ROGER V. NAVARRO vs. HON. JOSE L.

ESCOBIDO

FACTS: Respondent Karen T. Go filed two complaints before the RTC for replevin and/or sum of money with
damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs of replevin for the seizure
of two (2) motor vehicles in Navarro’s possession. In his Answers, Navarro alleged as a special affirmative defense
that the two complaints stated no cause of action, since Karen Go was not a party to the Lease Agreements with
Option to Purchase (collectively, the lease agreements) — the actionable documents on which the complaints were
based. RTC dismissed the case but set aside the dismissal on the presumption that Glenn Go’s (husband) leasing
business is a conjugal property and thus ordered Karen Go to file a motion for the inclusion of Glenn Go as co-
plaintiff as per Rule 4, Section 3 of the Rules of Court. Navarro filed a petition for certiorari with the CA. According to
Navarro, a complaint which failed to state a cause of action could not be converted into one with a cause of action by
mere amendment or supplemental pleading. CA denied petition.

ISSUE: Whether or not Karen Go is a real party in interest.

HELD: YES. Karen Go is the registered owner of the business name Kargo Enterprises, as the registered owner of
Kargo Enterprises, Karen Go is the party who will directly benefit from or be injured by a judgment in this case. Thus,
contrary to Navarro’s contention, Karen Go is the real party-in-interest, and it is legally incorrect to say that her
Complaint does not state a cause of action because her name did not appear in the Lease Agreement that her
husband signed in behalf of Kargo Enterprises.
Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered under this name;
hence, both have an equal right to seek possession of these properties. Therefore, only one of the co-owners,
namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto.
The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all
co-owners.
We hold that since Glenn Go is not strictly an indispensable party in the action to recover possession of the leased
vehicles, he only needs to be impleaded as a pro-forma party to the suit, based on Section 4, Rule 4 of the Rules,
which states:
Section 4.Spouses as parties. — Husband and wife shall sue or be sued jointly, except as provided by law.
Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder of indispensable
parties in a complaint is not a ground for dismissal of action as per Rule 3, Section 11 of the Rules of Court.

Issue: WON prior demand is a condition precedent to an action for a writ of replevin.

Held: No. Petitioner erred in arguing that prior demand is required before an action for a writ of replevin is filed since
we cannot liken a replevin action to an unlawful detainer.
For a writ of replevin to issue, all that the applicant must do is to file an affidavit and bond, pursuant to Section 2, Rule
60 of the Rules, which states:

Sec. 2. Affidavit and bond.

The applicant must show by his own affidavit or that of some other person who personally knows the facts:

(a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the
possession thereof;
(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof
according to the best of his knowledge, information, and belief;
(c) That the property has not been distrained or taken for a tax assessment or a fine pursuant to law, or seized
under a writ of execution or preliminary attachment, or otherwise placed under custodialegis, or if so seized, that it is
exempt from such seizure or custody; and
(d) The actual market value of the property.
The applicant must also give a bond, executed to the adverse party in double the value of the property as stated in
the affidavit aforementioned, for the return of the property to the adverse party if such return be adjudged, and for the
payment to the adverse party of such sum as he may recover from the applicant in the action.

The SC held that there is nothing in the afore-quoted provision which requires the applicant to make a prior demand
on the possessor of the property before he can file an action for a writ of replevin. Thus, prior demand is not a
condition precedent to an action for a writ of replevin.

Non-joinder of indispensable parties not

ground to dismiss action

Even assuming that Glenn Go is an indispensable party to the action, we have

held in a number of cases[26] that the misjoinder or non-joinder of indispensable
parties in a complaint is not a ground for dismissal of action. As we stated
in Macababbad v. Masirag:[27]

Rule 3, Section 11 of the Rules of Court provides that neither

misjoinder nor nonjoinder of parties is a ground for the dismissal of an
action, thus:

Sec. 11. Misjoinder and non-joinder of parties. Neither

misjoinder nor non-joinder of parties is ground for
dismissal of an action. Parties may be dropped or added by
order of the court on motion of any party or on its own
initiative at any stage of the action and on such terms as are
just. Any claim against a misjoined party may be severed
and proceeded with separately.

In Domingo v. Scheer, this Court held that the proper remedy

when a party is left out is to implead the indispensable party at any stage
of the action. The court, either motu proprio or upon the motion of a
party, may order the inclusion of the indispensable party or give the
plaintiff opportunity to amend his complaint in order to
include indispensable parties. If the plaintiff to whom the order to
include the indispensable party is directed refuses to comply with the
order of the court, the complaint may be dismissed upon motion of the
defendant or upon the court's own motion. Only upon unjustified failure
or refusal to obey the order to include or to amend is the action dismissed.
SULPICIA VENTURA, petitioner, vs.
HON. FRANCIS J. MILITANTE, in His Capacity as Presiding Judge, Regional Trial Court, 7th
Judicial District, Branch XII, Cebu City; and JOHN UY, respondent.
 G.R. No. 63145 October 5, 1999

FACTS: Private respondent filed a Complaint for a Sum of Money and Damages against petitioner.
However, petitioner moved to dismiss the foregoing complaint on the ground that “the estate of Carlos
Ngo has no legal personality,” the same being “neither a natural nor legal person in contemption of law.”
The petitioner then filed an opposition to private respondent’s Motion to Dismiss. The public respondent
then gave private respondent 15 days to make the amendment of the complaint. Petitioner filed a MR of
the order of public respondent. First, she argued that the action instituted by the private respondent to
recover P48, 889.70, representing the unpaid price of the automotive spare parts purchased by her
deceased husband during his lifetime, is a money claim which, under Section 21, Rule 3 of the Revised
Rules of Court, does not survive, the same having been filed after Carlos Ngo had already died. Second,
she claimed that the public respondent never acquired jurisdiction over the subject matter of the case
which, being an action to recover a sum of money from a deceased person, may only be heard by a
probate court. Private respondent opposed the foregoing motion. Public respondent then issued an Order
giving private respondent 24 hours to file his amended complaint. Private respondent then filed his
amended complaint. Petitioner then filed a Comment to Plaintiff’s Amended Complaint. Private
respondent then filed A Rejoinder to Defendant’s Comment. Public respondent then issued the herein
assailed order. Hence, the present Petition for Certiorari assailing the said Order.

ISSUE: WON A DEAD PERSON OR HIS ESTATE MAY BE A PARTY PLAINTIFF IN A

COURT ACTION.

HELD: No. Firstly, neither a dead person nor his estate may be a party plaintiff in a court action. A
deceased person does not have such legal entity as is necessary to bring action so much so that a motion
to substitute cannot lie and should be denied by the court. An action begun by a decedent's estate cannot
be said to have been begun by a legal person, since an estate is not a legal entity; such an action is a
nullity and a motion to amend the party plaintiff will not likewise lie, there being nothing before the court
to amend. Considering that capacity to be sued is a correlative of the capacity to sue, to the same extent, a
decedent does not have the capacity to be sued and may not be named a party defendant in a court
action. .
Secondly, It is clear that the original complaint of private respondent against the estate of Carlos Ngo was
a suit against Carlos Ngo himself who was already dead at the time of the filing of said complaint. At that
time, and this private respondent admitted, no special proceeding to settle his estate had been filed in
court. As such, the trial court did not acquire jurisdiction over either the deceased Carlos Ngo or his
estate. It is true that amendments to pleadings are liberally allowed in furtherance of justice, in order that
every case may so far as possible be determined on its real facts, and in order to speed the trial of causes
or prevent the circuitry of action and unnecessary expense. But amendments cannot be allowed so as to
confer jurisdiction upon a court that never acquired it in the first place. When it is evident that the court
has no jurisdiction over the person and the subject matter and that the pleading is so fatally defective as
not to be susceptible of amendment, or that to permit such amendment would radically alter the theory
and the nature of the action, then the court should refuse the amendment of the defective pleading and
order the dismissal of the case.
CHIANG KAI SHEK SCHOOL v CA & FAUSTINA FRANCO OH

FACTS:
 1. Fausta Oh has been working as a teacher for the school since 1932 (33 years). When she
reported for work on the first week of July 1968, she was told she had no assignment for the
next semester.
2. She sued and demanded for separation pay social security benefits, salary differentials,
maternity benefits and moral and exemplary damages.
3. The original defendant was the Chiang Kai Shek School but when it filed a motion to dismiss on
the ground that it could not be sued, the complaint was amended. Certain officials of the school
were also impleaded to make them solidarily liable with the school.
4. Court of First Instance of Sorsogon dismissed the complaint.
5. CA: reversed CFI which held the school suable and liable while absolving the other defendants.
6. The motion for reconsideration having been denied, the school then came to this Court in this
petition for review on certiorari.

ISSUES: Whether or not a school that has not been incorporated may be sued by reason alone of its long
continued existence and recognition by the government.

HELD: yes

1. It is true that Rule 3, Section 1, of the Rules of Court clearly provides that "only natural or
juridical persons may be parties in a civil action." It is also not denied that the school has not
been incorporated. However, this omission should not prejudice the private respondent in the
assertion of her claims against the school.
2. As a school, the petitioner was governed by Act No. 2706 as amended by C.A. No. 180, having
been recognized by the government, it was under obligation to incorporate under the
Corporation Law within 90 days from such recognition. It appears that it had not done so at the
time the complaint was filed notwithstanding that it had been in existence even earlier than
1932.
3. The petitioner cannot now invoke its own non-compliance with the law to immunize it from the
private respondent's complaint.
4. There should also be no question that having contracted with the private respondent every year
for thirty two years and thus represented itself as possessed of juridical personality to do so, the
petitioner is now estopped from denying such personality to defeat her claim against it.
5. According to Article 1431 of the Civil Code, "through estoppel an admission representation is
rendered conclusive upon the person making it and cannot be denied or disproved as against
the person relying on it."
6. As the school itself may be sued in its own name, there is no need to apply Rule 3, Section 15,
under which the persons joined in an association without any juridical personality may be
sued with such association. Besides, it has been shown that the individual members of the
board of trustees are not liable, having been appointed only after the private respondent's
dismissal.

LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA and DANILO LITONJUA, petitioners,

vs.
TERESITA VIGAN, respondent.
Facts:

1. TERESITA VIGAN’s version: She was hired by the Litonjua Group of Companies on February 2,
1979 as telex operator. Later, she was assigned as accounting and payroll clerk under the
supervision of DaniloLitonjua. She had been performing well until 1995, when DaniloLitonjua who
was already naturally a (sic) very ill-tempered, ill-mouthed and violent employer, became more so
due to business problems. The incidents prompted Vigan to write DaniloLitonjua letters asking why
she was treated so and what was her fault. DaniloLitonjua charged that Vigan had been hysterical,
emotional and created scenes at the office. He even required her to secure psychiatric assistance.
But despite proof that she was not suffering from psychosis or organic brain syndrome as certified
to by a Psychiatrist of DaniloLitonjua’s choice still she was denied by the guards entry to her work
upon instructions again of DaniloLitonjua. Left with no alternative, Vigan filed this case for illegal
dismissal, alleging she was receiving a monthly salary of P8,000.00 at the time she was
unlawfully terminated.
2. Litonjuas version: They negate the existence of the Litonjua Group of Companies and the
connection of Eduardo Litonjua thereto. They contended that Vigan was employed by ACT Theater,
Inc., where DaniloLitonjua is a Director. They dispute the charge of illegal dismissal for it was Vigan
who ceased to report for work despite notices and likewise contest the P8,000.00 monthly salary
alleged by Vigan, claiming it was merely P6,850.00.

They claim that Vigan was a habitual absentee. Her performance had been satisfactory, but then
starting March 15, 1996 she had become emotional, hysterical, uncontrollable and created
disturbances at the office with her crying and shouting for no reason at all. The incident was repeated
on April 3, 1996, May 24, 1996 and on June 4, 1996. Thus alarmed, on July 24, 1996 Vigan was
required by management to undergo medical and psychological examination at the company’s
expense and naming three doctors to attend to her. Dr.Baltazar Reyes and Dr. Tony Perlas of the
Philippine General Hospital and Dr. Lourdes Ignacio of the Medical Center Manila. But they claim
that Vigan refused to comply.

On August 2, 1996, Vigan again had another breakdown, hysterical, shouting and crying as usual
for about an hour, and then she just left the premises without a word. The next day, August 3, 1996,
Saturday, she came to the office and explained she was not feeling well the day before. After that
Vigan went AWOL and did not heed telegram notices from her employer made on August 26, 1996
and on September 9, 1996. She instead filed the instant suit for illegal dismissal."

3. On June 10, 1997, Labor Arbiter Ernesto S. Dinopol rendered his decision4 finding Vigan
diseased and unfit for work under Article 284 of the Labor Code5 and awarded corresponding
separation pay.
4. Vigan appealed the decision to the National Labor Relations Commission which modified7 the
arbiter’s decision by ruling that Art. 284 of the Labor Code is inapplicable in the instant case but
affirmed the legality of the termination of the complainant based on her having effectively abandoned
her job; the rest of the decision was affirmed. Vigan moved for a partial reconsideration which was
denied in a resolution dated August 7, 1998.
5. Vigan filed a petition for certiorari with the Court of Appeals which reversed the NLRC Resolution. It
ordered the respondents jointly and severally to: (a) Reinstate VIGAN if she so desires; or (b) pay
her separation compensation in the sum of P8,000.00 multiplied by her years of service counted
 from February 2, 1979 up to the time this Decision becomes final; and in either case to pay Vigan;
(c) full back wages from the time she was illegally dismissed up to the date of the finality of this
Decision; (d) moral damages in the amount of P40,000.00; (e) exemplary damages in the amount of
P15,000.00; and (f) attorney’s fees of P10,000.00.
6. Litonjuas filed their motion for reconsideration which was denied. Hence, the filing of the instant
petition for review on certiorari. alleging the following grounds:

ISSUE: WHETHER OR NOT “LITONJUA GROUP OF COMPANIES", WHICH HAS NO JURIDICAL

PERSONALITY, BUT ONLY A GENERIC NAME TO DESCRIBE THE VARIOUS COMPANIES WHICH THE
LITONJUA FAMILY HAS INTERESTS, CAN BE LEGALLY CONSTRUED AS RESPONDENT’S
EMPLOYER.

HELD: NO . Only natural or juridical persons or entities authorized by law may be parties to a civil action and
every action must be prosecuted and defended in the name of the real parties in interest.Petitioners’ claim
that Litonjua Group of Companies is not a legal entity with juridical personality hence cannot be a party to
this suit deserves consideration since respondent failed to prove otherwise. In fact, respondent Vigan’s own
allegation in her Memorandum supported petitioners’ claim that Litonjua group of companies does not exist
when she stated therein that instead of naming each and every corporation of the Litonjua family where she
had rendered accounting and payroll works, she simply referred to these corporations as the Litonjua group
of companies, thus, respondent merely used such generic name to describe collectively the various
corporations in which the Litonjua family has business interest. Considering the non-existence of the Litonjua
group of companies as a juridical entity and petitioner Eddie Litonjua’s denial of his connection in any capacity
with the ACT Theater, the supposed company where Vigan was employed, petitioner Eddie Litonjuas should
also be excluded as a party in this case since respondent Vigan failed to prove Eddie Litonjua’s participation
in the instant case. It is respondent Vigan, being the party asserting a fact, who has the burden of proof as
to such fact10 which however, she failed to discharge.

