700
(the balance allegedly due to her for her services as leading actress), plus
damages, against private respondents Hollywood Far East Productions
(HFEP) and its President Valenzuela
- Upon motion of defendants, respondent court dismissed the complaint
because “claim of plaintiff was not evidenced by any written document,
either public or private”, and the complaint was “Defective on its face” for
violating CC A 1356 and 135811, as well as for containing defective allege,
petitions.
- Plaintiff sought reconsideration of the dismissal, and for admission of an
amended complaint, attached to the motion
- court denied the reconsideration and the leave to amend.
- a second reconsideration was filed
- court denied it as its allegations were more or less the same as the first
motion, and not accompanied by an affidavit of merits. The court further
declared the dismissal final and unappealable.
- hence this petition
- the respondent court’s defense: The proposed amendment suffers from
the same vital defect of the original complaint, which is violation of A 1356
because the contract sued upon was not alleged to be in writing, and A
1358 in because the writing was absolute and indispensable because the
amount exceeds P500; and that the second motion for reconsideration did
not interrupt the period for appeal because it was not served on 3 days’
notice.
ISSUES
11 Article 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential
requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be
valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases,
the right of the parties stated in the following article cannot be exercised.
Article 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation,
transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein
are governed by articles 1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the
conjugal partnership of gains; (3) The power to administer property, or any other power which has for its object an act appearing
or which should appear in a public document, or should prejudice a third person; (4) The cession of actions or rights proceeding
from an act appearing in a public document.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales
of goods, chattels or things in action are governed by articles, 1403, No. 2 and 1405. (1280a)
 Civil Procedure Digest
1. WON the plaintiff-petitioner was entitled as of right to amend the
original dismissed complaint
2. WON xxx
HELD
1.YES
Reasoning Twhen a court sustains a demurrer or motion to dismiss, the
court must give the party plaintiff an opportunity to amend his complaint if
he so chooses. The first order of dismissal did not provide that the same
was without prejudice to amendment of the complaint, or reserve to the
plaintiff the right to amend his complaint, so the order was erroneous.
Hence, petitioner was within her rights in filing her so-called second
motion for reconsideration, which was actually a first motion against the
refusal to admit the amended complaint.
Also, since a motion to dismiss is not a responsive pleading, the plaintiff-
petitioner was entitled as of right to amend the original dismissed
complaint. Paeste v Jaurigue:
“Amendments to pleadings are favored and should be liberally
allowed in the furtherance of justice. (Torres vs. Tomacruz, 49 Phil. 913).
Moreover, under section 1 of Rule 17, Rules of Court, a party may amend
his pleading once as a matter of course, that is, without leave of court, at
any time before a responsive pleading is served. A motion to dismiss is
not a "responsive pleading". (Moran on the Rules of Court, vol. 1, 1952,
ed., p. 376). As plaintiffs amended their complaint before it was answered,
the motion to admit the amendment should not have been denied.”
Disposition The order dismissing the complaint is set aside, and the case
is ordered remanded to the court of origin for further proceedings not at
variance with this decision.
PHILIPPINE EXPORT vs. PHILIPPINE
INFRASTRUCTURES, INC.
G.R. No. 120384
AUSTRIA-MARTINEZ; January 13, 2004
NATURE: Petition for review on certiorari (Rule 45)
FACTS: Petitioner filed a complaint for collection of sum of money
against respondents Philippine Infrastructures, Inc. (PII), Philippine British
Assurance Co., Inc. (PBAC), The Solid Guaranty, Inc. (Solid), B.F. Homes,
Inc. (BF Homes), Pilar Development Corporation (PDC) and Tomas B.
Aguirre (Aguirre). The complaint alleged, among others, that: (i) petitioner
issued 5 Letters of Guarantee in favor of the Philippine National Bank
(PNB) as security for credit accommodations extended by PNB to PII; (ii)
PII, BF Homes, PDC and Aguirre executed a Deed of Undertaking binding
themselves, jointly and severally, to pay or reimburse petitioner upon
demand such amount of money or to repair the damages, losses or
penalties which petitioner may pay or suffer on account of its guarantees;
(iii) on April 24, 1985, PNB called on the guarantees of petitioner; (iv)
thereafter, petitioner demanded from PII the immediate settlement of
P20,959,529.36, representing the aggregate amount of the guarantees of
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petitioner called by PNB and the further sum of P351,517.57 representing
various fees and charges; (v) PII refused to settle said obligations; (vi)
respondents Solid and PBAC also refused to pay petitioner despite
demand.
Respondent BF Homes filed a Motion to Dismiss on the
ground that it is undergoing rehabilitation receivership in the SEC and
pursuant to P.D. 902-A, the trial court has no jurisdiction to try the case.
Respondent PII also filed a Motion to Dismiss on the ground that the
complaint states no cause of action. The other respondents filed their
respective responsive pleadings.
The trial court, through Judge Roberto M. Lagman, issued an
Order suspending the case only as against respondent BF Homes and
denying respondent PII's motion to dismiss. Thereafter, hearing on the
merits ensued.
During trial, petitioner presented Rosauro Termulo, its
treasury department manager, who testified that the amount of
P19,035,256.57 was paid by petitioner to the PNB through the account of
the National Treasury to cover the principal loan and interests incurred by
PII. Consequently, petitioner filed a Motion to Amend Complaint to
Conform to Evidence pursuant to Section 5, Rule 10 of the Revised Rules
of Court, seeking to amend the pertinent portions of the complaint insofar
as it refers to the fact of payment and the amount paid by petitioner to
PNB.
Acting on the motion to amend, the trial court, at that time
presided by Judge Joselito J. Dela Rosa, issued the assailed Order,
dismissing the case without prejudice on the ground of failure of the
complaint to state a cause of action, thus in effect, reversing the Order
issued by Judge Lagman five years earlier. Petitioner's motion for
reconsideration of the order of dismissal was denied by Judge de la Rosa.
Subsequently, petitioner filed with the Supreme Court a petition for
certiorari against the trial court. The SC issued referred the case to the
Court of Appeals for disposition. The Court of Appeals dismissed the
petition and denied petitioner’s motion for reconsideration. Hence, this
petition.
ISSUES: (1) WON an order dismissing a petition without prejudice should
be appealed by way of ordinary appeal; (2) WON the Court of Appeals
erred in affirming the dismissal of the complaint on the ground that
petitioner failed to state a cause of action for not alleging loss or actual
payment made by it to PNB under its guarantees; (3) WON the complaint
stated a cause of action.
HELD:
(1) NO (under the 1997 Rules of Civil Procedure). Prior to the 1997 Rules
of Civil Procedure, an order dismissing an action may be appealed by
ordinary appeal. However, under Section 1(h), Rule 41 of the 1997 Rules
of Civil Procedure, no appeal may be taken from an order dismissing an
action without prejudice. It may be subject of a special civil action for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure. Considering
that the assailed decision of the Court of Appeals was promulgated in
1994, respondent appellate court could not have committed any grave
Prof. Victoria A. 53
abuse of discretion in dismissing CA-G.R. SP No. 31483. Nevertheless,
in the higher interest of substantial justice and pursuant to the
hornbook doctrine that procedural laws may be applied
retroactively, 16 the Court gives due course to the present petition .
(2) YES. It should be stressed that the amendment of the complaint was
sought after petitioner had already presented evidence, more specifically,
the testimony of petitioner's Treasury Department Manager and a debit
memo from the PNB proving that petitioner had paid the PNB in the
amount of P19,035,256.57 pursuant to the guarantees it accorded to
respondent PII.
The record shows that respondents did not raise any objection when it
presented evidence to prove payment to PNB. Hence, as provided for in
Section 5, Rule 10 of the Revised Rules of Court, when issues not raised
by the pleadings are tried by express or implied consent of the parties,
they shall be treated in all respects, as if they had been raised in the
pleadings. A scrutiny of the pleadings filed by respondents reveal that
none of them denied petitioner's claim that said evidence was presented
before the trial court without objections having been raised by
respondents. None of them claimed that they raised any objections at the
time when petitioner presented its evidence to prove its payment to PNB.
Respondents Pilar and Aguirre admitted the presentation of the said
evidence.
Respondents contend that since they had already alleged the failure of
the complaint to state a cause of action as an affirmative defense in their
answer, there was no further need for them to raise an objection at the
time the evidence was introduced. This is not plausible. It is settled that
even if the complaint be defective, but the parties go to trial
thereon, and the plaintiff, without objection, introduces sufficient
evidence to constitute the particular cause of action which it
intended to allege in the original complaint, and the defendant
voluntarily produces witnesses to meet the cause of action thus
established, an issue is joined as fully and as effectively as if it
had been previously joined by the most perfect pleadings. Likewise,
when issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had
been raised in the pleadings.
Respondents' failure to object to the evidence at the time it is presented in
court is fatal to their cause inasmuch as whatever perceived defect the
complaint had was cured by the introduction of petitioner's evidence
proving actual loss sustained by petitioner due to payment made by it to
PNB.
(3) YES. Petitioner's cause of action against respondents stemmed from
the obligation of respondents under their Deed of Undertaking, a copy of
which was attached to the complaint. In the present petition, petitioner had
become liable to pay the amounts covered by said guarantees when, as
the original complaint alleges, the PNB called upon said guarantees.
Respondents' obligation under the Deed of Undertaking to keep petitioner
 Civil Procedure Digest
free and harmless from any damage or liability then became operative as
soon as the liability of petitioner arose and there was no need for
petitioner to first sustain actual loss before it could have a cause of action
against respondents. The mere inclusion in petitioner's original complaint
of the allegation that the PNB had already called on the guarantees of
petitioner is sufficient to constitute a cause of action against respondents.
Clearly therefore, the original complaint, by itself, stated a valid cause of
action.
DISPOSITIVE: The petition is GRANTED. Let the original records of Civil
Case No. 86-38169 be REMANDED to the Regional Trial Court (Branch
29), Manila, for continuation of the trial on the merits.
SURIGAO MINING V HARRIS
68 PHIL 113
LAUREL; May 17, 1939
NATURE
Appeal from the order of the CFI of Surigao dismissing the complaint filed
by Surigao Mining against Harris, et al.
FACTS
- On October 24, 1935, Surigao Mining filed a complaint claiming that it is
the owner by purchase of 14 placer claims and that lode claims were
staked by the defendants Harris, Surigao-Mainit Mining Syndicate.
Surigao Consolidated Mining Co., Inc., and Otto Weber on plaintiff's placer
claims after the latter had been validly and duly staked and located by the
plaintiff or its grantors and predecessors in interest.
- On November 23, 1935, the defendants demurred to the complaint on
the ground that the complaint was ambiguous and unintelligible. On
January 9, 1936 the CFI entered an order requiring Surigao Mining to
amend its complaint so as to contain a detailed description of its placer
claims.
- On January 13, 1936 an amended complaint was filed to which another
demurrer was interposed but was overruled. On June 11, 1936, a third
amended complaint in which thirty-two other individuals were included as
parties-defendant. In this third amended complaint the placer claims were
reduced, to eleven, and the relief prayed for was about the same as that
asked in the original complaint, although the amount sought as damages
was increased to P49,000.
- Exhibits O and O-1 to 0-9 were presented. With the exception of Exhibit
O-7, all are deeds of sale in favor of Surigao Mining covering the placer
claims and bear dates posterior to (AFTER) October 24, 1935, the date of
the filing of the original complaint. Exhibit O-7 is a deed of sale executed
by Pablo Atillo in favor of Maximo Borromeo on January 23, 1935. The
mining claims conveyed by Maximo Borromeo, to Surigao Mining under
Exhibit O-9 were the same claims acquired by Maximo Borromeo, under
Exhibit O-7.
- Before Surigao Mining could close its evidence, the defendants moved
for the dismissal of the complaint on the ground that, when the action was
commenced, plaintiff's right of action had not yet accrued, since the
A2010 Prof. Victoria A. 54
Avena
plaintiff did not become the owner of the claims until after the original SANDOVAL-GUTIERREZ; Nov. 29, 2005
complaint was filed on October 24, 1935. The CFI granted the MTD.
NATURE
ISSUE
Petition for review on certiorari assailing decision and resolution of the CA
1. WON the lower court erred in dismissing the complaint
FACTS
HELD
- Spouses Bautista are the registered owners of a lot in Batangas.
1. NO.
- MMCI. filed with the RTC a complaint for cancellation of petitioners’ title
Ratio Unless the plaintiff has a valid and subsisting cause of action at the
and damages, with application for a preliminary injunction, alleging that
time his action is commenced, the defect cannot be cured or remedied by
“without any color of right and through dubious means,” petitioners were
the acquisition or accrual of one while the action is pending, and a
able to obtain original title in their names.
supplemental complaint or an amendment setting up such later accrued
- Spouses filed a motion to dismiss on the ground that it does not state a
cause of action is not permissible.
cause of action. They averred that respondent is a private corporation,
Reasoning Subject to certain qualifications and except as otherwise
hence, disqualified under the Constitution from acquiring public alienable
provided by law, an action commenced before the cause of action has
lands except by lease, and cannot be considered a real party in interest.
accrued is prematurely brought and should be dismissed, provided, an
- RTC granted motion to dismiss.
objection on this ground is properly and seasonably interposed. The fact
- MMCI filed a motion for reconsideration with motion for leave to file an
that the cause of action accrues after the action is commenced and while
amended complaint for quieting of title. Respondent alleged that the
it is pending is of no moment.
technical description in petitioners’ title does not cover the disputed lot.
- In this case, timely objection was made by counsel for the appellees
- Spouses filed their opposition, contending that the amended complaint
upon discovery of the immaturity of the action. The date when a civil
does not also state a cause of action and if admitted, respondent’s theory
action is deemed commenced is determined by section 389 of the Code of
of the case is substantially modified.
Civil Procedure. Under section 389, which was taken from section 405 of
- RTC issued an Order denying petitioners’ motion to dismiss.
the Code of Civil Procedure of California, the action is deemed
- Petitioners filed with the CA a special civil action for certiorari and
commenced upon the "filing of a complaint in the office of the clerk of the
prohibition, alleging that the amended complaint does not cure the defect
court in which the action is to be instituted." The original complaint was
in the original complaint which does not state a cause of action.
filed on October 24, 1935.
- CA dismissed the petition for certiorari and prohibition. Petitioners filed a
- The right to amend a pleading is not an absolute and unconditional right.
motion for reconsideration but it was denied.
It is to be allowed in furtherance of justice under a sound judicial
discretion. This judicial discretion, upon the other hand, is of course not
ISSUE
without any restriction. The cause of action must exist at the time the
WON the CA erred in holding that the trial court did not commit grave
action was begun, and the plaintiff will not be allowed by an amendment to
abuse of discretion amounting to lack or excess of jurisdiction in admitting
introduce a cause of action which had no existence when the action was
respondent’s amended complaint
commenced. As soon as an action is brought and the complaint is filed,
the proceedings thus initiated are not subject to the arbitrary control of the
HELD
parties or of the court, but must be dealt with in accordance with
NO
recognized rules of pleading and practice. Amendments must be such,
- Section 2, Rule 10 of the 1997 Rules of Civil Procedure 12 shows that
and only such, as are necessary to promote the completion of the action
before the filing of any responsive pleading, a party has the absolute
begun.
right to amend his pleading, regardless of whether a new cause of action
- It is true, that an amended complaint and the answer thereto take the
or change in theory is introduced.
place of the originals which are thereby regarded as abandoned. That,
- Petitioners had not yet filed a responsive pleading to the original
however, which is no cause of action whatsoever cannot by amendment
complaint. What they filed was a motion to dismiss, which is not a
or supplemental pleading be converted into a cause of action: Nihil do re
responsive pleading as contemplated by the Rule. Thus respondent, as a
accrescit ei qui nihil in re quando jua accresceret habet.
plaintiff, may file an amended complaint even after the original complaint
Disposition Order appealed from is AFFIRMED.
was ordered dismissed, provided that the order of dismissal is not yet
final, as in this case.
Filing/ Service of pleadings,
judgments and other papers
12 “SEC. 2. Amendments as a matter of right. – A party may amend his pleading once as a matter of right at any time before a
BAUTISTA V MAYA-MAYA COTTAGES INC responsive pleading is served or, in the case of a reply, at any time within ten (10) days after it is served.”
G.R. No. 148361
 Civil Procedure Digest A2010 Prof. Victoria A. 55

Avena
- As to petitioners’ contention that MMCI is barred from acquiring the petitioner, the copy of the decision mailed to him by registered mail considered as a petition for certiorari under Rule 65 where it is alleged
subject lot, suffice it to say that this is a matter of defense which can only although returned unserved is sufficient to serve as notice to him and to that the respondents abused their discretion.
be properly determined during the full-blown trial of the instant case. his client following Sec. 5 of Rule 13 of RoC; it was the duty of petitioner
Dispositive Petition DENIED. CA decision affirmed in toto. to notify the court that Atty. Aquino was no longer its lawyer; if a lawyer is Disposition Petition is dismissed.
going to withdraw as counsel for his client, he should file a motion to
GCP-MANNY TRANSPORT SERVICES INC. V. withdraw as such with the conformity of the client. COMPUTATION OF TIME
PRINCIPE ISSUE/S
GR No. 141484 WON CA decision should be reversed SPS. CONRADO and MA. CORONA ROMERO vs.
AUSTRIA-MARTINEZ; Nov 11, 2005 CA, SATURNINO S. ORDEN
HELD G.R. No. 142406
NATURE NO
- Clients are bound by the actions of their counsel in the conduct of their
AUSTRIA-MARTINEZ; May 16, 2005
Petition for review on certiorari
case. If it were otherwise, and a lawyer’s mistake or negligence was
admitted as a reason for the opening of a case, there would be no end to NATURE
FACTS
litigation so long as counsel had not been sufficiently diligent or Petition for certiorari filed [R65]
- This petition is filed by GCP, seeking reversal of CA decision.
- The case started when Recolizado filed complaint for damages for experienced. The only exception to the general rule is when the counsel’s
actuations are gross or palpable, resulting in serious injustice to client. In FACTS
physical injuries sustained by him as passenger of GCP’s bus. RTC
this case, while Atty. Aquino, counsel of petitioner, was far from being - Ma. Corona Romero and her siblings executed a letter-contract to sell
rendered decision in favor of Recolizado.
vigilant in protecting the interest of his client, his infractions cannot be said with private respondent Saturnino Orden.
- Copy of decision sent to petitioner was returned because it had “moved”
to have deprived petitioner of due process. - In said contract, Orden proposed to purchase from Romero and her
(residence), while copy sent to Atty. Aquino, then petitioner’s counsel, was
- Petitioner was able to actively participate in the proceedings a quo. siblings a property located at Denver cor. New York Sts., Cubao, QC for
returned “unserved” being unclaimed. Petitioner states that copy of
While it may have lost its right to appeal, it was not denied its day in the total amount of P17M.
decision was personally delivered by Civil Docket Clerk of TC on Atty.
court. Right to appeal is not a natural right or a part of due process but - The contract stipulated that private respondent shall pay petitioner the
Aquino who refused to receive the same saying he was no longer counsel
only a statutory privilege and may be exercised only in the manner and in amount of P7M upon the execution of the deed of absolute sale, the
for petitioner, although no notice of withdrawal as counsel was filed by
accordance with the provisions of law. balance of P10M not later than December 19, 1996 and that Orden shall
him.
- When petitioner is at fault or not entirely blameless, there is no reason shoulder the expenses to evict the squatters on the property.
- Private respondent filed a motion for execution of the judgment, copy
to overturn well-settled jurisprudence. - When Orden failed to pay the down payment, petitioner Corona told him
furnished to Atty. Arnold M. Aquino and petitioner which the court granted.
- Petitioner was wanting in all these areas. Not only did it fail to regularly that she was rescinding the contract to sell.
Writ of execution was issued, which petitioner received.
check on the status of the case, it also failed to ensure that it could be - Orden then filed a complaint for specific performance and damages
- Atty. Jose de Luna entered his appearance as new counsel for the
notified of the decision as soon as it was promulgated. Petitioner did not against petitioners before the QC RTC alleging that he has complied with
petitioner with motion for reconsideration of the order granting the motion
inform the court that it has severed its relationship with Atty. Aquino. his obligation to evict the squatters on the property and is entitled to
for execution or the quashal of the writ of execution on the ground that
Neither did it hire a new lawyer soon after Atty. Aquino allegedly ceased to demand from petitioners the performance of their obligation under the
petitioner had not been duly notified.
be its counsel. contract.
- Petitioner received a Notice of Demand for Payment from the deputies
- That Atty. Aquino refused to receive a copy of the decision and no - Simultaneous with the filing of the complaint, Orden caused the
of the Ex-officio Sheriff of the RTC attaching thereto copies of the writ of
substituted service was effected does not erase the fact that a copy of the annotation of a notice of lis pendens on the TCT.
execution and the decision. petitioner filed a Notice of Appeal. 2 mos
trial court decision had earlier been sent by registered mail to Atty. Aquino - August 11, 1997, Manuel Y. Limsico, Jr. and Aloysius R. Santos,
later, respondent court issued assailed resolution denying petitioners’
This is sufficient service of the decision on petitioner since service upon subsequent buyers of the subject property sold by Corona and her
motion for reconsideration or to quash writ of execution.
counsel of record at his given address is service to petitioner. siblings, filed a motion for leave to intervene with the RTC and were
- Petitioner went to CA on petition for certiorari. CA found no abuse of
- In cases where service was made on the counsel of record at his given admitted as defendants-intervenors. - They filed a motion for the
discretion and dismissed the petition. Reconsideration was also denied.
address, notice sent to petitioner itself is not even necessary. Even then, cancellation of lis pendens which the RTC granted in its Resolution saying
Hence, the present petition for review on certiorari.
in the present case, the trial court had sent a copy of the decision to that the evidence presented by Orden does not bear out the main
- Petitioner argues that: when a copy of the decision which the court sent
petitioner’s known address. allegations in the complaint and that he does not have any actionable right
to Atty. Aquino was returned to sender, respondent Judge resorted in
over the subject property there being no deed of sale executed between
causing the service of the decision to said counsel in open court, as
Obiter him and the defendants over the subject real properties as offered in the
petitioner’s counsel on record, when said lawyer appeared in the sala of
Court reiterates the distinction between petition for review on certiorari alleged agreement.
respondent Judge for another case; petitioner should be deemed as
under Rule 45 and petition for certiorari under Rule 65. It should be - RTC: denied Orden’s MR.
having no notice of the trial court decision since its counsel, who had not
recalled that a petition under Rule 45 brings up for review errors of - Nov. 16, 1998, Orden filed a petition for certiorari before the CA seeking
withdrawn as such, refused to receive a copy of the same. What the civil
judgment while a petition under Rule 65 concerns errors of jurisdiction or the nullification of the resolutions of the RTC and asked for the re-
docket clerk of the trial court should have done was to resort to
grave abuse of discretion amounting to lack or excess of jurisdiction. annotation of the notice of lis pendens on the TCT.
substituted service.
Grave abuse of discretion is not an allowable ground under Rule 45. - The CA granted the petition on 4 grounds: First, they said that the
- Respondent in his Comment contends that since Atty. Aquino is counsel
However, a petition for review on certiorari under Rule 45 may be general rule is “a notice of lis pendens cannot be cancelled while the
of petitioner and there is nothing to show that he withdrew as counsel of
 Civil Procedure Digest
action is pending and undetermined except in cases expressly provided
by statute.” Second, CA cited Sec.77 of PD 1529-Property Registration
Decree which provided for two grounds for the court to order the
cancellation of a notice of lis pendens during the pendency of an action
which are: (1) if the annotation was for the purpose of molesting the title of
the adverse party, or (2) when the annotation is not necessary to protect
the title of the party who caused it to be recorded (NOW SEC 14, R13
ROC). Third, the Doctrine of Lis Pendens would be rendered meaningless
if the private respondents are allowed to file a bond regardless of the
amount, in substitution of said notice and that the law does not authorize a
judge to cancel a notice of lis pendens pending litigation, upon the mere
filing of a sufficient bond by the party on whose title said notice is
annotated. Fourth, if there was indeed an agreement to sell between the
petitioner and the private respondents-owners (which question of fact is
not for this court to determine in this petition), then the said parties are
bound by the provisions of A1475 of the Civil Code (The contract of sale is
perfected at the moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price.From that moment, the
parties may reciprocally demand performance, subject to the provisions of
the law governing the form of contract.)
-CA denied Romeros MR on January 26, 2000.
Petitioners’ contention. by ordering the re-annotation of the notice of lis
pendens, when private respondent did not even assert a claim of
possession or title over the subject property, the CA went against the
doctrine in Villanueva vs. Court of Appeals where this Court held that the
applicant must, in the complaint or answer filed in the subject litigation,
assert a claim of possession or title over the subject property in order to
give due course to his application; the CA, in concluding that there was no
hearing before the annotation was cancelled, overlooked the fact that the
motion for cancellation was set for hearing on November 12, 1997, that
private respondent was duly notified but failed to appear, and that he was
able to file his opposition to the motion to cancel lis pendens which the
RTC considered before promulgating its Resolution dated November 26,
1997.
Orden’s contention. the court a quo cancelled the notice of lis pendens
even before it has been apprised of all the relevant facts of the case; the
CA was correct in ruling that while the parties are locked in legal battle
and until it becomes manifest that the grounds set forth in Sec. 77, P.D.
No. 1529 exist, the trial court should not allow the cancellation of the lis
pendens;
In their Reply, petitioners reiterate their arguments and cited AFP Mutual
Benefit Association, Inc. vs. Court of Appeals where it was held that a
notice of lis pendens may be annotated only where there is an action or
proceeding in court which affects title to or possession of real property.
They further maintain that the requirement of prior hearing was sufficiently
complied with in this case and petitioners did not act in bad faith when she
sold the subject property pending the outcome of this case since there
was no outstanding injunction or restraining order which would have
prevented her from doing so.
ISSUE
A2010
Avena
WON the CA committed grave abuse of discretion in ordering the re-
annotation of the lis pendens.
HELD
NO. Petitioners have failed to show that the CA committed GAD.
Reasoning. Heirs of Eugenio Lopez, Sr. vs. Enriquez: Lis pendens,
which literally means pending suit, refers to the jurisdiction, power or
control which a court acquires over property involved in a suit, pending the
continuance of the action, and until final judgment.
-Lim v. Vera Cruz: Founded upon public policy and necessity, lis pendens
is intended to keep the properties in litigation within the power of the court
until the litigation is terminated, and to prevent the defeat of the judgment
or decree by subsequent alienation.
- Yared vs. Ilarde: Its notice is an announcement to the whole world that a
particular property is in litigation and serves as a warning that one who
acquires an interest over said property does so at his own risk or that he
gambles on the result of the litigation over said property.
- The filing of a notice of lis pendens has a two-fold effect: (1) to keep the
subject matter of the litigation within the power of the court until the entry
of the final judgment to prevent the defeat of the final judgment by
successive alienations; and (2) to bind a purchaser, bona fide or not, of
the land subject of the litigation to the judgment or decree that the court
will promulgate subsequently.
- Magdalena Homeowners Association, Inc. vs. CA: a notice of lis
pendens is appropriate in the following:
(a) an action to recover possession of real estate;
(b) an action to quiet title thereto;
(c) an action to remove clouds thereon;
(d) an action for partition; and
(e) any other proceedings of any kind in Court directly affecting the title
to the land or the use or occupation thereof or the buildings thereon.
-Atlantic Erectors, Inc. vs. Herbal Cove Realty Corp.: Resorting to lis
pendens is not necessarily confined to cases that involve title to or
possession of real property but also applies to suits seeking to establish a
right to, or an equitable estate or interest in, a specific real property; or to
enforce a lien, a charge or an encumbrance against it.
- The doctrine of lis pendens has no application to a proceeding in which
the only object sought is the recovery of a money judgment, though the
title or right of possession to property be incidentally affected. It is
essential that the property be directly affected such as when the relief
sought in the action or suit includes the recovery of possession, or the
enforcement of a lien, or an adjudication between conflicting claims of
title, possession, or the right of possession to specific property, or
requiring its transfer or sale. Even if a party initially avails of a notice of lis
pendens upon the filing of a case in court, such notice is rendered
nugatory if the case turns out to be a purely personal action. In such
event, the notice of lis pendens becomes functus officio.
-To put the property under the coverage of the rule on lis pendens, all a
party has to do is to assert a claim of possession or title over the subject
property. It is not necessary that ownership or interest over the property is
proved.
-By praying for the Romeros to be bound by the terms of their contract
(ie. Specific performance and damages), Orden in effect asks the court to
Prof. Victoria A. 56
order petitioners to fulfill their promise to sell the property for the amount
of P17M.
-While Orden did not explicitly state that he was running after the
ownership of the property, a simple reading of the complaint would show
that such was his intent. This is sufficient for purposes of annotating lis
pendens.
- There is no requirement that the party applying for the annotation must
prove his right or interest over the property sought to be annotated. Thus,
even on the basis of an unregistered deed of sale, a notice of lis pendens
may be annotated on the title.
-Said annotation cannot be considered as a collateral attack against the
certificate of title based on the principle that the registration of a notice of
lis pendens does not produce a legal effect similar to a lien.
- The rules merely require that an affirmative relief be claimed since a
notation of lis pendens neither affects the merits of a case nor creates a
right or a lien. It only protects the applicant’s rights which will be
determined during trial.
Dispositive the petition for certiorari is DISMISSED for lack of merit.
LUZ V NATIONAL AMNESTY COMMISSION
00 SCRA 00
CALLEJO, SR; SEP 24, 2004
NATURE
Petition for review of the Resolution of the CA
FACTS
-On July 18, 1988, the petitioner was charged with violation of Presidential
Decree No. 1866 (illegal possession of firearms) in the Regional Trial
Court of Makati City, docketed as Criminal Case No. 427. On March 22,
2000, the petitioner filed an application for amnesty with the Local
Amnesty Board for Metro Manila. In due course, the board denied the said
application. On August 26, 2002, the National Amnesty Commission
(NAC) issued a Resolution affirming that of the Local Amnesty Board. The
motion for reconsideration thereof was denied by the NAC, per its
Resolution dated November 13, 2002, a copy of which was received by
the petitioner on November 22, 2002.
-Under Rule III, Section 4 of NAC Administrative Order No. 2, Series of
1999, the petitioner had until December 7, 2002, a Saturday, within which
to file a petition for review of the said resolution with the Court of Appeals.
On December 9, 2002, the petitioner filed a motion in the appellate court
for an extension of fifteen (15) days from December 9, 2002, or until
December 24, 2002 within which to file his petition. The petitioner alleged
therein that he had just engaged the services of counsel who needed
additional time to study the case and draft the petition. However, the
petitioner failed to file his petition for review.
-December 24, 2002 was declared a national holiday; December 25, 2002
was also a holiday. On December 26, 2002, the petitioner filed a second
motion for extension of fifteen (15) days from December 26, 2002 or until
 Civil Procedure Digest
January 10, 2002, within which to file his petition. The petitioner filed his
petition for review with the Court of Appeals on January 10, 2003.
-On January 13, 2003, the CA issued a Resolution granting the
petitioner’s first motion for a fifteen-day extension counted from
December 7, 2002 or until December 22, 2002, within which to file said
petition. On February 20, 2003, the CA issued a Resolution denying
petitioner’s second motion for having been filed out of time. The petitioner
filed a motion for reconsideration of the February 20, 2003 Resolution
claiming that, since the last day to file his petition was a Saturday,
December 7, 2002, and the next day, December 8, 2002 was a Sunday,
the last day for filing the petition was December 9, 2002. He reasoned that
since he filed his motion for extension of time to file his petition for review
on the said date, the said motion was timely filed.
-On August 19, 2003, the CA issued a Resolution denying the petitioner’s
motion, relying on A.M. No. 00-2-14-SC issued on February 29, 2000,
which provides that any extension of time to file the required pleading
should be counted from the expiration of the period regardless of the fact
that the said due date is a Saturday, Sunday, or legal holiday.
ISSUE
WON the petitioner timely filed his second motion for extension of time to
file his petition for review.