Municipality of Kapalong v. Moya

MUNICIPALITY OF KAPALONG, THRU ITS MAYOR, PORFIRIO F. ROYO VICE MAYOR, TOMAS D. MANZANO, MUNICIPAL COUNCILORS
VALERIANO CLARO, CARIDAD A. DORONIO FELICULO ESTRADA, GEORGE PEDRO JAIN, LIDO E. MONOY SALVADOR PASPE AND
AGUEDO ROTOL (PETITIONERS) VS. HON. FELIX L. MOYA, PRESIDING JUDGE OF COURT OF FIRST INSTANCE OF DAVAO, BRANCH IX, AND THE
MUNICIPALITY OF STO. TOMAS, THRU ITS MAYOR, ANICETO SOLIS, VICE-MAYOR LEOPOLDO RECTO, MUNICIPAL COUNCILORS DOMINGO
CAGADAS, WENCESLAO CASTRO, WILDA ESPIRITU, PASTOR FERNANDEZ, MACROSQUE PIMENTEL, DOMINADOR SOLIS, JOSE
TAGHOY AND ALFONSO VALDEZ, AND MUNICIPAL TREASURER JOSE AVENIDO (RESPONDENTS)
SEPTEMBER 29, 1988
J. MELENCIO-HERRERA
creation of municipal corporations – nature and powers to create municipal corporations

SUMMARY: Kapalong moved to dismiss Sto. Tomas’ complaint for settlement of boundary.
Court held that dismissal was proper, since Sto. Tomas has no legal personality and
cannot be a party to any civil action. Presidents cannot create municipalities, and
Sto. Tomas here was created by Pres. Garcia.

FACTS:
 Pres. Garcia created the Municipality of Santo Tomas from portions of the
Municipality of Kapalong.
 Sto. Tomas now asserts jurisdiction over eight barrios of Kapalong. Sto. Tomas
filed a complaint against Kapalong for settlement of the municipal boundary
dispute.
 From portions of the Municipality of Kapalong, President Carlos P. Garcia created
Municipality of Sto.Tomas.
 Sto. Tomas now asserts jurisdiction over 8 barrios of Kapalong.
 For many years and on several occasions, this conflict of boundaries between the two
municipalities was brought, at the instance of the Mayor of Sto. Tomas, to the
Provincial Board of Davao for it to consider and decide. However, no action was taken
on the same.
 The Municipality of Sto. Tomas eventually filed a complaint against the Municipality
of Kapalong, for settlement of the municipal boundary dispute.
 The Municipality of Kapalong filed a MTD on the ground of lack of legal personality
of the Municipality of Sto. Tomas.

ISSUE: Does Santo Tomas legally exist? NO.

 As ruled in the Pelaez case, the President has no power to create a municipality.
Since Santo Tomas has no legal personality, it cannot be a party to any civil action,
and as such, Judge Moya should have dismissed the case, since further proceedings
would be pointless. The Rules of Court expressly provides that only "entities
authorized by law may be parties in a civil action.

DISPOSITION: Petitions dismissed for lack of merit.

RAFAEL C. UY vs ESTATE OF VIPA FERNANDEZ
G.R No. 200612
April 5, 2017

FACTS:

Vipa Fernandez Lahaylahay is the registered owner of a parcel of land situated in Jaro, Iloilo City. Vipa and
her husband Levi Lahaylahay have two children, Grace Joy and Jill Frances.

In 1990, a contract of lease was executed between Vipa and Rafael Uy over the subject property and the
improvements thereon to which Rafael bound himself to pay the amount of P 3,000/mo with provision for a
10% every year thereafter.

On 1995, Vipa died leaving no will or testament whatsoever, Grace Joy became the de facto administrator
of the estate of Vipa. In 1998, Rafael stopped paying the monthly rents. Consequently, the estate of Vipa
filed a complaint for unlawful detainer with MTCC against Rafael. Accordingly, at the time of the filing of the
complaint, unpaid rents amounted to P271,150.00.

MTCC rendered a decision ordering Rafael to vacate the premises and to pay the amount of unpaid rents
with 12% interest per annum.

On appeal, RTC reversed the decision of MTCC and dismiss the complaint for unlawful detainer. According
the RTC, Grace was the plaintiff not the estate and it had failed to the bring the dispute to the barangay
conciliation; that the property is part of conjugal property and after Vipa’s death the conjugal partnership
was terminated. Levi sold his property to Rafael, thus making him co-owner of the property.

Estate filed a petition for review to CA and reinstated the decision of MTCC.

Issue:

Whether or not the CA erred in reversing the RTC’s decision?

Ruling:

The petition is partly granted.

Complainants by and against corporations, partnerships, or other juridical entities may not filed with,
received or acted upon by the barangay for conciliation. The Estate of Vipa, which is the complainant below,
is a juridical entity that has a personality, separate and distinct from that of Grace Joy. Thus, there is no
necessity to bring the dispute to the barangay conciliation prior to filing of the complaint for unlawful detainer
with MTCC.

On the issue of ownership of Rafael, Levi had the right to freely dispose of his undivided interest. Thus the
sale by Levi of his one-half undivided share in the subject property was not necessarily void, for his right as
a co-owner thereof was effectively transferred, making the buyer Rafael, a co-owner of the subject property.
Accordingly, Rafael could no-longer be directed to vacate the subject property since he is already a co-
owner thereof. Nevertheless, Rafael is still bound to pay unpaid rentals from 1998 to 2003.

BALOLOY v. HULAR G.R. No. 157767 (Note: This case have several issues but only the issue about co-
ownership was presented in this digest)

FACTS: Spouses Lino and Victoriana Estopin were the original owners of a parcel of land located in Barangay
Biriran, Juban, Sorsogon ( Lot No. 3347 ) of the Juban Cadastre. A major portion of the property was agricultural,
while the rest was residential. November 11 and 25, 1961: When Lino Estopin died intestate, his widow,
Victoriana Lagata, executed a Deed of Absolute Sale on over the agricultural portion of Lot No. 3347, ( 15,906
sqm) and the residential portion of the property (287 sqm) to Astrologo Hular. In 1961 or thereabouts: Iluminado
asked Hularâs permission to construct a house on a portion of Lot No. 3347 near the road, and the latter agreed.

Iluminado Baloloy in 1945 acquired a coconut land (north of the residential portion of Lot 3347 Lot No. 3353
(9302 sqm) and registered the same. Iluminado constructed his house on a portion of Lot No. 3353. He and his
family, including his children, forthwith resided in said house.

In 1979, respondent Hular had his house constructed near the trail (road) on Lot No. 3347, which, however,
occupied a big portion of Lot No. 3353.

Iluminado died intestate on November 29, 1985. His widow and their children continued residing in the
property, while petitioner Reynaldo Baloloy, one of Iluminadoâs children, later constructed his house near that
of his deceased father. When Astrologo died, he was survived by his children, Jose, Romeo, Anacleto, Elena,
Leo, Teresita, and the respondent, among others, who continued to reside in their house.

Sometime in l991 the respondent had Lot No. 3353 surveyed and discovered that the residential area deeded by
Lagata to Astrologo Hular had an area of 1,405 square meters, instead of 287 square meters only.

Respondent Alfredo Hular filed a complaint for quieting of title of real property against the children and heirs
of Iluminado Baloloy, namely, Anacorita, Antonio, and petitioners Reynaldo and Adelina, all surnamed Baloloy.
He prayed among others that he be declared the absolute owner of the property in question.

ISSUE: Whether all the indispensable parties had been impleaded by the respondent in the trial court (NO)

RULING: Respondent adduced evidence that when his parents died intestate, they were survived by their
children, the respondent and his siblings Elena, Jose, Romeo, Anacleto, Leo, and Teresita.
Article 1078 of the Civil Code provides that where there are two or more heirs, the whole estate of the decedent
is, before partition, owned in common by such heirs, subject to the payment of the debts of the deceased. Under
Article 487 of the New Civil Code, any of the co-owners may bring an action in ejectment. This article covers
all kinds of actions for the recovery of possession, including an accion publiciana and a reinvidicatory action. If
the action is for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession
thereof, the action will not prosper unless he impleads the other co-owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole ownership over the subject property and
praying that he be declared the sole owner thereof. There is no proof that the other co- owners had waived their
rights over the subject property or conveyed the same to the respondent or such co-owners were aware of the
case in the trial court.

ONA BUMATAY, Petitioner, v. LOLITA BUMATAY, Respondents.

DECISION

CAGUIOA, J:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Petitioner
Jona Bumatay (Jona) against herein Respondent Lolita Bumatay (Lolita), assailing the Court of Appeals':
(1) Decision1 dated August 28, 2009, which denied Petitioner's appeal in the case of People of the Philippines
v. Lolita F. Bumatay, docketed as CA-G.R. CR. No. 31124; and (2) Resolution2 dated February 4, 2010
denying Petitioner's Motion for Reconsideration.

The Facts

Lolita allegedly married a certain Amado Rosete (Amado) on January 30, 1968, when she was 16 years
old.3 The marriage was solemnized before Judge Delfin D. Rosario, in Malasiqui, Pangasinan.4 Prior to the
declaration of nullity of her marriage with Amado on September 20, 2005,5 Lolita married Jona's foster
father,6 Jose Bumatay (Jose), on November 6, 2003.7

On August 17, 2004, Jona filed a Complaint-affidavit for Bigamy against Lolita,8 summarizing the acts
complained of as follows:

[i.] On January 30, 1968, Ms. Lolita Ferrer contracted marriage with a
certain Amado Rosete before the Hon. Delfin D. Rosario, municipal
judge of Malasiqui Pangasinan;

[ii.] Again, on November 6, 2003, while her husband Amado Rosete was
still alive and her marriage with him was valid and subsisting, Ms.
Lolita Ferrer contracted another marriage with Jose M. Bumatay in
Malasiqui, Pangasinan;
 [iii.] When Lolita Ferrer contracted her second marriage with Jose
Bumatay, she knows fully well that her first marriage with her first
husband Mr. Amado Rosete, who is still living up to today, has not
been legally dissolved but existing[.]9

In her Counter-Affidavit, Lolita claims that she learned from her children (with Amado) that Amado had filed
a petition for declaration of nullity of their marriage.10 Subsequently, sometime in 1990, she was informed
by her children that Amado had died in Nueva Vizcaya.11

Subsequently, an Information for Bigamy was filed by Prosecutor Bernardo S. Valdez of the Office of the
Provincial Prosecutor of San Carlos City, with the Regional Trial Court of San Carlos City, Pangasinan, Branch
56 (RTC-San Carlos) on November 8, 2004.12 The Information alleged:

The undersigned Government Prosecutor, hereby accuses LOLITA BUMATAY y FERRER, of the crime of
BIGAMY, committed as follows:

That on or about November 6, 2003, in the municipality of Malasiqui, province of Pangasinan, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused Lolita F. Bumatay being then
legally married to one Amado Rosete, which marriage is still subsisting not having been legally dissolved, did
then and there, willfully, unlawfully and feloniously contracted a second marriage with Jose Bumatay,
believing that accused has the legal capacity to contract their marriage, to the damage and prejudice of
complainant, Jona S. Bumatay.

Contrary to Article 349 of the Revised Penal Code. San Carlos City, Pangasinan, October 7, 2004.13

The Proceedings before the RTC-Dagupan City on Lolita's Petition

for Declaration of Nullity

Meanwhile, sometime in January 2005 - after the Information for Bigamy against her was filed14 in the RTC-
San Carlos but before her arraignment, Lolita filed with the Regional Trial Court of Dagupan City,
Pangasinan, Branch 4315 (RTC-Dagupan City) a petition for the declaration of nullity of her marriage to
Amado.16

On September 20, 2005, the RTC-Dagupan City issued a Decision17 declaring as null and void the marriage
between Lolita and Amado, viz:

WHEREFORE, in view of all of the above, judgment is hereby rendered by this Honorable Court as follows:

1. Declaring the marriage between the plaintiff Lolita Ferrer and the defendant Amado
Rosete void ab initio;

2. Ordering the Local Civil Registrar of Malasiqui, Pangasinan to make the proper annotations
in the entry of marriage of the parties in their Register of Marriages.

SO ORDERED.18

Based on the evidence submitted, including the testimonies from Lolita herself and her sister Erlinda,19the
RTC-Dagupan City found that no marriage ceremony took place between Lolita and Amado as it was Lolita's
sister who had married Amado and that, in fact, the signature appearing on the marriage certificate was not
Lolita's signature but that of her sister's.20 Thus, to the RTC-Dagupan City, there being no marriage
ceremony that actually took place between Amado and Lolita,21 their marriage was void from the very
beginning.22
The Bigamy Proceedings before the RTC-San Carlos

In the bigamy case in RTC-San Carlos involving Criminal Case No. SCC-4357, Lolita sought a deferment of
the arraignment for bigamy. On November 2, 2005,23 she filed a Motion to Quash24 the Information. Her
motion was hinged on the argument that the first element of the crime of bigamy - that is, that the offender
has been previously legally married - is not present. In support, Lolita attached a copy of the RTC-Dagupan
City Decision25 declaring the marriage between her and Amado void ab initio on the ground that there was
no marriage ceremony between them and what transpired was a marriage by proxy.26

Subsequently, in its Order27 dated March 20, 2006, the RTC-San Carlos granted Lolita's Motion to Quashand
dismissed the complaint for bigamy, relying on Morigo v. People,28 thus:

Due to the significant resemblance of this case to the Morigo case, this Court is constrained to adopt and
apply the ruling and principles laid down in Morigo. As succinctly put by the Supreme Court in the case
aforementioned[:]

"The first element of bigamy as a crime requires that the accused must have been legally married, but in
this case, legally speaking, the petitioner was never married to Lucia Barrete. Thus, there is no first
marriage to speak of. Under the principle of retroactivity of a marriage being declared void ab initio, the two
were never married from the beginning. The contract of marriage is null; it bears no legal effect. Taking this
argument to its logical conclusion, for legal purposes, petitioner was not married to Lucia Barrete at the time
he contracted the marriage with Maria Lumbago. The petitioner, must perforce, be acquitted of the charge.

Since the first marriage has been declared void ab initio, there is no first marriage to begin with in
determining the foremost element of bigamy. Such declaration of nullity retroacts to the date of the first
marriage. The accused in this case was, under the eyes of the law, never married to Amado Rosete at the
time she contracted the marriage with Jose Bumatay. Following this judicial fiat, the defense of good faith
and lack of criminal intent has been rendered moot and academic."29

The RTC-San Carlos concluded that there were "glaring material similarities"30 between Morigo and the case
against Lolita. Thus, in dismissing the bigamy case against Lolita, the RTC-San Carlos held that since the
first marriage has been declared void ab initio, then, pursuant to the ruling in Morigo, there is no first
marriage to begin with in determining the foremost element of bigamy. Such declaration of nullity retroacts
to the date of the first marriage.31 Thus, accused Lolita in this case was, for all intents and purposes, never
married to Amado at the time she contracted the marriage with Jose. Based on the foregoing, the RTC-San
Carlos dismissed the Bigamy charge against Lolita. Aggrieved, Jona appealed the RTC-San Carlos' Order to
the CA.