HELD
NO. Petitioner’s motion for a second extension of time to file his petition
for review was filed out of time.
Reasoning. Section 1, Rule 22, of the 1997 Rules of Civil Procedure
provides:
Section 1. How to compute time. In computing any period of time
prescribed or allowed by these Rules, or by order of the court, or by any
applicable statute, the day of the act or event from which the designated
period of time begins to run is to be excluded and the date of performance
included. If the last day of the period, as thus computed, falls on a
Saturday, a Sunday, or a legal holiday in the place where the court sits,
the time shall not run until the next working day.3
-The Court clarified the provision when it issued A.M. No. 00-2-14-SC,
which reads:
Whereas, the aforecited provision applies in the matter of filing of
pleadings in courts when the due date falls on a Saturday, Sunday, or
legal holiday, in which case, the filing of the said pleading on the next
working day is deemed on time;
Whereas, the question has been raised if the period is extended ipso jure
to the next working day immediately following where the last day of the
period is a Saturday, Sunday or legal holiday so that when a motion for
extension of time is filed, the period of extension is to be reckoned from
the next working day and not from the original expiration of the period;
NOW THEREFORE, the Court Resolves, for the guidance of the Bench
and the Bar, to declare that Section 1, Rule 22 speaks only of "the last day
of the period" so that when a party seeks an extension and the same is
granted, the due date ceases to be the last day and hence, the provision
no longer applies. Any extension of time to file the required pleading
A2010
Avena
should therefore be counted from the expiration of the period regardless
of the fact that said due date is a Saturday, Sunday or legal holiday.
-The extension granted by the Court of Appeals should be tacked to the
original period and commences immediately after the expiration of such
period. Under the Resolution of this Court in A.M. No. 00-2-14-SC, the CA
has no discretion to reckon the commencement of the extension it granted
from a date later than the expiration of such period, regardless of the fact
that said due date is a Saturday, Sunday, or a legal holiday.
-The Court of Appeals cannot be faulted for granting the petitioner’s first
motion for extension of fifteen (15) days within which to file his petition for
review, reckoned from December 7, 2002, and not from December 9,
2002 as prayed for by the petitioner. In so doing, it merely applied, with
fealty, Section 1, Rule 22 of the Revised Rules of Court, as amended, as
clarified by the Court via its Resolution in A.M. No. 00-2-14-SC. Had the
CA granted the petitioner�s first motion for extension and reckoned the
fifteen-day period from December 9, 2002, instead of from December 7,
2002, the appellate court would have acted with grave abuse of its
discretion.
Dispositive Petition granted
SUMMONS
modes of service
1. voluntary appearance
2. Voluntary submission
RODRIGUEZ VS ALIKPALA
(supra)
FACTS
-Spouses Tolentino were co-movants in the motion for a judgment on a
compromise with Spouses Rebollado
VOLUNTARY SUBMISSION
the Tolentinos freely and voluntarily entered into the compromise
agreement which became the basis of judgment of the City Court. Under
the circumstances, the Tolentinos are estopped the very authority they
invoked. And even assuming that estoppel lies, we cannot set aside the
principle of equity that jurisdiction over a person not originally a
party to a case may be acquired, upon proper conditions, thru the
voluntary appearance of the person before the court. By coming
forward with the original litigants in moving for a judgment on compromise
and by assuming such interest in the final adjudication of the case
together with the Robellados, the Tolentinos effectively submitted
themselves to the jurisdiction of the City Court.
-Jurisdiction over the plaintiff can be acquired by the court upon filing
of the complaint. On the other hand, jurisdiction over the defendants
can be acquired by the court upon service of valid summons and upon
voluntary appearance/submission of a person in court.
Prof. Victoria A. 57
3. service in person
TOYOTA CUBAO V. CA (GUEVARRA)
G.R. No. 126321
VITUG; October 23, 1997
NATURE
Petition for review
FACTS
-Petitioner Toyota Cubao, Inc., undertook repairs on the car owned by
private respondent Guevarra. The repair costwas paid by means of BPI
Check drawn by Guevarra in favor of Toyota.
-The check was dishonored.
-Guevarra failed to make good the check
-Toyota a civil case for collection of the unpaid account.
-trial court issued the summons to Guevarra at his address in 29
Burgos Street, Calamba, Laguna.
-Process Server Antonio Rimas of the Regional Trial Court of Calamba,
Laguna, submitted to the trial court a return on the service; it read in full:
"Respectfully returned to the Branch Clerk of Court, Regional Trial Court,
National Capital Judicial Region, Branch 92, Quezon City, the herein
attached original summon in the above entitled case with the information
that it was duly served to the defendant DANILO A. GUEVARRA, thru her
sister-in-law, GLORIA CABALLES, by leaving a copy of the
summons and complaint but refused to sign.”
-Toyota claims that Guevarra had failed to file an ANSWER within the
reglementary period, moved to declare Guevarra in default. A copy of the
motion was furnished Guevarra, through registered mail with return card,
at 29 Burgos Street, Calamba, Laguna.
-petitioner filed the registry return card indicating receipt of the motion
-trial court granted petitioner's Motion To Declare Defendant In Default
and allowed an ex-parte presentation of petitioner's evidence.
-TC in favor of Toyota
- a writ of execution was issued to implement the decision. The Deputy
Sheriff, implementing the writ, levied on Guevarra's Toyota Corolla. The
notice of levy was served on Guevarra personally but he refused to sign
the receipt thereof, expressed surprise over it, and stated that he was not
aware of any case instituted against him. Guevarra turned over the vehicle
but filed a certiorari petition before the CA claiming that the trial court did
not acquire jurisdiction over his person because of a defective service of
summons on him.
-CA in favor of Guevarra-annulled and set aside the default judgment, the
writ of execution, the levy upon execution and the sale at public auction of
the vehicle-saying that substituted service of summons was not valid
-Toyota went to SC
ISSUE
2. WON service of summons is defective
HELD
 Civil Procedure Digest
2. YES.
Reasoning
It is not here disputed that substituted service of summons has been
resorted to by the process server but that, unfortunately, the server's
return did not state the facts or the needed particulars that could justify the
substituted service. The constitutional requirement of due process, this
Court has held in Boticano vs. Chu, Jr., exacts that the service (of
summons) be such as may reasonably be expected to give the notice
desired. Once the service provided by the rules accomplishes that end,
"the requirement of justice is answered; the traditional notions of fair play
are satisfied; due process is served." Although Moran, on the Rules of
Court, has said that "Irregularities of this kind (substituted service) (might)
be cured by proof that the copies (have) actually been delivered to the
defendant," in the case at bar, however, private respondent appears to
have been notified of the case for the first time only at the time the levy on
execution of judgment was effected by the sheriff.
The fact of the matter was that Guevarra evidently had been unaware of
the proceedings before the RTC. Upon learning of the adverse decision,
but already too late in the day for him to get relief from that court, he filed,
instead, a certiorari petition before the Court of Appeals. The appellate
court neither abused its discretion nor was in error when it refused to
consider the affidavit of the process server (declaring the concomitant
facts required to be incorporated in the return) which was presented to it
for the first time only as an annex to its Reply filed with the tribunal. For
the appellate court to have accepted the affidavit favorably on its face
value, without hearing, would have again been a denial to the defendant
(herein private respondent) of his right to due process.
Disposition PETITION DENIED.
4. Substituted service
QUELNAN V. VHF PHIL.
G.R. No. 138500
GARCIA; September 16, 2005
NATURE
Petition for review on certiorari
FACTS
-VHF Phils filed an ejectment suit in the MeTC against Quelnan involving
a condominium unit
-MeTC in favor of VHF Phils.
-on its finding that "summons together with a copy of the complaint was
served [on petitioner] thru his wife on August 25, 1992 by substituted
service" and that petitioner "failed to file his answer within the
reglementary period", came out with a decision dated November 23, 1992
-Copy of the aforementioned decision was served on petitioner by
registered mail but the same was returned unclaimed on account of
petitioner's failure to claim the same despite the postmaster's three (3)
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successive notices on November 25, 1992, December 7, 1992 and
December 11, 1992.
-No appeal having been taken by the petitioner, the MeTC decision
became final and executory.
-a writ of execution, a notice of levy and a notice to vacate were served on
petitioner's wife who acknowledged receipt thereof.
-petitioner filed with the RTC a Petition for Relief from Judgment With
Prayer for Preliminary Injunction and/or temporary restraining order,
thereunder alleging, that he was never served with summons and was
completely unaware of the proceedings in the ejectment suit, adding that
he learned of the judgment rendered thereon only on May 18, 1993
when a notice of levy on execution came to his knowledge . He thus
prayed the RTC to annul and set aside the MeTC decision and the writs
issued in connection therewith.
-In a decision dated June 3, 1996, the RTC granted petitioner's petition for
relief and set aside the MeTC decision. The RTC explained that petitioner
had been unduly deprived of a hearing and had been prevented from
taking an appeal for the reason that petitioner's wife, in a fit of anger, tore
the summons and complaint in the ejectment suit in the heat of a marital
squabble.
-VHF went to SC but SC remanded to CA
-CA-in a decision dated September 17, 1997, upon a finding that
petitioner's petition for relief was filed with the RTC beyond the 60-day
mandatory period therefor under Section 3, Rule 38 of the Rules of Court,
reversed and set aside the RTC decision and reinstated that of the
MeTC,
ISSUE
3. WON THE METROPOLITAN TRIAL COURT OF MANILA NEVER
ACQUIRED JURISDICTION OVER THE PETITIONER, HENCE ITS
DECISION CANNOT BECOME FINAL AND EXECUTORY.
HELD
3. NO.
Reasoning The records clearly reveal that a copy of the MeTC decision
was sent to petitioner through registered mail at his given address on
November 25, 1992. It should be noted that petitioner was not
represented by counsel during the proceedings before the MeTC. The first
notice to him by the postmaster to check his mail was on November 25,
1992. Thereafter, subsequent notices were sent by the postmaster on
December 7, 1992 and December 11, 1992. For sure, a certification that
the registered mail was unclaimed by the petitioner and thus returned to
the sender after three successive notices was issued by the postmaster.
Hence, service of said MeTC decision became effective five (5) days after
November 25, 1992, or on November 30, 1992, conformably with Rule 13,
Section 10 of the 1997 Rules of Civil Procedure, which reads:
SEC. 10. Completeness of Service. — Personal service is complete
upon actual delivery. Service by ordinary mail is complete upon the
expiration of ten (10) days after mailing, unless the court otherwise
provides. Service by registered mail is complete upon actual receipt by the
addressee, or after five (5) days from the date he received the first notice
of the postmaster, whichever date is earlier. (Emphasis supplied)
Prof. Victoria A. 58
There is no doubt that under the Rules, service by registered mail is
complete upon actual receipt by the addressee. However, if the addressee
fails to claim his mail from the post office within five (5) days from the date
of the first notice, service becomes effective upon the expiration of five (5)
days therefrom. In such a case, there arises a presumption that the
service was complete at the end of the said five-day period. This means
that the period to appeal or to file the necessary pleading begins to run
after five days from the first notice given by the postmaster. This is
because a party is deemed to have received and to have been notified of
the judgment at that point.
With the reality that petitioner was first notified by the postmaster on
November 25, 1992, it follows that service of a copy of the MeTC decision
was deemed complete and effective five (5) days therefrom or on
November 30, 1992. Necessarily, the 60-day period for filing a petition
for relief must be reckoned from such date (November 30, 1992) as this
was the day when actual receipt by petitioner is presumed. In short,
petitioner was deemed to have knowledge of the MeTC decision
on November 30, 1992. The 60-day period for filing a petition for
relief thus expired on January 29, 1993. Unfortunately, it was only
on May 24, 1993, or 175 days after petitioner was deemed to have
learned of the judgment that he filed his petition for relief with the
RTC. Indubitably, the petition was filed way beyond the 60-day period
provided by law.
Disposition PETITION DENIED. CA AFFIRMED
SUMMONS – RULE 14
Contents, when issued, by whom
issued
Modes of Service
1. Voluntary Appearance
2. Voluntary Submission
3. Service in Person
4. Substituted Service
5. Extra-territorial Service
GUIGUINTO CREDIT COOPERATIVE, INC V
TORRES
G. R. No. 170926
YNARES-SANTIAGO; September 15, 2006
NATURE
Petition for review on certiorari under Rule 45 of the Rules of Court of the
decision and resolution of the Court of Appeals
FACTS
-Respondents Aida Torres, Nonilo Torres, and Sheryl Ann Torres-Holgado,
are members of Guiguinto Credit Cooperative, Inc. (GUCCI). They availed
 Civil Procedure Digest
of loans from the cooperative but were unable to pay on the due dates
despite demands.
-On March 24, 2003, petitioner filed a complaint before the RTC of
Bulacan for collection of sum of money and damages
-Summons against respondents were served through their
Secretary, a certain Benita S. Pagtalunan, who received the same
on April 22, 2003. The Return of Summons was filed on April 24, 2003
by Process Server Valeriano P. Badato
-On November 18, 2003, petitioner filed a motion to declare respondents
in default
-TC granted said petition, thereby allowing petitioner to present its
evidence ex-parte
-After presenting petitioner’s evidence ex-parte, the trial court rendered
judgment on September 15, 2004, ordering respondents to pay petitioner
the ff: 1. For Aida Torres, the amount of P163,516.80 from April, 2004 plus
legal interest until the said amount is fully paid; 2. For Nonilo Torres the
amount of P278,151.58 from April, 2004 plus legal interest until the said
amount is fully paid; 3. For Sheryl Ann Torres the amount of P15,903.93
from April, 2004 plus legal interest until the said amount is fully paid; 4. To
pay P10,000.00, jointly and severally, as attorney’s fees 5. Costs of suit.
-Petitioner thereafter moved for the issuance of a writ of execution, which
was granted and accordingly, the writ of execution was issued on even
date.
-On May 4, 2005, Sheriff Felixberto L. Samonte levied respondents’ house
and lot and the same was scheduled to be sold at public auction on June
7, 2005 when the Court of Appeals issued a temporary restraining order.
-On August 24, 2005, the Court of Appeals annulled the judgment of the
trial court on the ground that it did not acquire jurisdiction over the persons
of respondents since they were not validly served with summons and
neither did they voluntarily appear in court.
-According to the appellate court, the service of summons to Pagtalunan
was in violation of Section 6, Rule 14 of the Rules of Court because there
was no explanation why resort to substituted service of summons was
made. Thus, the appellate court held that respondents were deprived of
their right to due process.
-The Court of Appeals denied petitioner’s motion for reconsideration,
hence, this petition
ISSUE
WON summons was not validly served on the respondents, and therefore
the CA correctly annulled the judgment of the RTC
HELD
Yes.
-Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the court
acquires jurisdiction over his person. Jurisdiction over the person of the
defendant is acquired through coercive process, generally by the service
of summons issued by the court, or through the defendant’s voluntary
appearance or submission to the court.
-Where the defendant is a natural person, service may be personal,
substituted, by publication and such other mode of service as the court
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may deem sufficient.
-In an action in personam, jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the case. Jurisdiction over
the person of a resident defendant who does not voluntarily appear in
court can be acquired by personal service of summons as provided under
Section 7, Rule 14 of the Rules of Court.
-If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance
with Section 8 of the said Rule. If he is temporarily out of the
country, any of the following modes of service may be resorted to:
(1) substituted service set forth in Section 8; (2) personal service
outside the country, with leave of court; (3) service by publication,
also with leave of court; or (4) any other manner the court may
deem sufficient.
-In these types of civil actions (in personam), summons on the defendant
must be served by handing a copy thereof to the defendant in person, or
in case of refusal, by tendering it to him. If efforts to find defendant
personally makes prompt service impossible, service may be effected by
leaving copies of the summons at the defendant’s dwelling house or
residence with some person of suitable age and discretion residing
therein, or by leaving the copies at the defendant’s office or regular place
of business with some competent person in charge thereof.
-The proper service of summons is a critical step in litigation because
upon such service rests the court’s acquisition of jurisdiction over the
person of the defendant.
-In the absence of a valid waiver, trial and judgment without such service
are null and void.
-In the instant case, the Court of Appeals correctly ruled that since
substituted service was availed of in lieu of personal service, there should
be a report stating that Pagtalunan was one with whom respondents had a
relationship of trust and confidence that would ensure that the latter will
receive or be notified of the summons issued in their names.
-This is because substituted service may only be availed of when the
respondents could not be served personally within a reasonable period of
time, and such impossibility of prompt service must be shown by stating
that earnest efforts have been made to find the respondents personally
and that such efforts have failed.
-Such requirements under Sections 6 and 7 of Rule 14 must be followed
strictly, faithfully and fully in order not to deprive any person of his property
by violating his constitutional right to due process. The statutory
requirements of substituted service must be strictly construed since it is an
extraordinary method of service in derogation of personal service of
summons, availed of only under certain conditions imposed by the Rules
of Court. Any substituted service other than that authorized under Section
7 is deemed ineffective and contrary to law.
-Granting that Pagtalunan is the personal secretary of Aida Torres, as
appearing in the Affidavit of Merit of Sheryl Ann Torres and attached to the
Petition of Annulment filed before the Court of Appeals, there is no
showing that the former had indeed a relationship of trust and confidence
with the three respondents. It appears that the process server hastily
and capriciously resorted to substituted service of summons
without ascertaining the whereabouts of the respondents. Such
Prof. Victoria A. 59
service of summons is not binding upon respondents Nonilo and
Sheryl Ann Torres whose relationship with Pagtalunan was neither
readily ascertained nor adequately explained in the Return of
Summons. Also, no earnest efforts were made to locate
respondent Aida Torres who was allegedly working abroad at the
time summons was served on her person. No explanation was
stated in the Return why substituted service was resorted to
through Pagtalunan.
-Without specifying the details of the attendant circumstances or of the
efforts exerted to serve the summons, a general statement that such
efforts were made will not suffice for purposes of complying with the rules
of substituted service of summons.
-In the instant case, there was an undue, if not indecent, haste to serve
the summons at the first attempt without making sure that personal
service was an impossibility because either the respondents had left for a
foreign country or an unknown destination with no definite date of
returning within a reasonable period, or had gone into hiding to avoid
service of any process from the courts. Since the substituted service was
not validly effected, the trial court did not acquire jurisdiction over the
persons of the respondents. The order of default, the judgment by default,
the writ of execution issued by it, as well as the auction sale of the
respondents’ properties levied on execution are, therefore, null and void.
Disposition. Petition is denied.
BONNEVIE V CA (Phil Bank of Commerce)
G.R. NO. L-49101
GUERRERO; October 24, 1983
NATURE
Petition for review on certiorari seeking the reversal of the CA decision
FACTS
- Honesto Bonnevie filed with the CFI Rizal a complaint against Philippine
Bank of Commerce seeking the annulment of the Deed of Mortgage
dated Dec 6, 1966 executed in favor of the PBC by spouses Lozano, as
well as the extrajudicial foreclosure made on Sept 4, 1968.
They assail validity and legality of the extrajudicial foreclosure on the
following grounds: a) petitioners were never notified of the foreclosure
sale. b) The notice of auction sale was not posted for the period required
by law. c) publication of the notice of auction sale in the Luzon Weekly
Courier was not in accordance with law.
- History: Lozano spouses were the owners of the property which they
mortgaged to secure the payment of the loan in the principal amount of
P75T they were about to obtain from PBC.
- They then executed in favor of Bonnevie the Deed of Sale with Mortgage
for P100T, P25T of which amount being payable to the Lozano spouses
upon the execution of the document, and the P75T to PBC.
 Civil Procedure Digest
- When the mortgage was executed by the Lozano spouses in favor of
PBC, the loan of P75T was not yet received them.
- From April 28, 1967 to July 12, 1968, Bonnevie made payments to PBC
on the mortgage in the total amount of P18,944.22. Bonnevie then
assigned all his rights under the Deed of Sale with Assumption of
Mortgage to his brother, intervenor Raoul.
- PBC then applied for the foreclosure of the mortgage, and notice of sale
was published in the Luzon Weekly Courier on June 30, July 7, and July
14, 1968; auction sale was conducted a month after, and the property was
sold to PBC for P84,387.00.
- PBC specifically denied most of the allegations: (a) that the defendant
has not given its consent to the sale of the mortgaged property; (b) that
the demand letters and notice of foreclosure were sent to Jose Lozano at
his address; (c) that it was notified for the first time about the alleged sale
after it had foreclosed the Lozano mortgage; that the property in question
remained registered in the name of Lozano in the land records of Rizal
and there was no entry, notation or indication of the alleged sale.
- After petitioner Honesto Bonnevie had rested his case, petitioner Raoul
SV Bonnevie filed a motion for intervention, which was granted.
- CFI dismissed the complaint. MFR was also denied. CA affirmed.
ISSUE/S
1. WON the mortgage executed by the Lozanos in favor of PBC is valid
2. WON extrajudicial foreclosure is valid
HELD
1. YES
Reasoning A mortgage follows the property whoever the possessor may
be and subjects the fulfillment of the obligation for whose security it was
constituted. Petitioners voluntarily assumed it and are, therefore,
estopped from impugning its validity. They did not secure the consent of
respondent Bank to the sale with assumption of mortgage.
2. YES
Reasoning Act No. 3135 does not require personal notice on the
mortgagor. 13 Honesto Bonnevie was not entitled to any notice because
as of May 14, 1968, he had transferred and assigned all his rights and
interests in favor of intervenor Raoul without informing the Bank.
- Also, petitioners were placed on constructive notice. The notice of sale
was published in the Luzon Courier on June 30, July 7 and July 14, 1968
and notices of the sale were posted for not less than twenty days in at
least three (3) public places in the Municipality where the property is
located. Act No. 3135 merely requires that such notice shall be published
once a week for at least three consecutive weeks. Such phrase, as
interpreted by this Court in Basa vs. Mercado does not mean that notice
should be published for three full weeks.
- To be a newspaper of general circulation, it is enough that "it is published
for the dissemination of local news and general information; that it has a
13
Section 3. Notice shall be given by posting notices of the sale for not less than
twenty days in at least three public places of the municipality or city where the
property is situated, and if such property is worth more than four hundred pesos,
such notice shall also be published once a week for at least three consecutive weeks
in a newspaper of general circulation in the municipality or city.
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bona fide subscription list of paying subscribers; that it is published at
regular intervals." The newspaper need not have the largest circulation so
long as it is of general circulation.
- Whether or not the notice of auction sale was posted for the
period required by law is a question of fact. It can no longer be
entertained by this Court. Nevertheless, the records show that copies of
said notice were posted in three conspicuous places in the municipality of
Pasig, Rizal namely: the Hall of Justice, the Pasig Municipal Market and
Pasig Municipal Hall.
- A single act of posting (which may even extend beyond the period
required by law) satisfies the requirement of law. The burden of proving
that the posting requirement was not complied with is now shifted to the
one who alleges non-compliance.
Disposition The appeal being devoid of merit, the decision of the Court of
Appeals is hereby AFFIRMED. Costs against petitioners.
DIAL CORPORATION v SORIANO (RTC Judge)
00 SCRA 00
GRINO-AQUINO; May 31, 1988
NATURE
Petition for certiorari with a prayer for the issuance of a temporary
restraining order
FACTS
- The petitioners ( Dial Corp., C & T Refinery Inc., Nalin sdn. bhb.
Berisford Commodities, Ltd., and Pacific Molasses Co.) are foreign
corporations (US, UK and Malaysia). They are not domiciled in the
Philippines, nor do they have officers or agents, place of business, or
property in the Philippines; they are not licensed to engage, and are not
engaged, in business here. The respondent Imperial Vegetable Oil Co.,
Inc. (IVO) is a Philippine corporation which through its president,
Dominador Monteverde, had entered into several contracts for the delivery
of coconut oil to the petitioners. Those contracts stipulate that any dispute
between the parties will be settled through arbitration under the rules of
either the Federation of Oils Seeds and Fats Association (FOSFA) or the
National Institute of Oil Seed Products (NIOP). Because IVO defaulted
under the contracts, the petitioners and 15 others, initiated arbitration
proceedings abroad, and some have already obtained arbitration awards
against IVO.
- On April 8, 1987, IVO filed a complaint for injunction and damages (RTC
Manila) against 19 foreign coconut oil buyers including the petitioners,
with whom Dominador had entered into contracts for the delivery of
coconut oil. IVO repudiated Dominador's contracts on the grounds that
they were mere "paper trading in futures" as no actual delivery of the
coconut oil was allegedly intended by the parties; that the Board of
Directors of IVO removed Monteverde from his position as president of
the corporation, named in his place, Rodrigo Monteverde, and disowned
Dominador's allegedly illegal and unauthorized acts; that the defendants
have allegedly "harassed" IVO to comply with Dominador's contracts and
Prof. Victoria A. 60
to come to a settlement with them. IVO prayed for the issuance of a
temporary restraining order or writ of preliminary injunction to stop the
defendants from harassing IVO with their insistent demands to recognize
the contracts entered into by Dominador and from portraying the IVO as
one that defaults on its contracts and obligations and has fallen into bad
times and from interfering with IVO's normal conduct of business. IVO
also prayed that the defendants pay it damages worth more than P21M.
- Respondent Judge Soriano authorized IVO to effect extraterritorial
service of summons to all the defendants through DHL Philippines Corp.
Pursuant to that order, the petitioners were served with summons and
copy of the complaint by DHL courier service.
- On April 25, 1987, without submitting to the court's jurisdiction and only
for the purpose of objecting to said jurisdiction over their persons, the
petitioners filed motions to dismiss the complaint against them on the
ground that the extraterritorial service of summons to them was improper
and that hence the court did not acquire jurisdiction over them. The court
denied their motions to dismiss and upheld the validity of the
extraterritorial service of summons to them on the ground that "the
present action relates to property rights which lie in contracts within the
Philippines, or which defendants claim liens or interests, actual or
inchoate, legal or equitable. And one of the reliefs demanded consists,
wholly or in part, in excluding the defendants from any interest in such
property for the reason that their transactions with plaintiff's former
president are ultra vires." Furthermore, "as foreign corporations doing
business in the Philippines without a license, they opened themselves to
suit before Philippine courts, pursuant to Sec. 133 of the Corporation
Code of the Philippines." The petitioners' motions for reconsideration of
that order were also denied by the court. Hence this petition for certiorari
with a prayer for the issuance of a temporary restraining order.
ISSUE
WON the extra territorial service of summons was proper
HELD
NO.
Section 17, Rule 14 of the Rules of Court provides only 4 instances in
which extraterritorial service of summons is proper, namely: "(1) when
the action affects the personal status of the plaintiffs; (2) when the
action relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest,
actual or contingent; (3) when the relief demanded in such action
consists, wholly or in part, in excluding the defendant from any
interest in property located in the Philippines; and (4) when the
defendant non-resident's property has been attached within the
Philippines"
The complaint in this case does not involve the personal status of the
plaintiff, nor any property in the Philippines in which the defendants have
or claim an interest, or which the plaintiff has attached. The action is
purely an action for injunction to restrain the defendants from enforcing
against IVO ("abusing and harassing") its contracts for the delivery of
coconut oil to the defendants, and to recover from the defendants P21
million in damages for such "harassment." It is clearly a personal
 Civil Procedure Digest
action as well as an action in personam , not an action in rem or
quasi in rem . "An action in personam is an action against a person on
the basis of his personal liability, while an action in remedies is an action
against the thing itself, instead of against the person." A personal action
is one brought for the recovery of personal property, for the enforcement
of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an injury to the person or
property.
As the civil case filed is a personal action, personal or substituted
service of summons on the defendants, not extraterritorial service,
is necessary to confer jurisdiction on the court.
Moran's Comments on the Rules of Court:
As a general rule, when the defendant is not residing and is not found in
the Philippines, the Philippine courts cannot try any case against him
because of the impossibility of acquiring jurisdiction over his person
unless he voluntarily appears in court. But, when the action affects the
personal status of the plaintiff residing in the Philippines, or is intended to
seize or dispose of any property, real or personal, of the defendant located
in the Philippines, it may be validly tried by the Philippine courts, for then,
they have jurisdiction over the res, i.e., the personal status of the plaintiff
or the property of the defendant and their jurisdiction over the person of
the non-resident defendant is not essential. Venue in such cases may be
laid in the province where the property of the defendant or a part thereof
involved in the litigation is located.
In an action for injunction, extraterritorial service of summons and
complaint upon the non-resident defendants cannot subject them to the
processes of the regional trial courts which are powerless to reach them
outside the region over which they exercise their authority (Sec. 3-a,
Interim Rules of Court; Sec. 21, subpar. 1, B.P. Blg. 129). Extraterritorial
service of summons will not confer on the court jurisdiction or power to
compel them to obey its orders.
Neither may the court by extraterritorial service of summons acquire
jurisdiction to render and enforce a money judgment against a non-
resident defendant who has no property in the Philippines for "the
fundamental rule is that jurisdiction in personam over non-residents, so as
to sustain a money judgment, must be based upon personal service
within the state which renders the judgment ."
Respondents' contention that "the action below is related to property
within the Philippines, specifically contractual rights that petitioners are
enforcing against IVO" is specious for the "contractual rights" of the
petitioners are not property found in the Philippines for the petitioners
have not filed an action in the local courts to enforce said rights. They
have not submitted to the jurisdiction of our courts.
The lower court invoked Section 33 of the Corporation Code which
provides that a "foreign corporation transacting business in the Philippines
without a license may be sued or proceeded against before Philippine
courts or administrative tribunal on any valid cause of action recognized
under Philippine laws." It assumed that the petitioners are doing business
in the Philippines, which allegation the latter denied. Even if they can be
considered as such, the Corporation Code did not repeal the rules
requiring proper service of summons to such corporations as provided in
Rule 14 of the ROC and Section 128 of the Corporation Code.
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The respondent court's finding that, by filing motions to dismiss, the
petitioners hypothetically admitted the allegations of the complaint that
they are doing business in the Philippines without any license, and that
they may be served with summons and other court processes through
their agents or representatives enumerated in paragraph 2 of the
complaint, is contradicted by its order authorizing IVO to summon them by
extraterritorial service, a mode of service which is resorted to when the
defendant is not found in the Philippines, does not transact business here,
and has no resident agent on whom the summons may be served.
Disposition. The extraterritorial service of summons on the petitioners is
held to be improper, hence null and void. The petition for certiorari is
granted. The orders of Judge Soriano are set aside. The complaint is
dismissed as against the petitioners for failure of the court to acquire
jurisdiction over them.
MONTALBAN V. MAXIMO
22 SCRA 1070
SANCHEZ, March 15, 1968
NATURE
Appeal from the orders of CFI Manila
FACTS
-Fr. Gerardo Maximo was involved in a motor vehicle accident where the
son of the petitioners suffered injuries. Petitioners filed suit against Fr.
Maximo for damages. Summons were served at the Malabon Parish
where Fr. Maximo was allegedly residing. However, Fr. Maximo was in
Europe when the summons were served, Fr. Bautista was the one who
received the summons. Fr. Bautista wrote to the Clerk of Court of CFI
Manila informing him that Fr. Maximo was in Europe.
-On Plaintiff’s motion, lower court declared Fr. Maximo in default,
sentenced Fr. Maximo to pay for damages. The Montalbans even wrote to
Fr. Maximo at the Malabon Catholic Church informing him of the lower
court’s decision and requesting hi to comply with the decision. Fr. Maximo
replied that he was not aware of the civil case against him and that he was
acquitted in the criminal case.
-Deputy Sheriff of Rizal notified Fr. Maximo of the issuance of writ of
execution and demanded payment. Return to writ expressed that Fr.
Maximo is “financially hard up” and had no property. Alias writ of execution
issued. Copy received by Fr. Maximo. Deputy Sheriff attached and levied
on a residential house in Caloocan allegedly belonging to Fr. Maximo.
-After 2 years, 2 months, Fr. Maximo admittedly learned of lower court’s
decision and filed for ANNULMENT OF ENTIRE PROCEEDINGS on
verified motion on the grounds that the summons were not duly served
(based on then Sec.7, Rule 7 and Sec18, Rule 14 of ROC) therefore, the
court did not acquire jurisdiction over his person so the trial and the
decision were null and void. His verified motion was denied, MFR was
rejected.
ISSUE
Prof. Victoria A. 61
WON the summons in a suit in personam against a resident of the
Philippines temporarily absent may be validly effected by substituted
service under Sec. 8 Rule 14 (on residents temporarily out of the
Philippines)
HELD
*ON argument that Sec18 (in relation to sec17) is the sole
provision that governs summons upon a defendant temporarily
absent in an action in personam: substituted service – out of the
Philippines - is but one of the modes of effective service to bring a
defendant in court. The normal method of service of summons on one
temporarily absent is by substituted service. Personal service outside the
country and service by publication are not ordinary means of summoning
defendants.
-in suits in personam, the more circuitous procedure delineated in
Sections 17 and 18 is resorted to by a plaintiff if defendant’s dwelling
house or residence or place of business in this country is not known; or, if
known, service upon him cannot be had thereat upon the terms of Sec8.
Since personal service is impossible, resort to substituted service
becomes a necessity.
*ON fact that judgment has been long final: the judgment enjoys the
presumption of regularity. It is, unless striken down, entitled to respect.
Non quieta movere. Because “public policy and sound practice demand
that, at the risk of occasional errors, judgments of courts should become
final at some definite date fixed by law.”
Disposition. Orders affirmed.
DE MIDGELY VS FERANDOS
64 SCRA 23
AQUINO, May 13, 1975
NATURE
Original Actions. Certiorari and contempt.
FACTS
- Quemada, allegedly the illegitimate son of Alvaro Pastor, Sr., was
appointed as special administrator of the latter’s estate by the CFI of
Cebu. As such, he filed a complaint against his half siblings, the spouses
Alvaro Pastor, Jr. and Maria Elena Achaval, and Sofia Midgely, who were
all at that time citizens of Spain and residing in that country. The suit also
named Atlas Mining as co-respondent. The suit was to settle the question
of ownership over certain properties and rights in some mining claims as
Quemada believed that those properties belong to the estate of Alvaro
Pastor, Sr.
- Quemada, on his own, caused extraterritorial service of summons to be
made through the Department of Foreign Affairs and the Philippine
Embassy in Madrid, Spain, which effected the service of the summons
through registered mail upon De Midgely and Pastor, Jr. at their respective
addresses in Alicante and Barcelona.
- Both De Midgely and Pastor entered a special appearance and filed a
 Civil Procedure Digest
motion to dismiss on the ground of lack of jurisdiction as they are non-
residents. They further alleged that earnest efforts toward a compromise
have not been made as required in the Civil Code in suits between
members of the same family, The motion was denied by Judge Ferandos
and he ruled that the respondents were properly summoned.
- The subsequent motion for reconsideration was denied by Ferandos
indicating in the order that the action of Quemada was for the recovery of
real property and real rights. The respondents were instructed to file their
answer.
- De Midgely filed this action with the Supreme Court.
ISSUE/S
WON Judge Ferandos gravely abused his discretion in denying De
Midgely’s motion to dismissed based on the lack of jurisdiction over her
person.
HELD
No. The fact that she alleged as a ground for dismissal the lack of earnest
effort to compromise is deemed as abandonment of her special
appearance and as voluntary submission to the courts jurisdiction. “When
the appearance is by motion for the purpose of objecting to the jurisdiction
of the court over the person, it must be for the sole and separate purpose
of objecting to the jurisdiction of the court. If the motion is for any other
purpose than to object to the jurisdiction of the court over his person, he
thereby submits himself to the jurisdiction of the court,
- Even if the lower court did not acquire jurisdiction over De Midgely, her
motion to dismiss was properly denied because Quemada’s action against
her maybe regarded as a quasi in rem where jurisdiction over the person
of a non-resident defendant is not necessary and where the service of
summons is required only for the purpose of complying with the
requirement of due process. Quasi in rem is an action between parties
where the direct object is to reach and dispose of property owed by the
parties or of some interest therein.
- The SC cited the Perkins case as a precedent. In that case, it ruled that
in a quasi in rem action jurisdiction over a non resident defendant is not
essential. The service of summons by publication is required merely to
satisfy the constitutional requirement of due process. The judgment of the
court would settle the title to the properties and to that extent it partakes
of the nature of judgment in rem. The judgment is confined to the res
(properties) and no personal judgment could be rendered against the non
resident. It should be noted that the civil case filed by Quemada is related
to a testamentary proceeding as it was filed for the purpose of recovering
the properties which in the understanding of Quemada, belonged to the
estate of the Late Pastor, Sr. and which were held by De Midgely and her
brother.
Disposition
Petition is dismissed
SAHAGUN V CA (MADAYAG/FILINVEST CREDIT
CORP.)
A2010 Prof. Victoria A. 62
Avena
G.R. NO. 78328 petitioner and Rallye as additional defendants. Respondent court
admitted the amended complaint and directed service of summons
REGALADO; June 3 1991
and the complaint upon Abel at a different last known address in
Antipolo. Summons was supposedly served on Abel through
NATURE
publication in the Manila Evening Post according to the affidavit of
Petition for certiorari
publication of its president, with a confusing entry in the notice of
order which stated the Las Pinas address, contradicting the
FACTS
Antipolo address stated by the TC. Petitioner filed her answer to
- It was alleged that petitioner's spouse, Abel Sahagun (Alias
the amended complaint. Abel and Rallye filed no answer, so
Abelardo), manager of Rallye Motor Co., Inc. (Rallye), made it
Filinvest filed a motion to declare them in default which respondent
appear that his company had sold a motor vehicle to Salazar who
Judge Madayag of the RTC of Makati granted, but not as to Rallye
issued a promissory note for the price and executed as security a
since summons had not been served upon it. Petitoner went on
chattel mortgage on said vehicle in favor of Rallye. Rallye, through
certiorari to the CA (Feb. 6, 1987), assailing as grave abuse of
Abel, assigned the note and chattel to Filinvest for valuable
discretion the declaration of default of Abel; CA dismissed the
consideration. When the note matured, Salazar failed to pay,
petition and a subsequent MFR, hence this petiton.
compelling Filinvest to sue. However, Filinvest found that the
mortgaged car had not been delivered to Salazar by Abel. A writ of
ISSUE
attachment was issued and levied on a house and lot in Las
1. WON respondent court acquired jurisdiction over Abel by the
Pinas, registered in Abel's name. Petitioner had been continuously
publication of summons in the Manila Evening Post
residing in said house and claims ownership, having allegedly paid
for it with her own earnings.
HELD
-The TC denied the respondent's motion to declare Abel in default
1. YES
but directed it to "take steps to effect service of summons and
Ratio As a nonresident defendant, and since the suit involves real
complaint upon defendant, whose whereabouts in the US was
property wherein the defendant ostensibly has an interest and which the
unknown. The TC later dismissed the complaint of Filinvest for
property has in fact been attached at the instance of private respondent,
failure to serve summons extra-territorially upon Abel despite said
the court correctly ordered the service of summons by publication in a
order. Filinvest filed an MFR praying that said order be
newspaper of general circulation in such places and for such time as the
reconsidered and set aside and that Abel be declared in default
court may order. Although it would appear that publication should have
and to deny petitioner's motion for leave. TC granted petitioner
been made in a newspaper in the US as it would most likely give notice to
time to file intervention and denied the motion to declare Abel in
Abel, such a sweeping doctrine would virtually unsettle a long standing
default. Petitioner intervened, questioning the jurisdiction of the
interpretation of the aforesaid rule on extraterritorial service of summons
TC. Petitioner was declared in default for failure to appear, as was
by publication, as well as its implementation sanctioned by the practice
Abel for failing to answer the complaint. The court rendered
followed in this jurisdiction.
judgment against Abel, ordering him to pay P97,066.59 (equivalent
Reasoning The instant case is based on the attachment of defendant's
to 25% of the principal obligation due as liquidated damages +
property, and as such is an action quasi in rem, wherein summons by
25% as attorney's fees).
publication is allowed. Such is called constructive or substituted service,
-petitioner elevated the case to the IAC (Feb. 27, 1985) which
which does not constitute a service of process in any true sense but
granted her petition for certiorari with prohibition and set aside the
serves as a means whereby the owner may be admonished that his
TC's aforesaid decision, ruling that petitioner was deprived of
property is subject to judicial proceedings and that he should take steps
opportunity to present evidence (including evidence she and Abel
as he sees fit to protect it. Such is required to physically acquire
had been living separately since 1970). Filinvest filed a petition for
jurisdiction over the person of the defendant and for purposes of fair play
review with the SC which was denied. Filinvest filed a motion for
by informing him of the pendency of the action against him. Even then,
leave to serve summons by publicatio on Abel, which the court
there is no guarantee that the absent owner shall receive the actual
granted, stating that pursuant to Sec. 17, Rule 14, "the summons
notice; as such, under law, actual notice is not considered to be absolutely
be effected out of the Phils. by publication in a newspaper of
necessary (as held in Banco Espanol). Considering this, publication in the
general circulation in the Phils., to which this matter may be
US would be all the more difficult as Abel's exact location is unknown; to
assigned after due raffle, for 3 successive days. Said defendant
have at hand the available newspapers, research the laws governing
was ordered to file his answer in Court within a reasonable time
judicial processes in each state would be too taxing for the TC. Still, it was
(not less than 60 days after notice); that the CoC send copies of
held in De Midgely that in actions quasi in rem, jurisdiction over the person
the summons and tills Order by registered mail to last known
of the nonresident alien is not essential and service of summons is only
address of said defendant in Las Pinas. Plaintiff is ordered to
required to satisfy due process. Relief in an action against a nonresident
implead Rallye as co-defendant within 1 month from notice."
defendant who chooses not to submit himself to Phil. courts is limited to
-Filinvest filed an amended complaint, this time impleading
 Civil Procedure Digest
the res.
-There is no specific proscription against resorting to foreign publication in
the place where the defendant resides, but publication in a local
newspaper should not altogether be interdicted since the rule specifically
authorizes service of summons "in such places and for such time as the
court concerned may order". The matter should be left to the sound
discretion of the TC in each particular case since it has the facts before it.
Still, the publication in the Manila Evening Post was defective as there
was no showing that copies of the summons and the amended complaint
were duly served at the defendant's last know correct address.
-The Court is not inclined to dismiss the case for non-compliance of
private respondent to serve the amended complaint to Abel at his Antipolo
address as there is prima facie justification for extraterritorial service of
summons, and transmission of copies of the summons to the wrong
address is a matter which the TC can more readily remedy. Even if Abel is
declared in default, his interest can be duly represented by the non-
defaulting defendant since a common cause of action is involved.
Disposition Petition is granted
SEPARATE OPINIONS
Sarmiento, J. [concurring and dissenting]
-service of summons to the wrong last known address is a defect which
cannot justify an order of default. Assuming default were proper, it will not
preclude petitioner from presenting her own evidence.
-However, as to extrajudicial service of summons to a nonresident alien, it
is only valid when effected in the territory in which the absent defendant
may be found. Sec. 17 was in part, taken from Sections 398 and 399 of
Act. 190, which in turn were an adoption of the Code of Civil Procedure of
California which states that personal service outside the state must be
named and designated in the publication as most likely to give notice to
the person to be served. Publication in the Phils. is not likely to provide
notice to a US resident.
-As to Banco Espanol and De Midgely: although the court acquired
jurisdiction over the res, the res belongs to the defendant, and as such he
reserves the right to be heard when his possessions are in peril. Although
the court cannot award money by way of relief, judgment condemning the
res would yield the same result, that is, liability against the defendant. This
would lead to the fundamental injustice of trial in absentia, especially
considering the increase in immigrant Filipinos.
6. By Publication
-MODE OF SERVICE UPON CERTAIN
DEFENDANTS
1. Upon domestic private juridical
entity
PALUWAGAN NG BAYAN SAVINGS BANK vs. KING
172 SCRA 131
A2010
Avena
GANCAYCO; April 12, 1989
NATURE
Petition for certiorari
FACTS
- Petitioner sued Mercantile Financing Corporation (MFC) and private
respondents, as directors and officers of MFC, for the recovery of money
market placements through certain promissory notes. They were charged
jointly and solidarily in accordance with Section 31 of the Corporation
Code 5.
- Summons and copies of the complaints were served upon MFC and
private respondents at the 4th Floor, LTA Building, No. 118 Perea Street,
Makati, Metro Manila, which is the stated office address of MFC in the
complaint, through its Assistant Manager Mr. Nasario S. Najomot, Jr. who
acknowledged receipt thereof for and in behalf of MFC and the private
respondents. This is so recited in the certification of deputy sheriff
Bernardo San Juan dated May 11, 1983.
- The parties, assisted by their counsel, submitted a Compromise
Agreement for the approval of the court which was approved.
- Counsel for defendants filed a "Motion To Correct Compromise
Agreement" on the ground that he erroneously filed the Compromise
Agreement in behalf of all the defendants when in fact he was the counsel
for MFC only. (denied)
- Syquia Law Offices, in behalf of private respondents Angelo King, Keng
Suy Wat, Quintin Calderon and Jose J. Ferrer, Jr., filed a motion to set
aside decision on the following grounds:
a. there was no service of summons upon each of them as the corporate
address of the corporation was not their address they were no longer
connected therewith;
b. that Atty. Aragones had no authority to represent them in the action and
compromise agreement;
c. that they were not served copies of the decision of the court;
d. that they learned about the same only when it was being executed;
and
e. that they did not participate as directors or officers of MFC in the
subject transaction. (denied)
- CA reversed
- Motion for reconsideration (denied)
ISSUE
WON private respondents were properly served with summons
HELD
NO.
Ratio Although private respondents were sued in their capacity as
directors and officers of MFC, they are, nevertheless, being held
personally liable for the obligation subject of the litigation under the
complaint filed by petitioner. Hence, the rule on personal service of
summons must be observed in that summons must be served personally
on private respondents or, if they refuse to receive the same, by tendering
it to them.
Prof. Victoria A. 63
It is only when the defendant cannot be served personally within a
reasonable time that substituted service may be resorted to. The
impossibility of prompt service should be shown by stating the efforts
made to find the defendant personally and the fact that such efforts failed.
This statement should be made in the proof of service. This is necessary
because substituted service is in derogation of the usual method of
service. It has been held that this method of service is in derogation of the
common law; it is a method extraordinary in character, and hence may be
used only as prescribed and in the circumstances authorized by statute."
Thus, under the controlling decisions, the statutory requirements of
substituted service must be followed strictly, faithfully and fully, and any
substituted service other than that authorized by the statute is considered
ineffective.
Reasoning The proof of service prepared by the sheriff does not show
that such personal service of summons was effected. The office address
of the corporation as indicated in the complaint does not appear to be the
office address of private respondents as they were no longer connected
with the corporation then. Personal service of summons should have been
made on them at their residences as shown in the records of the
Securities and Exchange Commission and the Central Bank. Instead, the
sheriff effected substituted service by leaving copies of the summons with
the Assistant Manager of MFC at the place of business of said corporation
with which as above stated private respondents were no longer
connected. Such substituted service is not valid. There was no
compliance with the requirements of the rule that there must be a previous
personal service and a failure to effect the same before substituted
service could be resorted to. As the private respondents have not been
duly served with summons, the trial court never acquired jurisdiction over
their persons.
Disposition. Petition is DENIED
2. Upon Foreign Private Juridical
Entity
FACILITIES MANAGEMENT V DELA OSA
89 SCRA 131
MAKASIAR; March 26, 1979
NATURE
Petition for review on certiorari of the decision of the CIR
FACTS
-On July 1, 1967, Leonardo dela Osa sought his reinstatement. with full
backwages, as well as the recovery of his overtime compensation, swing
shift and graveyard shift differentials. Petitioner alleged that he was
employed by respondents as (1) painter with an hourly rate of $1.25 from
March, 1964 to November, 1964, inclusive; (2) houseboy with an hourly
 Civil Procedure Digest
rate of $1.26 from December, 1964 to November, 1965, inclusive; (3)
houseboy with an hourly rate of $1.33 from December, 1965 to August,
1966, inclusive; and (4) cashier with an hourly rate of $1.40 from August,
1966 to March 27, 1967, inclusive.
- Respondents filed on August 7, 1967 their letter- answer without
substantially denying the material allegations of the basic petition but
interposed the following special defenses that respondents Facilities
Management Corporation and J. S. Dreyer are domiciled in Wake Island
which is beyond the territorial jurisdiction of the Philippine Government;
that respondent J. V. Catuira, though an employee of respondent
corporation presently stationed in Manila, is without power and authority of
legal representation; and that the employment contract between petitioner
and respondent corporation carries -the approval of the DOL.
- On May 3, 1968. respondents filed MTD the subject petition on the
ground that this Court has no Jurisdiction over the instant case, and on
May 24, 1968, petitioner interposed an opposition thereto. Said motion
was denied.
ISSUE/S
1. WON Court can acquire jurisdiction over the persons of the accused
provided that they are domiciled beyond the territorial jurisdiction of the
Philippine Government
2. WON petitioner has been 'doing business in the Philippines' so that the
service of summons upon its agent in the Philippines vested the CFI of
Manila with jurisdiction.
HELD
1. Yes. While it is true the site of work is Identified as Wake Island, it is
equally true the place of hire is established in Manila. Moreover, what is
important is the fact that the contract of employment between the parties
litigant was shown to have been originally executed and subsequently
renewed in Manila, as asserted by petitioner and not denied by
respondents. Hence, any dispute arising therefrom should necessarily be
determined in the place or venue where it was contracted.
2.
the petitioner may be considered as doing busuness un the Philippines
within the the scope of Section 14, Rule 14 of the ROC
in compliance with law, the petitioner had to appoint Jaime V. Catuira, as
agent for FMC with authority to execute Employment Contracts and
receive, in behalf of that corporation, legal services from and be bound by
processes of the Philippine Courts of Justice, for as long as he remains an
employee of FMC. It is a fact that when the summons for the petitioner
was served on Jaime V. Catuira he was still in the employ of the FMC. Mr.
Catuira was a on officer representing petitioner in the Philippines.
Aetna Casualty & Curety Company v Pacific Star Line – WON the plaintiff
appellant has been doing business in the Philippines, considering the fact
that it has no license to transact business in the Philippines as a foreign
corporation. The object of Sections 68 and 69 of the Corporation Law was
not to prevent the foreign corporation from performing single acts, but to
prevent it from acquiring a domicile for the purpose of business without
taking the steps necessary to render it amenable to suit in the local courts.
A2010
Avena
It was never the purpose of the Legislature to exclude a foreign
corporation which happens to obtain an isolated order for business from
the Philippines, from securing redress in the Philippine courts (Marshall
Co. vs. Elser & Co., 46 Phil 70,75).
if a foreign corporation, not engaged in business in the Philippines, is not
banned from seeking redress from courts in the Philippines, a fortiori, that
same corporation cannot claim exemption from being sued in Philippine
courts for acts done against a person or persons in the Philippines.
Disposition WHEREFORE, THE PETITION IS HEREBY DENIED WITH
COSTS AGAINST THE PETITIONER
3. Upon Resident Temporarily Abroad
MONTALBAN V. MAXIMO
(SUPRA)
FACTS
-Fr. Maximo was sued by the parents of the child he injured during a motor
vehicle accident. He was in Europe when the summons were served upon
Fr. Bautista in the Malabon Church where Fr. Maximo was known to
reside. Since was away when trial was being held, he was declared in
default and a decision was made in favor of the Sps. After 2y, 2m Fr.
Maximo questioned the validity of the judgment against him, questioning
the service of summons made
ISSUE
WON the summons in a suit in personam against a resident of the
Philippines temporarily absent may be validly effected by substituted
service under Sec. 8 Rule 14 (on residents temporarily out of the
Philippines)
HELD
YES. In suits in personam, courts have jurisdiction over residents
temporarily out of the country.
Reasoning. HISTORY. Common Law (Power Concept of
Jurisdiction): Jurisdiction of Courts to render judgments in personam
was granted on their de facto power over defendant’s person. Jurisdiction
was based on the power to seize and imprison defendant.
-Continental Law: Principles of Roman Origin: (1) Suits in personam
and those relating to MOVABLES – courts of the domicile of the defendant
have general jurisdiction [Actor Rei Forum Sequitur ]; (2) actions
concerning IMMOVABLES: Courts of the situs have exclusive jurisdiction
-FORGED DOCTRINE: Domiciliaries of a state, though temporarily out
of its territorial jurisdiction, are ALWAYS amenable to suits in personam so
substituted service is binding on absent residents.
-MILLIKEN V MEYER: “The attendant duties, like the rights and
privileges incident to domicile, are not dependent on continuous presence
in the state. One such incident of domicile is amenability to suit within the
state even during sojourns without the state, where the state was provided
Prof. Victoria A. 64
and employed a REASONABLE METHOD for apprising such an absent
party of the proceeding against him.
*ON SERVICE OF SUMMONS & DUE PROCESS : the constitutional
requirement of due process exacts that the service be such as may be
reasonably expected to give reasonably calculated to give the notice
desired
-MILLIKEN V MEYER, supra : its adequacy so far as due process is
concerned is dependent on WON the form of substituted service provided
for such cases and employed is REASONABLY CALCULATED TO GIVE
HIM ACTUAL NOTICE of the proceedings and an opportunity to be heard.
*interpretation of then Sec8 on substituted service: Same meaning
shaped out by the jurisprudence of the jurisdiction where it was patterned
(American Legal System); the “defendant” means any resident of the
country without distinction as to whether he is physically present or not.
-on Sec18, Rule 14, according to CJ MORAN: Since resident of RP,
jurisdiction may be acquired over his person under Sec8; Extraterritorial
Service also allowed. Plaintiff is not duty bound to see to it that the person
upon when service was actually made delivers the summons to defendant
or informs him about it. The law presumes that for him. It is immaterial that
defendant does not in fact receive actual notice. This will not affect the
validity of the service.
-A man temporarily absent from this country leaves a definite place of
residence, a dwelling where he lives, a local base to which any inquiry
about him may be directed and where he is bound to return.
Disposition. Orders affirmed.
4. Upon Defendant whose
identity/whereabouts unknown
BALTAZAR VS CA (GOOD EARTH ENTERPRISES)
G.R. No. 78728
FELICIANO; December 8, 1988
Nature
Petition for review on certiorari to annul CA decision
FACTS
- Two parcels of land located in Barrio San Isidro, Paranaque were
adjudicated to Lorenzo Molera pursuant to the decree in a land
registration case by the CFI of Rizal acting as a cadastral court. They
were titled in the name of Lorenzo Molera, under Original Certificate of
Title (OCT) No. 1866. On 15 August 1965, the parcels of land were
acquired by Good Earth from successors-in-interest of Lorenzo Molera.
A transfer of Certificate title was issued in the name of Good Earth.
- On 22 March 1977, Artemio Baltazar instituted Civil Case No. 5552-P
against Good Earth for declaration of ownership and
reconveyance of the parcels of land before the CFI, Rizal. Baltazar
traced his claimed rights from an alleged vast Spanish land grant to
one Don Hermogenes Rodriguez, Governor General of Intramuros,
down to a deed of sale over the subject lots allegedly executed by one
 Civil Procedure Digest
Pedro Asedillo (for whose mother, Baltazar had been a tenant sharing
in the rice harvest from the lots)
- The Deputy Sheriff of the trial court, Mr. Ernesto Pre, received a copy
of the summons and complaint for service on Good Earth at its address
set forth in the complaint 666 Muelle de Binondo, Manila.
- On 1 April 1977, the Deputy Sheriff pre-certified in his Sheriffs Return
that: notwithstanding three attempts made by the undersigned Deputy
Sheriff, particularly on March 25, 27 and 30, 1977, to serve the
summons and copy of the complaint upon the defendant Good Earth
Enterprises, Inc. at the given address, the same has failed as
according to information defendant Corporation has never held office
thereat and its present office address is unknown.
- On the same date, Baltazar filed a motion for leave to serve the
summons and a copy of the complaint upon therein defendant Good
Earth by publication. The trial court granted Baltazar's motion.
Publication of the summons and the complaint in the "Times Journal," a
newspaper of general circulation, for 3 consecutive weeks was effected
on 6, 13 and 20 August 1977.
- Subsequently the trial court, on motion of Baltazar and upon finding
that Good Earth had failed to file its answer within the sixty (60) day
period counted from the day following the last day of the publication,
declared Good Earth "as if in default" and allowed Baltazar to present
his evidence ex parte 10 days later
- the trial court then issued the questioned judgment by default against
Good Earth which: 1) declared Baltazar true and owner of the property
covered by TCT No. 191048, 2) ordered Good Earth to reconvey that
property to Baltazar and, should Good Earth fail so to reconvey, 3)
decreed the cancellation of TCT No. 191048; and 4) required the
Register of Deeds of Rizal to issue a new TCT in the name of Baltazar.
These were done accordingly all without the knowledge of Good Earth.
- Baltazar lost no time at all in selling the land so titled in his name to
Aurora Galvez, Rizaliana Garments, Inc. and to BGB Development
CorporationOn 9 August 1979, Good Earth instituted a complaint for
annulment of the judgment in Civil Case No. 5552-P and for
reconveyance, against Artemio Baltazar and his vendees Aurora
Galvez and BGB Development Corporation, which complaint was
docketed as Civil Case No. PQ-7410-P, in the Court of First Instance of
Rizal, Branch 28, the same court which had issued the judgment by
default against Good Earth. Good Earth later impleaded Baltazar's
third vendee, Rizaliana Garments, Inc. as an additional defendant.
- Good Earth assailed the judgment as null and void, upon the ground
that the trial court had not acquired jurisdiction over the person of
Good Earth. It was urged by Good Earth that the suit commenced by
Baltazar was an action in personam which required personal service of
summons; hence, service of summons by publication was improper
and unwarranted in this case. It was also urged by Good Earth that
Land Registration Decree No. N-70457, by virtue of which OCT No.
1866 was issued to Lorenzo Molera, predecessor-in-interest of Good
Earth, became incontrovertible one year after its registration on 5
February 1959.
- The trial court rendered judgment against Good Earth. It held that the
trial court which issued the judgment by default had acquired
A2010
Avena
jurisdiction over the person of defendant Good Earth through service of
summons by publication; that the suit brought by Baltazar against
Good Earth was an action quasi in rem such that service of summons
by publication was appropriate; that Lorenzo Molera, the original
registered owner of the subject lands, was not an indispensable party
to the suit brought against Good Earth; that the action instituted by
Good Earth was barred by res judicata; and that defendants Galvez,
BGB Development Corporation and Rizaliana Garments, Inc. were
purchasers in good faith and for value.
- CA reversed TC’s decision and directed the defendants to reconvey the
parcels of land in question to Good Earth free from all liens and
encumbrances. Hence this Petition for Review instituted by Baltazar
and Galvez.
ISSUE
WON the service of summons by publication upon respondent Good Earth
was proper.
HELD
 The regular mode of serving summons upon a private domestic
corporation (i.e., a private corporation organized under Philippine law
and hence registered with the Securities and Exchange Commission)
is governed by Section 13 of Rule 14 of the Revised Rules of Court.
The regular mode, in other words, of serving summons upon a private
Philippine corporation is by personal service upon one of the officers of
such corporation identified in Section 13.
 For the purpose of receiving service of summons and being bound by
it, a corporation is Identified with its agent or officer who under the rule
is designated to accept service of process. " The corporate power to
receive and act on such service, so far as to make it known to the
corporation, is thus vested in such officer or agent." A strict
compliance with the mode of service is necessary to confer jurisdiction
of the court over a corporation. The purpose is to render it reasonably
certain that the corporation will receive prompt and proper notice in an
action against it or to insure that the summons be served on a
representative so integrated with the corporation that such person will
know what to do with the legal papers served on him.
 It is not disputed that Deputy Sheriff Pre did not comply and did not
attempt to comply with the requirement of Section 13 of Rule 14. Since
personal service of summons was clearly not effected upon Good
Earth, we come to the question of whether the substituted service by
publication purported to have been effected by the trial court in Civil
Case No. 5552-P was proper and effective to vest jurisdiction upon
such court over the person of Good Earth. The first point that must
be made in this connection is that the propriety of service of
summons by publication is not dependent upon the technical
characterization of the action being initiated as an action in rem
or quasi in rem. The propriety of service by publication is
dependent, rather, upon compliance with the requirements of
the applicable provisions of the Rules of Court. We note secondly,
that service of summons of publication may be allowed under Rule 14
of the Revised Rules of Court in three 3 different situations. The first is
Prof. Victoria A. 65
the situation of an "unknown defendant" addressed by Section 16 of
Rule 14. The second refers to situations where "extra-territorial service"
is proper, governed by Section 17 of Rule 14. The third situation is that
of a resident of the Philippines who is temporarily out of the Philippines
and who may be served with summons by publication under Section
18.
 Even a cursory examination of Sections 16,17 and 18 of Rule 14 above
will at once reveal that, if at all, service of summons by publication
upon Good Earth could only be done under Section 16. Section 17 can
find application only where the defendant is both a non-resident and
not actually found in the Philippines. Since Good Earth is a corporation
organized under the Philippine law, it cannot be regarded as a non-
resident corporation. Section 18, upon the other hand, appears to
contemplate a defendant who is a natural person. In any case,
petitioner did not pretend that Good Earth was at any time temporarily
out of the Philippines, assuming such a condition were possible.
Section 16 itself covers two (2) distinguishable situations: where the
identity of the defendant is unknown; and where the address of the
defendant is unknown. Under Section 16, therefore, petitioner must
show that the address of Good Earth was "unknown" and that such
address "could not be ascertained by diligent inquiry."
 In the case at bar, petitioner acted as if the address of Good Earth was
"unknown." Petitioner claimed that Good Earth could not be found at
the address appearing in the TCT issued in the name of Good Earth.
The sum total of what the Sheriff actually did, was to ask a security
guard he found at 666 Muelle de Binondo and this security guard
apparently pointed to the building directory where the name of Good
Earth did not appear. It is argued by Good Earth that had the Sheriff
inquired at any of the offices actually found in the building at 666
Muelle de Binondo, he would have found Good Earth which is a
corporation owned or controlled by the Ching family, considering that
all the corporations quartered at 666 Muelle de Binondo are Ching
family corporations. Good Earth, in other words, did not dispute that
666 Muelle de Binondo, Manila was its correct corporate address. The
court does not believe, therefore, that the address of Good Earth could
be regarded as "unknown" within the meaning of Section 16 of Rule
14. More importantly, it does not believe that the acts of Deputy Sheriff
Pre satisfied the standard of diligent inquiry' established by Section 16
of Rule 14. Deputy Sheriff Pre should have known what every law
school student knows, that Good Earth being a domestic corporation
must have been registered with the Securities and Exchange
Commission and that the SEC records would, therefore, reveal not just
the correct address of the corporate headquarters of Good Earth but
also the addresses of its directors and other officers. We believe and
so hold that a litigant or process server who has not gone through the
records of the SEC cannot claim to have carried out the "diligent
inquiry" required under Section 16 of Rule 14 of the Revised Rules of
Court for valid service of summons by publication upon a domestic
corporation.
 It may be noted, finally, that the record does not show that Baltazar
sent a copy of the summons and the order for publication to Good
Earth by registered mail to its last known address which was 666
 Civil Procedure Digest
Muelle de Binondo, Manila, as required by Section 21 of Rule 14,
Revised Rules of Court. We hold that the purported service of
summons by publication upon Good Earth in Civil Case No. 5552-P
was legally and constitutionally vitiated and hence invalid and
ineffective to vest jurisdiction over the person of Good Earth upon the
trial court, and that the judgment there rendered by that court was null
and void. It vested no rights upon Baltazar and imposed no liabilities or
burdens upon Good Earth. We agree with the respondent Court of
Appeals that the trial court in Civil Case No. PQ-7410-P fell into
profound error in not setting aside and annulling the judgment of the
trial court in Civil Case No. 5552-P.
Disposition. WHEREFORE, the Petition for Review is DENIED and the
Decision dated 14 January 1987 of the Court of Appeals in C.A. G.R. CV
No. 00104 is AFFIRMED. Costs against petitioners.