The CA Decision

In its Decision dated August 28, 2009,32 the CA affirmed the RTC-San Carlos' Order dated March 20, 2006
granting the Motion to Quash and dismissed Jona's appeal. The CA resolved the issue of whether the RTC-
San Carlos erred in ordering the quashal of the Information for Bigamy on the ground that the criminal
liability of the accused had been extinguished when her first marriage was declared null and voidab initio.33

In upholding the RTC-San Carlos' decision, the CA held that:

First, a motion to quash is the mode by which an accused assails, before entering his plea, the validity of the
criminal complaint or information filed against him for insufficiency on its face in point of law, or for a defect
apparent on the face of the Information.34 Under Rule 117, Section 3 of the Rules of Court, in the hearing of
a motion to quash, only such facts as are alleged in the information, and those admitted by the prosecutor,
should be taken into account in the resolution thereof unless the Rules expressly permit the investigation of
the facts alleged in the motion to quash. However, the Supreme Court has held that under Rule 117, Section
2 of the Rules of Court, a motion to quash may be based on factual and legal grounds and that it necessarily
follows that facts outside the Information itself may be introduced to prove such grounds.35

Here, the trial court anchored its acquittal on the Declaration of Nullity issued by the RTC-Dagupan City, on
the ground that no actual marriage ceremony took place.36 The RTC-Dagupan City reasoned that there being
no first marriage to speak of, there was no legal impediment at the time the accused married Jose Bumatay;
and as a consequence, the accused is not guilty of bigamy. Consequently, according to the CA, it is crystal
clear that in granting the motion to quash, the RTC-Dagupan City took into consideration the factual findings
of the RTC-Dagupan City which led to the latter's declaration that the marriage of Lolita and Amado was null
and void ab initio.37

Finally, the CA was not persuaded by Jona's contention that the RTC-San Carlos erred in granting the motion
to quash on the basis of the decision declaring the nullity of the first marriage since it is not among the
grounds for extinction of criminal liability. The CA agreed with the RTC-San Carlos' conclusion that the
extinction of criminal liability presupposes the existence of such liability in the first place, which is later
totally obliterated by virtue of a certain circumstance that eventually happens. In the present case, criminal
liability never existed from the beginning as the first marriage never validly occurred due to the fact that a
marriage ceremony never took place. Hence, there was no criminal liability to extinguish in the first place.38

Jona's Motion for Reconsideration was likewise denied by the CA in its Resolution dated February 4,
2010,39 finding that the arguments raised in the Motion for Reconsideration are substantially a reiteration of
those already passed upon and considered by the CA in its Decision. Jona received a copy of said
CA Resolution on February 17, 2010.40

On April 5, 2010, Jona filed, in her personal capacity, the instant petition. In a Resolution dated April 28,
2010, the Court required Lolita to file her comment.41 Lolita filed her Comment42 on June 11, 2010, while
Jona filed her Reply (with Compliance) on March 9, 2011.43

The Issue

The sole issue brought before this Court is whether the CA committed any reversible error in upholding the
RTC-San Carlos' Order granting Lolita's motion to quash the Information for the crime of Bigamy.

The Court's Ruling

The petition is denied.

Based on the records, it appears undisputed that Petitioner has no legal personality to assail the dismissal of
the criminal case. Rule 110, Section 544 of the Revised Rules of Criminal Procedure,45 dictates that all
criminal actions commenced by complaint or by information shall be prosecuted under the direction and
control of a public prosecutor. In appeals of criminal cases before the Supreme Court, the authority to
represent the State is vested solely in the Office of the Solicitor General (OSG).46

This authority is codified in Section 35(1), Chapter 12, Title III, Book IV of the 1987 Administrative Code,
which provides:

SECTION 35. Powers and Functions. � The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding,
investigation or matter requiring the services of a lawyer. When authorized by the President or head of the
office concerned, it shall also represent government-owned or controlled corporations. The Office of the
Solicitor General shall constitute the law office of the Government and, as such, shall discharge duties
requiring the services of a lawyer. It shall have the following specific powers and functions:

(1) Represent the Government in the Supreme Court and the Court
of Appeals in all criminal proceedings; represent the Government
and its officers in the Supreme Court, the Court of Appeals, and all
other courts or tribunals in all civil actions and special proceedings in
which the Government or any officer thereof in his official capacity is a
party. (Emphasis supplied)
Thus, in criminal cases, the People is the real party-in-interest and only the OSG can represent the People in
criminal proceedings before this Court. Inasmuch as the private offended party is but a witness in the
prosecution of offenses,47 the interest of the private offended party is limited only to the aspect of civil
liability.48 It follows therefore that in criminal cases, the dismissal of the case against an accused can only be
appealed by the Solicitor General, acting on behalf of the State.49

In Beams Philippine Export Corp. v. Castillo,50 a similar appeal by a private party of a criminal case, the
Court cogently disposed, thus:

"The purpose of a criminal action, in its purest sense, is to determine the penal liability of the accused for
having outraged the state with his crime and, if he be found guilty, to punish him for it. In this sense, the
parties to the action are the People of the Philippines and the accused. The offended party is regarded
merely as a witness for the state."

Consequently, the sole authority to institute proceedings before the CA or the SC is vested only on the OSG.
Under Presidential Decree No. 478, among the specific powers and functions of the OSG was to "represent
the Government in the [SC] and the [CA] in all criminal proceedings x x x." This provision has been carried
over to the Revised Administrative Code particularly in Book IV, Title III, Chapter 12 thereof. Clearly, the
OSG is the appellate counsel of the People of the Philippines in all criminal cases.

Moreover, in Bautista v. Cuneta-Pangilinan, this Court held that in criminal cases, the acquittal of the
accused or the dismissal of the case against him can only be appealed by the OSG, acting on behalf of the
State. The private complainant or the offended party may question such acquittal or dismissal only insofar
as the civil liability of the accused is concerned.

In the present case, a perusal of the petition for certiorari filed by the petitioner before the CA discloses that
it sought reconsideration of the criminal aspect of the decision of the RTC, not the civil aspect of the case.
xxx

xxxx

Clearly, the petition is bereft of any claim for civil liability. In fact, the petitioner did not even briefly discuss
the alleged civil liability of the respondents. As such, it is apparent that the petitioner's only desire was to
appeal the dismissal of the criminal case against the respondents. Since estafa, however, is a criminal
offense, only the OSG has the power to prosecute the case on appeal. Therefore, the petitioner lacked the
personality or legal standing to question the RTC decision.51

While this Court is mindful of cases52 where the private offended party was allowed to pursue a criminal
action on his or her own behalf � such as when there is a denial of due process - such exceptional
circumstances do not exist in this case. The OSG, in its Manifestation,53 expressly stated that it will not file a
reply to Lolita's comment on the petition for review on certiorari considering that it did not file the present
petition.54

To be sure, Jona's personality to even institute the bigamy case and thereafter to appeal the RTC-San
Carlos' Order55 dismissing the same is nebulous, at best. Settled is the rule that "every action must be
prosecuted or defended in the name of the real party in interest[,]" who, in turn, is one "who stands to be
benefited or injured by the judgment in the suit, or by the party entitled to the avails of the suit."56Within
this context, "interest" means material interest or an interest in issue to be affected by the decree or
judgment of the case, as distinguished from mere interest in the question involved.57 To be clear, real
interest refers to a present substantial interest, and not a mere expectancy, or a future, contingent,
subordinate or consequential interest.58

Here, the record is replete with indications59 that Jona's natural parents are unknown and she was merely
raised as the "foster daughter" of Jose Bumatay, without having undergone the process of legal
adoption.60 It likewise does not escape the Court's attention that in the Petition for the Issuance of Letters of
Administration filed by Rodelio Bumatay (Jose Bumatay's nephew), Jona was described as "claiming to be
the adopted [child] of [Jose] but cannot present legal proof to this effect".61 Finally, even in her
own Reply62 (to the comment to the petition for review), Jona merely denotes herself as "the only child of
the late Jose Bumatay,"63 without, however, presenting or even indicating any document or proof to support
her claim of personality or legal standing.

Based on the foregoing, the Court does not see the need and will not waste its precious time in even delving
into the question of whether or not the CA decision upholding the dismissal of the Bigamy case was
erroneous or not. Indeed, in view of the lack of personality of the party who filed the petition, any such
discourse by the Court would be obiter and correctly characterized as an advisory opinion.

WHEREFORE, premises considered, this Court resolves to DENY the instant petition for lack of merit
and AFFIRM the Court of Appeals' Decision dated August 28, 2009 and Resolution dated February 4, 2010.

SO ORDERED.

Carandang v Heirs of De Guzman

CHICO-NAZARIO, J.:

Facts:

 Quirino de Guzman and the Spouses Carandang are stockholders as well as corporate
officers of Mabuhay Broadcasting System (MBS), with equities at fifty four percent
(54%) and forty six percent (46%) respectively.

 On November 26, 1983, the capital stock of MBS was increased, from P500,000 to P1.5
million and P345,000 of this increase was subscribed by the spouses Carandang

o Thereafter, on March 3, 1989, MBS again increased its capital stock, from P1.5
million to P3 million, the spouses Carandang yet again subscribed to the
increase.

o They subscribed to P93,750 worth of newly issued capital stock.

 De Guzman claims that, part of the payment for these subscriptions were paid by him,
P293,250 for the November 26, 1983 capital stock increase and P43,125 for the March
3, 1989 Capital Stock increase or a total of P336,375.

o Thus, on March 31, 1992, [de Guzman] sent a demand letter to the spouses
Carandang for the payment of said total amount.

 The spouses Carandang refused to pay the amount, contending that a pre-incorporation
agreement was executed between Arcadio Carandang and de Guzman, whereby the
latter promised to pay for the stock subscriptions of the former without cost, in
consideration for Arcadio Carandang’s technical expertise, his newly purchased
equipment, and his skill in repairing and upgrading radio/communication equipment
therefore, there is no indebtedness on their part.
  On June 5, 1992, de Guzman filed his complaint, seeking to recover the P336,375
together with damages. After trial on the merits, the trial court disposed of the case in
favor of de Guzman

o Accordingly, the spouses Carandang are ordered to jointly and severally pay de
Guzman P336,375.00 representing the spouses Carandang’s loan to de Guzman;
interest on the preceding amount at the rate of twelve percent (12%) per annum
from June 5, 1992 when this complaint was filed until the principal amount shall
have been fully paid; P20,000.00 as attorney’s fees; and Costs of suit.

 spouses Carandang appealed the RTC Decision to the Court of Appeals, which affirmed
the same in the 22 April 2003 assailed Decision

Issues:
1. Whether or not the RTC Decision is void for failing to comply with Section 16, Rule 3 of
the Rules of Court

2. Whether or not the RTC should have dismissed the case for failure to state a cause of
action, considering that Milagros de Guzman, allegedly an indispensable party, was not
included as a party-plaintiff

3. Whether or not respondents were able to prove the loan sought to be collected from
petitioners

4. Whether or not the liability of the spouses Carandang is joint and solidary

Held:
1. NO

 SC stated that unlike jurisdiction over the subject matter which is conferred by law and
is not subject to the discretion of the parties, jurisdiction over the person of the parties
to the case may be waived either expressly or impliedly.

o Implied waiver comes in the form of either voluntary appearance or a failure to

object.

 Not only do the heirs of de Guzman interpose no objection to the jurisdiction of the
court over their persons; they are actually claiming and embracing such jurisdiction.
 o In doing so, their waiver is not even merely implied (by their participation in the
appeal of said Decision), but express (by their explicit espousal of such view in
both the Court of Appeals and in this Court).

o The heirs of de Guzman had no objection to being bound by the Decision of the
RTC.

 Thus, lack of jurisdiction over the person, being subject to waiver, is a personal defense
which can only be asserted by the party who can thereby waive it by silence.

 SC ruled that the RTC Decision is valid despite the failure to comply with Section 16, Rule
3 of the Rules of Court, because of the express waiver of the heirs to the jurisdiction
over their persons, and because there had been, before the promulgation of the RTC
Decision, no further proceedings requiring the appearance of de Guzman’s counsel.

2. No

 SC agrees with the CA in its ruling that the joint account of spouses Quirino A de
Guzman and Milagros de Guzman from which the four (4) checks were drawn is part of
their conjugal property and under both the Civil Code and the Family Code the husband
alone may institute an action for the recovery or protection of the spouses’ conjugal
property.

 Petitioners erroneously interchange the terms “real party in interest” and

“indispensable party.”

o A real party in interest is the party who stands to be benefited or injured by the
judgment of the suit, or the party entitled to the avails of the suit.

o An indispensable party is a party in interest without whom no final

determination can be had of an action,

o A necessary party, which is one who is not indispensable but who ought to be
joined as a party if complete relief is to be accorded as to those already parties,
or for a complete determination or settlement of the claim subject of the action.

 The spouses Carandang are indeed correct that “(i)f a suit is not brought in the name of
or against the real party in interest, a motion to dismiss may be filed on the ground that
the complaint states no cause of action.”
 o However, what dismissal on this ground entails is an examination of whether the
parties presently pleaded are interested in the outcome of the litigation, and not
whether all persons interested in such outcome are actually pleaded.

 The latter query is relevant in discussions concerning indispensable and

necessary parties, but not in discussions concerning real parties in
interest.

 Both indispensable and necessary parties are considered as real parties in

interest, since both classes of parties stand to be benefited or injured by
the judgment of the suit.

3. Yes

 The petitioners offered the following argument

o It is an undeniable fact that payment is not equivalent to a loan. For

instance, if Mr. “A” decides to pay for Mr. “B’s” obligation, that payment by
Mr. “A” cannot, by any stretch of imagination, possibly mean that there is
now a loan by Mr. “B” to Mr. “A”. There is a possibility that such payment by
Mr. “A” is purely out of generosity or that there is a mutual agreement
between them. As applied to the instant case, that mutual agreement is the
pre-incorporation agreement (supra) existing between Mr. de Guzman and
the petitioners --- to the effect that the former shall be responsible for
paying stock subscriptions of the latter. Thus, when Mr. de Guzman paid for
the stock subscriptions of the petitioners, there was no loan to speak of, but
only a compliance with the pre-incorporation agreement.

 SC disagrees and offers the following justifications

o If indeed a Mr. “A” decides to pay for a Mr. “B’s” obligation, the presumption
is that Mr. “B” is indebted to Mr. “A” for such amount that has been paid.
This is pursuant to Articles 1236 and 1237 of the Civil Code.

 SC ruled that Articles 1236 and 1237 are clear that, even in cases where the debtor
has no knowledge of payment by a third person, and even in cases where the third
person paid against the will of the debtor, such payment would produce a debt in
favor of the paying third person.

o In fact, the only consequences for the failure to inform or get the consent of
the debtor are the following:
  the third person can recover only insofar as the payment has been
beneficial to the debtor; and

 the third person is not subrogated to the rights of the creditor, such
as those arising from a mortgage, guarantee or penalty.

 SC claims that this is merely a presumption.

o By virtue of the parties’ freedom to contract, the parties could stipulate

otherwise and thus, as suggested by the spouses Carandang, there is indeed
a possibility that such payment by Mr. “A” was purely out of generosity or
that there was a mutual agreement between them.

o But such mutual agreement, being an exception to presumed course of

events as laid down by Articles 1236 and 1237, must be adequately proven.

 The de Guzmans have successfully proven their payment of the spouses Carandang’s
stock subscriptions.

 Unfortunately for the spouses Carandang, the only testimony which touched on the
existence and substance of the pre-incorporation agreement, that of petitioner
Arcardio Carandang, was stricken off the record because he did not submit himself
to a cross-examination of the opposing party.

 There being no testimony or documentary evidence proving the existence of the

pre-incorporation agreement, the spouses Carandang are forced to rely upon an
alleged admission by the original plaintiff of the existence of the pre-incorporation
agreement.

 As there was no admission, and as the testimony of Arcardio Carandang was stricken
off the record, we are constrained to rule that there was no pre-incorporation
agreement rendering Quirino de Guzman liable for the spouses Carandang’s stock
subscription.

o The payment by the spouses de Guzman of the stock subscriptions of the

spouses Carandang are therefore by way of loan which the spouses
Carandang are liable to pay.

4. No
  SC stated that when the spouses are sued for the enforcement of the obligation
entered into by them, they are being impleaded in their capacity as representatives
of the conjugal partnership and not as independent debtors.

o Hence, either of them may be sued for the whole amount, similar to that of a
solidary liability, although the amount is chargeable against their conjugal
partnership property.

WHEREFORE, the Decision of the Court of Appeals, affirming the judgment rendered
against the spouses Carandang, is hereby AFFIRMED with the following MODIFICATION: The
spouses Carandang are ORDERED to pay the following amounts from their conjugal partnership
properties:

(1) P336,375.00 representing the spouses Carandang’s loan to Quirino de Guzman;

and
(2) Interest on the preceding amount at the rate of twelve percent (12%) per annum
from 5 June 1992 when the complaint was filed until the principal amount can be
fully paid; and
(3) P20,000.00 as attorney’s fees.

No costs.

Samaniego v. Aguila
FACTS: Petitioners are tenants in a landholding with an aggregate area of 10.4496 hectares, more or less,
in Malvar, Santiago, Isabela. The land belongs to Salud Aguila, whose children are private respondents. It
appears that the land in question was identified by the Department of Agrarian Reform (DAR)-Region 2
as covered by the Operation Land Transfer Program of the government. In 1976, Aguila, in behalf of her
children, filed a petition for exemption from the coverage of P.D. No. 27. Petitioners opposed the
application. The Regional Director granted the application for exemption. On appeal to the DAR, the
decision was affirmed in a decision dated September 28, 1992. However, on motion of petitioners, the
DAR reversed its ruling and denied private respondents' application for exemption and declared
petitioners the rightful farmer-beneficiaries of the land. Private respondents appealed to the Office of the
President which, in a decision, setting aside the Order dated January 6, 1993 of DAR and confirming and
reinstating the Order dated September 28, 1992 of the said Department a modification that subject
landholdings are not covered by the OLT program of the government pursuant to P.D. No. 27. Petitioners
appealed to the Court of Appeals, but their petition was dismissed. Petitioners moved for reconsideration,
however, their motion was denied. Hence, this present Petition for review on certiorari.

ISSUE: WONTHE OFFICE OF THE PRESIDENT IS AN INDESPENSABLE PARTY IN AN

APPEAL FROM ITS DECISION AND, THEREFORE, MUST BE IMPLEADED PURSUANT TO
THE RULES OF CIVIL PROCEDURE.

HELD: No. An indispensable party is a party in interest without whom no final determination can be had
of an action without that party being impleaded. Indispensable parties are those with such an interest in
the controversy that a final decree would necessarily affect their rights, or that the court cannot proceed
without their presence. “Interests” within the meaning of this rule, should be material, directly in issue
and to be affected by the decrees as distinguished from a mere incidental interest in the question involved.
On the other hand, a nominal or pro forma party is one who is joined as a plaintiff or defendant, not
because such party has any real interest on the subject matter or because any relief is demanded, but
merely because the technical rules of pleadings require the presence of such party on the record. In the
case at bar, the failure to implead the Office of the President does not warrant the dismissal of the case as
such is considered as a pro forma party.
(5)
Go vs Distinction Properties Development and Construction
G.R. No. 194024; April 25, 2012

Doctrine: An intra-corporate controversy is one which pertains to any of the following

relationships: (1) between the corporation, partnership or association and the public; (2)
between the corporation, partnership or association and the State in so far as its
franchise, permit or license to operate is concerned; (3) between the corporation,
partnership or association and its stockholders, partners, members or officers; and (4)
among the stockholders, partners or associates themselves.

FACTS
Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered individual
owners of condominium units in Phoenix Heights Condominium developed by the
respondent.
In August 2008, petitioners, as condominium unit-owners, filed a complaint before the
HLURB against Distinction Properties Development and Construction, Inc.(DPDCI) for
unsound business practices and violation of the Master Deed and Declaration of
Restrictions (MDDR), alleging that DPDCI committed misrepresentation in their circulated
flyers and brochures as to the facilities or amenities that would be available in the
condominium and failed to perform its obligation to comply with the MDDR.
In defense, DPDCI alleged that the brochure attached to the complaint was “a mere
preparatory draft”. HLURB rendered its decision in favor of petitioners. DPDCI filed with
the CA its Petition for Certiorari and Prohibition on the ground that HLURB acted without
or beyond its jurisdiction.
The CA ruled that the HLURB had no jurisdiction over the complaint filed by petitioners
as the controversy did not fall within the scope of the administrative agency’s authority.

ISSUES:

1. Whether the HLURB has jurisdiction over the complaint filed by the petitioners
2. Whether PHCC is an indispensable party

HELD:

1. Jurisdiction over the subject matter of a case is conferred by law and determined by
the allegations in the complaint which comprise a concise statement of the ultimate facts
constituting the plaintiff's cause of action. The nature of an action, as well as which court
or body has jurisdiction over it, is determined based on the allegations contained in the
complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. The averments in the complaint and
the character of the relief sought are the ones to be consulted. Once vested by the
allegations in the complaint, jurisdiction also remains vested irrespective of whether or
not the plaintiff is entitled to recover upon all or some of the claims asserted therein. Thus,
it was ruled that the jurisdiction of the HLURB to hear and decide cases is determined by
the nature of the cause of action, the subject matter or property involved and the parties.

In this case, the complaint filed by petitioners alleged causes of action that apparently are
not cognizable by the HLURB considering the nature of the action and the reliefs sought.
Moreover, considering that petitioners, who are members of PHCC, are ultimately
challenging the agreement entered into by PHCC with DPDCI, they are assailing, in
effect, PHCCs acts as a body corporate. This action, therefore, partakes the nature of an
intra-corporate controversy, the jurisdiction over which used to belong to the Securities
and Exchange Commission (SEC), but transferred to the courts of general jurisdiction or
the appropriate Regional Trial Court (RTC), pursuant to Section 5b of P.D. No. 902-A, as
amended by Section 5.2 of Republic Act (R.A.) No. 8799.

An intra-corporate controversy is one which "pertains to any of the following relationships:

(1) between the corporation, partnership or association and the public; (2) between the
corporation, partnership or association and the State in so far as its franchise, permit or
license to operate is concerned; (3) between the corporation, partnership or association
and its stockholders, partners, members or officers; and (4) among the stockholders,
partners or associates themselves."

Based on the foregoing definition, there is no doubt that the controversy in this case is
essentially intra-corporate in character, for being between a condominium corporation
and its members-unit owners. In the recent case of Chateau De Baie Condominium
Corporation v. Sps. Moreno, an action involving the legality of assessment dues against
the condominium owner/developer, the Court held that, the matter being an intra-
corporate dispute, the RTC had jurisdiction to hear the same pursuant to R.A. No. 8799.

2. An indispensable party is defined as one who has such an interest in the controversy
or subject matter that a final adjudication cannot be made, in his absence, without injuring
or affecting that interest. It is "precisely ‘when an indispensable party is not before
the court (that) an action should be dismissed.’ The absence of an indispensable
party renders all subsequent actions of the court null and void for want of authority
to act, not only as to the absent parties but even to those present. The purpose of
the rules on joinder of indispensable parties is a complete determination of all issues not
only between the parties themselves, but also as regards other persons who may be
affected by the judgment.
PHCC is an indispensable party and should have been impleaded, as it would be directly
and adversely affected by any determination therein. Evidently, the cause of action
rightfully pertains to PHCC.

Fortich vs. Corona (AJG)

G.R. No. 131457 | August 19, 1999 | Ynares-Santiago, J.

Petitioners: Carlos Fortich (Governor of Bukidnon), Rey Baula (Mayor of Sumilao, Bukidnon), NQSR
Management and Development Corporation

Respondents: Deputy Executive Secretary Renato Corona, Agrarian Reform Secretary Ernesto Garilao

Summary: The subject of the controversy is an agricultural land in Sumilao, Bukidnon, measuring 144 hectares.
The municipality of Sumilao wanted to convert this into an agro-industrial land. In its Order dated March 29, 1996,
Office of the President acceded to this conversion, and converted the whole 144 hectares to agro-industrial land in
order to attract investors. This order became final and executory. Feeling aggrieve, farmers commenced a hunger-
strike in protest of this ruling. The OP wanted to appease the farmers, hence, they issued a new resolution. They said
that only 44 hectares will be converted into agro-industrial land and that the remaining 100 hectares will be
distributed to the farmers. The respondents filed a motion for reconsideration, but there was “no result” because the
justices voted 2-2 in resolving such MR. Now, the respondents wanted to refer the case to the Supreme Court en
banc. The Supreme Court said that the resolution of the MR cannot be referred to the Court en banc. It based its
reasoning on Article 8, Sec. 4 (3) of the Constitution. From that certain paragraph, the Court differentiated CASES
from MATTERS. CASES are to be DECIDED, while MATTERS are to be RESOLVED. An example of a
MATTER is a motion for reconsideration, such as the one in this case. Only CASES which do not obtain the
required number of votes are required to be elevated en banc. On the other hand, as regards MATTERS, the failure
of the division to resolve the motion because of a tie in the voting does not leave the case undecided. If there is a tie
in resolving a matter, the earlier decision of the Court is upheld.

RESOLUTION

(We will learn the difference between “Decision” and “Resolution” in this case. This case is a “Resolution”, just in
case sir asks :D )

Facts:

 Background facts: On October 1997, alleged farmer-beneficiaries commenced a hunger strike in front of
the Department of Agrarian Reform compound in Quezon City. They protested the decision of the Office of
the President (OP) dated March 29, 1996 which approved the conversion of a 144-hectare land from
agricultural to agro-industrial/institutional area. Note that this decision already became final and executory.
o The land is located at San Vicente, Sumilao, Bukidnon, owned by NQSRMDC (Norberto
Quisumbing Sr. Management and Development Corp). It was leased as a pineapple plantation to
Del Monte.
o The Sangguniang Bayan of Sumilao, Bukidnon became interested in the property, and enacted an
ordinance converting the said land to industrial/institutional with a view to attract investors in
order to achieve economic vitality.
o Apparently, land conversion issues need to go through the Department of Agrarian Reform. The
DAR rejected the land conversion and instead opted to put the same under CARP and ordered the
distribution of the property to the farmers.
o The case reached the OP. The OP rendered a decision reversing the DAR and converting the land
to agro-indusrial area, which became the subject of the strike of the farmers.
o The hunger strike was dramatic and well-publicized which commanded nationwide attention that
even church leaders and some presidential candidates tried to intervene for their “cause”.
 These events led the OP, through then Deputy Exec. Sec. Corona, to issue the so-called “Win-Win”
Resolution, substantially modifying its earlier Decision (see decision dated March 29, 1996) after it had
already become final and executory.
 o It modified the approval of the land conversion to agro-industrial area only to the extent of forty-
four (44) hectares, and ordered the remaining one hundred (100) hectares to be distributed to
qualified farmer-beneficiaries.
 The Supreme Court, in their decision dated April 24, 1998, ruled for Fortich and company and declared that
the “Win-Win” Resolution is VOID and of no legal effect considering that the March 29, 1996 resolution
of the OP already became final and executory.
 ALERT – This is where the issue relevant to our topic arose: Aggrieved, respondents Corona and Garilao
filed [separate] motions for reconsideration for the said ruling (separate MRs pero rinesolve ng Court
through one resolution).
o The Court, in their Resolution dated Nov. 17, 1998, voted TWO-TWO on the separate MRs filed
by Corona and Garilao assailing the April 24, 1998 Decision.
 Hence, this motion. The respondents pray that this case be referred to the Court en banc. They contend that
inasmuch as their earlier motions for reconsideration (of the Decision dated April 24, 1998) were resolved
by a vote of two-two, the required number to carry a decision, i.e., three, was not met. Consequently, the
case should be referred to and be decided by this Court en banc, relying on the following constitutional
provision:
o Art. 8, Sec. 4 (3) - Cases or matters heard by a division shall be decided or resolved with the
concurrence of a majority of the Members who actually took part in the deliberations on the issues
in the case and voted thereon, and in no case without the concurrence of at least three of such
Members. When the required number is not obtained, the case shall be decided en banc:
Provided, that no doctrine or principle of law laid down by the Court in a decision rendered en
banc or in division may be modified or reversed except by the Court sitting en banc.
Issue/Held: Whether or not the aforementioned resolution of the Court (the resolution addressing the MR, wherein
the justices voted 2-2) should be referred to the Court en banc – NO.