5. Upon others
MOTIONS IN GENERAL
MOTION TO DISMISS UNDER RULE 16
US v. RUIZ
136 SCRA 487
ABAD SANTOS; May 22, 1985
NATURE
Petition to review to set aside certain orders and restrain the respondent
judge from trying Civil Case No. 779-M of the defunct CFI of Rizal.
FACTS
- US had a naval base in Subic, Zambales. The base was one of those
provided in the Military Bases Agreement between the Philippines and the
US.
- US invited the submission of bids for the following projects:
1. Repair fender system, Alava Wharf at the U.S. Naval Station Subic
Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon
damage to shoreline revetment, NAVBASE Subic; and repair to Leyte
Wharf approach, NAVBASE Subic Bay, Philippines.
- Eligio de Guzman & Co., Inc. responded to the invitation and submitted
bids. US requested it to confirm its price proposals and for the name of its
bonding company. The company complied with the requests.
- The company received a letter which was signed by Dir. Collins,
Contracts Division, Naval Facilities Engineering Command, Southwest
Pacific, Department of the Navy of the United States, who is one of the
petitioners herein. The letter said that the company did not qualify to
receive an award for the projects because of its previous unsatisfactory
performance rating on a repair contract for the sea wall at the boat
A2010
Avena
landings of the U.S. Naval Station in Subic Bay. The letter further said that
the projects had been awarded to third parties.
- The company sued the US and Messrs. James E. Galloway, William I.
Collins and Robert Gohier all members of the Engineering Command of
the U.S. Navy. The complaint is to order the defendants to allow the
plaintiff to perform the work on the projects and, in the event that specific
performance was no longer possible, to order the defendants to pay
damages. The company also asked for the issuance of a writ of
preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.
- The defendants entered their special appearance "for the purpose only
of questioning the jurisdiction of this court over the subject matter of the
complaint and the persons of defendants, the subject matter of the
complaint being acts and omissions of the individual defendants as agents
of defendant United States of America, a foreign sovereign which has not
given her consent to this suit or any other suit for the causes of action
asserted in the complaint."
- Defendants filed a motion to dismiss the complaint which included an
opposition to the issuance of the writ of preliminary injunction. The
company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no avail.
Hence the instant petition which seeks to restrain perpetually the
proceedings in Civil Case No. 779-M for lack of jurisdiction on the part of
the trial court.
ISSUE
WON trial court has jurisdiction
HELD
NO. The traditional rule of State immunity exempts a State from being
sued in the courts of another State without its consent or waiver. This rule
is a necessary consequence of the principles of independence and
equality of States. But State immunity now extends only to acts jure
imperii.
- The respondent judge recognized the restrictive doctrine of State
immunity when he said in his Order denying the defendants' (now
petitioners) motion: "A distinction should be made between a strictly
governmental function of the sovereign state from its private, proprietary
or non-governmental acts." However, the respondent judge also said: "It is
the Court's considered opinion that entering into a contract for the repair
of wharves or shoreline is certainly not a governmental function altho it
may partake of a public nature or character.
- The restrictive application of State immunity is proper only when the
proceedings arise out of commercial transactions of the foreign sovereign,
its commercial activities or economic affairs. Stated differently, a State
may be said to have descended to the level of an individual and can thus
be deemed to have tacitly given its consent to be sued only when it enters
into business contracts. It does not apply where the contract relates to the
exercise of its sovereign functions. In this case the projects are an integral
part of the naval base which is devoted to the defense of both the United
States and the Philippines, indisputably a function of the government of
Prof. Victoria A. 66
the highest order; they are not utilized for nor dedicated to commercial or
business purposes.
- That the correct test for the application of State immunity is not the
conclusion of a contract by a State but the legal nature of the act is shown
in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the plaintiffs leased
three apartment buildings to the United States of America for the use of its
military officials. The plaintiffs sued to recover possession of the premises
on the ground that the term of the leases had expired, They also asked for
increased rentals until the apartments shall have been vacated. It held:
"On the basis of the foregoing considerations we are of the belief and we
hold that the real party defendant in interest is the Government of the
United States of America; that any judgment for back or increased rentals
or damages will have to be paid not by defendants Moore and Tillman and
their 64 co-defendants but by the said U.S. Government. On the basis of
the ruling in the case of Land vs. Dollar already cited, and on what we
have already stated, the present action must be considered as one
against the U.S. Government. It is clear that the courts of the Philippines
including the Municipal Court of Manila have no jurisdiction over the
present case for unlawful detainer. The question of lack of jurisdiction was
raised and interposed at the very beginning of the action. The U.S.
Government has not given its consent to the filing of this suit which is
essentially against her, though not in name. Moreover, this is not only a
case of a citizen filing a suit against his own Government without the
latter's consent but it is of a citizen filing an action against a foreign
government without said government's consent, which renders more
obvious the lack of jurisdiction of the courts of his country. The principles
of law behind this rule are so elementary and of such general acceptance
that we deem it unnecessary to cite authorities in support thereof." (At p.
323.)
- In Syquia, the United States concluded contracts with private individuals
but the contracts notwithstanding the United States was not deemed to
have given or waived its consent to be sued for the reason that the
contracts were for jure imperii and not for jure gestionis.
Disposition WHEREFORE, the petition is granted; the questioned orders
of the respondent judge are set aside and Civil Case No. 779-M is
dismissed. Costs against the private respondent.
SEPARATE OPINION
MAKASIAR, dissents:
- The petition should be dismissed and the proceedings in Civil Case No.
779-M in the defunct CFI (now RTC) of Rizal be allowed to continue
therein.
- When the U.S. Government, through its agency at Subic Bay, confirmed
the acceptance of a bid of a private company for the repair of wharves or
shoreline in the Subic Bay area, it is deemed to have entered into a
contract and thus waived the mantle of sovereign immunity from suit and
descended to the level of the ordinary citizen. Its consent to be sued,
therefore, is implied from its act of entering into a contract.
- Justice and fairness dictate that a foreign government that commits a
breach of its contractual obligation - in the case at bar by the unilateral
cancellation of the award for the project by the United States government,
through its agency at Subic Bay - should not be allowed to take undue
 Civil Procedure Digest
advantage of a party who may have legitimate claims against it by seeking
refuge behind the shield of non-suability. A contrary view would render a
Filipino citizen, as in the instant case, helpless and without redress in his
own country for violation of his rights committed by the agents of the
foreign government professing to act in its name.
- Constant resort by a foreign state or its agents to the doctrine of State
immunity in this jurisdiction impinges unduly upon our sovereignty and
dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into
contracts with United States authorities or facilities in the Philippines -
whether naval, air or ground forces - because the difficulty, if not
impossibility, of enforcing a validly executed contract and of seeking
judicial remedy in our own courts for breaches of contractual obligation
committed by agents of the United States government, always looms
large, thereby hampering the growth of Filipino enterprises and creating a
virtual monopoly in our own country by United States contractors of
contracts for services or supplies with the various U.S. offices and
agencies operating in the Philippines.
- In the case at bar, the efficacy of the contract between the U.S. Naval
authorities at Subic Bay on one hand, and herein private respondent on
the other, was honored more in the breach than in the compliance. The
opinion of the majority will certainly open the floodgates of more violations
of contractual obligations. American authorities or any foreign government
in the Philippines for that matter, dealing with the citizens of this country,
can conveniently seek protective cover under the majority opinion. The
result is disastrous to the Philippines.
SEAFDEC V NLRC (LAZAGA)
(supra)
NATURE
Petition for certiorari to review the decision of the NLRC
FACTS
-SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries Development Center. Private Respondent
Lazaga was hired as a Research Associate and eventually became the
Head of External Affairs Office of SEAFDEC-AQD. However, he was
terminated allegedly due to financial constraints being experienced by
SEAFEC-AQD. He was supposed to receive separation benefits but
SEAFDEC-AQD failed to pay private respondent his separation pay so
Lazaga filed a complaint for non-payment of separation benefits, plus
moral damages and attorney’s fees with the NLRC.
-In their ANSWER WITH COUNTERCLAIM (NOT MOTION TO
DISMISS), SEAFDEC alleged that NLRC has no jurisdiction over the
case because: (1) It is an international organization; (2) Lazaga must
first secure clearances from the proper departments for property or money
accountability before any claim for separation pay will be paid (and
clearances has not been paid)
A2010
Avena
COUNTERCLAIM: Lazaga had property accountability and outstanding
obligation to SEAFDEC-AQD amounting to P27, 532.11 and that Lazaga
was not entitled to the accrued sick leave benefits due to his failure to
avail of the same during his employment
-LA: for Lazaga
-NLRC: affirmed LA, deleted attorney’s fees and actual damages
-SEAFDEC-AQD filed MFR, denied
ISSUES
WON SEAFDEC-AQD is estopped from claiming that the court had no
jurisdiction
HELD
NO
Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that has
none over a cause of action. Jurisdiction is conferred by law. Where there
is none, no agreement of the parties can provide one. Settled is the rule
that the decision of a tribunal not vested with appropriate jurisdiction is
null and void.
-The lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal.
-The issue of jurisdiction is not lost by waiver or by estoppel
NATIONAL UNION VS STOLT-NIELSEN
184 SCRA 682
MELENCIO-HERRERA, J.; April 26, 1990
NATURE
Petition to review. Certiorari
FACTS
- United Coconut Chemicals shipped on board MT Stolt Sceptre, a tanker
owned by Stolt-Nielsen Philippines 404 tons of distilled C6-C18 fatty acid
from Batangas to Rotterdam Netherlands.The cargo was insured with
National Union Fire Insurance, an American insurance company, thru its
Philippine Agent, American International Underwriters.
- Upon arrival and after inspection, the shipment was found to be totally
contaminated and discolored. The Carrier denied the claim but the Insurer
indemnified said shipper. As subrogee, the insurer filed suit against Carrier
before the RTC to recovery the sum of P1,619,469.21, the amount paid to
the Shipper.
- Carrier filed a motion to dismiss on the ground that the RTC had no
jurisdiction over the claim the same being arbitrable as provided by the
terms of the Charter Party dated 21 December 1984 between Shipper and
Parcel Tankers.
- Insurer opposed the motion on the ground that it was not legally
bound to submit the claim for arbitration as the arbitration clause in
the Charter Party was not incorporated into the Bill of Lading. RTC
denied the motion to dismiss but issued a resolution on the Motion
to Dismiss until trial on the merits since the ground alleged in said
Prof. Victoria A. 67
motion does not appear indubitable.
- Carrier filed motion for Certiorari and Prohibition with the CA
seeking to nullify the RTC order which it set aside.
- Hence the appeal to the SC
ISSUE/S
1. WON the CA order setting aside the RTC order, which was
interlocutory, is valid
2. WON the terms of the Charter Party, particularly the provision on
arbitration, binding on the Insurer.
HELD
1. Yes. Generally, an interlocutory order cannot be the subject of a special
civil action on certiorari and prohibition. . However, the case before us
falls under the exception. While a Court Order deferring action on a
motion to dismiss until the trial is interlocutory and cannot be challenged
until final judgment, still, where it clearly appears that the trial Judge or
Court is proceeding in excess or outside of its jurisdiction, the remedy of
prohibition would lie since it would be useless and a waste of time to go
ahead with the proceedings.
2. Yes. A reading of the charter Party and the Bill of Lading shows that the
Insurer is in fact bound to arbitration. Clearly, the Bill of Lading
incorporates by reference the terms of the Charter Party. It is settled law
that the charter may be made part of the contract under which the goods
are carried by an appropriate reference in the Bill of Lading (Wharton
Poor, Charter Parties and Ocean Bills of Lading (5th ed., p. 71). This
should include the provision on arbitration even without a specific
stipulation to that effect. The entire contract must be read together and its
clauses interpreted in relation to one another and not by parts. Moreover,
in cases where a Bill of Lading has been issued by a carrier covering
goods shipped aboard a vessel under a charter party, and the charterer is
also the holder of the bill of lading, "the bill of lading operates as the
receipt for the goods, and as document of title passing-the property of the
goods, but not as varying the contract between the charterer and the
shipowner" (In re Marine Sulphur Queen, 460 F 2d 89, 103 [2d Cir. 1972];
Ministry of Commerce vs. Marine Tankers Corp. 194 F, Supp 161, 163
[S.D.N.Y. 1960]; Greenstone Shipping Co., S.A. vs. Transworld Oil, Ltd.,
588 F Supp [D.El. 1984]). The Bill of Lading becomes, therefore, only a
receipt and not the contract of carriage in a charter of the entire vessel, for
the contract is the Charter Party (Shell Oil Co. vs. MIT Gilds, 790 F 2d
1209, 1212 [5th Cir. 1986]; Home Insurance Co. vs. American Steamship
Agencies, Inc., G.R. No. L-25599, 4 April 1968, 23 SCRA 24), and is the
law between the parties who are bound by its terms and condition
provided that these are not contrary to law, morals, good customs, public
order and public policy (Article 1306, Civil Code).
Disposition
Petition for certiorari is denied and the judgment of the CA is affirmed.
BALO V CA (JUDGE ASIS, GARRIDO)
GR No. 129704
 Civil Procedure Digest
CHICO-NAZARIO; September 30, 2005
NATURE
Petition for review of CA Resolution under Rule 45 of the Rules of Court
FACTS
- complaint for Judicial Partition of Real Properties and Accounting with
Damages was filed by Josefina Garrido against Ulpiano Balo, Lydia Balo-
Lumpas, Eugenio Balo, Ulpiano Balo, Jr., Nida Balo-Moraleta, Nora Balo-
Catano, Zaida Balo, Judith Balo-Mandreza, Danilo Balo and Ronilo Balo,
before RTC Abuyog, Leyte alleging that Garrido and Balo’s are the co-
owners of undivided parcels of land located at Mayorga, Leyte. According
to her, these lands were originally owned by the spouses Eugenio Balo,
Sr. and Ma. Pasagui-Balo, who, at the time of the filing of the complaint,
were already deceased. The Balo spouses were survived by their two (2)
children, Ulpiano, Sr. and Maximino, the latter likewise deceased. Garrido
is the daughter of Maximino Balo and Salvacion Sabulao. Ulpiano Balo is
the son of Eugenio Balo, Sr. and the other petitioners, the children of
Ulpiano, are Eugenio’s grandchildren.
- Garrido alleged in her complaint that immediately upon the death of her
grandfather, Eugenio Sr., the Balo’s took possession of the said real
properties without her knowledge and consent. Her uncle and cousins
were earnestly requested by Garrido that they come up with a fair and
equal partition of the properties left by her grandparents. The Balo’s
outrightly refused her proposal.
- Garrido filed a complaint. In lieu of an Answer, Balo’s filed a Motion to
Dismiss on the following grounds:
(1) Failure to state a cause of action - plaintiff, though daughter of
Maximino, failed to allege WON she is a legitimate child thus fatal
considering A992 CC and to allow Garrido to inherit from the estate of the
spouses Eugenio and Maria Balo in representation of her father Maximino
Balo would be to permit intestate succession by an illegitimate child from
the legitimate parent of his father, assuming that she is the child of
Maximino Balo
(2) complaint does not show that estate have been settled and its
obligations have been paid.
(3) properties enumerated in the complaint were proceeded against by
way of execution to satisfy a judgment against Eugenio and Maria Balo.
Subsequently, Ulpiano repurchased the properties and has been openly,
exclusively and adversely in possession of the properties
- RTC denied the motion to dismiss for lack of merit and said that the
complaint clearly states that the late Eugenio Balo, Sr., and Maria Pasagui
Balo had two (2) children, namely: Ulpiano, Sr. and Maximino. The
plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao;
while the defendants are children of the late Ulpiano Balo, Sr. and
Felicidad Superio. The complaint enumerates/annexes 13 tax
declarations in the name of Eugenio Balo, Sr. The plaintiff as an heir
prays that these parcels of land be partitioned in accordance with Article
982 of the Civil Code which states: “The grandchildren and other
descendants shall inherit by right of representation, and if any one of them
should have died, leaving several heirs, the portion pertaining to him shall
be divided among the latter in equal portions.” No evidence may be
A2010
Avena
alleged or considered to test the sufficiency of the complaint except the
very facts pleaded therein. It would be improper to inject into the
allegation, facts not alleged and use them as basis for the decision on the
motion. The Court is not permitted to go beyond and outside of the
allegations in the complaint for data or facts. Therefore, the allegation of
illegitimacy and claim of absolute ownership are modifications and
unreasonable inferences. If there is doubt to the truth of the facts averred
in the complaint, the Court does not dismiss the complaint but requires an
answer and proceeds to hear the case on the merit.
- Balo’s filed an MFR which the RTC denied
- Balo’s filed a Petition for Certiorari before the CA. After the filing of
Comment and other pleadings, the case was deemed submitted for
decision. In a resolution, the CA denied due course to the petition and
accordingly dismissed the same and justified the dismissal in the following
manner: It is an established rule that an order denying a motion to
dismiss is basically interlocutory in character and cannot be the proper
subject of a petition for certiorari. When a motion to dismiss is denied, the
proper procedure is to proceed with the trial and if the decision be adverse
to the movant, the remedy is to take an appeal from said decision,
assigning as one of the errors therefore the denial of the motion to
dismiss.
- Balo’s filed an MFR which the CA denied
ISSUES
1. WON CA’s dismissal of the petition for certiorari filed by the Balo’s is
valid
2. WON the failure to allege the nature and extent of plaintiff’s title in a
petition for partition is fatal to its cause of action
3. WON the action for judicial partition and accounting has prescribed,
was waived, or was otherwise abandoned
HELD
1. NO, CA should not have dismissed the petition outright as the same
alleges grave abuse of discretion. Instead, it should have proceeded to
determine WON the trial court did commit grave abuse of discretion as
alleged by the Balo’s. CA having failed in this regard, it behooves upon
this Court to discuss the merits of the petition to put to rest the issues
raised by the petitioners.
Reasoning
- The general rule regarding denial of a motion to dismiss as a basis of a
resort to the extraordinary writ of certiorari is that an order denying a
motion to dismiss is an interlocutory order which neither terminates nor
finally disposes of a case as it leaves something to be done by the court
before the case is finally decided on the merits. As such, the general rule
is that the denial of a motion to dismiss cannot be questioned in a special
civil action for certiorari which is a remedy designed to correct errors of
jurisdiction and not errors of judgment. To justify the grant of the
extraordinary remedy of certiorari, therefore, the denial of the motion to
dismiss must have been tainted with grave abuse of discretion. By “grave
abuse of discretion” is meant, such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion
must be grave as where the power is exercised in an arbitrary or despotic
Prof. Victoria A. 68
manner by reason of passion or personal hostility and must be so patent
and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act all in contemplation of law.
- Specific instances whereby the rule admits certain exceptions are
provided as follows: Under certain situations, recourse to certiorari or
mandamus is considered appropriate, i.e., (a) when the trial court issued
the order without or in excess of jurisdiction; (b) where there is patent
grave abuse of discretion by the trial court; or (c) appeal would not prove
to be a speedy and adequate remedy as when an appeal would not
promptly relieve a defendant from the injurious effects of the patently
mistaken order maintaining the plaintiff’s baseless action and compelling
the defendant needlessly to go through a protracted trial and clogging the
court dockets by another futile case
- Contrary to petitioners’ contention, allegations sufficient to support a
cause of action for partition may be found in private respondent’s
complaint. Nothing is more settled than the rule that in a motion to
dismiss for failure to state a cause of action, the inquiry is into the
sufficiency, not the veracity, of the material allegations. Moreover, the
inquiry is confined to the four corners of the complaint, and no other.
- Section 1, Rule 8 of the 1997 Rules of Civil Procedure provides that the
complaint needs only to allege the ultimate facts upon which private
respondent bases her claim. The rules of procedure require that the
complaint must make a concise statement of the ultimate facts or the
essential facts constituting the plaintiff’s cause of action. A fact is
essential if it cannot be stricken out without leaving the statement of the
cause of action inadequate.
- In her Complaint, the private respondent made the following assertions:
That the afore-described parcels of lands were originally owned by
Eugenio Balo, Sr. and Ma. Pasagui-Balo, who are now both deceased and
after their death, were inherited into two (2) equal shares by their two (2)
children, namely: Ulpiano, Sr. and Maximino, both surnamed Balo, the
later (sic) being already dead; That plaintiff is the daughter of the late
Maximino Balo and Salvacion Sabulao, who after her father’s death, had
inherited her father’s share of the inheritance; That defendant Ulpiano
Balo, Sr. aside from being the son of Eugenio Balo, Sr., is married to
Felicidad Superio, and is the father of all the other defendants in this case;
The defendants took possession of the above-described real properties
immediately after the death of plaintiff’s grandfather Eugenio Balo, Sr.
without her knowledge and consent; That plaintiff is desirous that the
above-described real properties be partitioned between her and
defendants; That plaintiff has proposed to the defendants that the above-
described real properties be amicably partitioned between them by mutual
agreement in a very fair and practical division of the same, but said
defendants refused and continue to do so without any justifiable cause or
reason to accede to the partition of the said properties. The foregoing
allegations show substantial compliance with the formal and substantial
requirements of a Complaint for Partition as required under Section 1,
Rule 69 of the 1997 Rules of Civil Procedure.
2. NO
- Briz v. Briz: proof of legal acknowledgment is not a prerequisite before
an action for partition may be filed. There is no absolute necessity
requiring that the action to compel acknowledgment should have been
 Civil Procedure Digest
instituted and prosecuted to a successful conclusion prior to the action in
which that same plaintiff seeks additional relief in the character of heir.
- In a complaint for partition, the plaintiff seeks, first, a declaration that he
is a co-owner of the subject properties; and second, the conveyance of his
lawful shares. As the Court of Appeals correctly held, an action for
partition is at once an action for declaration of co-ownership and for
segregation and conveyance of a determine portion of the properties
involved. If the defendant asserts exclusive title over the property, the
action for partition should not be dismissed. Rather, the court should
resolve the case and if the plaintiff is unable to sustain his claimed status
as a co-owner, the court should dismiss the action, not because the wrong
remedy was availed of, but because no basis exists for requiring the
defendant to submit to partition. If, on the other hand, the court after trial
should find the existence of co-ownership among the parties, the court
may and should order the partition of the properties in the same action.
3. NO
- On the matter of prescription cited by the petitioners as a ground for the
dismissal of the complaint, it is noteworthy that the motion to dismiss filed
by the Balo’s did not ipso facto establish prescription. An allegation of
prescription can effectively be used in a motion to dismiss only when the
complaint on its face shows that indeed the action has already prescribed;
otherwise, the issue of prescription is one involving evidentiary matters
requiring a full-blown trial on the merits and cannot be determined in a
mere motion to dismiss.
Disposition instant Petition is DENIED and the decision of CA affirming
the Order of the RTC is affirmed
SEA-LAND SERVICE INC V CA (A.P. MOLLER/
MAERSK LINE)
00 SCRA 00
YNARES-SANTIAGO; March 2, 2000
NATURE
Petition for review on certiorari decision of CA
FACTS
- Sea-land Service Inc and AP Moller/Maersk Line (AMML) are both
carriers of cargo and common carriers. They entered into a contract
entitled “Cooperation in the Pacific,” which is essentially a vessel sharing
agreement whereby they mutually agreed to purchase, share, and
exchange needed space for cargo in their respective containerships.
Under the Agreement, they could be, depending on the occasion, either a
principal carrier (with a negotiable bill of lading or other contract of
carriage with respect to cargo) or a containership operator (owner,
operator or charterer of containership on which the cargo is carried).
- During the lifetime of the contract, Florex delivered to AMML cargo of
various foodstuffs. A corresponding Bill of Lading was issued by AMML to
Florex. Pursuant to the agreement, AMML loaded the cargo to a vessel of
Sea-land. Thus, under this arrangement, AMML was the principal carrier
while Sea-land was the containership operator.
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- However, the consignee (not named in the case) refused pay for the
cargo, alleging that delivery was delayed. Florex then filed a complaint
against AMML for reimbursement of the value of the cargo
- AMML’s answer: even on the assumption that Florex was entitled to
reimbursement, it was Sea-land who should be liable. Thus, AMML filed a
3rd Party Complaint against Sea-Land, averring that whatever damages
sustained by Florex were caused by Sea-Land, which actually received
and transported Florex's cargo on its vessels and unloaded them.
- Sea-land filed a motion to dismiss the 3 rd party complaint on the ground
of failure to state a cause of action and lack of jurisdiction, the amount of
damages not having been specified therein. Also, Sea-Land prayed for
either dismissal or suspension of the 3 rd party complaint on the ground
that there exists an arbitration agreement between it and AMML
- RTC denied motion to dismiss. Sea-Land filed petition for certiorari with
CA: dismissed. Hence, this appeal.
WON the 3rd party complaint should have been dismissed
HELD
YES
Ratio AMML is barred from taking judicial action against Sea-Land by the
clear terms of their Agreement.
Reasoning To allow AMML's 3rd Party Claim against Sea-Land to proceed
would be in violation of Clause 16.2 of the Agreement. As summarized,
the clause provides that whatever dispute there may be between the
Principal Carrier and the Containership Operator arising from contracts of
carriage shall be governed by the provisions of the bills of lading deemed
issued to the Principal Carrier by the Containership Operator. On the other
hand, to sustain the 3rd Party Complaint would be to allow AMML to hold
Sea-Land liable under the provisions of the bill of lading issued by the
Principal Carrier to Florex, under which the latter is suing in its Complaint,
not under the bill of lading petitioner, as containership operator, issued to
AMML, as Principal Carrier, contrary to what is contemplated in Clause
16.2.
- As the Principal Carrier with which Florex directly dealt with, AMML can
and should be held accountable by Florex in the event that it has a valid
claim against the former. Pursuant to Clause 16.3 of the Agreement,
AMML, when faced with such a suit “shall use all reasonable endeavours
to defend” itself or “settle such suits for as low a figure as reasonably
possible”. In turn, AMML can seek damages and/or indemnity from Sea-
Land as Containership Operator for whatever final judgment may be
adjudged against it under the Complaint of Florex. The crucial point is that
collection of said damages and/or indemnity from Sea-Land should be by
arbitration. In the light of the Agreement, it is clear that arbitration is the
mode provided by which AMML as Principal Carrier can seek damages
and/or indemnity from Sea-Land, as Containership Operator.
- Arbitration being the mode of settlement between the parties expressly
provided for by the Agreement, the 3 rd Party Complaint should have been
dismissed. “This Court has previously held that arbitration is one of the
alternative methods of dispute resolution that is now rightfully vaunted as
‘the wave of the future’ in international relations, and is recognized
worldwide. To brush aside a contractual agreement calling for arbitration in
Prof. Victoria A. 69
case of disagreement between the parties would therefore be a step
backward.”
(bottomline, the court considered the existence of the arbitration clause as
binding between the parties, thus a ground for dismissal of the 3rd party
complaint)
Obiter : “CA did not err in reading the Complaint of Florex and AMML's
Answer together with the 3rd Party Complaint to determine whether a
cause of action is properly alleged. In Fil-Estate Golf and Development,
Inc. vs. CA, this Court ruled that in the determination of whether or not the
complaint states a cause of action, the annexes attached to the complaint
may be considered, they being parts of the complaint.”
Disposition Petition is granted.
SWAGMAN HOTELS V. CA
G.R. 161135
Davide, Jr., C.J.: April 8, 2005
FACTS:
- Sometime in 1996 and 1997, petitioner Swagman Hotels and Travel,
Inc., through Atty. Leonor L. Infante and Rodney David Hegerty, its
president and vice-president, respectively, obtained from private
respondent Neal B. Christian loans evidenced by three promissory notes
dated 7 August 1996, 14 March 1997, and 14 July 1997. Each of the
promissory notes is in the amount of US$50,000 payable after three years
from its date with an interest of 15% per annum payable every three
months. In a letter dated 16 December 1998, Christian informed the
petitioner corporation that he was terminating the loans and demanded
from the latter payment in the total amount of US$150,000 plus unpaid
interests in the total amount of US$13,500.
- On 2 February 1999, private respondent Christian filed with the Regional
Trial Court of Baguio City, Branch 59, a complaint for a sum of money and
damages against the petitioner corporation, Hegerty, and Atty. Infante.
- The petitioner corporation, together with its president and vice-president,
filed an Answer raising as defenses lack of cause of action and novation
of the principal obligations. According to them, Christian had no cause of
action because the three promissory notes were not yet due and
demandable.
- In due course and after hearing, the trial court rendered a decision on 5
May 2000 declaring the first two promissory notes dated 7 August 1996
and 14 March 1997 as already due and demandable and that the interest
on the loans had been reduced by the parties from 15% to 6% per annum.
The TC reasoned: When the instant case was filed on February 2, 1999,
none of the promissory notes was due and demandable. As of this date
however, the first and the second promissory notes have already
 Civil Procedure Digest
matured. Hence, payment is already due. Under Section 5 of Rule 10 of
the 1997 Rules of Civil Procedure, a complaint which states no cause of
action may be cured by evidence presented without objection. Thus, even
if the plaintiff had no cause of action at the time he filed the instant
complaint, as defendants’ obligation are not yet due and demandable
then, he may nevertheless recover on the first two promissory notes in
view of the introduction of evidence showing that the obligations covered
by the two promissory notes are now due and demandable.
- In its decision of 5 September 2003, the Court of Appeals denied
petitioner’s appeal and affirmed in toto the decision of the trial court.
- The petitioner came to this Court harping on the absence of a cause of
action at the time the private respondent’s complaint was filed with the trial
court.
ISSUE: May a complaint that lacks a cause of action at the time it was
filed be cured by the accrual of a cause of action during the pendency of
the case?
HELD: No, it cannot be cured. The curing effect under Section 5 is
applicable only if a cause of action in fact exists at the time the
complaint is filed, but the complaint is defective for failure to
allege the essential facts . The interpretation of Section 5, Rule 10 of
the 1997 Rules of Civil Procedure by the TC and CA is erroneous.
RATIO:
- It is undisputed that the three promissory notes were for the amount of
P50,000 each and uniformly provided for (1) a term of three years; (2) an
interest of 15 % per annum, payable quarterly; and (3) the repayment of
the principal loans after three years from their respective dates. However,
both the Court of Appeals and the trial court found that a renegotiation of
the three promissory notes indeed happened in December 1997 between
the private respondent and the petitioner resulting in the reduction – not
waiver – of the interest from 15% to 6% per annum, which from then on
was payable monthly, instead of quarterly. The term of the principal loans
remained unchanged in that they were still due three years from the
respective dates of the promissory notes. Thus, at the time the complaint
was filed with the trial court on 2 February 1999, none of the three
promissory notes was due yet; although, two of the promissory notes with
the due dates of 7 August 1999 and 14 March 2000 matured during the
pendency of the case with the trial court. Both courts also found that the
petitioner had been religiously paying the private respondent US$750 per
month from January 1998 and even during the pendency of the case
before the trial court and that the private respondent had accepted all
these monthly payments.
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- With these findings of facts, it has become glaringly obvious that when amended on motion of a party. Thus, a complaint which fails to state a
the complaint for a sum of money and damages was filed with the trial cause of action may be cured by evidence presented during the trial.
court on 2 February 1999, no cause of action has as yet existed because
the petitioner had not committed any act in violation of the terms of the
- However, the curing effect under Section 5 is applicable only if a cause
three promissory notes as modified by the renegotiation in December
of action in fact exists at the time the complaint is filed, but the complaint
1997. Without a cause of action, the private respondent had no right to
is defective for failure to allege the essential facts.
maintain an action in court, and the trial court should have therefore
dismissed his complaint.
- A complaint whose cause of action has not yet accrued cannot be cured
or remedied by an amended or supplemental pleading alleging the
- Despite its finding that the petitioner corporation did not violate the
existence or accrual of a cause of action while the case is pending. Such
modified terms of the three promissory notes and that the payment of the
an action is prematurely brought and is, therefore, a groundless suit,
principal loans were not yet due when the complaint was filed, the trial
which should be dismissed by the court upon proper motion seasonably
court did not dismiss the complaint, citing Section 5, Rule 10 of the 1997
filed by the defendant. The underlying reason for this rule is that a person
Rules of Civil Procedure, which reads:
should not be summoned before the public tribunals to answer for
complaints which are immature.