Ratio:

 A careful reading of the above constitutional provision, however, reveals the intention of the framers to
draw a distinction between CASES and MATTERS.
o CASES are “decided”.
o MATTERS, which include motions, are “resolved”.
 Otherwise put, the word “decided” must refer to “cases”; while the word “resolved” must refer to
“matters”, applying the rule of reddendo singula singulis.
o This is true not only in the interpretation of the above-quoted Article VIII, Section 4(3), but also
of the other provisions of the Constitution where these words appear.
 With the aforesaid rule of construction in mind, it is clear that only cases are referred to the Court en banc
for decision whenever the required number of votes is not obtained.
 Conversely, the rule does not apply where, as in this case, the required three votes is not obtained in the
resolution of a motion for reconsideration. Hence, the second sentence of the aforequoted provision speaks
only of “case” and not “matter”.
 The reason is simple. The above-quoted Article VIII, Section 4(3) pertains to the disposition of cases by a
division. If there is a tie in the voting, there is no decision. The only way to dispose of the case then is to
refer it to the Court en banc.
o On the other hand, if a case has already been decided by the division and the losing party files a
motion for reconsideration, the failure of the division to resolve the motion because of a tie in the
voting does not leave the case undecided. There is still the decision which must stand in view of
the failure of the members of the division to muster the necessary vote for its reconsideration.
 Quite plainly, if the voting results in a tie, the motion for reconsideration is lost. The assailed decision
is not reconsidered and must therefore be deemed affirmed. Such was the ruling of this Court in the
Resolution of November 17, 1998.
 Respondents further argue that the issues submitted in their separate motions for reconsideration are of first
impression. They are arguing that the local government unit concerned still needs to obtain the approval of
DAR when converting land. However, this was rebutted in the resolution dated November 17, wherein it
was expressed that:
 o “Regrettably, the issues presented before us by the movants are matters of no extraordinary
import to merit the attention of the Court en banc. In the case of Province of Camarines Sur, et al.
vs. Court of Appeals wherein we held that local government units need not obtain the approval of
the DAR to convert or reclassify lands from agricultural to non-agricultural use.”
o The Court voted uninamously in that case, hence, the argument of the petitioners that their MRs
are motions involving first impression is flawed.
 Moreover, a second motion for reconsideration is generally prohibited, unless there is a showing of
extraordinary persuasive reasons and a leave of court is filed. In this case, there was none.
 Remember that the Court, in its Decision, upheld the March 29, 1996 ruling of the OP because it was
already final and executory thus the Win-Win resolution cannot be implemented anymore? Well, because
of this, there was a litany of protestations on the part of respondents and intervenors including entreaties
for a liberal interpretation of the rules. The sentiment was that notwithstanding its importance and far-
reaching effects, the case was “disposed of on a mere technicality”.
o The Court however said that it was not a “mere technicality” because the finality of the March 29,
1996 OP Decision accordingly vested appurtenant rights to the land in dispute on petitioners as
well as on the people of Bukidnon and other parts of the country who stand to be benefited by the
development of the property.
 Lastly, the Court determines whether or not the farmer-intervenors have standing to intervene in this case.
The Court said there was none, because the source of their “standing to file” is the “Win-Win Resolution”
(note that in that resolution, pinamigay nga yung lupa sa mga farmers, ngayon, meron silang Certificate of
Land Ownership Award (CLOA). Dahil dun, nag intervene sila).
o Why was there no standing on the part of the farmer-intervenors who derived their rights from the
Win-Win resolution? The issuance of the CLOA to them does not grant them the requisite
standing in view of the nullity of the “Win-Win” Resolution. No legal rights can emanate from a
resolution that is null and void.
Before finally disposing of these pending matters, we feel it necessary to rule once and for all on the legal
standing of intervenors in this case. In their present motions, intervenors insist that they are real parties
in interest inasmuch as they have already been issued certificates of land ownership award, or CLOAs, and
that while they are seasonal farmworkers at the plantation, they have been identified by the DAR as
qualified beneficiaries of the property. These arguments are, however, nothing new as in fact they have
already been raised in intervenors earlier motion for reconsideration of our April 24, 1998 Decision. Again
as expressed in the opinion of Mr. Justice Martinez, intervenors, who are admittedly not regular but
seasonal farmworkers, have no legal or actual and substantive interest over the subject land inasmuch as
they have no right to own the land. Rather, their right is limited only to a just share of the fruits of the
land.[10] Moreover, the Win-Win Resolution itself states that the qualified beneficiaries have yet to be
carefully and meticulously determined by the Department of Agrarian Reform.[11] Absent any definitive
finding of the Department of Agrarian Reform, intervenors cannot as yet be deemed vested with sufficient
interest in the controversy as to be qualified to intervene in this case. Likewise, the issuance of the CLOA's
to them does not grant them the requisite standing in view of the nullity of the Win-Win Resolution. No
legal rights can emanate from a resolution that is null and void.

VICTORIANO BORLASA, ET AL., plaintiffs-appellants, vs. VICENTE POLISTICO, ET AL., defendants-appellees.

G.R. No. L-22909 January 28, 1925

FACTS: In the month of April, 1911, the Borlasa et al. and Polistico et al., together with several hundred other persons, formed an association under the name
of Turuhan Polistico & Co. Vicente Polistico, was elected president and treasurer of the association, and his house in Lilio, Laguna, was made its principal place of
business. The life of the association was fixed at fifteen years, and under the by-laws each member obligated himself to pay to Vicente Polistico, as president-
treasurer, before 3 o'clock in the afternoon of every Sunday the sum of 50 centavos, except that on every fifth Sunday the amount was P1, if the president
elected to call this amount, as he always did. It is alleged that from April, 1911, until April, 1917, the sums of money mentioned above were paid weekly by all of
the members of the society with few irregularities. The inducement to these weekly contributions was found in provisions of the by-laws to the effect that a
lottery should be conducted weekly among the members of the association and that the successful member should be paid the amount collected each week,
from which, however, the president-treasurer of the society was to receive the sum of P200, to be held by him as funds of the society.

It is further alleged that by virtue of these weekly lotteries Vicente Polistico, as president-treasurer of the association, received sums of money amounting to
P74,000, more or less, in the period stated, which he still retains in his power or has applied to the purchase of real property largely in his own name and partly
in the names of others. Polistico et al. in the complaint are the members of the board of directors of the association, including Vicente Polistico, as president-
treasurer, Alfonso Noble, secretary, Felix Garcia and Vivencio Zulaybar, as promoter (propagandistas), and Afroniano de la Peña and Tomas Orencia, as members
(vocales) of the board.

In an amended answer, Polistico et al. raised the question of lack of parties and set out a list of some hundreds of persons whom they alleged should be brought
in as parties-defendant on the ground, among others, that they were in default in the payment of their dues to the association. On November 28, 1922, the court
made an order requiring the Borlasa et al. to amend their complaint within a stated period so as to include all of the members of the Turnuhan Polistico & Co. either
as Borlasa et al. or Polistico et al.. Borlasa et al. excepted to this order, but acquiesced to the extent of amending their complaint by adding as additional parties-
plaintiff some hundreds of persons, residents of Lilio, said to be members of the association and desirous of being joined as Borlasa et al.. Some of these new
Borlasa et al. had not been named in the list submitted by the Polistico et al. with their amended answer; and on the other hand many names in said list were
here omitted, it being claimed by the Borlasa et al. that the persons omitted were not residents of Lilio but residents of other places and that their relation to
the society, so far as the Borlasa et al. could discover, was fictitious. Polistico et al. demurred to the amended complaint on the ground that it showed on its face
a lack of necessary parties and this demurrer was sustained, with the ultimate result of the dismissal of the action, as stated in the first paragraph of this opinion.

The trial judge appears to have supposed that all the members of the Turnuhan Polistico & Co. should be brought in either plaintiffs or defendants.

ISSUE: Whether all the members of Turuhan Polistico & Co. were correctl included as plaintiffs or defendants.

RULING: NO. The notion is entirely mistaken. The situation involved is precisely the one contemplated in section 118 of the Code of Civil Procedure, where one
or more may sue for the benefit of all. It is evident from the showing made in the complaint, and from the proceedings in the court below, that it would be
impossible to make all of the persons in interest parties to the cases and to require all of the members of the association to be joined as parties would be
tantamount to a denial of justice.

The general rule with reference to the making of parties in a civil action requires, of course, the joinder of all necessary parties wherever possible, and the joinder
of all indispensable parties under any and all conditions, the presence of those latter being a sine qua non of the exercise of judicial power. The class suit
contemplates an exceptional situation where there are numerous persons all in the same plight and all together constituting a co nstituency whose presence in
the litigation is absolutely indispensable to the administration of justice. Here the strict application of the rule as to indispensable parties would require that each
and every individual in the class should be present. But at this point the practice is so far relaxed as to permit the suit to proceed, when the class is sufficient
represented to enable the court to deal properly and justly with that interest and with all other interest involved in the suit. In the class suit, then, representation
of a class interest which will be affected by the judgment is indispensable; but it is not indispensable to make each member of the class an actual party.

His Honor, the trial judge, in sustaining this demurrer was possibly influenced to some extent by the case of Rallonza vs. Evangelista (15 Phil., 531); but we do not
consider that case controlling, inasmuch as that was an action for the recovery of real property and the different parties in interest had determinable, though
undivided interests, in the property there in question. In the present case, the controversy involves an indivisible right affecting many individuals whose particular
interest is of indeterminate extent and is incapable of separation.

The addition of some hundreds of persons to the number of the Borlasa et al., made in the amendment to the complaint of December 13, 1922, was unnecessary,
and as the presence of so many parties is bound to prove embarrassing to the litigation from death or removal, it is suggested that upon the return of this record
to the lower court for further proceedings, the plaintiff shall again amend their complaint by dismissing as to unnecessary parties Borlasa et al., but retaining a
sufficient number of responsible persons to secure liability for costs and fairly to present all the members of the association.

There is another feature of the complaint which makes a slight amendment desirable, which is, that the complaint should be made to show on its face that the
action is intended to be litigated as a class suit. We accordingly recommend that the Borlasa et al. further amend by adding after the names of the parties Borlasa
et al. the words, "in their own behalf and in behalf of other members of Turuhan Polistico & Co."

The order appealed from is reversed, the demurrer of the Polistico et al. based upon supposed lack of parties is overruled, and the Polistico et al. are required to
answer to the amended complaint within the time allowed by law and the rules of the court. The costs of this appeal will be paid by the Polistico et al.. So
ordered.

Villanueva V. Nite (2006)

FACTS:
 Nite loaned from Villanueva P409,000
 as a sceurity he issued an Asian Bank Corporation (ABC) check of P325,500 dated February
8, 1994
 it was consented to be changed to June 8, 1994
 check was dishonored due to a material alteration
 August 24, 1994: Nite while abroad partially paid P235K through her representative Emily
P. Abojada
 The balance of P174K was due on or before December 8, 1994.
 August 24, 1994: Villanueva filed an action for a sum of money and damages against
ABC for the full amount of the dishonored check (despite the loan not being due and Nite
away)
 RTC: favored Villanueva
 June 30, 1997: Nite went to ABC to withdraw but she was not able to because of the RTC
order
 August 25, 1997: ABC remitted to the sheriff a manager’s check amounting
to P325,500 drawn on Nite's account
 CA: favored Nite's appeal
ISSUE: W/N ABC should be liable to Villanueva

HELD: NO. DENIED

 Negotiable Instruments Law
 SEC. 185. Check, defined. – A check is a bill of exchange drawn on a bank payable on
demand. Except as herein otherwise provided, the provisions of this Act applicable to a bill
of exchange payable on demand apply to a check
 SEC. 189. When check operates as an assignment. – A check of itself does not operate as an
assignment of any part of the funds to the credit of the drawer with the bank, and the bank is
not liable to the holder, unless and until it accepts or certifies the check
 Rule 3, Sec. 7 of the Rules of Court states:

Sec. 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no

final determination can be had of an action shall be joined either as plaintiffs or defendants.
 The contract of loan was between Villanueva and Nite. No collection suit could prosper
without Nite who was an indispensable party
 Sec. 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no
final determination can be had of an action shall be joined either as plaintiffs or
defendants. (emphasis ours)
 An indispensable party is one whose interest in the controversy is such that a final decree
will necessarily affect his rights. The court cannot proceed without his presence.11 If an
indispensable party is not impleaded, any judgment is ineffective.12 On this, Aracelona v.
Court of Appeals13 declared:
 Rule 3, Section 7 of the Rules of Court defines indispensable parties as parties-in-interest
without whom there can be no final determination of an action. As such, they must be joined
either as plaintiffs or as defendants. The general rule with reference to the making of parties
in a civil action requires, of course, the joinder of all necessary parties where possible, and
the joinder of all indispensable parties under any and all conditions, their presence
being sine qua non for the exercise of judicial power. It is precisely "when an indispensable
party is not before the court (that) the action should be dismissed." The absence of an
indispensable party renders all subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but even as to those present.

CHRISTINE CHUA, Petitioner

- versus -
JORGE TORRES and ANTONIO BELTRAN, Respondents.
A complaint for damages was lodged before the Regional Trial Court. The complaint was filed by
Christine Chua impleading her brother Jonathan Chua as a necessary co-plaintiff. Named as
defendants in the suit were herein respondents Jorge Torres and Antonio Beltran.

Significantly, while Jonathan Chua was named as a plaintiff to the suit, it was explicitly qualified in the
second paragraph of the complaint that he was being impleaded here-in as a necessary party-
plaintiff. There was no allegation in the complaint of any damage or injury sustained by Jonathan, and
the prayer therein expressly named petitioner as the only party to whom respondents were sought to
recompense. Neither did Jonathan Chua sign any verification or certification against forum-shopping,
although petitioner did sign an attestation, wherein she identified herself as the principal plaintiff.

Upon motion of respondents, the RTC ordered the dismissal of the complaint on the ground that
Jonathan Chua had not executed a certification against forum-shopping stressing Section 5, Rule 7 of
the Rules of Civil Procedure.

Issue: whether the absence of the signature in the required verification and certification against
forum-shopping of a party misjoined as a plaintiff is a valid ground for the dismissal of the complaint.

Held:
The SC ruled that it is not so, and that the RTC erred in dismissing the instant complaint. There is no
judicial precedent affirming or rejecting such a view, but we are comfortable with making such a
pronouncement. A misjoined party plaintiff has no business participating in the case as a plaintiff in
the first place, and it would make little sense to require the misjoined party in complying with all the
requirements expected of plaintiffs.

At the same time, Section 11, Rule 3 of the 1997 Rules of Civil Procedure states:

Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of any party or on its own initiative at any stage of
the action and on such terms as are just. Any claim against a misjoined party may be severed and
proceeded with separately.

Clearly, misjoinder of parties is not fatal to the complaint. The rule prohibits dismissal of a suit on the
ground of non-joinder or misjoinder of parties. Moreover, the dropping of misjoined parties from the
complaint may be done motu proprio by the court, at any stage, without need for a motion to such
effect from the adverse party. Section 11, Rule 3 indicates that the misjoinder of parties, while
erroneous, may be corrected with ease through amendment, without further hindrance to the
prosecution of the suit.

It should then follow that any act or omission committed by a misjoined party plaintiff should not be
cause for impediment to the prosecution of the case, much less for the dismissal of the suit. After all,
such party should not have been included in the first place, and no efficacy should be accorded to
whatever act or omission of the party. Since the misjoined party plaintiff receives no recognition from
the court as either an indispensable or necessary party-plaintiff, it then follows that whatever action or
inaction the misjoined party may take on the verification or certification against forum-shopping is
inconsequential. Hence, it should not have mattered to the RTC that Jonathan Chua had failed to sign
the certification against forum-shopping, since he was misjoined as a plaintiff in the first place. The
fact that Jonathan was misjoined is clear on the face of the complaint itself, and the error of the RTC
in dismissing the complaint is not obviated by the fact that the adverse party failed to raise this point.
After all, the RTC could have motu proprio dropped Jonathan as a plaintiff, for the reasons above-
stated which should have been evident to it upon examination of the complaint.
NEMENCIO C. EVANGELISTA VS. CARMELINO M. SANTIAGO, G.R. NO. 157447, APRIL 29,
2005, CHICO-NAZARIO, J.