Section 5. Amendment to conform to or authorize presentation of
evidence. — When issues not raised by the pleadings are tried with the
DISPOSITION: The petition is hereby GRANTED
express or implied consent of the parties, they shall be treated in all
GOODYEAR V. SY
respects as if they had been raised in the pleadings. Such amendment of
the pleadings as may be necessary to cause them to conform to the G.R. 154554
evidence and to raise these issues may be made upon motion of any PANGANIBAN;Nov 9, 2005
party at any time, even after judgment; but failure to amend does not
affect the result of the trial of these issues. If evidence is objected to at the Nature
trial on the ground that it is not within the issues made by the pleadings, Petition for Review under Rule 45
the court may allow the pleadings to be amended and shall do so with
liberality if the presentation of the merits of the action and the ends of Facts
substantial justice will be subserved thereby. The court may grant a In 1983 Goodyear Philippines purchased from Industrial and Transport
continuance to enable the amendment to be made. Equipment, Inc. an Isuzo JCR 6-Wheeler. the truck was hijacked on April
30, 1986. This hijacking was reported to the Philippine National Police
According to the trial court, and sustained by the Court of Appeals, this (PNP) which issued out an alert alarm on the said vehicle as a stolen
one.It was later on recovered also in 1986. Goodyear sold it to Anthony Sy
Section allows a complaint that does not state a cause of action to be
on September 12, 1996.Sy, in turn, sold it to Jose L. Lee on January 29,
cured by evidence presented without objection during the trial. Thus, it
1997.
ruled that even if the private respondent had no cause of action when he
Lee filed an action for rescission of contract with damages against Sy on
filed the complaint for a sum of money and damages because none of the
December 4, 1997 because he could not register the vehicle in his name
three promissory notes was due yet, he could nevertheless recover on the
due to the certification from the PNP Regional Traffic Management Office
first two promissory notes dated 7 August 1996 and 14 March 1997, which
in Legazpi City that it was a stolen vehicle and the alarm covering the
became due during the pendency of the case in view of the introduction of
same was not lifted. Instead, the PNP in Legazpi City impounded the
evidence of their maturity during the trial.
vehicle and charged Lee criminally.Sy informed Goodyear.Goodyear
requested on July 10, 1997 the PNP to lift the stolen vehicle alarm status.
- Such interpretation of Section 5, Rule 10 of the 1997 Rules of Civil This notwithstanding, Goodyear was impleaded as third-party defendant in
Procedure is erroneous. the third-party complaint filed by Sy on January 9, 1998.Goodyear filed a
motion to dismiss on March 24, 1998 on the twin grounds that the third-
party complaint failed to state a cause of action and even if it did, such
- Amendments of pleadings are allowed under Rule 10 of the 1997 Rules
cause of action was already extinguished. The Regional Trial Court
of Civil Procedure in order that the actual merits of a case may be
[(RTC)] resolved to dismiss the third-party complaint because it does not
determined in the most expeditious and inexpensive manner without
expressly show any act or omission committed by the third party
regard to technicalities, and that all other matters included in the case
defendant which violates a right of the third party complainant. CA
may be determined in a single proceeding, thereby avoiding multiplicity of
granted the appeal, holding that that the Third-Party Complaint had stated
suits. Section 5 thereof applies to situations wherein evidence not within
the issues raised in the pleadings is presented by the parties during the a cause of action. First, petitioner did not make good its warranty in the
trial, and to conform to such evidence the pleadings are subsequently Deed of Sale: to convey the vehicle to Respondent Anthony Sy free from
 Civil Procedure Digest
all liens, encumbrances and legal impediments. The reported hijacking of
the vehicle was a legal impediment that prevented its subsequent sale.
Second, Respondent Sy had a right to protect and a warranty to enforce,
while petitioner had the corresponding obligation to honor that warranty.
Goodyear moved for reconsideration, which CA denied.
Issues
WON the third-party complaint states a cause of action against Goodyear
Held
No. The Third-Party Complaint filed by Sy is inadequate, because it did not
allege any act or omission that petitioner had committed in violation of his
right to the subject vehicle.
Reasoning:
A cause of action is a formal statement of the operative facts that give rise
to a remedial right. The question of whether the complaint states a cause
of action is determined by its averments regarding the acts committed by
the defendant. Thus, it “must contain a concise statement of the ultimate
or essential facts constituting the plaintiff’s cause of action.” Failure to
make a sufficient allegation of a cause of action in the complaint “warrants
its dismissal.”
Elements of a Cause of Action
A cause of action, which is an act or omission by which a party violates
the right of another, has these elements:
1) the legal right of the plaintiff;
2) the correlative obligation of the defendant to respect that legal right;
and
3) an act or omission of the defendant that violates such right.”
TEST In determining whether an initiatory pleading states a cause of
action admitting the truth of the facts alleged, can the court render a valid
judgment in accordance with the prayer?” To be taken into account are
only the material allegations in the complaint; extraneous facts and
circumstances or other matters aliunde are not considered. The court
may consider -- in addition to the complaint -- the appended annexes or
documents, other pleadings of the plaintiff, or admissions in the records.
In the present case, the third element is missing. The Third-Party Complaint
filed by Sy is inadequate, because it did not allege any act or omission that
petitioner had committed in violation of his right to the subject vehicle. The
Complaint capitalized merely on the fact that the vehicle -- according to the
records of the PNP, which was a stranger to the case -- was “a stolen
vehicle.” The pleading did not contain “sufficient notice of the cause of
action” against petitioner.
without even going into the veracity of its material allegations, the
Complaint is insufficient on its face. No connection was laid out between
the owner’s sale of the vehicle and its impounding by the PNP. That the
police did not lift the alert status did not make petitioner less of an owner.
The Deed of Sale between petitioner and Respondent Sy was attached as
Annex A to the Third-Party Complaint filed by the latter against the former.
The Deed stated that petitioner was the absolute owner of the subject
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vehicle. No contrary assertion was made in the Complaint. Hence, the
trial court correctly observed that the Complaint had failed to show that, at
the time of its sale to Respondent Sy, the vehicle belonged to a person
other than petitioner.
ANGELITA MORCAL VS. ANTONIO LAVIÑA ET. AL.
476 SCRA 508 (2005)
QUISUMBING, J.
NATURE
For review on certiorari are the Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 75402, which affirmed the Decision of the
Regional Trial Court of Mauban, Quezon, Branch 64. The trial court
Decision sustained the Orders issued by Regional Office No. IV of the
Department of Environment and Natural Resources in DENR IV Case No.
5441 CENRO Case No. 91-02.
FACTS
-The case involves a parcel of unregistered land with an area of 4,840
square meters, situated at Barangay Cagsiay, Mauban Quezon, identified
only as Lot No. 2056-Cad-245.
-Petitioner Angelita Morcal, with her sister Ildefonsa Morcal and other
members of their family occupied, cleared and planted seasonal crops on
the land up to the time it was declared as public land on May 14, 1941.
Thereafter, their family declared the land for taxation purposes and began
planting coconut and other fruit bearing trees. Having been in possession
of the said land for almost forty (40) years, petitioner filed Free Patent
Application No. (IV-3) 14661 in 1976. However, on September 11, 1990,
private respondents Antonio Laviña (now deceased) and Teresita Laviña
protested the free patent application.
-On August 10, 1993, Regional Office No. IV of the DENR decreed the
reduction of the area covered by the FPA. The Spouses Antonio and
Teresita Laviña were directed to file the appropriate public land application
covering the other half of the lot in question particularly the northern
portion thereof. Morcal’s motion for reconsideration was denied. Petitioner
then filed with the Regional Trial Court a civil action to nullify the two
Orders of the DENR Regional Office. The trial court, however, dismissed
petitioner’s civil action and sustained DENR. Petitioner appealed to the
Court of Appeals but the latter eventually affirmed the TC.
-Petitioner contends the trial court is vested with the power to rule on the
substantial rights of the parties in this case. She insists the issue of
jurisdiction has been settled when the trial court issued an Order denying
the Motion to Dismiss filed by respondents. Petitioner alleges the principle
of exhaustion of administrative remedies does not apply because there is
urgent need for judicial intervention and because what is involved is a
small piece of agricultural land, all of 2,420 square meters. She adds she
has lost trust in the DENR as a body, which she believes would not
reverse itself.
-However, private respondent Teresita Laviña counters that petitioner’s
failure to pursue and exhaust the proper administrative remedies was fatal
Prof. Victoria A. 71
to her cause. She maintains that the Regional Executive Director of the
DENR did not commit any palpable error or grave abuse of discretion.
Likewise, private respondent contests petitioner’s claim that the disputed
land is very small; she alleges that the same is valued at a considerable
amount, over a million pesos.
ISSUE
WON the petition should be given due course
HELD
NO, for failure to comply with the doctrine of exhaustion of administrative
remedies
Ratio. The doctrine of exhaustion of administrative remedies requires that
resort be first made to the administrative authorities in cases falling under
their jurisdiction to allow them to carry out their functions and discharge
their responsibilities within the specialized areas of their competence. This
is because the administrative agency concerned is in the best position to
correct any previous error committed in its forum.[9]
-There are exceptions, however, to the applicability of the doctrine. Among
the established exceptions are:
1) when the question raised is purely legal;
2) when the administrative body is in estoppel;
3) when the act complained of is patently illegal;
4) when there is urgent need for judicial intervention;
5) when the claim involved is small;
6) when irreparable damage will be suffered;
7) when there is no other plain, speedy and adequate remedy;
8) when strong public interest is involved;
9) when the subject of the controversy is private land; and
10) in quo warranto proceedings.
-In this case, however, none of the foregoing exceptions may be availed
of. Contrary to petitioner’s assertion, we see no urgent need for judicial
intervention. Note that the case arose from the protest filed by
respondents against petitioner’s free patent application for the subject
unregistered agricultural land. Clearly, the matter comes within the
exclusive primary jurisdiction of the DENR in the exercise of its quasi-
judicial powers. The impugned Orders of the DENR Regional Office are
subject to review by the DENR Head Office. Petitioner cannot circumvent
this procedure by simply invoking a supposed loss of faith in the said
agency.
-Neither are we prepared to sustain petitioner’s claim that exhaustion of
administrative remedies need not be complied with on the ground that the
value of the disputed parcel of land is allegedly insignificant. Records
show that the land in question consists of 2,420 square meters, no doubt
a sizable parcel of land, regardless of its agricultural nature and the fact
that it is located in a remote area; and its value of over a million pesos is
certainly substantial and not insignificant.
Dispositive. In sum, we are convinced that no reversible error was
committed by the Court of Appeals when it sustained the trial court’s
dismissal of petitioner’s complaint seeking to nullify the questioned DENR
 Civil Procedure Digest
Orders for petitioner’s failure to exhaust the proper administrative
remedies.
PASCUAL VS PASCUAL
G.R. No 157830
CARPIO-MORALES; November 17, 2005
NATURE
Petition for Review on Certiorari challenging the February 10, 2003 Order
of the Regional Trial Court (RTC) of Isabela on motion of herein
respondent Marilou M. Pascual, the complaint filed against her by her
brother-herein petitioner Dante M. Pascual for non-compliance with the
conciliation provision-pre condition to filing of complaint in court under
R.A. 7160 (the Local Government Code)
FACTS
- Petitioner, a permanent resident of the United States of America,
appointed Sagario as his attorney-in-fact by a Special Power of Attorney
(SPA) dated April 10, 2002: (1.) To file a case for the cancellation of
Transfer Certificate of Title No. T-271656 issued in the name of Marilou M.
Pascual as well as the Deed of Sale of Registered Land and/or
Reconveyance at the appropriate court; ( 2.) To collect the monthly
rentals from the tenant; (3). To enter into amicable settlement with Marilou
M. Pascual or any other mode of payment/and/or dispute resolution; (4).
To execute and sign any and all papers, contracts/documents which may
be necessary relative to the above acts.
- Sagario filed on October 14, 2002 (pursuant to the SPA) before the
Isabela RTC at Roxas a complaint for Annulment of Transfer Certificate of
Title No. T-271657 of Isabela and Deed of Absolute Sale of Registered
Land and/or Reconveyance with Damages
- Defendant-herein respondent Marilou M. Pascual filed a Motion to
Dismiss on two grounds one of which was non-compliance with the
requirement under Section 412 of the Local Government Code. She
contends that there is no showing that the dispute was referred to the
barangay court before the case was filed in court. By the assailed Order of
February 10, 2003, Branch 23 of the Isabela RTC at Roxas granted
respondent’s Motion to Dismiss. It stated that :
-RA 7160 repealing P.D. 1508 otherwise known as the Revised
Katarungang Pambarangay provides under Section 409 “All disputes
involving real property or any interest therein shall be brought in the
barangay where the real property or the larger portion thereof is situated.”
Hence, the reliance of the plaintiff on Section 408 of R.A. 7160 is
incorrect. When real property or any interest therein is involved, the
dispute shall be filed before the barangay where the property is located,
regardless of the residence of the parties . Besides, it is incorrect to
say that the parties are not residents of the same place, Vira, Roxas,
Isabela. The Attorney-in-fact of the plaintiff in the person of
Reymel R. Sagario is a resident of Vira, Roxas, Isabela, and he
substitute (sic) Dante Pascual by virtue of said Special Power of
Attorney. Hence, said Attorney-in-fact should have brought the dispute
before barangay Vira, Roxas, Isabela, where the property is located. In
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the case of Royales vs. Intermediate Appellate Court, “Ordinarily, non-
compliance with the condition precedent prescribed by P.D. 1508 could
affect the sufficiency of the plaintiff’s cause of action and make his
complaint vulnerable to dismissal on ground of lack of cause of action or
prematurity.”
-Petitioner’s Motion for Reconsideration of the above-said order was
denied. This order stated that “Consequently, the Court is [of] the opinion
that the said Attorney-in-fact shall be deemed to be the real party in
interest, reading from the tenor of the provisions of the Special Power of
Attorney. Being a real party in interest, the Attorney-in-fact is therefore
obliged to bring this case first before the Barangay Court. Sec. 3, Rule 3
of the Rules of Court provides that “Where the action is allowed to be
prosecuted or defended by a representative or someone acting in a
fiduciary capacity, the beneficiary shall be included in the title of the case
and shall be deemed to be the real party in interest.
ISSUE/S
WON the dismissal of the case by the RTC is valid
HELD
NO
Ratio. Petitioner argues that since he, not his attorney-in-fact Sagario, is
the real party in interest, and since he actually resides abroad, the lupon
would have no jurisdiction to pass upon the dispute involving real property,
he citing Agbayani v. Belen
The pertinent provisions of the Local Government Code read: SEC. 408.
Subject Matter for Amicable Settlement; Exception Thereto. – The lupon
of each barangay shall have authority to bring together the parties
actually residing in the same city or municipality for amicable settlement
of all disputes except: xxxxx
-In the 1982 case of Tavora v. Veloso the Court held that where the parties
are not actual residents in the same city or municipality or adjoining
barangays, there is no requirement for them to submit their dispute to the
lupon as provided for in Section 6 vis a vis Sections 2 and 3 of P.D. 1508
(Katarungang Pambarangay Law).
-[B]y express statutory inclusion and exclusion, the Lupon shall have no
jurisdiction over disputes where the parties are not actual residents of the
same city or municipality, except where the barangays in which they
actually reside adjoin each other.
Reasoning. To construe the express statutory requirement of actual
residency as applicable to the attorney-in-fact of the party-plaintiff, as
contended by respondent, would abrogate the meaning of a “real party in
interest” as defined in Section 2 of Rule 3 of the 1997 Rules of Court vis a
vis Section 3 of the same Rule which was earlier quoted but misread and
misunderstood by respondent.
-In fine, since the plaintiff-herein petitioner, the real party in interest , is
not an actual resident of the barangay where the defendant-herein
respondent resides, the local lupon has no jurisdiction over their dispute,
hence, prior referral to it for conciliation is not a pre-condition to its filing in
court.
Prof. Victoria A. 72
Dispositive. The petition is granted.
PHILVILLE VS JAVIER
00 SCRA 00
SANDOVAL-GUTIERREZ; Dec. 13, 2007
NATURE
Instant petition for review on certiorari
FACTS
- This case traces its antecedents to a verified complaint filed by
Mercedes Javier, herein respondent with the RTC for damages and
injunction. Impleaded as defendant was PHILVILLE Development and
Housing Corporation (PHILVILLE).
- The complaint alleges that spouses Crisanto (now deceased) and Javier
have been tenant-cultivators of a 5.5 hectare parcel of rice land owned by
Felimon Emperado, a holder of a free patent.
- Sometime in 1977, PHILVILLE proposed to buy the land for conversion
into a housing subdivision. Spouses Javier, PHILVILLE and Emperado
then entered into a Kasulatan ng Pagsasalin at Kusang Loob na
Pagsusuko. Among the terms agreed upon by the parties was that the
Javiers would be given a 2,000 square meter lot as a disturbance
compensation. However, instead of giving them a single lot measuring
2,000 square meters, what they received were 2 separate lots of 1,000
square meters each located far apart. This prompted Mercedes to sue
PHILVILLE for damages.
- In its answer, PHILVILLE specifically denied the allegations in the
complaint and raised the following affirmative and special defenses: (1)
the complaint fails to state a cause of action; (2) it does not allege that the
parties resorted to conciliation proceedings before the barangay; and (3)
plaintiff is estopped from filing the complaint.
- Mercedes filed a motion for leave of court to amend her complaint. In
her attached amended complaint, she alleged that the Kasulatan did not
express the true agreement of the parties and that the sale is void as it
was executed within the 5-year prohibitive period from the issuance of the
free patent.
- The trial court denied the motion, holding that the proposed amendment
is inconsistent with the cause of action in the original complaint; and that
the proposed amendment is the subject of another civil case between the
same parties pending before another branch of the trial court.
- PHILVILLE moved to dismiss the original complaint alleging that the
plaintiff had filed a protest with the Land Management Bureau seeking the
revocation of the free patent issued to Emperado and the reversion of the
land to the public domain.
- the trial court granted PHILVILLE’s motion to dismiss
- Mercedes filed a motion for reconsideration of the said Order but it was
denied. This prompted her to interpose an appeal to the CA which
reversed the order and remanded the cast to the trial court.
- PHILVILLE filed a motion for reconsideration but it was denied by the
Appellate Court. Hence, the instant petition for review on certiorari.
 Civil Procedure Digest
ISSUE
WON the CA erred in reversing the challenged Orders of the trial court
dismissing the complaint of Mercedes.
HELD
NO.
Ratio Section 1, Rule 16 of the Revised Rules of Court then applicable
provides:
“SEC. 1. Grounds. – Within the time for pleading a motion to dismiss
the action may be made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the defendant or
over the subject of the action or suit; (b) That the court has no jurisdiction
over the nature of the action or suit; (c) That venue is improperly laid; (d)
That the plaintiff has no legal capacity to sue; (e) That there is another
action pending between the same parties for the same cause; (f) That the
cause of action is barred by a prior judgment or by statute of limitations;
(g) That the complaint states no cause of action; (h) That the claim or
demand set forth in the plaintiff’s pleading has been paid, waived,
abandoned, or otherwise extinguished; (i) That the claim on which the
action or suit is founded is unenforceable under the provisions of the
statute of frauds; (j) The suit is between members of the same family and
no earnest efforts towards a compromise have been made.”
In J.M. Tuason & Co., Inc. v. Rafor, this Court interpreted “within the
time for pleading” to mean within the time to answer .
Reasoning Under Section 1, Rule 11, the time to answer is 15 days after
service of summons upon the defendant. In the instant case, we note that
PHILVILLE’s motion to dismiss the complaint was filed after it had filed its
answer.
- The only exceptions to the rule, as correctly pointed out by the CA, are:
(1) where the ground raised is lack of jurisdiction of the court over the
subject matter; (2) where the complaint does not state a cause of action;
(3) prescription; and (4) where the evidence that would constitute a
ground for the dismissal of the complaint was discovered only during the
trial. None of the foregoing grounds is present in PHILVILLE’s motion to
dismiss.
Dispostition WHEREFORE, the petition is DENIED.
DIU V CA (BUSHNELL AND PAGBA)
G.R. NO. 115213
REGALADO; DEC.19, 1995
NATURE
Appeal by certiorari from judgment of CA which set aside the RTC’s
FACTS
- Private respondent Pagba purchased on credit various merchandise
from petitioners’ (Wilson and Dorcita Diu) store in Naval, Biliran all valued
at P7, 862.55.
- Respondents failed to pay despite repeated demands. Petitioners then
brought the matter to the Barangay Chairman of Naval and so the case
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was set for hearing but private respondents failed to appear. When the
case was again set for hearing, the parties appeared but they failed to
reach an amicable settlement. Accordingly, the barangay chairman issued
a Certification to File Action.
- Petitioners then filed their complaint for a sum of money before the MTC
of Naval to which private respondents interposed the counterclaim that
petitioners also had existing obligations to them: one for alleged
maintenance and repair of petitioners’ boat and another for the cost of 2
tires that petitioners allegedly misappropriated. Private respondents
likewise alleged that despite the confrontations before the barangay
chairman, petitioners refused to pay their just and valid obligations to
private respondent and her husband
- The MTC dismissed the complaint for non-compliance with the
provisions of P.D. 1508 on conciliation. Petitioners appealed to the RTC,
which did not pass upon the issue of the alleged non-compliance with P.D.
1508 but instead, decided the appeal on the merits and rendered
judgment in favor of petitioners.
- Private respondents then went to the CA and said appellate court set
aside the judgment of the RTC on the ground that there had been no
compliance with P.D. 1508. The CA said thus:
“It is, therefore, clear that if efforts of the barangay captain to settle
the dispute fails, the Pangkat ng Tagapagkasundo shall be constituted
with the end in view of exploring all possibilities of amicable settlement.
If no conciliation or settlement has been reached pursuant to the
aforesaid rules, the matter may then be brought to the regular courts.”
“In the case at bar, it has been established that there was no valid
conciliation proceeding between the parties. The efforts of the
barangay captain of Naval, Biliran to mediate the dispute between the
parties having failed, the Pangkat ng Tagapamayapa should have been
constituted for purposes of settling the matter. However, the Pangkat
was not constituted, and instead, a Certification to File Action was
issued by the barangay captain in favor of respondent spouses Diu. In
Bejer vs. Court of Appeals, 169 SCRA 5 66, it was held that “failure to
avail of conciliation process under P.D. 1508, x x x renders the
complaint vulnerable to a timely motion to dismiss.”
ISSUE
WON the confrontations before the Barangay Chairman of Naval satisfied
the requirement in P.D. 1508, there was substantial compliance with the
pre-condition (for filing the claim)
HELD
YES.
Ratio Under Sec.412 of the Local Government Code, confrontation
before the Lupon Chairman OR the Pangkat is sufficient compliance with
the pre-condition for filing the case in court.
Reasoning P.D. 1508 has been repealed by codification in the Local
Government Code, which took effect on Jan.1, 1992.
Prof. Victoria A. 73
Sec.410 (B)14 of the Local Govt. Code which mandates that the barangay
chairman shall constitute a pangkat if he fails in his mediation efforts,
should be construed together with Sec.412 15, as well as the circumstances
obtaining and peculiar to the case. On this score, the barangay chairman
or punong barangays is himself the chairman of the lupon under the Local
Govt. Code.
- While no pangkat was constituted, it is not denied that the parties met at
the office of the barangay chairman for possible settlement. Although no
pangkat was formed, there was substantial compliance with the law.
- From the facts, it is undeniable that there was substantial compliance
with P.D.1508 which does not require strict technical compliance with its
procedural requirements. Under the factual antecedents, it cannot be said
that the failure of the parties to appear before the pangkat caused any
prejudice to the case for private respondents considering that they already
refused conciliation before the barangay chairman and, their sham
insistence for a meeting before the pangkat is merely a ploy for further
delay. Technicalities should not be made to desert their true role in our
justice system, and should not be used as obstructions therein.
- The Court noted that although the basic complaint was filed by
petitioners on July 10, 1991, before the effectivity of the Local Govt. Code,
or when P.D. 1508 was still in force, the procedural provisions of the Local
Govt. Code are also applicable to this case. Statutes regulating procedure
in courts are applicable to actions pending and undetermined at the time
of their passage. Procedural laws are retrospective in that sense.
- The Court further reasoned that the failure of Pagba to specifically allege
in their Answer that there was no compliance with the barangay
conciliation procedure constituted a waiver of that defense. Since private
respondents failed to duly raise that issue, their defense founded thereon
is deemed waived, especially since they did not pursue the issue before
the case was set for hearing. Also, the conciliation procedure under P.D.
1508 is not a jurisdictional requirement and noncompliance therewith
cannot affect the jurisdiction which the lower courts had already acquired
over the subject matter and private respondents as defendants therein.
Disposition petition GRANTED. The CA judgment is SET ASIDE. RTC
judgment is REINSTATED.
BERBA V. PABLO
474 SCRA 686
CALLEJO, November 11, 2005
14
SEC. 410. PROCEDURE FOR AMICABLE SETTLEMENT. (b) x x x. If
he (lupon chairman) fails in his mediation effort within fifteen (15) days
from the first meeting of the parties before him, he shall forthwith set a
date for the constitution of the pangkat in accordance with the provisions
of this chapter.
15
SEC. 412. CONCILIATION. - (a) Precondition to filing of Complaint in
Court. - No complaint x x x shall be filed or instituted in court x x x unless
there has been a confrontation of the parties before the lupon chairman
OR the pangkat, and that no conciliation or settlement has been reached
as certified by the lupon secretary or pangkat secretary as attested to by
the lupon or pangkat chairman x x x.
 Civil Procedure Digest
Nature
Petition for review on certiorari
Facts
- Estela Berba was the owner of a parcel of land located at M. Roxas St,
Sta. Ana, Manila. A house was constructed on the lot, which she leased to
Josephine Pablo and the Heirs of Carlos Palanca sometime in 1976,
covered by a lease contract. Upon its expiration, the lessees continued
leasing the house on a month-to-month basis.
- The lessees failed to pay the rentals due, and by May 1999, their
arrears amounted to P81,818. Berba filed a complaint for eviction and
collection of unpaid rentals only against Pablo in the Office of the Punong
Barangay.
- On June 5, 1999, Berba and Pablo executed an Agreement approved
by the pangkat, wherein: 1) Pablo undertook to pay Berba P3000 every
tenth of the month until fully paid; 2) Pablo will voluntarily leave the leased
premises upon failure to pay; and 3) Pablo will pay P3450 as monthly
rental, on top of the P3000.
- By May 2000, the lessees still had a balance of P71,716. As of May
2001, the total arrearages of the lessees amounted to P135,115.63.
- On May 2, 2001, Berba through counsel wrote to lessees, demanding
payment of the arrearages and to vacate the house within 30 days from
notice, otherwise she will sue them. The lessees ignored the demand.
- On June 21, 2001, Berba filed a complaint against Pablo and the Heirs
of Carlos Palanca in the MTC of Manila for unlawful detainer. Berba,
however, failed to append to her complaint a certification from the Lupon
ng Tagapamayapa that no conciliation or settlement has been reached.
- In their answer, defendants admitted they stopped paying rentals
because of financial distress. By way of special and affirmative defenses,
they averred that the plaintiff had no cause of action against them as she
failed to secure a Certificate to File Action from the Lupon.
- During the pre-trial conference, the parties manifested that despite
earnest efforts, no amicable settlement was reached. They defined the
main issue as WON the plaintiff had a valid cause of action for unlawful
detainer against defendants.
- In her position paper, Berba appended an Agreement dated June 5,
1999 between her and Pablo, which appeared to have been approved by
the Punong Barangay and the members of the Lupon. She also appended
a Statement of Account.
- In their position paper, defendants insisted that the dispute did not go
through the Lupon ng Tagapamayapa prior to the filing of the complaint;
hence Berba’s complaint was premature.
- In her reply, the plaintiff alleged that there was no more need for her to
secure a Certificate to File Action because she was a resident of Maligaya
St., Malate, Manila, while the defendants were residing in Barangay 873,
Zone 6 in Sta. Ana Manila.
- MTC ruled in favor of Berba. Defendants appealed to the RTC. On
motion of Berba, RTC issued an order for the execution of the decision
pending appeal. The defendants filed a motion for the recall of the Order,
but before the court could resolve the motion, the Sheriff turned over the
physical possession of the property to Berba on May 20, 2002.
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- In their Appeal Memorandum, defendants insisted that Berba’s action
in the MTC was premature because of the absence of Certificate to File
Action issued by the Lupon. Berba averred there was no need of a prior
referral to the Lupon, and cited Sec 408(f) of the Local Government Code,
pointing out that she resided in a barangay in Malate, 8 kilometers away
from the barangay in Sta. Ana where the defendants lived.
- RTC granted the appeal, reversing the decision of the MTC and
ordering the dismissal of the complaint for unlawful detainer without
prejudice. The RTC ruled that under Sec 408 of the Local Government
Code, parties who reside in the same city or municipality although in
different barangays are mandated to go through conciliation proceedings
in the Lupon.
- RTC denied Berba’s MFR. She then filed petition for review with CA,
claiming that Sec 408 of Local Government Code should be construed
liberally together with Sec 412. She further averred that she had complied
substantially with the requisites of the law, and recalls that conciliation
proceedings before the Lupon resulted in the execution of an Agreement
on June 5, 1999. Upon failure to comply with the agreement, all chances
of amicable settlement were effectively foreclosed.
- CA dismissed the petition and affirmed the RTC decision.
Issue
WON the CA erred in dismissing the petition and declaring that there was
no substantial compliance with the mandate of the law with respect to
prior referral to the Barangay Court.
Held
NO
- Berba and Pablo executed the Agreement which was approved by the
Lupon. This agreement had the force and effect of a final judgment. When
Pablo failed to comply with her obligation of repaying the back rentals,
Berba had the right to enforce the Agreement against her and move for
her eviction from the premises. However, instead of filing a motion before
the Lupon for the enforcement of the agreement, or an action in the MTC
for the enforcement of the settlement, the petitioner filed an action against
Pablo for unlawful detainer and the collection of unpaid rentals. The action
of Berba against Pablo was barred by the Agreement of June 5, 1999.
- Berba’s complaint against the Heirs of Carlos Palanca was premature.
They were not impleaded by Berba as parties-respondents before the
Lupon. Moreover, they were not privy to the agreement, and as such,
were not bound by it.
- Under Sec 408 of the Local Government Code, parties actually
residing in the same city or municipality are bound to submit their disputes
to the Lupon for conciliation/amicable settlement, unless otherwise
provided therein.
- If the complainant/plaintiff fails to comply with the requirements of the
Local Government Code, such complaint filed with the court may be
dismissed for failure to exhaust all administrative remedies.
Disposition Petition denied.
Prof. Victoria A. 74
SUSTIGUER V TAMAYO
G.R. No. 29341
FERNAN; AUG 21 1989
NATURE
Appeal to order by CFI
FACTS
-Sustiguer and Aposaga both claimed that they were qualified and entitled
to purchase a subdivision lot in Bacolod for the reason that they possess
the preferential right to buy it from the Govt of Bacolod, being the actual
occupants of the lot.
- they agreed that the award of the lot be given to Aposaga and that a
down payment of 20% of the total cost of the lot shall be made (or else
the lot will be awarded to other applicants)
-Aposaga failed to pay the price. The same lot was sold to Jose Tamayo.
-Sustiguer and Aposaga filed for annulment of the sale on installment and
award of said lot against the Govt of Bacolod and Tamayo, claiming that
Tamayo was not qualified to apply for the award nor to purchase the lot
under Ordinance No. 149. It was also claimed that Tamayo maliciously
filed for unlawful detainer against Aposaga and Sustiguer
- 5 years and 5 months after the complaint was filed, Aposaga filed a
"Motion to Withdraw in Case 6528 (annulment of sale)” and “Confess
Judgment in Civil Case No. 7512 (unlawful detainer case)" declaring she
is no longer interested in its prosecution. The court allowed her withdrawal
as plaintiff.