In this Petition for Review under Rule 45 of the Rules of Court, petitioners
pray for the reversal of the Decision of the Court of Appeals in CA-G.R. CV No.
64957, affirming the Order of the Regional Trial Court (RTC) of San Mateo,
[1]

Rizal, Branch 77, in Civil Case No. 1220, dismissing petitioners Complaint for
[2]

declaration of nullity of Original Certificate of Title (OCT) No. 670 and all other
titles emanating therefrom.
In their Complaint, petitioners alleged that they occupied and possessed
parcels of land, located in Sitio Panayawan, Barangay San Rafael, Montalban
(now Rodriquez), Province of Rizal (Subject Property), by virtue of several
Deeds of Assignment, dated 15 April 1994 and 02 June 1994, executed by a
certain Ismael Favila y Rodriguez. [3]

According to the Deeds of Assignment, the Subject Property was part of a

vast tract of land called Hacienda Quibiga, which extended to Paraaque, Las
Pias, Muntinlupa, Cavite, Batangas, Pasay, Taguig, Makati, Pasig,
Mandaluyong, Quezon City, Caloocan, Bulacan, and Rizal; awarded to Don
Hermogenes Rodriguez by the Queen of Spain and evidenced by a Spanish
title. Ismael Favila claimed to be one of the heirs and successors-in-interest of
Don Hermogenes Rodriguez. Acting as Attorney-in-Fact pursuant to a Special
Power of Attorney executed by his mga kapatid on 25 February 1965, Ismael
Favila signed the aforementioned Deeds of Assignment, assigning portions of
the Subject Property to the petitioners, each portion measuring around 500 to
1,000 square meters, in exchange for the labor and work done on the Subject
Property by the petitioners and their predecessors. [4]

Petitioners came by information that respondent was planning to evict them

from the Subject Property. Two of the petitioners had actually received notices
to vacate. Their investigations revealed that the Subject Property was included
in Transfer Certificates of Titles (TCTs) No. 53028, No. 281660, No. N-39258
and No. 205270, all originating from OCT No. 670, and now in the name of
respondent. [5]

OCT No. 670 was issued in the name of respondents mother, Isabel
Manahan y Francisco, and three other individuals, pursuant to Decree No.
10248, dated 13 February 1913, in Case No. 8502 of the Court of Land
Registration of the Philippine Islands. The whole property covered by OCT No.
670 was subsequently adjudicated in favor of Isabel Manahan Santiago
(formerly Isabel Manahan y Francisco). Consequently, OCT No. 670 was
cancelled and TCT No. T-53028 was issued exclusively in the name of Isabel
Manahan Santiago. On 28 December 1968, Isabel Manahan Santiago
executed a Deed of Donation transferring the property to her son, respondent
herein, who subsequently secured TCTs No. 281660, No. N-39258 and No.
205270 in his own name. [6]

Petitioners filed with the trial court, on 29 April 1996, an action for
declaration of nullity of respondents certificates of title on the basis that OCT
No. 670 was fake and spurious. Among the defects of OCT No. 670 pointed out
by petitioners were that: (1) OCT No. 670 was not signed by a duly authorized
officer; (2) Material data therein were merely handwritten and in different
penmanships; (3) OCT No. 670 was not printed on the Official Form used in
1913, the year it was issued; (4) It failed to indicate the Survey Plan which was
the basis of the Technical Description of the property covered by the title; (5)
Decree No. 10248 referred to in OCT No. 670 was issued only on 11 April 1913,
while OCT No. 670 was issued earlier, on 13 February 1913; and (6) Decree
No. 10248 was issued over a property other than the one described in OCT No.
670, although also located in the Province of Rizal. [7]

Respondent filed his Answer with Prayer for Preliminary Hearing on the
Affirmative Defenses on 03 July 1996. According to respondent, [t]he
allegations in the Complaint would readily and patently show that the same are
flimsy, fabricated, malicious, without basis in law and in fact [8]

As an affirmative defense, respondent claimed that the petitioners had no

legal capacity to file the Complaint, and thus, the Complaint stated no cause of
action. Since OCT No. 670 was genuine and authentic on its face, then OCT
No. 670 and all of respondents land titles derived therefrom, are
incontrovertible, indefeasible and conclusive against the petitioners and the
whole world. [9]

Citing the consolidated cases of Director of Forestry, et al. v. Hon.

Emmanuel M. Muoz, et al. and Pinagcamaligan Indo-Agro Development
Corporation v. Hon. Macario Peralta, Jr., et al., respondent argued that the
[10]

Spanish title, on which petitioners based their claim, was neither indefeasible
nor imprescriptible. Moreover, Presidential Decree (P.D.) No. 892, which took
effect on 16 February 1976, required all holders of Spanish titles or grants to
apply for registration of their lands under Republic Act No. 496, otherwise
known as the Land Registration Act, within six months from effectivity of the
[11]

decree. After the given period, Spanish titles could no longer be used as
evidence of land ownership in any registration proceedings under the Torrens
System. [12]

Respondent also raised the affirmative defense of prescription. He pointed

out that any action against his certificates of title already prescribed, especially
with regard to OCT No. 670, which was issued in 1913 or more than 83 years
prior to the filing of the Complaint by the petitioners. At the very least,
respondent contended, it must be presumed that the questioned land titles were
issued by the public officials concerned in the performance of their regular
duties and functions pursuant to the law. [13]

Even assuming arguendo that the petitioners entered and occupied the
Subject Property, they did so as mere intruders, squatters and illegal occupants,
bereft of any right or interest, since the Subject Property was already covered
by Torrens certificates of title in the name of respondent and his predecessors-
in-interest.
[14]

Lastly, respondent denied knowing the petitioners, much less, threatening

to evict them. In fact, petitioners were not included as defendants in Civil Case
No. 783 entitled, Carmelino M. Santiago v. Remigio San Pascual, et al., which
respondent instituted before the same trial court against squatters occupying
the Subject Property. In its decision, dated 01 July 1992, the trial court held that
there is no doubt that the plaintiff (respondent herein) is the owner of the land
involved in this case on which the defendants have built their houses and
shanties Although the decision in Civil Case No. 783 was appealed to the Court
of Appeals, it had become final and executory for failure of the defendants-
appellants therein to file their appellants brief. [15]

In the instant case, the trial court held a preliminary hearing on the
affirmative defenses as prayed for by the respondent. During said hearing,
petitioners presented their lone witness, Engineer Placido Naval, a supposed
expert on land registration laws. In response to questions from Honorable
Judge Francisco C. Rodriguez of the trial court, Engineer Naval answered that
a parcel of land titled illegally would revert to the State if the Torrens title was
cancelled, and that it was the State, through the Office of the Solicitor General,
that should file for the annulment or cancellation of the title. Respondent, on the
other hand, did not present any evidence but relied on all the pleadings and
documents he had so far submitted to the trial court. [16]

After the preliminary hearing, the trial court issued the questioned Order,
dated 05 February 1999, dismissing petitioners Complaint. Pertinent portions
of the Order of the trial court read:

After considering the testimonial and documentary evidence presented, this Court is
inclined not to grant plaintiffs (sic) prayer. Finding credence and giving weight to
plaintiffs (sic) lone but expert witness, it is crystal clear that, to quote:

1. a parcel of land titled illegally will revert to the State

 2. it is the State who must file the corresponding case of annulment of title
through the Office of the Solicitor General, and

3. a land illegally titled in the name of private individual, the State

through the Office of the Solicitor General should file the
corresponding case for cancellation of title. (TSN August 26, 1997).

The above quoted testimony is straight from horse (sic) mouth so to speak as this was
the testimony of the plaintiffs (sic) expert witness. And judging from the said
testimony alone aforecited, plaintiffs (sic) cause [of action] is bound to fail. Plaintiffs
(sic) own testimony wrote finis to their case. From the record, this case was initiated
and filed by private individuals, Nemencio Evangelista, et. al., contradicting their
witness (sic) testimony. To reiterate, this Court finds credence to the testimony of the
plaintiffs (sic) witness, i.e., is (sic) the State through the Office of the Solicitor
General who must initiate and file a case of this nature when title to a land is being
claimed to be obtained through fraud and allegedly spurious.

The opinion of this Court anent the testimony of the witness is not without basis.
Explicit is the pronouncement of the Supreme Court in the recent case of Heirs of
Marciano Nagano v. Court of Appeals, to wit:

An action for reversion has to be instituted by the Solicitor General pursuant to

Section 101, Commonwealth Act No. 141. (282 SCRA 43).

As to the documentary evidence, having gone through with the Deed of Assignment/s
purportedly executed by and between a certain Ismael Favila y Rodriguez and the
plaintiffs, which is the principal if not the only basis of plaintiffs claim ownership and
possession of the subject parcel of land, the same does not hold water in a manner of
speaking, for being self-serving. Assignor Ismael Favila y Rodriguez claimed in said
Deed that he is the Attorney-in-Fact by virtue of an alleged Special Power of Attorney
executed in his favor by his mga kapatid on February 23, 1965, but said Special
Power of Attorney was not presented before this Court, thus there arises a doubt as to
its existence and execution not to mention doubt on the existence of his mga kapatid
who as alleged executed said Special Power Attorney (sic) in his favor.

Even if this Court granting arguendo would admit the authenticity of said Deeds of
Assignment/s, that will not alter the outcome of the pending incident/s before this
Court. Why? Because the said Deed of Assignment/s which were based on Spanish
title have lost their evidentiary value pursuant to the Presidential Decree No. 892 i.e.
DISCONTINUANCE OF THE SPANISH MORTGAGE SYSTEM OF
REGISTRATION AND OF THE USE OF SPANISH TITLES AS EVIDENCE IN
LAND REGISTRATION PROCEEDINGS.
There is no need to elaborate on the above-cited provisions of PD 892 as they are self-
explanatory. Suffice it to say that there is no showing, that plaintiffs complied with the
said law i.e. to apply for registration of their lands under Act No. 496, otherwise
known as the Land Registration Act, within six (6) months from the effectivity of this
decree (February 16, 1976). Thereafter, Spanish titles cannot be used as evidence of
land ownership in any registration proceedings under the Torrens System.

This being the case and likewise being clear that plaintiffs were not the lawful owners
of the land subject of this case, for they did not comply with PD 892, the said
plaintiffs do not have the legal standing to bring before this Court the instant
complaint

Moreover, the principal issue in this case is for the declaration of nullity of defendants
title, which has nothing to do with plaintiffs (sic) claim of ownership and possession
even if we set aside, albeit momentarily, the truth that plaintiffs (sic) claim were based
on barred Spanish Title/s, and thus plaintiffs were never the owners of the parcel of
land subject of this case.

Further, defendants (sic) title especially so with the mother title OCT 670 was entered
and issued in 1913 or more than Eighty Three (83) years ago, the same not having
been questioned by any party. Only now that it is being questioned, but sad to say,
plaintiffs who are on the offensive and relying on their lone expert witness, instead of
bolstering their case, unwittingly sealed their fate [17]

After the trial court denied petitioners Motion for Reconsideration in its
Order, dated 20 July 1999, petitioners appealed both Orders of the trial court
[18]

to the Court of Appeals.

The Court of Appeals, in its Decision, dated 29 July 2002, affirmed the
[19]

Order of the trial court, dated 05 February 1999, dismissing petitioners

Complaint. The Court of Appeals denied petitioners Motion for Reconsideration
in its Resolution, dated 14 February 2003. [20]

Thus, petitioners filed this Petition for Review under Rule 45 of the Rules
[21]

of Court, raising the following issues and praying for the reversal of the
aforementioned Decision of the Court of Appeals affirming the Order of
dismissal of the trial court:

I. Whether the lower courts dismissal of the petitioners complaint should be

proscribed by the rules of evidence it being based inter alia on Engr. Navals
testimony, which was indisputably not based on facts but conclusion of law.
 II. Whether the lower courts dismissal of petitioners complaint should be
proscribed by the rules of evidence it being done sans ample evidence except
bare allegations of respondent.

III. Whether the provision of P.D. 892, i.e., Spanish titles cannot be used as
evidence of land ownership in any registration proceedings under the Torrens
system, holds of an exception.

IV. Whether an action for quieting of title, specifically where petitioners are in
possession of subject land, can be subject of prescription.

In his Comment, the respondent, for the most part, reiterated the findings
[22]

of the trial court and the Court of Appeals.

The Court believes that the trial court rightfully dismissed petitioners
Complaint, but for reasons different from those relied upon by the trial court and
the Court of Appeals.
According to the respondent, petitioners had no legal capacity to file the
Complaint, and thus, the Complaint filed before the trial court stated no cause
of action.
Before anything else, it should be clarified that the plaintiff has no legal
capacity to sue and the pleading asserting the claim states no cause of
[23]

action are two different grounds for a motion to dismiss or are two different
[24]

affirmative defenses. Failure to distinguish between the lack of legal capacity to

sue from the lack of personality to sue is a fairly common mistake. The
difference between the two is explained by this Court in Columbia Pictures, Inc.
v. Court of Appeals: [25]

Among the grounds for a motion to dismiss under the Rules of Court are lack of legal
capacity to sue and that the complaint states no cause of action. Lack of legal capacity
to sue means that the plaintiff is not in the exercise of his civil rights, or does not have
the necessary qualification to appear in the case, or does not have the character or
representation he claims. On the other hand, 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 term "lack of capacity to sue"
should not be confused with the term "lack of personality to sue." While the former
refers to a plaintiffs general disability to sue, such as on account of minority, insanity,
incompetence, lack of juridical personality or any other general disqualifications of a
party, the latter refers to the fact that the plaintiff is not the real party- in-interest.
Correspondingly, the first can be a ground for a motion to dismiss based on the
ground of lack of legal capacity to sue; whereas the second can be used as a ground
for a motion to dismiss based on the fact that the complaint, on the face thereof,
evidently states no cause of action.

In the present case, this Court may assume that the respondent is raising
the affirmative defense that the Complaint filed by the petitioners before the trial
court stated no cause of action because the petitioners lacked the personality
to sue, not being the real party-in-interest. It is the respondents contention that
only the State can file an action for annulment of his certificates of title, since
such an action will result in the reversion of the ownership of the Subject
Property to the State.
The affirmative defense that the Complaint stated no cause of action, similar
to a motion to dismiss based on the same ground, requires a hypothetical
admission of the facts alleged in the Complaint. In the case of Garcon v.
Redemptorist Fathers, this Court laid down the rules as far as this ground for
[26]

dismissal of an action or affirmative defense is concerned:

It is already well-settled by now that, in a motion to dismiss a complaint based on lack

of cause of action, the question submitted to the court for determination is the
sufficiency of the allegations of fact made in the complaint to constitute a cause of
action, and not on whether these allegations of fact are true, for said motion must
hypothetically admit the truth of the facts alleged in the complaint; that the test of the
sufficiency of the facts alleged in the complaint is whether or not, admitting the facts
alleged, the court could render a valid judgment upon the same in accordance with the
prayer of said complaint. Stated otherwise, the insufficiency of the cause of action
must appear in the face of the complaint in order to sustain a dismissal on this ground,
for in the determination of whether or not a complaint states a cause of action, only
the facts alleged therein and no other matter may be considered, and the court may not
inquire into the truth of the allegations, and find them to be false before a hearing is
had on the merits of the case; and it is improper to inject in the allegations of the
complaint facts not alleged or proved, and use these as basis for said motion.