- Sustiguer filed a manifestation that the withdrawal of Aposaga as party-
plaintiff in Civil Case 6528 and as party defendant in Civil Case 7512 does
not change the status and character of the said cases considering that
she was merely accommodated by her codefendant in occupying the lot in
question.
- Tamayo moved for a preliminary hearing on his affirmative and special
defenses and to dismiss both the complaint and complaint in intervention
(of Villamarzo) invoking Sec 5 of Rule 16. He prayed that he be allowed to
submit a written memorandum in support of his affirmative and special
defenses.
-Tamayo filed his memorandum on the issue WON Sustiguer has any
cause of action against the defendants. Sustiguer filed an opposition to
the motion to dismiss and moved for judgment on the pleadings pursuant
to Sec 1 of Rule 19.
-lower court dismissed the complaint of Sustiguer for lack of cause of
action
-Sustiguer filed MFR and new trial claiming that the dismissal of the
complaint is contrary to law as there was no preliminary hearing and that
she still has a valid cause of action even after the withdrawal of Aposaga
from the case as she was suing in her own right as an awardee entitled to
the award in question. CFI denied.
ISSUE
WON dismissal of complaint was proper
 Civil Procedure Digest
HELD
YES
- Rule 3.2 “Every action must be prosecuted and defended in the name of
the real party-in-interest. All persons having an interest in the subject of
the action and in obtaining the relief demanded shall be joined as
plaintiffs. . . ."
-The real party-in-interest is the party who stands to be benefited or
injured by the judgment or the party entitled to the avails of the suit.
"Interest" within the meaning of the rule means material interest, an
interest in issue and to be affected by the decree, as distinguished from
mere interest in the question involved, or a mere incidental interest. As a
general rule, one having no right or interest to protect cannot invoke the
jurisdiction of the court as a party-plaintiff in an action.
- Sustiguer is not entitled to the relief prayed for, she not being the real
party-in-interest. The dismissal of the complaint for lack of cause of action
is proper under the circumstances. It is well-settled that where the plaintiff
is not the real party-in-interest, the ground for the motion to dismiss is lack
of cause of action.
-Sustiguer’s interest cannot be categorized as material interest within the
meaning of Rule 3.2 considering that it is contingent upon the final
execution of the contract of sale on installment in favor of Aposaga.
-Although the ground of lack of cause of action was pleaded by Tamayo
as one of his special and affirmative defenses in his answer, the said
ground for dismissal of the complaint may be heard preliminarily as if a
motion to dismiss had been filed pursuant to Section 5 of Rule 16 of the
Rules of Court. Tamayo took this procedural step by filing a motion for
preliminary hearing and thereafter to dismiss the complaint and the
complaint in intervention. Records show that instead of a preliminary
hearing, the parties filed their respective memoranda on the issue WON
Sustiguer has a cause of action.
-When the ground for dismissal is that the complaint states no cause of
action, the rule provides that its sufficiency can only be determined by
considering the facts alleged in the complaint and no other, the test being
whether the court can render a valid judgment from the facts set forth.The
rule is that when the motion to dismiss is based on the ground that the
complaint states no cause of action, no evidence may be allowed and the
issue should only be determined in the light of the allegations of the
complaint. Thus it was erroneous for Sustiguer to claim that the lower
court should have conducted a trial on the merits instead of dismissing the
complaint upon a mere motion.
Disposition dismissal of complaint for lack of cause of action as well as
the order denying MFR affirmed
HEIRS OF LICAROS V SANDIGANBAYAN
A2010 Prof. Victoria A. 75
Avena
440 SCRA 483 - The Sandiganbayan ruled that the argument of petitioners that
Licaros could not be held personally liable was untenable because the
PANGANIBAN; October 18, 2004
GBTC assets had been acquired by Tan through a public bidding duly
approved by the Monetary Board. According to the anti-graft court, this
FACTS
argument was a matter of defense that could not be resorted to in a
- Gregorio S. Licaros, petitioners’ predecessor-in-interest, served as
motion to dismiss, and that did not constitute a valid ground for
governor of the Central Bank of the Philippines from 1970 to 1980 during
dismissal.
the presidency of Marcos. He died on August 3, 1983.
- It was immaterial that Licaros was not a business associate of the
- July 17, 1987 – PCGG, assisted by Office of SolGen, filed a complaint
main defendants and not an officer, a director, or a stockholder of any
for reversion, reconveyance, restitution, accounting and damages against
of the defendant corporations. The paramount issue hinged on his acts
Marcos and alleged crony Lucio Tan. The complaint was to recover ill-
as Central Bank governor, particularly his participation in an allegedly
gotten wealth which was allegedly acquired and accumulated in flagrant
illegal conspiracy with Marcos and Domingo to give undue advantage
breach of trust and of their fiduciary obligations as public officers.
to Tan’s bid for the GBTC assets.
- Aside from the main defendants (Marcos, wife Imelda and Tan), 23 other
persons who had purportedly acted as their dummies, nominees or
ISSUE
agents.
WON the motion to dismiss should have been granted on the
- It alleged, among others, that Tan (with the connivance of some
grounds of:
government officials, including CB Governor Licaros) had fraudulently
1) Lack of cause of action
acquired the assets of the General Bank and Trust Company, now known
2) Prescription
as the Allied Bank.
- Despite the allegation, Licaros was not impleaded in this Complaint or in
HELD
the subsequent Expanded Complaint.
1. NO
- September 13, 1991 - 4 years after the original action was filed, RP filed
Ratio It is a well-settled rule that in a motion to dismiss based on the
a Motion for Leave to Amend Complaint and for Admission of a Second
ground that the complaint fails to state a cause of action, the question
Amended Complaint, which impleaded the Estate/Heirs of Licaros for the
submitted to the court for determination is the sufficiency of the allegations
first time.
in the complaint itself. Whether these allegations are true or not is beside
- The Amended Complaint, reiterating earlier allegations in the
the point, for their truth is hypothetically admitted. The issue rather is:
Expanded Complaint, detailed Licaros’ participation in the alleged
admitting them to be true, may the court render a valid judgment in
unholy conspiracy.
accordance with the prayer in the complaint? So rigid is the norm
- Licaros had allegedly facilitated the fraudulent acquisition of the
prescribed that if the court should doubt the truth of the facts averred, it
assets of GBTC worth over P688 million at that time, to favor the
must not dismiss the complaint but require an answer and proceed to hear
Marcoses and the Lucio Tan Group who acquired said GBTC assets
the case on the merits.
for only P500,000.00. Hence, his estate represented by his heirs was
Reasoning
impleaded as a party defendant for the purpose of obtaining complete
- Petitioners are seeking the dismissal of the present case, because (1)
relief.
the actions imputed to Licaros as Central Bank governor were allegedly
- In 1976, GBTC got into financial difficulties and a loan was extended
official acts of the members of the Monetary Board acting as a collegial
to it by CB amounting to P310 million.
body; and (2) the acquisition was done through a public bidding and in
- In extending this loan, the CB took control of GBTC when the latter
good faith. These contentions are evidently matters of defense, the
executed an irrevocable proxy of 2/3 of the bank’s outstanding shares
veracity of which must be determined in a full-blown trial (or in a pretrial
in favor of the CB. 7 of the 11-member Board of Directors were CB
stipulation), and not in a mere motion to dismiss.
nominees.
- A cause of action exists if the following elements are present: (1) a right
- March 25, 1977 – GBTC was declared insolvent and placed under
in favor of the plaintiff by whatever means and under whatever law it
receivership.
arises or is created; (2) an obligation on the part of the named defendant
- A public bidding was held for the shares of GBTC. Among the
to respect and not to violate that right; and (3) an act or omission
conditions was the attachment by the bidder of a letter of credit. This
constituting a breach of obligation of the defendant to the plaintiff or
was not fulfilled by Tan, et. al. who only paid P500,000 and attached a
violating the right of the plaintiff, for which the latter may maintain an
letter from PNB president Domingo. Marcos, Domingo and Licaros
action for recovery of damages.
allegedly conspired with each other and gave Tan, et. al. favors.
- The allegations in the Second Amended Complaint clearly and
- September 3, 2001 - The heirs of Licaros filed a Motion to Dismiss the
unequivocally outlines its cause of action against Licaros.
Complaint, raising as grounds (1) lack of cause of action and (2)
- The Second Amended Complaint was unambiguous when it charged that
prescription.
Licaros, during his lifetime, had conspired with the main defendants in
- The Sandiganbayan held that the averments in the Second Amended
facilitating the allegedly questionable transfer of the GBTC assets to Tan.
Complaint had sufficiently established a cause of action against Licaros.
 Civil Procedure Digest
- This charge of "conspiracy" casts a wide net, sufficiently extensive to
include all acts and all incidents incidental, related to or arising from the
charge of systematic plunder and pillage against the main defendants
Ratio An action to recover ill-gotten wealth is outside the purview of the
ordinary rules on prescription, as contained in Article 1146 of the Civil
Code.
Reasoning
- The instant action for reconveyance, restitution, and accounting
impleads the Estate/Heirs of Gregorio Licaros for previous acts committed
by the decedent during his lifetime, more particularly for conspiring with
the main defendants to prejudice the Republic.
- Section 15 of Article XI of the 1987 Constitution states that “the right of
the State to recover properties unlawfully acquired by public officials or
employees, from them or from their nominees or transferees, shall not be
barred by prescription, laches or estoppel.”
- The intent of the constitutional provision presumably lies in the special
attendant circumstances and the primordial state interests involved in
cases of such nature.
Disposition Petition dismissed
TANCUNTIAN V GEMPESAW
00 SCRA 00
CORONA; October 18, 2004
NATURE
Petition for review under Rule 45 for the reversal of the decision and
resolution of the Court of Appeals which affirmed the order of the Regional
Trial Court dismissing an action for cancellation of title and damages for
alleged lack of legal personality of petitioners.
FACTS
- Plaintiffs, Fausto Tancuntian, Macario Tancuntian and Cristina Cayang
are beneficial owners of that parcel of land
- Sometime in May 1994, the plaintiffs discovered that defendants applied
for a free patent and fraudulently and anomalously secured titles on the
portions of the same parcels of land from the Bureau of Lands
- Petitioners prayed for the issuance of a temporary restraining order
and/or writ of preliminary injunction enjoining respondents from selling,
alienating and disposing the subject properties or any portion thereof
during the pendency of the case. They also sought the cancellation and
nullification of all the titles of the subject properties in the names of
respondents as well as the reconveyance thereof to petitioners, plus
damages and attorney’s fees.
- Private respondents filed an opposition to the motion for the issuance of
a writ of preliminary injunction on the ground that petitioners had neither
the legal personality nor the authority to institute the proceedings for
cancellation of title.
- Petitioners clarified that they were not asking for the reversion of subject
private land to the public domain, which would have required the
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participation of the Director of Lands or the Secretary of the Department of
Environment and Natural Resources (DENR) through the Solicitor
General. In essence, petitioners were seeking the quieting of their original
titles that would ultimately lead to the cancellation of private respondents’
unlawfully issued and void free patent titles on the same private land.
- RTC motu propio dismissed the complaint because only the Republic of
the Philippines through the Solicitor General can file a case for
cancellation of title on the ground of fraud in the processing and issuance
of the said title
- Petitioners filed motions for reconsideration of the said order and
inhibition of the presiding judge.
- Judge Salvador Ibarreta, Jr. of Branch 8 of the Davao City RTC, to whom
the case was re-raffled after Judge Quitain’s inhibition, granted the motion
for reconsideration and set aside the order of dismissal. In reinstating the
complaint Judge Ibarreta reasoned that “it was error for the court to have
dismissed the case without a prior motion to dismiss having been filed by
private respondents.”
- Respondents Vicente Gempesaw, et al. filed their answer to the
complaint, while Jofre Saniel, another respondent, filed a motion to
dismiss. They principally invoked petitioner’s lack of legal personality and
authority to institute the action for cancellation of their titles.
- Respondent Saniel asserted that since the action was for the
cancellation of the original certificates of title issued to them through free
patent, it was only the Government through the Solicitor General or his
duly authorized representative who could institute the reversion
proceeding.
- Eventually, Judge Ibarreta issued an order dismissing the complaint.
- Petitioners appealed to the Court of Appeals which affirmed the trial
court and held: There is no dispute that the titles registered in the names
of the defendants-appellees are free patent titles issued by the State
through the Bureau of Lands. Thus, not being owners, much less grantors,
plaintiffs-appellants cannot as for cancellation or reconveyance.
- Petitioners filed this petition.
- Petitioners contend that the suit they initially filed in the RTC of Davao
City was not an action for reversion (wherein the real party in interest
would have indeed been the Republic of the Philippines) but rather an
action for cancellation of titles with damages, since the problem was
“double titling.”
- Petitioners thus pray for the cancellation of titles and free patents
fraudulently secured by respondents over the same parcels of land which
were already registered to them through OCTs which were still intact and
in their names at the time of the issuance of respondents’ allegedly void
titles.
- Petitioners insist that since the land in question was already private land
at the time it was issued a free patent by the Bureau of Lands, the
inclusion of the Republic of the Philippines as the real party in interest was
unnecessary.
ISSUE
WON the petitioners have legal personality to institute the proceedings.
HELD
Prof. Victoria A. 76
YES
- This legal dispute does not involve an action for the reversion of land to
the public domain but one for the cancellation of null and void free patents
over private land.
- Heirs of Ambrocio Kionisala vs. Heirs of Honorio Dacut : An ordinary civil
action for declaration of nullity of free patents and certificates of title is not
the same as an action for reversion. The difference between them lies in
the allegations as to the character of ownership of the realty whose title is
sought to be nullified.
- In an action for reversion, the pertinent allegations in the complaint
would admit State ownership of the disputed land. On the other hand, a
cause of action for declaration of nullity of free patent and certificate of
title would require allegations of the plaintiff’s ownership of the contested
lot prior to the issuance of such free patent and certificate of title as well
as the defendant’s fraud or mistake; as the case may be, in successfully
obtaining these documents of title over the parcel of land claimed by
plaintiff. In such a case, the nullity arises strictly not from the fraud or
deceit but from the fact that the land is beyond the jurisdiction of the
Bureau of Lands to bestow and whatever patent or certificate of title
obtained therefor is consequently void ab initio. The real party in interest
is not the State but the plaintiff who alleges a pre-existing right of
ownership over the parcel of land in question even before the grant of title
to the defendant.
- Petitioners claim continuing ownership over the subject parcels of land
since 1976, as evidenced by OCT No. 0-328 and 0-329 in their names.
This can only mean, according to petitioners, that the free patents and
OCTs issued to respondents in 1990 and 1991 were null and void
because the land was their private property, and as such, could not have
been validly disposed of by the Government. Conformably with our ruling
in Heirs of Ambrocio Kionisala, petitioners are therefore the real party in
interest in this case.
- Furthermore, Rule 3, Section 2 of the 1997 Rules of Civil Procedure
states:
Section 2. Parties in interest - A real party in interest is the party
who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be presented
or defended in the name of the real party in interest.
- Since, petitioners are the real parties in interest under the rules, then
they have the legal personality to sue respondents. The land subject of
the controversy is titled either in their names or that of their predecessors-
in-interest. They stand to be benefited or injured by whatever decision the
court may decree. Hence, they are entitled to the opportunity to defend
their titles and present their side of the controversy since their titles date
even earlier than those of the patent holders-respondents.
Disposition Petition GRANTED.
MALLION V ALCANTARA
G.R. No. 141528
 Civil Procedure Digest A2010 Prof. Victoria A. 77

Avena
AZCUNA; October 31, 2006 -This doctrine is a rule which pervades every well-regulated system of by having circumscribed and limited theories of recovery opened by the
jurisprudence and is founded upon the following precepts of common law, pleadings in the first.
namely: (1) public policy and necessity, which makes it to the interest of -Litigants are provided with the options on the course of action to take in
NATURE
the State that there should be an end to litigation, &(2) the hardship on the order to obtain judicial relief. Once an option has been taken and a case is
Petition for review on certiorari under Rule 45, ROC
individual that he should be vexed twice for the same cause. A contrary filed in court, the parties must ventilate all matters and relevant issues
doctrine would subject the public peace and quiet to the will and neglect of therein. The losing party who files another action regarding the same
FACTS
individuals and prefer the gratification of the litigious disposition on the controversy will be needlessly squandering time, effort and financial
-Oct24,1995: Oscar P. Mallion filed a petition with RTC San Pablo City
part of suitors to the preservation of the public tranquility and happiness. resources because he is barred by law from litigating the same
seeking a declaration of nullity of his marriage to Editha Alcantara under
-In this jurisdiction, the concept of res judicata is embodied in Sec47(b) controversy all over again.
Article 36 of the Family Code, citing Alcantara’s alleged psychological
and (c) of Rule 39 of ROC. Res judicata in this sense requires the -Having expressly and impliedly conceded the validity of their marriage
incapacity. After trial on the merits, RTC denied the petition upon the
concurrence of the following requisites : celebration, petitioner is now deemed to have waived any defects therein.
finding that Mallion failed to adduce preponderant evidence to warrant the
(1) the former judgment is final; For this reason, the Court finds that the present action for declaration of
grant of the relief he is seeking. CA dismissed the appeal for failure of
(2) it is rendered by a court having jurisdiction over the subject matter and nullity of marriage on the ground of lack of marriage license is barred by
Mallion to pay the docket and other lawful fees within the reglementary
the parties; the earlier decision dismissing the petition for declaration of nullity on the
period.
(3) it is a judgment or an order on the merits; and ground of psychological incapacity.
-After said decision attained finality, Mallion filed on July 12, 1999 another
(4) there is -- between the first and the second actions -- identity of Disposition Petition denied for lack of merit. Costs against petitioner.
petition for declaration of nullity of marriage with RTC San Pablo City, this
parties, of subject matter, and of causes of action. SO ORDERED.
time alleging that his marriage with Alcantara was null and void due to the
-test to determine whether the causes of action are identical :
fact that it was celebrated without a valid marriage license. For her part,
ascertain whether the same evidence will sustain both actions, or whether
Alcantara filed an answer with a MTD praying for the dismissal of the
there is an identity in the facts essential to the maintenance of the two LEE BUN TING V ALIGAEN
petition on the ground of res judicata and forum shopping.
actions. If the same facts or evidence would sustain both, the two actions
-RTC granted MTD and dismissed the case forforum shopping and 76 SCRA 416
are considered the same, and a judgment in the first case is a bar to the
multiplicity of suits. Mallion’s MFR was also denied. Hence, this petition. ANTONIO; April 22, 1977
subsequent action.
-Mallion argues that while the relief prayed for in the two cases was the
-Based on this test, it is apparent that petitioner is simply invoking different
same, that is, the declaration of nullity of his marriage to respondent, the
grounds for the same cause of action. By definition, a cause of action is NATURE
cause of action in the earlier case was distinct and separate from the
the act or omission by which a party violates the right of another. In both Original petition in the SC. Certiorari with preliminary injunction.
cause of action in the present case because the operative facts upon
petitions, petitioner has the same cause - the declaration of nullity of his
which they were based as well as the evidence required to sustain either
marriage to respondent. What differs is the ground upon which the cause FACTS
were different. Because there is no identity as to the cause of action,
of action is predicated. These grounds cited by petitioner essentially split - The case involves a question of res judicata. The first case was
petitioner claims that res judicata does not lie to bar the second petition . In
the various aspects of the pivotal issue that holds the key to the resolution Dinglasan v Lee Bun Ting. The present case seeks for the reversal of the
this connection, petitioner maintains that there was no violation of the rule
of this controversy, that is, the actual status of petitioner and respondent’s decision in aforementioned case.
on forum shopping or of the rule which proscribes the splitting of a cause
marriage. DINGLASAN V LEE BUN TING
of action.
-Furthermore, the instant case is premised on the claim that the marriage - Petitioners sold to Lee Liong, a Chinese citizen (predecessor of Lee Bun
-Alcantara, in her comment, counters that while the present suit is
is null and void because no valid celebration of the same took place due Ting), a parcel of land situated in Capiz, for P6,000. After the sale Lee
anchored on a different ground, it still involves the same issue raised in
to the alleged lack of a marriage license. But in the earlier case, petitioner Liong constructed a concrete building which he used for his lumber
the earlier civil case (validity of their marriage) and prays for the same
impliedly conceded that the marriage had been solemnized and business and his residence.
remedy (declaration of nullity). Respondent thus contends that petitioner
celebrated in accordance with law. Petitioner is now bound by this - Petitioners sought for the declaration of nullity of the sale. Petitioners
violated the rule on forum shopping. Moreover, respondent asserts that
admission. The alleged absence of a marriage license which petitioner contend that the sale was a conditional sale with the right to repurchase,
petitioner violated the rule on multiplicity of suits as the ground he cites in
raises now could have been presented and heard in the earlier case. but the RTC and CA found that the sale was absolute. Another contention
this petition could have been raised during the trial in the first case.
-Parties are bound not only as regards every matter offered and received was that the sale is null and void as it violated the 1973 Constitution, Art
to sustain or defeat their claims or demand but as to any other admissible XIII, Sec. 5 (that foreigners cannot own land in the Philippines). On June
ISSUE
matter which might have been offered for that purpose and of all other 27, 1956, the Court upheld the sale.
WON a previous final judgment denying a petition for declaration of nullity
matters that could have been adjudged in that case. - The Supreme Court held that even if Lee Liong violated the Constitution,
on the ground of psychological incapacity is bar to a subsequent petition
-A party cannot evade or avoid the application of res judicata by simply the sale cannot be deemed null and void because at the time of the sale,
for declaration of nullity on the ground of lack of marriage license
varying the form of his action or adopting a different method of presenting one of the plaintiffs, Judge Rafael Dinglasan (an assistant attorney at the
his case. Perez v. CA: the statement of a different form of liability is not a DOJ) knew of the said Constitutional provision. The vendor was equally
HELD: YES
different cause of action, provided it grows out of the same transaction or guilty, and the doctrine of pari delicto applied. The doctrine of in pari
-Res judicata , defined : a matter adjudged; a thing judicially acted upon
act and seeks redress for the wrong. Two actions are not necessarily for delicto barred petitioner-appellants from recovering the title to the property
or decided; a thing or matter settled by judgment. It also refers to the rule
different causes of action simply because the theory of the second would in question and renders unnecessary the consideration of the other
that a final judgment or decree on the merits by a court of competent
not have been open under the pleadings in the first. A party cannot arguments presented.
jurisdiction is conclusive of the rights of the parties or their privies in all
preserve the right to bring a second action after the loss of the first merely - The Court pointed out the absence of policy governing lands sold to
later suits on points and matters determined in the former suit.
aliens in violation of the Constitutional prohibition.
 Civil Procedure Digest
PRESENT CASE
- Twelve (12) years later, private respondents Dinglasan et al. filed a
complaint on JULY 1, 1968 for the recovery of the same parcel of land
(subject-matter of the previous case), on the basis of the decision of the
SC in Philippine Banking Corporation v Lui She. The respondents again
asserted that the sale violated the Constitution. They prayed that they be
declared the legal owners, the land be surrendered, that Lee Bun Ting
receive P6K as restitution for the land, and that they be paid P2K monthly
until the return of the property.
- A motion to dismiss was filed by Lee Bun Ting on the ground of res
judicata, alleging that the issues have definitely been settled in the
Dinglasan case.
- On Oct. 10, 1968 Aligaen of Capiz CFI denied the motion to dismiss. A
motion for reconsideration was filed by defendants. The claimed that in
the case of Philippine Banking Corporation, there is no statement which
would have the effect of reopening and changing previously adjudicated
rights of parties and finally settled cases (meaning there is no express
prohibition against changing previous cases).
- Lee Bun Ting reiterated their defense of res judicata on the basis of the
decision of the SC on June 27, 1956. They prayed that the complaint
be dismissed.
ISSUE
WON the case Rafael Dinglasan, et al. v Lee Bun Ting, et al. could be
relitigated in view of the subsequent decision of the SC in Philippine
Banking Corp. v Lui She
HELD
NO.
Ratio It is clear that posterior changes in the doctrine of the SC cannot
retroactively be applied to nullify a prior final ruling in the same proceeding
where the prior adjudication was had, whether civil or criminal.
Reasoning
- Reasons of public policy, judicial orderliness, economy and judicial time
and the interests of litigants, as well as the peace and order of society, all
require that stability be accorded the solemn and final judgments of the
courts or tribunals of competent jurisdiction.
RES JUDICATA
- The doctrine of res judicata applies where, between a pending action
and one which has been finally and definitely settled, there is identity of
parties, subject matter and cause of action. Parties should not be allowed
to litigate the same issue more than once.
Rule 39, Sec. 49(b)
(b) In other cases the judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in
interest by the title subsequent to the commencement of the action or
special proceeding, litigating for the same title and in the same capacity.
(c) In any other litigation between the same parties or their successors-in-
interest, that only is deemed to have been adjudged in a former judgment
which appears upon it face to have been so adjudged, or was actually and
necessarily included therein or necessary thereto.
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- 49(b) refers to bar by prior judgment, while 49(c) refers to
conclusiveness of judgment. The judgment in the first case constitutes an
absolute bar to the subsequent action. (However, even if there is identity
of parties but no identity or cause of action, the first judgment is
conclusive in the second case.
- In the present case, the names of the parties involved were the same,
and the action and relief prayed for are identical—annulment of sale and
recovery of the parcel of land.
- a subsequent reinterpretation of the law may be applied to new cases
but not to an old one finally and conclusively determined by the people.
Once the judgment of the SC becomes final, it is binding on all inferior
courts, and hence beyond their power and authority to alter or modify.
DISPOSITION
Certiorari is granted, with costs against private respondents.
VILLARINO v AVILA
G.R. No. 131191
TINGA, J. ; September 26, 2006
NATURE
Petition for review on certiorari assailing the decision of the CA affirming
the order of dismissal of the RTC
FACTS
- Petitioners spouses Villarino filed an action for Annulment of Title,
Reconveyance, Damages and Injunction against respondents the Avilas
and the Provincial Sheriff. Petitioners opposed the application of the Avilas
for the registration of Lot No. 967 on the ground that a portion of Lot No.
967 encroached upon Lot No. 968 to the extent of 2,146 square meters.
Lot No. 968 is the adjacent property belonging to petitioners. In their
complaint, petitioners averred that the registration of Lot No. 967 was
based on an erroneous survey and technical description. They sought the
reconveyance of the disputed area and the cancellation of the OCT to
reflect the consequent reduction in area. The Avilas moved for the
dismissal of the case on the ground of res judicata. After a preliminary
hearing, the RTC issued the order dismissing the case.
- Petitioners elevated the matter to the CA, contending that the RTC erred
in dismissing the case based on res judicata. The CA upheld the
incontrovertibility of the decree of registration one year after its issuance.
It also debunked the erroneous survey and technical description foisted by
petitioners as not the fraud contemplated under Sec. 53 of PD 1529,
which allows the reconveyance of fraudulently registered land.
- Petitioners filed the instant petition. They argued that the judgment in the
land registration case is not yet final because the aggrieved party can still
avail of the remedy of reconveyance and recovery of damages, and that
the trial court therein had no jurisdiction over the disputed area since it
had already been covered by an OCT issued in the name of petitioners.
ISSUES
Prof. Victoria A. 78
WON petitioner’s complaint is barred by res judicata
HELD
YES
Ratio For res judicata to serve as an absolute bar to a subsequent action,
the following requisites must concur:
(1) the former judgment or order must be final; (2) the judgment or order
must be on the merits; (3) it must have been rendered by a court having
jurisdiction over the subject matter and parties; and (4) there must be
between the first and second actions, identity of parties, of subject matter,
and of causes of action. When there is no identity of causes of action, but
only an identity of issues, there exists res judicata in the concept of
conclusiveness of judgment. The rule on conclusiveness of judgment bars
the relitigation of particular facts or issues in another litigation between the
same parties on a different claim or cause of action.
Reasoning All the elements of res judicata in the mode of bar by prior
judgment are present. There is no question that said decision was an
adjudication on the merits. Petitioners and respondents were the same
party litigants. The subject matter of the civil case was the same property
that was the subject matter in the LRC case. Petitioners’ cause of action
in the civil case would call for the determination and adjudication of
ownership over the disputed portion, an issue already passed by the land
registration court when it confirmed the Avilas’ title over Lot No. 967.
Petitioners point out that the land registration court had no jurisdiction
over the disputed portion as this had already been decreed in an earlier
land registration case and a second decree for the same land is null and
void. Petitioners claim that the disputed portion is covered by their title,
but that it was erroneously included in the survey and technical
description subject of the Avilas’ land registration application. That was
precisely the content and thrust of petitioners’ opposition to the Avilas’
land registration application. But the land registration court debunked the
opposition and upheld the application. Petitioners could have appealed
the decision of the land registration court. Their failure to do so rendered
said decision final and executory.
Disposition Petition DENIED.
CARILLO V. CA (DABON AND DABON)
(supra)
NATURE
Review on certiorari of decision of Court of Appeals
FACTS
- Gonzales filed complaint (action for specific performance) against Manio
sps, seeking execution of deed of sale of property she bought fr Priscilla
Manio. Gonzales said she pd downpayment to Priscilla because she had
an SPA from her son Aristotle, the owner of the land.
- TC ruled in favor of Gonzales. Gonzales deposited balance w/ the court
and filed motion for execution, w/c was w/drawn bec decision wasn’t
served on defendants. Sheriff finally served a copy at an ungodly hour of
12 mn.
 Civil Procedure Digest
- TC’s decision became final and executory.
- The Dabons, claiming to have bought the land fr Aristotle, filed before the
CA a petition for annulment of judgment and orders of the TC. They
alleged that the decision was void for lack of jurisdiction over their persons
as the real parties in interest. CA issued resolution restraining TC from
implementing its decision. Hence, this petition by Gonzales.
ISSUE/S
1. WON there was basis to annul the decision of the TC.
2. WON the Dabons can seek annulment of the TC judgment
HELD
1. YES.
Ratio
An action should be brought against the real party in interest. The real
party in interest is the one who would be benefited or injured by the
judgment or is the one entitled to the avails of the suit.
Reasoning
- Named petitioners herein are Carillo (Presiding Judge), Guyot (Clerk of
Court), Senoy (Deputy Sheriff), Risonar (Registrar of Deeds), and
Gonzales. Carillo, Guyot, Senoy and Risonar are not interested parties
because they would not benefit from the affirmative reliefs sought. Only
Gonzales remains as genuine party-petitioner in this case.
- Gonzales insists that the Dabons have no right to seek annulment of the
TC’s judgment bec they’re not parties to the specific performance case.
But the Dabons insist that they are parties in interest bec they are buyers,
owners and possessors of the contested land.
- The specific performance case brought by Gonzales to the TC named
Priscilla Manio and husband as defendants. However, the lot is owned by
Aristotle, their son. Priscilla had no interest on the lot and can have no
interest in the judgment of the TC. Failure to implead Aristotle Manio
renders the proceedings in the specific performance case null and void.
2. YES.
Ratio
A person need not be a party to the judgment sought to be annulled.
What is essential is that he can prove that the judgment was obtained by
fraud and he would be adversely affected thereby.
Reasoning
Although the Dabons are not parties to the specific performance case, any
finding of extrinsic fraud would adversely affect their ownership and could
be basis of annulment of judgment. In this case, Gonzales knew of the
sale of lot by Aristotle Manio to the Dabons yet Gonzales did not include
the Dabons in her petition. This is extrinsic fraud.
Disposition Petition is denied.
REGALA V SANDIGANBAYAN
G.R. No. 10538
KAPUNAN; September 20, 1996
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Avena
NATURE
Special civil action for certiorari
FACTS
- This is an offshoot of the complaint before the Sandiganbayan through
the PCGG against Eduardo Cojuangco Jr. for recovery of alleged ill-gotten
wealth including shares of stocks in certain corporations.
- ACCRA Law Firm performs legal svcs incl. organization and acquisition
of business associations/orgs. Sometimes, members of the firm act as
incorporators or stockholders. They acquire info relative to assets of
clients and their personal/biz circumstances. In this case, ACCRA lawyers
acted as nominees-stockholders of said corps involved in sequestration
proceedings.
- PCGG filed Third Amended Complaint w/c excluded respondent Raul
Roco because he promised to reveal identity of principal/s for whom he
acted as nominee-stockholder
- ACCRA lawyers said it was in furtherance of legit lawyering and they
became holders of shares of stock only as incorporating or acquiring
stockholders, and as such, they do not claim any proprietary interest in
said shares.
- Petitioner Paraja Hayudini, who separated fr ACCRA, filed a separate
answer.
- ACCRA lawyers filed a counter-motion that PCGG also exclude them as
parties-defendant as it did to Roco. PCGG set conditions for exclusion of
the petitioners:
- disclosure of identity of clients
- submission of docs substantiating lawyer-client relationship
- submission of deeds of assignments petitioners executed in favor
of its clients covering their respective shareholdings.
- PCGG presented supposed proof to substantiate compliance by Roco of
the said conditions.
- Sandiganbayan denied exclusion of petitioners fr the PCGG case. That
denial is now being questioned.
ISSUE/S
1. WON there is a cause of action against the defendants
2. WON lawyer-client confidentiality applies in this case
3. WON Roco and the ACCRA lawyers are similarly situated, thus,
making the denial of the ACCRA lawyers’ exclusion from the PCGG case
a violation of equal protection clause.
HELD
1. NO.
Reasoning
- It is quite apparent that petitioners were impleaded by the PCGG as co-
defendants to force them to disclose the identity of their clients. Clearly,
respondent PCGG is not after petitioners but the “bigger fish” as they say
in street parlance. This ploy is quite clear from the PCGG’s willingness to
cut a deal with petitioners -- the names of their clients in exchange for
exclusion from the complaint
- It would seem that petitioners are merely standing in for their clients as
defendants in the complaint. Petitioners are being prosecuted solely on
Prof. Victoria A. 79
the basis of activities and services performed in the course of their duties
as lawyers. Quite obviously, petitioners’ inclusion as co-defendants in the
complaint is merely being used as leverage to compel them to name their
clients and consequently to enable the PCGG to nail these clients. Such
being the case, respondent PCGG has no valid cause of action as against
petitioners and should exclude them from the Third Amended Complaint
2. Yes
Ratio
- The right to counsel of an accused is also involved in this issue. If client
were made to choose bet legal representation w/o effective
communication and disclosure and legal representation w/ all his secrets
revealed then he might be compelled to stay away from the judicial
system or lose right to counsel.
Reasoning
- GENERAL RULE:
- Court has right to know that client whose privileged info is sought
to be protected is flesh and blood.
- Privilege exists only after atty-client relationship has been
established. It does not attach until there is a client.
- Privilege generally pertains to subject matter of the relationship.
- Due process requires that the opposing party should, as a general
rule, know his adversary.
- EXCEPTIONS
- Client identity is privileged where a strong probability exists that
revealing client’s name would implicate that client in the very activity
for w/c he sought the lawyer’s advice.
- It is also privileged where disclosure would open the client to civil
liability.
- It is also privileged when govt’s lawyers have no case against an
atty’s client unless, by revealing the client’s name, the said name
would furnish the only link that would be necessary to convict an
individual of a crime.
- Apart fr the exceptions above, other situations could qualify as
exceptions. Info relating to the identity of client may fall w/in privilege
when client’s name itself has independent significance such that
disclosure would reveal client confidence.
- The instant case FALLS UNDER AT LEAST 2 EXCEPTIONS. First,
disclosure would lead to establish the client’s connection w/ the very fact
in issue. Also, the link bet the offense and the legal advice/svc was duly
established by no less than the PCGG itself. Petitioners have a legitimate
fear that identifying their clients would implicate them. Revelation of the
name would provide the link for prosecution to build its case, where none
otherwise exists.
- It is diff when the client consults atty for illicit purposes, seeking advice
on how to around the law. In this case, a client thinks he might have
previously committed something illegal and consults atty abt it.
- Court is trying to avoid fishing expedition by the prosecution. After all,
there are alternative sources of info available to prosecutor w/c does not
depend on utilizing a defendant’s counsel as convenient and readily
available source of info.
 Civil Procedure Digest
- Lawyer-client confidentiality and loyalty exists not only during
relationship but even after termination of the relationship.
3. Yes
- Respondents failed to show that Roco actually revealed the identity of
his clients. PCGG shld show that Roco was treated as a species apart fr
the ACCRA lawyers on basis of classification w/c made substantial
distinctions based on real differences. No such substantial distinctions
exist.
Disposition Decision of the Sandiganbayan annulled and set aside
DISMISSAL BY CLAIMANT
GOJO V GOYALA
(supra)
NATURE
Appeal from a decision of the CFI of Sorsogon
FACTS
-Appellee Segundo Goyala, with his now deceased wife Antonina sold to
Gojo a 2.5 hectare parcel of agricultural land for P750 by a “Deed of Pacto
de Retro Sale”, the repurchase to be made within one year, as stated in
the deed. The deed also indicates that the vendee paid another P100 in
addition to the purchase price. 10 years after the execution of said
document, Gojo filed a case with the CFI against Goyala by way of a
petition for consolidation of ownership of said land. Gojo alleged that the
period for repurchasing had expired and ownership had become
consolidated in him and that for purposes of recording the consolidation in
the Registry of Property, it was necessary that a judicial order be issued to
that effect.
-Goyala filed an answer to the petition, alleging that they had obtained a
cash loan of P810 from Gojo payable w/in one year w/o interest and that
to guarantee payment, Goyala executed a mortgage in favor of the
petitioner on the parcel of land in question. Hence, although the deed was
executed in the form of a pacto de retro sale, the true intention of the
parties was for it to be a mere mortgage to secure payment. Goyala
further claimed that he and his wife attempted to pay the debt but
petitioner refused to receive the sum and cancel the mortgage. By way of
counterclaim, Goyala prayed that petitioner receive the P810 and that the
document of mortgage be declared so, and not a pacto de retro sale. He
further prayed for P1800 per annum until the final termination of the case
for the fruits of said property and in the case that the instrument be
deemed a true pacto de retro sale, that petitioner be ordered to execute a
deed of resale in favor of respondents in accordance with A1606CC.
-Counsel for Goyala filed a manifestation informing the TC that the named
defendant, Antonina, had died, prompting the TC to issue an order
requiring counsel for the plaintiff to submit an amended Complaint
substituting Antonina with one of her successors in interest as party
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defendants. Goyala filed a motion to dismiss the petition on the ground
that notwithstanding the lapse of 43 days after appellant’s receipt of a
copy of the said TC order, said appellant failed and neglected to submit
the amended complaint required of him. Appellant opposed the motion but
the TC dismissed the complaint.
-Appellee filed a motion to declare appellant in default in respect of said
appellee’s counterclaim, which was granted by the TC, which further
required Goyala to submit his evidence before the Clerk of Court. TC
rendered favorable judgment on appellee’s counterclaim, declaring the
Deed of Pacto de Retro Sale an equitable mortgage and ordering Gojo to
receive the P810 and to restore possession to the defendants and
allowing them to redeem the same.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ISSUES
WON TC erred in declaring plaintiff in default with respect to defendant’s
counterclaim
HELD
YES. The appellant contends that there is no occasion for the TC to
declare him in default in respect of appellee’s counterclaim as said
counterclaim falls within the category of compulsory counterclaim which
does not call for an independent answer as the complaint already denies
its material allegations. It is now settled that a plaintiff who fails or chooses
not to answer a compulsory counterclaim may not be declared in default,
principally because the issues raised in the counterclaim are deemed
automatically joined by the allegations of the complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored is a
void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the estate
of a deceased person. In Barrameda vs Barbara, the SC held that an
order to amend the complaint, before the proper substitution of parties as
directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and imposes upon
the plaintiff no duty to comply therewith to the end that an order dismissing
the said complaint, for such non-compliance, would similarly be void. It
was further held in Ferriera vs Gonzales that the continuance of a
proceeding during the pendency of which a party thereto dies, without
such party having been validly substituted in accordance with the rules,
amounts to lack of jurisdiction.
WHEREFORE, the decision appealed from is set aside
JUDGMENT ON THE PLEADINGS
PRE-TRIAL
Prof. Victoria A. 80
JONATHAN LANDOIL INTERNATIONAL CO. V.
MANGUDADATU
00 SCRA 00
PANGANIBAN, August 16, 2004
NATURE
Petition for Review under Rule 45
FACTS
-Spouses Suharto and Miriam Sangki Mangudadatu (Respondent) filed
with the RTC of Tacurong City, Sultan Kudarat, a Complaint for damages
against Jonathan Landoil International Co., Inc. ("JLI" -Petitioner). Parties
submitted their respective Pretrial Briefs.
-Trial proceeded without the participation of petitioner, whose absence
during the pretrial had led the trial court to declare it in default. Petitioner
received a copy of the RTC’s Decision. It filed an Omnibus Motion for New
Trial and Change of Venue. This Motion was deemed submitted for
resolution but was eventually denied by the trial court in an Order.
Petitioner received a copy of a Writ of Execution. Alleging that it had yet to
receive a copy of an Order resolving the Omnibus Motion for New Trial,
petitioner filed a Motion to Quash/Recall Writ of Execution. Its counsels --
Attys. Jaime L. Mario Jr. and Dioscoro G. Peligro -- submitted separate
withdrawals of appearance. On the same date, the law firm Ong Abad
Santos & Meneses filed an Entry of Appearance with Supplement to
Motion to Quash/Recall Writ of Execution. To its Supplement, petitioner
attached the Affidavits of Attys. Mario and Peligro attesting that they had
not yet received a copy of the Order resolving the Omnibus Motion for
New Trial. On the same day, January 7, 2002, petitioner received a
Sheriff’s Notice regarding the public auction sale of its properties. By
reason of the immediate threat to implement the Writ of Execution, it filed
with the CA a Petition for Prohibition seeking to enjoin the enforcement of
the Writ until the resolution of the Motion to Quash. RTC issued an Order
directing respondents to file their written comment on the Motion to Quash
and scheduled the hearing thereon for February 1, 2002. Petitioner
received a copy of respondents’ Vigorous Opposition (Re: Motion to
Quash/Recall Writ of Execution, and its Supplement) dated January 16,
2001. Attached to this pleading were two separate Certifications
supposedly issued by the postmaster of Tacurong City, affirming that the
Order denying the Motion for New Trial had been received by petitioner’s
two previous counsels of record. The Certification pertaining to Atty.
Peligro alleged that a certain Michelle Viquira had received a copy of the
Order intended for him. The Certification as regards Atty. Mario stated that
he had personally received his copy on December 21, 2001.
-Petitioner personally served counsel for respondents a Notice to Take
Deposition Upon Oral Examination of Attys. Mario and Peligro. The
Deposition was intended to prove that petitioner had not received a copy
of the Order denying the Omnibus Motion for New Trial. At 9:30 a.m. on
January 28, 2002, the deposition-taking proceeded as scheduled -- at the
Business Center Conference Room of the Mandarin Oriental Hotel in
Makati City -- before Atty. Ana Peralta-Nazareno, a notary public acting as
deposition officer. At 12:00 noon of the same day, respondents sent
 Civil Procedure Digest
petitioner a fax message via JRS Express, advising it that they had filed a
Motion to Strike Off from the records the Notice to Take Deposition; and
asking it not to proceed until the RTC would have resolved the Motion, a
copy of which it eventually received later in the day, at 3:10 p.m. On
January 29, 2002, separate Notices were sent by Atty. Nazareno to Attys.
Mario and Peligro, as witnesses, for them to examine the transcript of their
testimonies. On the same date, Atty. Nazareno filed via registered mail a
Submission to the RTC attaching (1) a Certification that the witnesses had
been present and duly sworn to by her; (2) a transcript bearing their
signatures, attesting that it was a true record of their testimonies; (3) a
copy of the Notice to Take Deposition delivered to her; and (4) a copy of
the Notice signed by respondents’ counsel. Hearing on the Motion to
Quash, petitioner submitted its (1) Formal Offer of Exhibits, together with
the documentary exhibits marked during the deposition-taking; (2) Reply
to respondents’ Vigorous Opposition to the Motion to Quash; and (3)
Opposition ad Cautelam to respondents’ Motion to Strike Off the Notice to
Take Deposition. Meanwhile CA issued a Resolution denying the Petition
for Prohibition. Petitioner received a copy of the RTC’s Resolution dated
February 21, 2002, denying the Motion to Quash, it received a copy of
respondents’ Motion to Set Auction Sale of Defendant’s Levied Properties.
Petitioner filed with the CA a Petition for Certiorari and Prohibition, seeking
to hold in abeyance the February 21, 2002 RTC Resolution and the
December 4, 2001 Writ of Execution. Petitioner alleged that since it had
not received the Order denying its Motion for New Trial, the period to
appeal had not yet lapsed.[33] It thus concluded that the judgment, not
being final, could not be the subject of a writ of execution.
Ruling of the Court of Appeals = It ruled that petitioner could no longer
avail itself of a deposition under Rule 23 of Rules of Court, since trial had
already been terminated. The appellate court also opined that the alleged
error committed by the trial court -- when the latter disregarded two
witnesses’ oral depositions -- was an error of judgment not reviewable by
certiorari or prohibition. Finally, it ruled that between the denial of a lawyer
and the certification of a postmaster, the latter would prevail.
ISSUES
(1) whether petitioner received the Order denying its timely filed Motion for
New Trial;
(2) whether the taking of oral depositions was proper under the
circumstances.
HELD
1. No. It is readily apparent that petitioner is raising factual issues that this
Court does not review. A motion for new trial may be filed on the grounds
of (1) fraud, accident, mistake or excusable negligence that could not
have been guarded against by ordinary prudence, and by reason of which
the aggrieved party’s rights have probably been impaired; or (2) newly
discovered evidence that, with reasonable diligence, the aggrieved party
could not have discovered and produced at the trial; and that, if
presented, would probably alter the result. In its Omnibus Motion for New
Trial, petitioner argued that its counsel Atty. Mario was sick, a fact that
allegedly constituted excusable negligence for his failure to appear at the
August 8, 2000 pretrial. With regard to Atty. Rogelio Fernandez, the
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collaborating counsel, it alleged that the Board of Directors had terminated
his legal services on August 4, 2000.
-These grounds relied upon by petitioner cannot properly secure a new
trial. Counsels are not the only ones required to attend the pretrial. The
appearance of the plaintiff and the defendant is also mandatory. The
pertinent rule states:
Section 4. Appearance of parties. -- It shall be the duty of the parties and
their counsel to appear at the pre-trial. The non-appearance of a party
may be excused only if a valid cause is shown therefore or if a
representative shall appear in his behalf fully authorized in writing to enter
into an amicable settlement, to submit to alternative modes of dispute
resolution, and to enter into stipulations or admissions of facts and of
documents.
-The rationale for this requirement of compelling the parties to appear
personally before the court is to exhaust the possibility of reaching a
compromise. While notice of the pretrial is served on counsels, it is their
duty to notify the party they represent.
The explanation offered by petitioner as regards the absence of its
counsel from the pretrial is therefore unacceptable. It should have also
justified its own absence therefrom. Having failed to do so, it had no valid
ground to request a new trial.
Petitioner also failed to justify the absence of both its counsels.
Until their formal withdrawal is granted, lawyers are deemed to be the
representatives of their clients.
Atty. Fernandez may have been notified of the termination of his services
on August 7, 2004. But as far as the trial court was concerned, he
continued to be petitioner’s counsel of record, since no withdrawal of
appearance had yet been granted. Hence, his absence from the pretrial
was still not excusable. While he could no longer represent petitioner, his
presence would have afforded him an opportunity to make a formal
withdrawal of appearance. An improvident termination of legal services is
not an excuse to justify non-appearance at a pretrial. Otherwise, the rules
of procedure would be rendered meaningless, as they would be subject to
the counsel’s will.
-The Proper Remedy under the new Rules, the consequence of non-
appearance without cause at the pretrial is not for the petitioner to be
considered "as in default," but "to allow the plaintiff to present evidence ex
parte and [for] the court to render judgment on the basis thereof." This
procedure was followed in the instant case.
To the trial court’s order allowing the ex parte presentation of
evidence by the plaintiff, the defendant’s remedy is a motion for
reconsideration. An affidavit of merit is not required to be attached to such
motion, because the defense has already been laid down in the answer.
Liberality is the rule in considering a motion for reconsideration. It is
best for the trial court to give both the plaintiff and the defendant a chance
to litigate their causes fairly and openly, without resort to technicality.
Unless the reopening of the case is clearly intended for delay, courts
should be liberal in setting aside orders barring defendants from
presenting evidence. Judgments based on an ex parte presentation of
evidence are generally frowned upon.
In the present case, petitioner did not file a motion for
reconsideration after the trial court had allowed respondents’ ex parte
Prof. Victoria A. 81
presentation of evidence. The Rules of Court does not prohibit the filing of
a motion for a new trial despite the availability of a motion for
reconsideration. But the failure to file the latter motion -- without due
cause -- is a factor in determining whether to apply the liberality rule in
lifting an order that allowed the ex parte presentation of evidence. In its
motions and petitions filed with this Court and the lower courts, petitioner
did not explain why it had failed to file a motion for reconsideration.
The lapse of time -- from the August 8, 2000 pretrial to the September 5,
2000 ex parte presentation of evidence, and until the June 19, 2001
promulgation of the Decision-- shows the negligence of petitioner and its
counsels. Prior to the trial court’s resolution of the case, it had ample
opportunity to challenge the Order allowing the ex parte presentation of
evidence. Too late was the challenge that it made after the Decision had
already been rendered.
-In addition to the foregoing facts, petitioner fails to convince us that it has
not received the trial court’s Order denying its Motion for New Trial. There
is a disputable presumption that official duties have been regularly
performed. On this basis, we have ruled that the postmaster’s certification
prevails over the mere denial of a lawyer. This rule is applicable here.
Petitioner has failed to establish its non-receipt of the trial court’s Order
denying its Motion for New Trial. This Court notes the trial court’s finding
that petitioner received a copy of respondents’ September 24, 2001
Motion for Execution and November 21, 2001 Motion for Early Resolution,
as well as the trial court’s September 28, 2001 Order submitting the
Motion for Execution for resolution. Given these unrebutted facts, it is
unbelievable that petitioner did not know that a ruling on the Motion for
New Trial had already been issued. At the very least, the Motions filed by
respondents should have alerted it of such issuance. Otherwise, it could
have opposed their Motion for Execution by requesting the RTC to resolve
the Motion for New Trial; or the trial court could have been informed by
petitioner of the latter’s non-receipt of the Order resolving respondents’
Motion.
2. No. A deposition may be taken with leave of court after jurisdiction has
been obtained over any defendant or over property that is the subject of
the action; or, without such leave, after an answer has been served.
Deposition is chiefly a mode of discovery, the primary function of which is
to supplement the pleadings for the purpose of disclosing the real points
of dispute between the parties and affording an adequate factual basis
during the preparation for trial. The liberty of a party to avail itself of this
procedure, as an attribute of discovery, is "well-nigh unrestricted if the
matters inquired into are otherwise relevant and not privileged, and the
inquiry is made in good faith and within the bounds of the law."
Limitations would arise, though, if the examination is conducted in bad
faith; or in such a manner as to annoy, embarrass, or oppress the person
who is the subject of the inquiry; or when the inquiry touches upon the
irrelevant or encroaches upon the recognized domains of privilege.
As a mode of discovery resorted to before trial, deposition has
advantages, as follows:
-1. It is of great assistance in ascertaining the truth and in checking and
preventing perjury. x x x 2. It is an effective means of detecting and
exposing false, fraudulent, and sham claims and defenses. 3. It makes
 Civil Procedure Digest
available in a simple, convenient, and often inexpensive way facts which
otherwise could not have been proved, except with great difficulty and
sometimes not at all.
4. It educates the parties in advance of trial as to the real value of their
claims and defenses, thereby encouraging settlements out of court. 5. It
expedites the disposal of litigation, saves the time of the courts, and
clears the docket of many cases by settlements and dismissals which
otherwise would have to be tried. 6. It safeguards against surprise at the
trial, prevents delays, and narrows and simplifies the issues to be tried,
thereby expediting the trial. 7. It facilitates both the preparation and the
trial of cases.
-The Rules of Court and jurisprudence, however, do not restrict a
deposition to the sole function of being a mode of discovery before trial.
Under certain conditions and for certain limited purposes, it may be taken
even after trial has commenced and may be used without the deponent
being actually called to the witness stand. In Dasmariñas Garments v.
Reyes, we allowed the taking of the witnesses’ testimonies through
deposition, in lieu of their actual presence at the trial. Thus, "[d]epositions
may be taken at any time after the institution of any action, whenever
necessary or convenient. There is no rule that limits deposition-taking
only to the period of pre-trial or before it; no prohibition against the taking
of depositions after pre-trial." There can be no valid objection to allowing
them during the process of executing final and executory judgments,
when the material issues of fact have become numerous or complicated.
In keeping with the principle of promoting the just, speedy and
inexpensive disposition of every action and proceeding, depositions are
allowed as a "departure from the accepted and usual judicial proceedings
of examining witnesses in open court where their demeanor could be
observed by the trial judge." Depositions are allowed, provided they are
taken in accordance with the provisions of the Rules of Court (that is, with
leave of court if the summons have been served, without leave of court if
an answer has been submitted); and provided, further, that a circumstance
for their admissibility exists (Section 4, Rule 23, Rules of Court).
The Rules of Court vests in the trial court the discretion to order whether a
deposition may be taken or not under specified circumstances that may
even differ from those the proponents have intended. However, it is well-
settled that this discretion is not unlimited. It must be exercised -- not
arbitrarily, capriciously or oppressively -- but in a reasonable manner and
in consonance with the spirit of the law, to the end that its purpose may be
attained.
When a deposition does not conform to the essential requirements of law
and may reasonably cause material injury to the adverse party, its taking
should not be allowed.
-The Rules of Court provides adequate safeguards to ensure the reliability
of depositions. The right to object to their admissibility is retained by the
parties, for the same reasons as those for excluding evidence if the
witness were present and had testified in court; and for errors and
irregularities in the deposition. As a rule, depositions should be allowed,
absent any showing that taking them would prejudice any party.
-Depositions may be used for the trial or for the hearing of a motion or an
interlocutory proceeding, under the circumstances specified hereunder:
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Section 4. Use of Depositions. -- At the trial or upon the hearing of a
motion or an interlocutory proceeding, any part or all of a deposition, so
far as admissible under the rules of evidence, may be used against any
party who was present or represented at the taking of the deposition or
who had due notice thereof, in accordance with any one of the following
provisions:
(a)Any deposition may be used by any party for the purpose of
contradicting or impeaching the testimony of deponent as a witness;
(b)The deposition of a party or of anyone who at the time of taking the
deposition was an officer, director, or managing agent of a public or
private corporation, partnership, or association which is a party may be
used by an adverse party for any purpose; (c) The deposition of a witness,
whether or not a party, may be used by any party for any purpose if the
court finds: (1) that the witness is dead; or (2) that the witness resides at a
distance more than one hundred (100) kilometers from the place of trial or
hearing, or is out of the Philippines, unless it appears that his absence
was procured by the party offering the deposition; or (3) that the witness is
unable to attend or testify because of age, sickness, infirmity, or
imprisonment; or (4) that the party offering the deposition has been unable
to procure the attendance of the witness by subpoena; or (5) upon
application and notice, that such exceptional circumstances exist as to
make it desirable, in the interest of justice and with due regard to the
importance of presenting the testimony of witnesses orally in open court,
to allow the deposition to be used; and (d) If only part of a deposition is
offered in evidence by a party, the adverse party may require him to
introduce all of it which is relevant to the part introduced, and any party
may introduce any other parts.
The present case involved a circumstance that fell under the above-cited
Section 4(c)(2) of Rule 23 -- the witnesses of petitioner in Metro Manila
resided beyond 100 kilometers from Sultan Kudarat, the place of hearing.
Petitioner offered the depositions in support of its Motion to Quash (the
Writ of Execution) and for the purpose of proving that the trial court’s
Decision was not yet final. As previously explained, despite the fact that
trial has already been terminated, a deposition can still be properly taken.
We note, however, that the RTC did not totally disregard petitioner’s
depositions. In its February 21, 2001 Resolution, the trial court
considered and weighed -- against all other evidence -- that its Order
denying the Motion for New Trial filed by petitioner had not been received
by the latter’s counsels. Despite their depositions, petitioner failed to
prove convincingly its denial of receipt.
Disposition. WHEREFORE, the Petition is DENIED, and the assailed
Decision and Resolution AFFIRMED. Costs against petitioner. SO
ORDERED.
PAREDES V VERANO
G.R. No.164375
TINGA; October 12, 2006
NATURE
Prof. Victoria A. 82
Petition for review
FACTS
- A complaint for the establishment of a right of way was filed at RTC
Maasin by Paredes, Alago and Baybay (plaintiffs-petitioners) against
Verano and Hinunangan (defendants-respondents). It culminated in a
judgment by compromise. In the Compromise Agreement, Hinunangan
granted a 2- meter-wide right of way in favor of Paredes for a
consideration of P6K.
- Alleging that petitioners had blocked the passage way in violation of the
Compromise Agreement, respondents filed a complaint for specific
performance with damages against petitioners. Petitioners answered,
denied having violated the Compromise Agreement. They alleged that like
them, respondents were not actual residents of Brgy Tagnipa where the
"road right of way" was established and that respondent Hinunangan had
already sold his only remaining lot in the vicinity to petitioner Paredes
- Petitioners next filed MTD for lack of cause of action, which was denied
by RTC. Petitioners elevated case to CA and SC but to no avail.
Petitioners asked Judge Kapili to inhibit himself from the case. The judge
denied the motion
- Pre-trial was initially set and reset and reset again. In the pre-trial,
Baybay's counsel moved to reset it to another date on account of a
conflicting hearing. However, petitioner Baybay, who is the father of the
counsel for petitioners, was present in court along with the other
defendants. RTC was informed of a proposed settlement between the
parties, although respondent Baybay qualified his reaction by telling the
court that he would first have to inform his lawyer and the co-defendants
of the said proposal. The RTC then commented unfavorably on the
absence of petitioners' counsel, expressing disappointment towards his
attitude, even making note of the fact that not once had the counsel
appeared before the RTC, even though the case had already reached SC
over the denial of MTD. RTC again reset the pre-trial date.
- Before the new pre-trial date, counsel for petitioners filed a Manifestation
of Willingness to Settle With Request for Cancellation . Apart from
manifesting his willingness to settle the complaint, petitioners' counsel
suggested to the opposing counsel that he be informed of the terms of the
proposed settlement. So, petitioners' counsel requested the cancellation
of the 23 Jan 2004 hearing.
- But the hearing pushed through on 23 Jan 2004. Private respondents
and their counsel were present. So were Baybay and Paredes, and co-
defendant Alago, but not their counsel. The RTC allowed respondents to
present their evidence ex parte, "for failure of the defendants’ counsel to
appear before RTC. Petitioners filed MFR, but was denied
- So, petitioners filed a petition for certiorari with CA. CA dismissed it for
failure to attach duplicate original copies of the annexes to the petition
other than the RTC Orders and for failure to submit such other pleadings
relevant and pertinent to the petition. Petitioners filed MFR with Motion to
Admit Additional Exhibits, adverting to the documents previously missing
from the petition but attached to the motion.
- MFR dismissed. CA resolved on the merits, ruling that under Sec 5, Rule
18 ROC, it is the failure of the defendant, and not defendant's counsel, to
appear at the pre-trial that would serve cause to allow plaintiff to present
 Civil Procedure Digest
evidence ex parte. CA noted that Baybay had made it clear that he would
never enter into any amicable settlement without the advice of his
counsel.
- CA cited Sps. Ampeloquio, Sr. v. CA where the Court held that if every
error committed by RTC were to be a proper object of review by certiorari,
then trial would never come to an end and the appellate court dockets
would be clogged with petitions challenging every interlocutory order of
the TC. It concluded that the acts of Judge Kapili did not constitute grave
abuse of discretion equivalent to lack of jurisdiction.
ISSUE
WON the absence of the counsel for defendants at the pre-trial, with all
defendants themselves present, is a ground to declare defendants in
default and to authorize plaintiffs to present evidence ex parte.
HELD
NO
Ratio The absence of counsel for defendants at pre-trial does not ipso
facto authorize the judge to declare the defendant as in default and order
the presentation of evidence ex parte. It bears stressing that nothing in the
Rules of Court sanctions the presentation of evidence ex parte upon
instances when counsel for defendant is absent during pre-trial. The Rules
do not countenance stringent construction at the expense of justice and
equity
Reasoning
- The order of RTC allowing respondents to present evidence ex parte
was undoubtedly to the detriment of petitioners. Since the RTC would only
consider the evidence presented by respondents, and not that of
petitioners, the order strikes at the heart of the case, disallowing as it does
any meaningful defense petitioners could have posed. A judgment of
default against a defendant who failed to attend pre-trial, or even any
defendant who failed to file an answer, implies a waiver only of their right
to be heard and to present evidence to support their allegations but not all
their other rights.
- Nothing in the ROC authorizes a trial judge to allow the plaintiff to
present evidence ex parte on account of the absence during pre-trial of
the counsel for defendant. In Rule 18, Sect. 4 imposes the duty on
litigating parties and their respective counsel during pre-trial. The
provision also provides for the instances where the non-appearance of a
party may be excused. Nothing, however, in Sec. 4 provides for a sanction
should the parties or their respective counsel be absent during pre-trial.
Instead, the penalty is provided for in Sec. 5. Notably, what Section 5
penalizes is the failure to appear of either the plaintiff or the defendant,
and not their respective counsel.
-The Court also cited cases and discussed why although they have similar
facts are inapplicable or do not constitute a precedent to the instant case.
These cases are: UCPB v. Magpay, Jonathan Landoil International Co. v.
Mangudadat, SSS v. Chaves, Africa v. IAC. (See original)
- Due process dictates that petitioners be deprived of their right to be
heard and to present evidence to support their allegations if, and only if,
there exists sufficient basis in fact and in law to do so. There being a
manifest lack of such basis in this case, petitioners would be unjustly
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denied of the opportunity to fully defend themselves should the Court
affirm the questioned orders which were evidently issued by the RTC with
grave abuse of discretion. The better and certainly more prudent course of
action in every judicial proceeding is to hear both sides and decide on the
merits rather than dispose of a case on technicalities
- While counsel is somewhat to blame for his non-attendance at pre-trial,
incidentally the operative act which gave birth to the controversy at bar, it
would be most unfair to penalize petitioners for what may be the
deficiency of their lawyer when the consequent penalty has no basis in
law.
Disposition Petition is granted. RTC and CA rulings reversed.
COURSE OF TRIAL
1. trial proper
2. kinds of trial
a. consolidated/ separate trial
SPS. YU V MAGNO CONSTRUCTION
G.R. No. 138701-02
GARCIA; October 17, 2006
NATURE
Petition for review on certiorari
FACTS
- The spouses Roque Yu, Sr. and Asuncion Yu are the controlling
stockholders of Leyte Lumber. During his lifetime, Engr. Basilio G. Magno
entered into a verbal agreement with Leyte Lumber through Roque Yu,
Sr., whereby the latter agreed to supply Magno with building materials he
may need in his construction business. The success of Magno's business
gave birth to the Basilio G. Magno Construction and Development
Enterprises, Inc.
- Owing to this fruitful relationship, the two (Roque Yu, Sr. and Magno)
entered into a joint venture, the Great Pacific Construction Company
(GREPAC), with Yu as President and Magno as Vice President. The
relationship between Yu and Magno began in 1975 and continued until
Magno's death on August 21, 1978.
- On January 30, 1979, in the RTC of Tacloban City, the petitioners
instituted two separate complaints for sums of money with damages and
preliminary attachment against the respondents. One was Civil Case No.
5822, raffled to Branch 8 of the court, instituted by Leyte Lumber against
BG Magno and the Estate of Basilio Magno, to collect on the principal
amount of P1,270,134.87 for construction materials claimed to have been
obtained on credit by BG Magno, and the other was Civil Case No. 5823,
raffled to Branch 6, filed by the Yu spouses against BG Magno and the
Estate of Basilio Magno, to collect upon loans and advances
(P3,575,000.00) allegedly made by the spouses to BG Magno.