In resolving whether or not the Complaint in the present case stated a cause
of action, the trial court should have limited itself to examining the sufficiency of
the allegations in the Complaint. It was proscribed from inquiring into the truth
of the allegations in the Complaint or the authenticity of any of the documents
referred or attached to the Complaint, since these are deemed hypothetically
admitted by the respondent. The trial court evidently erred in making findings
as to the authenticity of the Deeds of Assignment executed by Ismael Favila in
favor of petitioners on 15 April 1994 and 02 June 1994; and questioning the
existence and execution of the Special Power of Attorney in favor of said Ismael
Favila by his siblings on 25 February 1965. These matters may only be resolved
after a proper trial on the merits.
Petitioners alleged in their Complaint, and respondent hypothetically
admitted that: (1) Petitioners predecessors-in-interest, in the concept of owners,
had been in actual, physical, open, continuous and adverse possession of the
Subject Property against the whole world since time immemorial; (2) The
Subject Property was part of the vast tract of land called Hacienda Quibiga
awarded to Don Hermogenes Rodriguez by the Queen of Spain by virtue of a
Spanish title; (3) Ismael Favila, an heir and successor-in-interest of Don
Hermogenes Rodriguez, acting as Attorney-in-Fact pursuant to a Special
Power of Attorney executed by his mga kapatid on 25 February 1965, executed
Deeds of Assignment covering the Subject Property in favor of petitioners; (4)
Petitioners still occupied and possessed the Subject Property, on which their
houses were erected, when they discovered that the Subject Property was
already covered by Torrens certificates of title in the name of respondent; and
(5) That petitioners filed the Complaint to prevent their eviction by the
respondent. To determine whether these allegations are sufficient to constitute
a cause of action, it is important for this Court to establish first the nature of
petitioners action.
Indeed, petitioners Complaint filed before the trial court was captioned as
an action for declaration of nullity of respondents certificates of title. However,
the caption of the pleading should not be the governing factor, but rather the
allegations therein should determine the nature of the action, because even
without the prayer for a specific remedy, the courts may nevertheless grant the
proper relief as may be warranted by the facts alleged in the Complaint and the
evidence introduced. [27]

The trial court believed that petitioners action was ultimately one for
reversion of the Subject Property to the public domain. Based on the testimony
of Engineer Naval and the case of Nagao v. Court of Appeals, it declared that
[28]

the State, represented by the Office of the Solicitor General, is the party-in-
interest in an action for cancellation of a certificate of title illegally issued in the
name of a private individual, because the eventual effect of such cancellation
is the reversion of the property to the State.
The Court disagrees in this pronouncement of the trial court, and calls for a
far closer review of its decision in Nagao v. Court of Appeals, wherein the [29]

Court held that

It is then clear from the allegations in the complaint that private respondents claim
ownership of the 2,250 square meter portion for having possessed it in the concept of
an owner, openly, peacefully, publicly, continuously and adversely since 1920. This
claim is an assertion that the lot is private land, or that even assuming it was part of
the public domain, private respondents had already acquired imperfect title thereto
under Section 48(b) of C.A. No. 141, otherwise known as the Public Land Act, as
amended by R.A. No. 1942

Under Section 48, a subject lot is, for all legal intents and purposes, segregated from
the public domain, because the beneficiary is conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.

Consequently, merely on the basis of the allegations in the complaint, the lot in
question is apparently beyond the jurisdiction of the Director of the Bureau of Lands
and could not be the subject of a Free Patent. Hence, dismissal of private respondents
complaint was premature and trial on the merits should have been conducted to thresh
out evidentiary matters.

It would have been entirely different if the action were clearly for reversion, in which
case, it would have to be instituted by the Solicitor General pursuant to Section 101 of
C.A. No. 141, which provides:

Sec. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the [Republic] of the
Philippines.

In the more recent case of Heirs of Ambrocio Kionisala v. Heirs of Honorio

Dacut, the difference between an action for declaration of nullity of land titles
[30]

from an action for reversion was more thoroughly discussed as follows:

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. Hence, in Gabila vs. Barriga [41 SCRA
131], where the plaintiff in his complaint admits that he has no right to demand the
cancellation or amendment of the defendants title because even if the title were
canceled or amended the ownership of the land embraced therein or of the portion
affected by the amendment would revert to the public domain, we ruled that the action
was for reversion and that the only person or entity entitled to relief would be the
Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent and
certificate of title would require allegations of the plaintiffs ownership of the
contested lot prior to the issuance of such free patent and certificate of title as well as
the defendants 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 therefore 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

In their Complaint, petitioners never alleged that the Subject Property was
part of the public domain. On the contrary, petitioners asserted title over the
Subject Property by virtue of their actual, physical, open, continuous and
adverse possession thereof, in the concept of owners, by themselves and
through their predecessors-in-interest, since time immemorial. The Deeds of
Assignment executed in their favor and attached to their Complaint referred to
a Spanish title granted by the Queen of Spain to their predecessor-in-interest,
Don Hermogenes Rodriguez. Clearly, petitioners are asserting private title over
the Subject Property, and consequently, their action could not be one for
reversion.
In their instant Petition, petitioners further averred that rather than an action
for nullity of respondents certificates of title, theirs was more appropriately an
action to remove a cloud on or to quiet their title over the Subject Property.
Article 476 of the Civil Code, on removal of a cloud on or quieting of title,
provides that:

Art. 476. Whenever there is a cloud on title to real property or any interest therein, by
reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.

Respondents certificates of title over the Subject Property appeared valid or

effective; but according to the petitioners, they were fake, spurious and/or
fraudulent, and a cloud on their title to the same property that needed to be
removed. A cloud on title has been defined as follows:
Cloud on Title. A cloud on title is an outstanding instrument, record, claim,
encumbrance or proceeding which is actually invalid or inoperative, but which may
nevertheless impair or affect injuriously the title to property. The matter complained
of must have a prima facie appearance of validity or legal efficacy. The cloud on title
is a semblance of title which appears in some legal form but which is in fact
unfounded. The invalidity or inoperativeness of the instrument is not apparent on the
face of such instrument, and it has to be proved by extrinsic evidence[31]

Even as this Court agrees with the petitioners that their action was one for
removal of a cloud on or quieting of title, it does arrive at the same conclusion
as the trial court and the Court of Appeals that petitioners had no personality to
file the said action, not being the parties-in-interest, and their Complaint should
be dismissed for not stating a cause of action.
According to Article 477 of the Civil Code, the plaintiff, in an action to remove
a cloud on or to quiet title, must have legal or equitable title to, or interest in, the
real property which is the subject matter of the action. Petitioners failed to
[32]

establish in their Complaint that they had any legal or equitable title to, or
legitimate interest in, the Subject Property so as to justify their right to file an
action to remove a cloud on or to quiet title.
Title to real property refers to that upon which ownership is based. It is the
evidence of the right of the owner or the extent of his interest, by which means
he can maintain control and, as a rule, assert right to exclusive possession and
enjoyment of the property. [33]

In their Complaint, petitioners claimed title to the Subject Property by virtue

of their actual and continuous possession of the same since time immemorial,
by themselves and through their predecessors-in-interest. Yet, the Deeds of
Assignment executed by Ismael Favila in their favor, attached to and an integral
part of their Complaint, revealed that petitioners predecessors-in-interest based
their right to the Subject Property on the Spanish title awarded to Don
Hermogenes Rodriguez.
There existed a contradiction when petitioners based their claim of title to
the Subject Property on their possession thereof since time immemorial, and at
the same time, on the Spanish title granted to Don Hermogenes Rodriguez.
Possession since time immemorial carried the presumption that the land
had never been part of the public domain or that it had been private
property even before the Spanish conquest. If the Subject Property was
[34]

already private property before the Spanish conquest, then it would have been
beyond the power of the Queen of Spain to award or grant to anyone.
 The title to and possession of the Subject Property by petitioners
predecessors-in-interest could be traced only as far back as the Spanish title of
Don Hermogenes Rodriguez. Petitioners, having acquired portions of the
Subject Property by assignment, could acquire no better title to the said portions
than their predecessors-in-interest, and hence, their title can only be based on
the same Spanish title.
Respondent maintained that P.D. No. 892 prevents petitioners from
invoking the Spanish title as basis of their ownership of the Subject Property.
P.D. No. 892 strengthens the Torrens system by discontinuing the system of
registration under the Spanish Mortgage Law, and by categorically declaring all
lands recorded under the latter system, not yet covered by Torrens title,
unregistered lands. It further provides that within six months from its effectivity,
all holders of Spanish titles or grants should apply for registration of their land
under what is now P.D. No. 1529, otherwise known as the Land Registration
Decree. Thereafter, Spanish titles can no longer be used as evidence of land
ownership in any registration proceedings under the Torrens
system. Indubitably, P.D. No. 892 divests the Spanish titles of any legal force
[35]

and effect in establishing ownership over real property.

P.D. No. 892 became effective on 16 February 1976. The successors of
Don Hermogenes Rodriguez had only until 14 August 1976 to apply for a
Torrens title in their name covering the Subject Property. In the absence of an
allegation in petitioners Complaint that petitioners predecessors-in-interest
complied with P.D. No. 892, then it could be assumed that they failed to do so.
Since they failed to comply with P.D. No. 892, then the successors of Don
Hermogenes Rodriguez were already enjoined from presenting the Spanish title
as proof of their ownership of the Subject Property in registration proceedings.
Registration proceedings under the Torrens system do not create or vest
title, but only confirm and record title already created and vested. By virtue of
[36]

P.D. No. 892, the courts, in registration proceedings under the Torrens system,
are precluded from accepting, confirming and recording a Spanish title. Reason
therefore dictates that courts, likewise, are prevented from accepting and
indirectly confirming such Spanish title in some other form of action brought
before them (i.e., removal of cloud on or quieting of title), only short of ordering
its recording or registration. To rule otherwise would open the doors to the
circumvention of P.D. No. 892, and give rise to the existence of land titles,
recognized and affirmed by the courts, but would never be recorded under the
Torrens system of registration. This would definitely undermine the Torrens
system and cause confusion and instability in property ownership that P.D. No.
892 intended to eliminate.
 Petitioners argued that the Spanish title may still be presented as proof of
ownership on the basis of the exception provided in the fourth whereas clause
of P.D. No. 892, which reads:

WHEREAS, Spanish titles to lands which have not yet been brought under the
operation of the Torrens system, being subject to prescription, are now ineffective to
prove ownership unless accompanied by proof of actual possession; . . .

Since Petitioners alleged that they were in actual possession of the Subject
Property, then they could still present the Spanish title as evidence of their
ownership of the Subject Property. [37]

This Court cannot sustain petitioners argument. Actual proof of possession

only becomes necessary because, as the same whereas clause points out,
Spanish titles are subject to prescription. A holder of a Spanish title may still
lose his ownership of the real property to the occupant who actually possesses
the same for the required prescriptive period. Because of this inherent
[38]

weakness of a Spanish title, the applicant for registration of his Spanish title
under the Torrens system must also submit proof that he is in actual possession
of the real property, so as to discount the possibility that someone else has
acquired a better title to the same property by virtue of prescription.
Moreover, legislative intent must be ascertained from a consideration of the
statute as a whole, and not just a particular provision alone. A word or phrase
taken in the abstract may easily convey a meaning quite different from the one
actually intended and evident when the word or phrase is considered with those
with which it is associated. An apparently general provision may have a limited
application if read together with other provisions of the statute. [39]

The fourth whereas clause of P.D. No. 892 should be interpreted and
harmonized with the other provisions of the whole statute. Note that the tenor
[40]

of the whole presidential decree is to discontinue the use of Spanish titles and
to strip them of any probative value as evidence of ownership. It had clearly set
a deadline for the filing of applications for registration of all Spanish titles under
the Torrens system (i.e., six months from its effectivity or on 14 August 1976),
after which, the Spanish titles may no longer be presented to prove ownership.
All holders of Spanish titles should have filed applications for registration of
their title on or before 14 August 1976. In a land registration proceeding, the
applicant should present to the court his Spanish title plus proof of actual
possession of the real property. However, if such land registration proceeding
was filed and initiated after 14 August 1976, the applicant could no longer
present his Spanish title to the court to evidence his ownership of the real
property, regardless of whether the real property was in his actual possession.
 Therefore, the fact that petitioners were in actual possession of the Subject
Property when they filed the Complaint with the trial court on 29 April 1996 does
not exclude them from the application of P.D. No. 892, and their Spanish title
remain inadmissible as evidence of their ownership of the Subject Property,
whether in a land registration proceeding or in an action to remove a cloud on
or to quiet title.
The preceding discussion does not bar holders of Spanish titles from
claiming ownership of the real property on some other basis, such as those
provided in either the Land Registration Decree or the Public Land [41]

Act. Petitioners though failed to allege any other basis for their titles in their
[42]

Complaint aside from possession of the Subject Property from time immemorial,
which this Court has already controverted; and the Spanish title, which is
already ineffective to prove ownership over the Subject Property.
Therefore, without legal or equitable title to the Subject Property, the
petitioners lacked the personality to file an action for removal of a cloud on, or
quieting of, title and their Complaint was properly dismissed for failing to state
a cause of action. In view of the dismissal of the case on this ground, it is already
unnecessary for this Court to address the issue of prescription of the action.
Wherefore, this Court DENIES the instant petition and AFFIRMS the
Decision of the Court of Appeals, dated 29 July 2002, and the Order of the
Regional Trial Court of San Mateo, Rizal, Branch 77, dated 05 February 1999,
dismissing petitioners Complaint for failure to state a cause of action.
SO ORDERED.
Lack of legal capacity to sue means that the plaintiff is not in the exercise of his civil rights, or
does not have the necessary qualification to appear in the case, or does not have the character
or representation he claims. On the other hand, 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 term "lack of capacity to sue" should not be confused with the term "lack
of personality to sue." While the former refers to a plaintiff’s general disability to sue, such as
on account of minority, insanity, incompetence, lack of juridical personality or any other general
disqualifications of a party, the latter refers to the fact thatthe plaintiff is not the real party- in-
interest. Correspondingly, the first can be a ground for a motion to dismiss based on the ground
of lack of legal capacity to sue; whereas the second can be used as a ground for a motion to
dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of
action. (NEMENCIO C. EVANGELISTA VS. CARMELINO M. SANTIAGO, G.R. NO. 157447,
APRIL 29, 2005, CHICO-NAZARIO, J.)