- On June 17, 1993 the court rendered its decision i favor of the defendant
on both cases. The two separate decisions of even date were penned by
Judge Getulio M. Francisco, the presiding judge of Branch 6 to which only
Prof. Victoria A. 83
Civil Case No. 5823 was raffled. The parties did not move for a
reconsideration of the two decisions nor did they call the attention of
Judge Francisco on the absence of an order for consolidation of the two
cases. Instead, they directly interposed their respective appeals to the CA.
- In the CA, the two cases on appeal were consolidated. In Civil Case No.
5822, the appealed decision is MODIFIED by declaring that defendant
B.G. Magno Construction and Development Enterprises, Inc., made an
overpayment in the amount of P631,235.61, instead of P620,239.61 and
ordering plaintiff to return said amount to defendant, with interest of 12%
per annum from promulgation hereof until fully paid, and by DELETING
the award of exemplary damages in the sum of P200,000.00 in favor of
defendan. In Civil Case No. 5823, the appealed decision is REVERSED
and SET ASIDE. Accordingly, defendant B.G. Magno Construction and
Development Enterprises, Inc. is ordered to pay plaintiffs the sum of
P625,000.00, with 12% interest per annum from promulgation hereof until
fully paid, and the further sum of P50,000.00 by way of attorney's fees,
plus costs of suit.
ISSUE
WON Branch 6 had jurisdiction to decide Civil Case No. 5822
pending in Branch 8 in the absence of a motion or order of
consolidation of the two cases
HELD
YES
- There was nothing irregular in the procedure taken. The records show
that there appears to have been a previous agreement to either transfer or
consolidate the two cases for decision by the presiding judge of Branch 6.
- Indeed, when the respondents filed a Motion to Lift, Dissolve and Quash
the Writs of Attachment with Branch 6 on January 20, 1993, the caption
thereof indicated the docket numbers of both cases. Likewise, on October
29, 1993, when the petitioners' new counsel entered his Formal
Appearance, in the caption thereof was also written the docket numbers of
both cases. Petitioners' previous counsel of longstanding (whose
representation dates back to the filing of the two complaints in 1979) filed
his Motion to Withdraw as Counsel on October 30, 1993, and the caption
thereof similarly indicated the docket numbers of both cases. Subsequent
orders of the court which emanated from Branch 6 also bear, in the
caption thereof, the titles and docket numbers of both cases. In other
words, as early as six months prior to the promulgation of Judge
Francisco’s decisions in the two cases, there appears to have been a
transfer or consolidation of said cases in Branch 6 and the parties knew of
it, albeit the actual date when the two cases were consolidated or
transferred does not appear on record. Nonetheless, the fact remains that
no opposition or objection in any manner was registered by either of the
parties to the same, thereby evincing their consent thereto. It is, therefore,
already too late in the day for the petitioners to question the competence
of Judge Francisco to render the separate decisions in the two cases.
Petitioners may not now question the transfer or consolidation of the two
cases on appeal, for they knew of it and did not question the same in the
court below. They may not now make a total turn-around and adopt a
 Civil Procedure Digest
contrary stance; more so when the judgment issued is adverse to their
cause.
- The next logical questions are: Is the consolidation of the two cases
(Civil Case Nos. 5822 and 5823) a procedural step which the court a
quo could have properly taken? Is it a remedy available within the context
of the surrounding circumstances? We answer both questions in the
affirmative. The two cases were filed just a few months apart; they involve
simple cases of collection of sums of money between identical parties and
no other; the respondents (as defendants therein) claim, in both cases,
essentially the same defense, which is overpayment; they cover the same
period of transacting continuous business that spans four years; they
relate to simple issues of fact that are intimately related to each other;
they entailed the presentation of practically identical evidence and
witnesses; in fact, a broad part of the evidence and testimonies in one
case was totally adopted or reproduced in the other by either or both
parties. And the trial court, being multi-sala courts, its Branches 6 and 8
possessed jurisdiction to try either or both cases on their own.
- A court may order several actions pending before it to be tried together
where they arise from the same act, event or transaction, involve the
same or like issues, and depend largely or substantially on the same
evidence, provided that the court has jurisdiction over the case to be
consolidated and that a joint trial will not give one party an undue
advantage or prejudice the substantial rights of any of the parties (citing 1
CJS, 1347). Consolidation of actions is expressly authorized under
Section 1, Rule 31 of the Rules of Court:
“Section 1. Consolidation. — When actions involving a common
question of law or fact are pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may order
all the actions consolidated; and it may make such orders concerning
proceedings therein as may tend to avoid unnecessary costs or delay.”
- The obvious purpose of the above rule is to avoid multiplicity of suits, to
guard against oppression and abuse, to prevent delays, to clear
congested dockets, to simplify the work of the trial court; in short the
attainment of justice with the least expense and vexation to the parties
litigants (citing 1 CJS 1342-1343).
- Consolidation of actions is addressed to the sound discretion of the
court, and its action in consolidating will not be disturbed in the absence of
manifest abuse of discretion. In the instant case, respondent judge did not
abuse his discretion in ordering the joint trial of the two cases. There is no
showing that such joint trial would prejudice any substantial right of
petitioner. Neither does the latter question the court's jurisdiction to try and
decide the two cases.
- The ordered consolidation of cases, to our mind, crystallizes into reality
the thinking of our predecessors that:
". . . The whole purpose and object of procedure is to make the powers of
the court fully and completely available for justice. The most perfect
procedure that can be devised is that which gives opportunity for the most
complete and perfect exercise of the powers of the court within the
limitations set by natural justice. It is that one which, in other words, gives
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the most perfect opportunity for the powers of the court to transmute
themselves into concrete acts of justice between the parties before it. The
purpose of such a procedure is not to restrict the jurisdiction of the court
over the subject matter, but to give it effective facility in righteous action. It
may be said in passing that the most salient objection which can be urged
against procedure today is that it so restricts the exercise of the court's
powers by technicalities that part of its authority effective for justice
between the parties is many times an inconsiderable portion of the whole.
The purpose of procedure is not to thwart justice. Its proper aim is to
facilitate the application of justice to the rival claims of contending parties.
It was created not to hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the thing itself which courts
are always striving to secure to litigants. It is designed as the means best
adapted to obtain that thing. In other words, it is a means to an end. It is
the means by which the powers of the court are made effective in just
judgments. When it loses the character of the one and takes on that of the
other the administration of justice becomes incomplete and unsatisfactory
and lays itself open to grave criticism."
Disposition Judgment is hereby rendered MODIFYING the assailed CA
decision by setting aside and deleting the award of the respondents’
counterclaim in the amount of P142,817.27 in Civil Case No. 5822;
reiterating the P50,000.00 award of attorneys’ fees and litigation expenses
in favor of the respondents in Civil Case No. 5822; and deleting the award
of attorneys’ fees to the petitioners in Civil Case No. 5823. In all other
respects, the assailed decision is AFFIRMED.
b. trial by commissioners
ANGARA v FEDMAN
G.R. NO. 156822
AUSTRIA-MARTINEZ; October 18, 2004
NATURE: Motion for Reconsideration
FACTS:
- On February 8, 1996, respondent filed a complaint for Accion
Reinvindicatoria and/or Quieting of Title against petitioner before the
Regional Trial Court, Nasugbu, Batangas , claiming to be the rightful
owners of the land currently occupied by petitioner. They even conducted
a relocation survey.
-petitoner on the other hand claimed that he is the lawful owner; the said
parcels of land do not encroach on respondent's property; and assuming
that there is such an encroachment, he nevertheless had acquired title
thereto by virtue of acquisitive prescription
-RTC ordered the constitution of committee of three surveyors composed
of geodetic engineers representing the petitioner, respondent and the
DENR
Prof. Victoria A. 84
-On June 22, 2000, the RTC issued subpoena ad testificandum to the
three Geodetic Engineers who composed the Board of Commissioners to
testify in connection with their individual reports. The RTC also reminded
respondent that the case was filed as early as February 8, 1996, the pre-
trial was conducted on January 20, 1999 and since then respondent has
not even commenced presenting its evidence on the merits.
-On September 27, 2000, the RTC ordered the dismissal of the case due
to the failure of the respondent to prosecute its case for an unreasonable
length of time. However, upon respondent's motion for reconsideration,
the RTC reconsidered the order of dismissal.
-petitioner filed an Omnibus Motion praying that judgment be rendered on
the basis of the commissioners' report and, alternatively, all other persons
who will be adversely affected by the relocation survey be impleaded as
parties
-RTC denied the said Omnibus Motion. The RTC held that according to
respondent there was no joint survey conducted by the commissioners as
ordered by it and as agreed upon by the parties, hence the report of the
commissioners cannot be the basis of the judgment, petitioner filed a
motion for reconsideration which was rejected by the RTC. Petitioner then
filed a petition for certiorari with the CA. this too was rejected. Petitoner
filed a petition for certiorari with the SC. Court denied the petition for
review on certiorari for failure to sufficiently show that the CA committed
any reversible error. Hence, the present Motion for Reconsideration
ISSUE: WON CA erred in rejecting the appeal
HELD: no.
-According to petitioner, this is a "simple case of an alleged
'encroachment' or 'overlapping' of property boundaries." Considering that
the issue involves principally a factual and technical matter for which the
RTC, at the instance of the parties, created a Panel of Commissioners has
done its job and the chairman submitted his report on the basis of his
evaluation of the separate surveys conducted by the members. The RTC,
however, simply ignored the report on the technical and lame excuse that
the Panel of Commissioners did not conduct a "joint survey."
-petitioner submits that the RTC cannot simply ignore the commissioners'
report without considering its merits simply because the parties agreed
that the same is not final and binding. Petitioner argues that the RTC
should have considered the merits of the report and acted on its
recommendation instead of rejecting it outright without any cause or
reason. As to the insistence of respondent that the RTC ordered a "joint
survey", petitioner submits that there is nothing in the order of the RTC
defining or specifying what a "joint" survey is.
-Petitioner reiterates his arguments in the petition that a joint survey, as
understood by respondent, wherein the commissioners literally go out
together, conduct a survey in the presence of one another, and prepare
one report, could not have been contemplated by the RTC since the
commissioners nominated by the parties insisted on two different methods
or approaches for the survey.
-A battle of semantics is principally being waged before this Court.
Petitioner argues that undue emphasis was placed on the words "joint
relocation survey, which literally means one that is conducted physically
together or in the presence of one another." The order constituting the
 Civil Procedure Digest
panel of commissioners, however, does not define what a joint relocation
survey entails nor does it lay out the steps or procedures in conducting
the same. Petitioner submits that the term "joint survey" does not rule out
a survey that is coordinated and linked together resulting in a joint finding
and recommendation. On the other hand, respondent subscribes to the
pronouncement of the RTC that the record is replete with explicit motion
and orders of the court calling for joint survey.
*issue of certiorari (important to note)
- It must be emphasized that the petition before the CA is a special civil
action for certiorari under Rule 65 of the Rules of Court. Certiorari under
Rule 65 is a remedy narrow in scope and inflexible in character. It can be
invoked only for an error of jurisdiction, that is, one where the act
complained of was issued by the court, without or in excess of jurisdiction,
or with grave abuse of discretion which is tantamount to lack or in excess
of jurisdiction.
-In this case, the assailed orders of the RTC are but resolutions on
incidental matters which do not touch on the merits of the case or put an
end to the proceedings. They are interlocutory orders since there leaves
something else to be done by the RTC with respect to the merits of the
case. Consequently, the Court is perplexed that, in resolving the petition
before it, the Court of Appeals chose to delve into the wisdom and
soundness of the orders of the RTC, overlooking the nature of the petition
before it. The supervisory jurisdiction of the court to issue a certiorari writ
cannot be exercised in order to review the judgment of the lower court as
to its intrinsic correctness, either upon the law or the facts of the case
-Petitioner failed to demonstrate his claim that the RTC acted with grave
abuse of discretion amounting to lack or in excess of its jurisdiction in
denying petitioner's prayer for rendition of judgment based on the
commissioners' report. The Rules of Court clearly provides that the trial
court is not bound by the findings of the commissioners or precluded from
disregarding the same. It may adopt, modify, reject the report or recommit
it with instructions, or require the parties to present further evidence
3. incidents/ processes
a. calendar of cases
b. intervention
HOLIDAY INN V SANDIGANBAYAN
186 SCRA 447
MEDIALDEA: June 8, 1990
NATURE:
Petition for review on certiorari (treated as a special civil action for
certiorari)
FACTS:
- On January 1, 1976, Holiday Inn, Inc. (HII) entered into a management
contract with New Riviera Hotel and Development Co., Inc. (NRHDC) for a
period of ten (10) years. Article 18 of said agreement stipulates:
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ARTICLE 18 RIGHT OF FIRST REFUSAL
If Owner, at any time or times during the term hereof, shall receive a
bona fide offer from a third party acceptable to Owner, or which Owner
does not promptly reject, to purchase the Premises or any part
thereof, or the business conducted in connection therewith, or in the
buildings, equipment, or furnishings used in connection therewith, or
any interest in Owner (whether a partnership, or corporation or
otherwise), Owner shall deliver to Manager an executed original copy
of such offer and agrees concurrently therewith to deliver to Manager
an financial information (including but not limited to, certified balance
sheets and operating statements) involved and such, other information
as may be reasonably requested by Manager. Manager may, within
twenty one (21) days of its receipt of such offer and said financial data,
at its portion, purchase said interest of said Owner on the terms of
said offer.
- On January 1, 1976, NRHDC and HII assigned all their rights under the
above mentioned agreement to petitioner Holiday Inn (Phils.), Inc. (HIP)
- On April 22, 1986, NRHDC was sequestered by the PCGG which
subsequently appointed fiscal agents and/or placed an operating team to
monitor the activities of said corporation.
- Because of numerous controversies and conflicts resulting in
operational problems regarding NRHDC, PCGG and Roberto S.
Benedicto, who is perceived to be the controlling stockholder of the
company, entered into an agreement whereby 2/3 of the members of the
Board of Directors of NRHDC shall be nominees of the PCGG and 1/3
thereof shall be nominees of Mr. Benedicto.
- On July 14, 1986, HIP and NRHDC, as sequestered by PCGG entered
into an agreement (addendum) extending the terms of their January 1,
1976 agreement thereof to an indefinite period "on its existing terms and
conditions" with either party having the right to terminate the agreement
upon six (6) months prior written notice to the other party
- On May 10, 1988, NRHDC served upon HIP a letter advising that the
management agreement shall be terminated six (6) months from said
date. It was latter learned that the letter of termination was brought about
by NRHDCs decision to have New World Hotel Philippines (NWHP)
manage the property in lieu of HIP.
- Contending that there was breach of Article 18 of its original
management agreement with NRHDC, HIP initiated on November 2, 1988
an action for intervention in Sandiganbayan, a sequestration case, and
wherein NRHDC was included as among the firms sequestered, alleged to
be part of the ill-gotten wealth amassed by Roberto S. Benedicto in
conspiracy with former President Ferdinand Marcos.
- The proposed complaint-in-intervention attached to the motion-in-
intervention questions the termination of the management agreement
without the corresponding prior notice and/or right of first refusal under
Article 18 of the Agreement. Petitioner likewise prayed for recovery of
unpaid management fees under the agreement.
- On November 11, 1988, the Sandiganbayan issued the questioned
Resolution denying HIPs motion for intervention for lack of jurisdiction
since
- HIP has flied the present petition contending that, the Sandiganbayan
has exclusive and original jurisdiction over all cases civil or criminal, and
all incidents arising from incidental to, or related to, such cases
necessarily fall likewise under the Sandiganbayan's exclusive, and
Prof. Victoria A. 85
original jurisdiction subject to review on certiorari exclusively by the
Supreme Court
- The court a quo issued a temporary restraining order on November 16,
1988.
ISSUES
1. WON petitioner has a legal interest sufficient to justify its
intervention
2. WON the Sandiganbayan has jurisdiction over the subject
matter of petitioner’s proposed complaint-in-intervention
HELD
1. NO
Reasoning
Sec. 2 of Rule 12 tells us that a person may intervene in proceedings in
progress if that person has a legal interest in the success of either of the
parties, or against both or when a disposition of the property involved
would affect the prospective intervenor. Holiday Inn, Inc., has not shown
how the termination or continuation of its management contract would be
legally affected by a finding of whether or not Roberto S. Benedicto
lawfully acquired RIVIERA.
The subject-matter of petitioner's proposed complaint-in-intervention
involves basically, an interpretation of contract, i.e., whether or not the
right of first refusal could and/or should have been observed, based on
the Addendum/Agreement of July 14, 1988, which extended the terms and
conditions of the original agreement of January 1, 1976. The question of
whether or not the sequestered property was lawfully acquired by Roberto
S. Benedicto has no bearing on the legality of the termination of the
management contract by NRHDC's Board of Directors. The two are
independent and unrelated issues and resolution of either may proceed
independently of each other. Upholding the legality of Benedicto's
acquisition of the sequestered property is not a guarantee that HIP's
management contract would be upheld, for only the Board of Directors of
NRHDC is qualified to make such a determination.
2. NO
Reasoning
The original and exclusive jurisdiction given to the Sandiganbayan over
PCGG cases pertains to (a) cases filed by the PCGG, pursuant to the
exercise of its powers under Executive Order Nos. 1, 2 and 14. as
amended by the Office of the President, and Article XVIII, Section 26 of
the Constitution, i.e., where the principal cause of action is the recovery of
ill-gotten wealth, as well as all incidents arising from, incidental to, or
related to such cases and (b) cases filed by those who wish to question or
challenge the commission's acts or orders in such cases.
Evidently, petitioner's proposed complaint-in-intervention is an ordinary
civil case that does not pertain to the Sandiganbayan. As the Solicitor
General stated, the complaint is not directed against PCGG as an entity,
but against a private corporation, in which case it is not per se, a PCGG
case.
 Civil Procedure Digest
Dispositive. Dismissed.
ORDONEZ V GUSTILO
192 SCRA 469
PARAS; December 20, 1990
NATURE
Petition for certiorari to review decision and order of RTC Cavite, Br. 16,
Cavite City, Gustilo, J.
FACTS
- Respondent Espiritu filed complaint for specific performance and
damages against respondents Municipality of Rosario, Cavite and Mayor
Enriquez to enforce their agreement contained in a Reclamation Contract.
Plaintiff prays that a portion of the foreshore land of the town be conveyed
to him as assignee of Salinas Dev’t. Corp. (SADECO), the entity which
reclaimed the land in question. Defendants resisted the claim stating it
was barred by the statute of limitations.
- Herein petitioner, the barangay captain of Tejeros Convention, Rosario,
Cavite, together with 7 others intervened and alleged in their Answer-in-
Intervention that the area being claimed by Espiritu came about by natural
accretion and that the Reclamation Contract is null and void.
- At the pre-trial conference, where the original parties and intervenors
were present, Espiritu and defendant municipality manifested that they
would submit to a compromise agreement at a latter date.
- On the other hand, intervenors asked that they be allowed to present
evidence to prove their defense.
- The principal litigants submitted to the court their compromise
agreement. TC approved and rendered a decision in accordance
therewith. Yet, intervenors continued to present evidence, regarding their
allegations.
- 2 years later, intervenors filed a motion to set aside the compromise
agreement. Respondent judge denied. Judge Gustilo also terminated the
proceedings and ordered the case to be closed.
ISSUE/S
WON trial court erred in stopping/preventing the intervenors from further
presenting evidence in support of their Answer-in-Interevention.
HELD
1. NO. Intervention is defined as a “proceeding in a suit or action by which
a third party is permitted by the court to make himself a party, either
joining plaintiff in claiming what is sought by the complaint, or uniting with
defendant in resisting the claims of plaintiff, or demanding something
adversely to both of them; the act or proceeding by which a third person
becomes a party in a suit pending between the others; the admission, by
leave of court, of a person not an original party to pending legal
proceedings, by which such person becomes a party thereto for the
protection of some right or interest alleged by him to be affected by such
proceedings.”
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Ratio Intervention is only collateral or ancillary to the main action .
Hence, it was previously ruled that the final dismissal of the
principal action results in the dismissal of said ancillary
action.
Reasoning A judgment approving a compromise agreement is final and
immediately executory. All pending issues will become moot and
academic once a compromise submitted by the parties is
approved by the trial court.
The continuation of reception of intervenor’s evidence would serve no
purpose at all. Should intervenors fail to prove that the Reclamation
Contract is null and void and that no actual reclamation was made, the
correctness and propriety of the decision based upon the compromise
agreement would be strengthened. On the other hand, should they
succeed in proving that the contract is null and void, and that the area in
question came into being through the natural action of the sea, still the
decision of the lower court could no longer be set aside, inasmuch as it
has already become final and executed.
Disposition WHEREFORE, for lack of merit, the petition is DISMISSED.
Costs against petitioner.
AGULTO v TECSON
G.R. No.145276
CORONA;November 29, 2005
FACTS:
-On August 25, 1997, the respondent William Z. Tecson filed an action for
damages against petitioners Rolando Agulto, Maxima Agulto, Cecille
Tenoria and a certain Maribel Mallari in the RTC of Quezon City. Agulto
filedan answer claiming that Tecson had no cause of action and alleged
malicious prosecution. RTC dismissed Tecson’s complaint (failure to
prosecute for an unreasonable length of time). Tecson filed a motion for
reconsideration, which was gracted. Court required the parties to appear
during the pre-trial conference scheduled on January 21, 1999. The pre-
trial was, however, reset to April 29, 1999.
-During the scheduled pre-trial on April 29, 1999, petitioner Rolando
Agulto and his counsel were informed by an employee of the RTC that the
presiding judge was on leave. Counsel for Agulto suggested that it be re-
scheduled on June 17. Employee advised petitioner’s counsel that the
suggested setting was not yet official as it would depend on the calendar
of the court and the counsel of respondent.
-The pre-trial proceeded on June 17, 1999. For failure of petitioners to
appear at the pre-trial and to submit their pre-trial brief, the RTC issued an
order allowing the respondent to present his evidence ex parte
-Petitioners filed a motion for reconsideration of the June 17, 1999 order
of the RTC. They claimed that they were not notified of the pre-trial held
on June 17, 1999. Before the motion could be heard, however, the court
rendered its July 12, 1999 decision in favor of respondent. Petitioners
were ordered to pay respondent moral damages, exemplary damages and
attorney’s fees in the aggregate amount of P170,000.
-Petitioners filed a petition for certiorari under Rule 65 of the 1997 Rules of
Prof. Victoria A. 86
Civil Procedure with the CA on November 24, 1999. They claimed that the
RTC gravely abused its discretion when it issued the September 24, 1999
order
-CA dismissed the petition. It ruled that the proper remedy was appeal by
writ of error, i.e., ordinary appeal, under Rule 41 of the 1997 Rules of Civil
Procedure, not a petition for certiorari under Rule 65. The CA also held
that the petitioners failed to show that their absence during the scheduled
pre-trial was for a valid cause
-Hence, this petition for review on certiorari under Rule 45 of the Rules of
Court
ISSUE: WON RTC acted with grave abuse of discretion in not considering
Agulto’s motions for reconsideration regarding the pre-trial.
HELD: YES
-Under the present Section 3, Rule 18 of the 1997 Rules of Civil
Procedure, the notice of pre-trial should be served on counsel. The
counsel served with notice is charged with the duty of notifying the party
he represents. It is only when a party has no counsel that the notice of
pre-trial is required to be served personally on him.
-Thus, the present rule simplifies the procedure in the sense that notice of
pre-trial is served on counsel, and service is made on a party only if he
has no counsel. It does not, however, dispense with notice of pre-trial.
-Thus, sending a notice of pre-trial stating the date, time and place of pre-
trial is mandatory. Its absence will render the pre-trial and subsequent
proceedings void. Thus, the trial court’s order allowing the plaintiff to
present his evidence ex parte without due notice of pre-trial to the
defendant constitutes grave abuse of discretion
-Although the failure of the defendant to file a pre-trial brief has the same
effect as his failure to appear at the pre-trial (this is, the plaintiff may be
allowed to present his evidence ex parte and the court shall render
judgment on the basis thereof), a condition precedent is the service of
notice of pre-trial. Otherwise, the defendant will be groping in the dark as
to when exactly he is supposed to file his pre-trial brief.
-More specifically, under Section 6, Rule 18 of the 1997 Rules of Civil
Procedure, the parties are required to file with the court and serve on the
adverse party, in such manner as shall ensure their receipt thereof at least
three days before the date of the pre-trial, their respective pre-trial briefs.
Clearly, the date of the pre-trial is the reckoning point for the filing of the
pre-trial brief. But without prior notice of pre-trial, the parties cannot
reasonably be expected to know the date of the pre-trial.
c. subpoena
d. Rule 22
UY vs. FIRST METRO INTEGRATED STEEL CORP.
G.R. No. 167245
YNARES-SANTIAGO; September 27, 2006
NATURE: Petition for Review
 Civil Procedure Digest
FACTS: Private respondent First Metro Integrated Steel Corporation
(FMISC) filed a complaint for sum of money with prayer for writ of
preliminary attachment against Robert Juan Uy (Robert), Midland
Integrated Construction Company (MICC) and petitioner Elpidio Uy. The
complaint arose from petitioner’s issuance of a check in the amount of
P695,811.00 in favor of FMISC to cover payment for deformed steel bars
delivered by the latter to petitioner and private respondents MICC and
Robert. However, the check was dishonored upon presentment and
despite demands, MICC, Robert and petitioner refused to pay.
After the filing of the respective Answers of FMISC, Robert
and MICC, hearings were thereafter conducted for the reception of their
respective evidence. The initial reception of petitioner's evidence was set
on February 28, 2001 but it was cancelled because petitioner had
influenza. The hearing was reset six more times, but in each instance,
petitioner, through his lawyers, moved for the cancellation and resetting of
the presentation of his evidence. During the sixth scheduled hearing on
February 28, 2002, Atty. Bañares, counsel for petitioner arrived late. Upon
motion of FMISC, the trial court ordered that petitioner's right to present
evidence is deemed waived and the parties were directed to file their
respective memorandum. Atty. Bañares withdrew his appearance on
January 8, 2003 with petitioner's conformity.
On March 7, 2003, the trial court rendered judgment against
petitioner and in favor of FMISC. On April 4, 2003, petitioner received a
copy of the Decision. On April 21, 2003, petitioner through Atty. Lucas C.
Carpio, Jr. filed a Motion for New Trial on the ground of gross negligence
of petitioner's counsel in failing to attend the hearing for the reception of
evidence, thus impairing his rights to due process. The trial court denied
the motion for new trial. Dissatisfied, petitioner filed with the Court of
Appeals a petition for certiorari. The CA dismissed the petition and denied
petitioner's motion for reconsideration. Hence, this Petition.
ISSUES: (1) WON petitioner’s motion for new trial was filed out of time;
(2) WON a petition for certiorari is the proper remedy to overturn the
denial of a motion for new trial; (3) WON the motion for new trial should be
granted.
HELD:
(1) NO. A scrutiny of the records discloses that while the Motion for New
Trial was received by the trial court on April 28, 2003, the date on the
Registry Receipt attached to the Affidavit of Service as well as that
stamped on the envelope which contained the copy of the motion, reveals
that it was filed and served by registered mail on April 21, 2003, a
Monday, because April 19, 2003, the last day for filing the same was a
Saturday. Section 1, Rule 22 of the Rules of Court states that if the last
day of the period thus computed falls on a Saturday, a Sunday, or a legal
holiday in the place where the court sits, the time shall not run until the
next working day. Thus, the motion was actually filed on time it having
been filed on April 21, 2003, the next working day, following the last day
for filing which fell on a Saturday.
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(2) YES. Section 9, Rule 37 of the Rules of Court which provides that the An affidavit of merit should state facts, and not mere opinion or
remedy to an order denying a motion for new trial is to appeal the conclusions of law. Petitioner's motion for new trial and affidavit of merit
judgment or final order, must be read in conjunction with Section 1, Rule did not mention the evidence which he was prevented from introducing,
41 which provides that “no appeal may be taken from an order denying a nor did it allege that such evidence would change the outcome of the
new trial or reconsideration.” Rule 41, Section 1 further provides that: case.
“where the judgment or final order is not appealable, the aggrieved party
may file an appropriate special civil action under Rule 65.” Thus, the filing Petitioner's argument that his counsel's negligence was so gross that he
by the petitioner of a petition for certiorari with the Court of Appeals from was deprived of due process fails to impress. Gross negligence is not one
the denial of the motion for new trial by the trial court is proper. of the grounds for a motion for a new trial. We cannot declare his
counsel's negligence as gross as to liberate him from the effects of his
(3) NO. Section 1, Rule 37 provides that a motion for new trial may be failure to present countervailing evidence. Besides, we find that
filed within the period for taking an appeal based, among others, on petitioner's and his counsel's negligence are concurrent. During the initial
excusable negligence. Negligence to be excusable must be one which hearing for the reception of his evidence, petitioner was absent allegedly
ordinary diligence and prudence could not have guarded against. In the due to influenza. During the succeeding scheduled hearings, petitioner
instant case, the negligence of petitioner's counsel in failing to attend the was absent but his lawyer, Atty. Molina, was present but did not present
hearings for the reception of evidence is inexcusable. The trial court any evidence. Instead, motions for postponement or resetting were made.
scheduled the hearing for the reception of petitioner's evidence seven In one occasion, Atty. Molina was absent but Atty. Carpio, Jr. appeared as
times. The initial hearing set on February 28, 2001 was cancelled because collaborating counsel. Still, no evidence was presented but a resetting
petitioner allegedly had influenza. The hearings scheduled on April 26, was again requested.
2001 and May 10, 2001 were cancelled and moved to October 25, 2001
and December 13, 2001. Petitioner was represented by Atty. Carpio, Jr. as Finally, petitioner's counsel's inexcusable neglect did not amount to
collaborating counsel during the hearing on October 25, 2001 but no petitioner's deprivation of due process of law. The right to due process
evidence was presented. Instead, the hearing was cancelled. On safeguards the opportunity to be heard and to submit any evidence one
December 13, 2001, Atty. Bañares, petitioner's new counsel, appeared but may have in support of his claim or defense. In the instant case, petitioner
he requested for a resetting. On February 14, 2002, Atty. Bañares moved was given several opportunities to be heard and to submit evidence but
to postpone the hearing to February 28, 2002 as previously scheduled. he squandered them. Blunders and mistakes in the conduct of the
On February 28, 2002, Atty. Bañares arrived late. The records disclose proceedings in the trial court as a result of the ignorance, inexperience or
that the hearings were postponed or cancelled without any justification. incompetence of counsel do not qualify as a ground for new trial.
However, the trial court accommodated the requests for postponement or
resetting in order to accord petitioner due process. Under the DISPOSITIVE: The Petition is DENIED for lack of merit.
circumstances, petitioner's counsel's failure to attend the seven scheduled
hearings is without justifiable reason tantamount to inexcusable neglect.
As such, it cannot be a ground for new trial.
In addition, the Rule requires that motions for new trial founded on fraud,
accident, mistake or excusable negligence must be accompanied by
affidavits of merits, i.e., affidavits showing the facts (not mere conclusions
or opinions) constituting the valid cause of action or defense which the
movant may prove in case a new trial is granted, because a new trial
would serve no purpose and would just waste the time of the court as well
as the parties if the complaint is after all groundless or the defense is nil or
ineffective.
Under the Rules, the moving party must show that he has a meritorious
defense. The facts constituting the movant's good and substantial
defense, which he may prove if the petition were granted, must be shown
in the affidavit which should accompany the motion for a new trial. .
Petitioner's Affidavit of Merit did not contain clear statements of the facts
constituting a good and valid defense which he might prove if given the
chance to introduce evidence. The allegations that he has a "meritorious
defense" and a "good cause" are mere conclusions which did not provide
the court with any basis for determining the nature and merit of the case.
Civil Procedure Digest A2010 Prof. Victoria A. 88

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