LORENZO SHIPPING CORP. vs. CHUBB and SONS,

Litigants: Lorenzo Shipping Corporation, the petitioner, a domestic corporation engaged in coastwise shipping.
Gearbulk, Ltd., a foreign corporation licensed as a common carrier under the laws of Norway and doing business
in the Philippines through its agent the Philippine Transmarine Carriers, Inc.
Philippine Transmarine Carriers, Inc. a domestic corporation, carried the goods on board its vessel M/V San
Mateo Victory to the United States, for the account of Sumitomo Corporation.
 Sumitomo Corporation, a foreign corporation organized under the laws of the United States of America. •
Chubb and Sons, Inc., a foreign corporation organized and licensed to engage in insurance business under the
laws of the United States of America

FACTS: On November 21, 1987, Mayer Steel Pipe Corporation of Binondo, Manila, loaded 581 bundles of
ERW black steel pipes worth around US$138, 000 on board the vessel owned by petitioner Lorenzo Shipping,
for shipment to Davao City. . Petitioner Lorenzo Shipping issued a clean bill of lading for the account of the
consignee, Sumitomo Corporation of San Francisco, California, USA, which in turn, insured the goods with
respondent Chubb and Sons, Inc. Transmarine Carriers received the subject shipment which was discharged on
December 4, 1987. It discovered seawater in the hatch of the vessel, and found the steel pipes submerged in it.
The consignee Sumitomo then hired the services of R.J. Del Pan Surveyors to inspect the shipment prior to and
subsequent to discharge. • Del Pan’s Survey Report showed that the subject shipment was no longer in good
condition, as in fact, the pipes were found with rust formation on top and/or at the sides. The surveyor also noted
that the cargo hold of the vessel was flooded with seawater, and the tank top was “rusty, thinning, and with
several holes at different places.” The rusty condition of the cargo was noted on the mate’s receipts and the
checker of the vessel signed his conforme thereon. After the survey, Gearbulk loaded the shipment on board its
vessel, for carriage to the United States. It issued Bills of Lading covering bundles of steel pipes to be discharged
at Oakland, U.S.A., and Bills of Lading covering the bundles of steel pipes to be discharged at Vancouver,
Washington, U.S.A. All bills of lading were marked “ALL UNITS HEAVILY RUSTED.” • When the vessel
arrived in U.S.A., Toplis and Harding, Inc. of San Franciso, California, surveyed the steel pipes, and also
discovered the latter heavily rusted. When the steel pipes were tested with a silver nitrate solution, it was found
that they had come in contact with salt water. • Due to its heavily rusted condition, the consignee Sumitomo
rejected the damaged steel pipes and declared them unfit for the purpose they were intended. It then filed a
marine insurance claim with respondent Chubb and Sons, Inc. which the latter settled in the amount of
US$104,151.00. Chubb and Sons, Inc. filed a complaint for collection of a sum of money against respondents
Lorenzo Shipping, Gearbulk, and Transmarine. The Regional Trial Court ruled in favor of the respondent Chubb
and Sons, Inc. Petitioner Lorenzo Shipping appealed to the Court of Appeals insisting that respondent Chubb
and Sons does not have capacity to sue before Philippine courts; The appellate court denied the petition likewise
denied petitioner’s Motion for Reconsideration Petitioner argues that respondent Chubb and Sons is a foreign
corporation not licensed to do business in the Philippines, and is not suing on an isolated transaction. It contends
that because the respondent Chubb and Sons is an insurance company, it was merely subrogated to the rights of
its insured, the consignee Sumitomo, after paying the latter’s policy claim. Sumitomo, however, is a foreign
corporation doing business in the Philippines without a license and does not have capacity to sue before
Philippine courts. Since Sumitomo does not have capacity to sue, petitioner then concludes that, neither the
subrogee-respondent Chubb and Sons could sue before Philippine courts.

ISSUE: Whether respondent Chubb and Sons has capacity to sue before the Philippine courts. YES.

Assuming arguendo that Sumitomo cannot sue in the Philippines, it does not follow that respondent, as subrogee,
has also no capacity to sue in our jurisdiction. Subrogation is the substitution of one person in the place of another
with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in
relation to a debt or claim, including its remedies or securities The principle covers the situation under which an
insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the
insured against a third party with respect to any loss covered by the policy. It contemplates full substitution such
that it places the party subrogated in the shoes of the creditor, and he may use all means which the creditor could
employ to enforce payment. In other words, a subrogee cannot succeed to a right not possessed by the subrogor.

A subrogee in effect steps into the shoes of the insured and can recover only if insured likewise could have
recovered. However, when the insurer succeeds to the rights of the insured, he does so only in relation to the
debt. The person substituted (the insurer) will succeed to all the rights of the creditor (the insured), having
reference to the debt due the latter In the instant case, the rights inherited by the insurer, respondent Chubb and
Sons, pertain only to the payment it made to the insured Sumitomo as stipulated in the insurance contract between
them, and which amount it now seeks to recover from petitioner Lorenzo Shipping which caused the loss
sustained by the insured Sumitomo. The capacity to sue of respondent Chubb and Sons could not perchance
belong to the group of rights, remedies or securities pertaining to the payment respondent insurer made for the
loss which was sustained by the insured Sumitomo and covered by the contract of insurance. Capacity to sue is
a right personal to its holder. Lack of legal capacity to sue means that the plaintiff is not in the exercise of his
civil rights, or does not have the necessary qualification to appear in the case, or does not have the character or
representation he claims. It refers to a plaintiff’s general disability to sue, such as on account of minority,
insanity, incompetence, lack of juridical personality, or any other disqualifications of a party Respondent Chubb
and Sons does not possess any of these disabilities.

On the contrary, it has satisfactorily proven its capacity to sue, after having shown that it is not doing business
in the Philippines, but is suing only under an isolated transaction, i.e., under the one (1) marine insurance policy
issued in favor of the consignee Sumitomo covering the damaged steel pipes. The law on corporations is clear
in depriving foreign corporations which are doing business in the Philippines without a license from bringing or
maintaining actions before, or intervening in Philippine courts The law does not prohibit foreign corporations
from performing single acts of business. A foreign corporation needs no license to sue before Philippine courts
on an isolated transaction

We reject the claim of petitioner Lorenzo Shipping that respondent Chubb and Sons is not suing under an isolated
transaction because the steel pipes, subject of this case, are covered by two (2) bills of lading; hence, two
transactions. The stubborn fact remains that these two (2) bills of lading spawned from the single marine
insurance policy that respondent Chubb and Sons issued in favor of the consignee Sumitomo, covering the
damaged steel pipes. The execution of the policy is a single act, an isolated transaction. This Court has not
construed the term “isolated transaction” to literally mean “one” or a mere single act What is determinative of
"doing business" is not really the number or the quantity of the transactions, but more importantly, the intention
of an entity to continue the body of its business in the country.

The number and quantity are merely evidence of such intention. The phrase "isolated transaction" has a definite
and fixed meaning, i.e. a transaction or series of transactions set apart from the common business of a foreign
enterprise in the sense that there is no intention to engage in a progressive pursuit of the purpose and object of
the business organization. Whether a foreign corporation is "doing business" does not necessarily depend upon
the frequency of its transactions, but more upon the nature and character of the transactions. Transactions which
are occasional, incidental, and casual — not of a character to indicate a purpose to engage in business — do not
constitute the doing or engaging in business as contemplated by law.

Columbia Pictures v. CA (1996) – Regalado, J.

Concept: Foreign Corporations

FACTS:

Columbia Pictures, et al. had lodged a formal complaint with the NBI, vis-à-vis their anti-film piracy drive.
Eventually, the NBI obtained a search warrant against Sunshine Video seeking to seize pirated video tapes,
among others. The NBI carried out the seizure, and filed a return with the trial court. However, the trial court
eventually granted a motion to lift the order of search warrant – the contention was that the master tapes
of the copyrighted films from which the pirated films were allegedly copied were never presented in the
proceedings for the issuance of the search warrants. The CA dismissed the appeal brought before it. Hence,
Columbia Pictures, et al. brought the case before the SC. Sunshine Video contended that Columbia Pictures,
et al. (being foreign corporations doing business in the Philippines) should have a license in order to maintain
an action in Philippine courts – and without such license, it had no right to ask for the issuance of a search
warrant. Sunshine video submitted that the fact that Columbia Pictures, et al. were copyright owners or
owners of exclusive rights of distribution in the Philippines of copyrighted motion pictures, AND the fact that
Att. Domingo had been appointed as their atty.-in-fact constituted “doing business in the Philippines”, under
the Rules of the Board of Investments.
ISSUE:

Do Colombia Pictures, et al. have legal personality to sue in the Philippines?

HELD:

YES. Under the Sec. 133 of the Corp. Code, no foreign corporation shall be permitted to transact business in
the Philippines, as this phrase is understood under the Corporation Code, unless it shall have the license
required by law, and until it complies with the law in transacting business here, it shall not be permitted to
maintain any suit in local courts. However, such license is not necessary if it is not engaged in business in the
Philippines. Any foreign corporation not doing business in the Philippines may maintain an action in our courts
upon any cause of action, provided that the subject matter and the defendant are within the jurisdiction of
the court.

No general rule or governing principles can be laid down as to what constitutes "doing" or "engaging in" or
"transacting" business. The true tests, however, seem to be whether the foreign corporation is continuing the
body or substance of the business or enterprise for which it was organized (as distinguished from merely
casual, sporadic, or occasional transactions and isolated acts) or whether it has substantially retired from it
and turned it over to another. Based on Article 133 of the Corporation Code and gauged by statutory
standards, petitioners are not barred from maintaining the present action. There is no showing that, under our
statutory or case law, petitioners are doing, transacting, engaging in or carrying on business in the Philippines
as would require obtention of a license before they can seek redress from our courts.

As a general rule, a foreign corporation will not be regarded as doing business in the State simply because it
enters into contracts with residents of the State, where such contracts are consummated outside the State.
It has moreover been held that the act of a foreign corporation in engaging an attorney to represent it in a
Federal court sitting in a particular State is not doing business within the scope of the minimum contact test.
The mere institution and prosecution or defense of a suit, particularly if the transaction which is the basis of
the suit took place out of the State, do not amount to the doing of business in the State.

Steelcase, Inc. v. Design International

Selections, Inc. (DISI), G.R. No. 171995, 18
April 2012
18APR
[MENDOZA, J.]

FACTS
Steelcase, Inc. (Steelcase) granted Design International Selections, Inc. (DISI) the right to market, sell,
distribute, install, and service its products to end-user customers within the Philippines.Steelcase argues
that Section 3(d) of R.A. No. 7042 or the Foreign Investments Act of 1991 (FIA) expressly states that the
phrase doing business excludes the appointment by a foreign corporation of a local distributor domiciled in
the Philippines which transacts business in its own name and for its own account. On the other hand, DISI
argues that it was appointed by Steelcase as the latter’s exclusive distributor of Steelcase products. The
dealership agreement between Steelcase and DISI had been described by the owner himself as basically
a buy and sell arrangement.

ISSUE
Whether Steelcase had been doing business in the Philippines.

RULING
NO.

[T]he appointment of a distributor in the Philippines is not sufficient to constitute doing business unless it is
under the full control of the foreign corporation. On the other hand, if the distributor is an independent entity
which buys and distributes products, other than those of the foreign corporation, for its own name and its
own account, the latter cannot be considered to be doing business in the Philippines. Here, DISI was an
independent contractor which sold Steelcase products in its own name and for its own account. As a result,
Steelcase cannot be considered to be doing business in the Philippines by its act of appointing a distributor
as it falls under one of the exceptions under R.A. No. 7042.
Advertisements
Kionsala v. Dacut
ONCE MORE we are faced with the erroneous application of what are
perceived to be elementary rules of pleading. The misapprehension of the basic
concepts underlying these rules can be befuddling, but what is worse, the lost
man-hours spent in untangling the ensuing allegations of pleading errors
causing unnecessary delay in the adjudication of cases. Instead of immediately
resolving the original dispute and adjudicating the merits of conflicting claims,
which in the instant petition involves the ownership of two (2) parcels of land
with the sizable area of 187,718 square meters, the judicial process is
unfortunately wasted in the maze of unfounded claims of deficiencies in the
parties pleadings.
On 19 December 1995 private respondents filed a complaint for declaration
of nullity of titles, reconveyance and damages against petitioners, docketed as
Civil Case No. 95-312 Of the Regional Trial Court of Manolo Fortich, Bukidnon.
This complaint involved two (2) parcels of land known as Lot No. 1017 and Lot
No. 1015 with areas of 117,744 square meters and 69,974 square meters
respectively, located in Pongol, Libona, Bukidnon. On 7 September 1990 Lot
No. 1017 was granted a free patent to petitioners Heirs of Ambrocio Kionisala
under Free Patent No. 603393, and on 13 November 1991 Lot 1015 was
bestowed upon Isabel Kionisala, one of the impleaded heirs of Ambrocio
Kionisala under Free Patent No. 101311-91-904. Thereafter, on 19 November
1990 Lot 1017 was registered under the Torrens system and was issued
Original Certificate of Title No. P-19819 in petitioners name, while on 5
December 1991 Lot No. 1015 was registered in the name of Isabel Kionisala
under Original Certificate of Title No. P-20229.
In support of their causes of action for declaration of nullity of titles and
reconveyance, private respondents claimed absolute ownership of Lot 1015
and 1017 even prior to the issuance of the corresponding free patents and
certificates of title. They further alleged in their complaint -

x x x x 2. That plaintiffs are absolute and exclusive owners and in actual possession
and cultivation of two parcels of agricultural lands herein particularly described as
follows [technical description of Lot 1015 and Lot 1017] x x x x 3. That plaintiffs
became absolute and exclusive owners of the abovesaid parcels of land by virtue of
inheritance from their late father, Honorio Dacut, who in turn acquired the same from
a certain Blasito Yacapin and from then on was in possession thereof exclusively,
adversely and in the concept of owner for more than thirty (30) years. In fact Honorio
Dacut has had this parcels of land rented by the Philippine Packing Corporation for
more than twenty years (20) up to the present time; 4. That recently, plaintiff
discovered that defendants, without the knowledge and consent of the former,
fraudulently applied for patent the said parcels of land and as a result thereof
certificates of titles had been issued to them as evidenced by certificate of title No. P-
19819 in the name of the Hrs. of Ambrocio Kionisala and No. P-20229 in the name of
Isabel Kionisala, xerox copies of the titles hereto attached and marked as annexes A
and B and made part hereof; 5. That the patents issued to defendants are null and void,
the same having been issued fraudulently, defendants not having been and/or in actual
possession of the litigated properties and the statement they may have made in their
application are false and without basis in fact, and, the Department of Environment
and Natural Resources not having any jurisdiction on the properties the same not
being anymore public but already private property; 6. That in the remote possibility
that said certificates of title cannot be declared as null and void, plaintiffs, being the
absolute and exclusive owners of the parcels of land titled by the defendants, are
entitled to reconveyance x x x x WHEREFORE, premises considered, it is
respectfully prayed of the Honorable Court that judgment issue: 1. declaring
certificates of title No. P-19819 and P-20229, null and void, and in the event that this
remedy is not possible, ordering defendants to reconvey to plaintiffs the land subject
matter of this litigation x x x x

The complaint was accompanied by a verification and certificate of non-

forum shopping which affirmed under oath thus -
I, VISAMINDA DACUT OREVILLO, after being duly sworn, states: That I am one
of the plaintiffs in the above-entitled case; that we have caused the preparation and
filing of the same and that all allegations contained therein are true and correct to the
best of my own knowledge; That we have not filed any case in any court or bodies
affecting the same subject matter.

On 7 February 1996 petitioners filed their answer to the complaint and

asserted the following affirmative defenses -

8. That the complaint states no cause of action; 9. That the cause of action, if any, is
barred by statute of limitations, prescription of action or by equitable principle of
laches; 10. That x x x it is only the Director of Lands (now DENR) through the Office
of the Solicitor General that has the authority to file annulment of Free Patent or
Homestead Patent issued by the Director of Lands or DENR; That the complaint is not
supported by certification of non-forum shopping as required by Administrative
Circular No. 04-94 of the Supreme Court x x x x

Petitioners set for hearing their affirmative defenses. After the hearing, or
on 3 December 1996 the trial court dismissed the complaint on the ground that
the cause of action of private respondents was truly for reversion so that only
the Director of Lands could have filed the complaint, and that the certificate of
non-forum shopping accompanying the complaint did not comply with the
standard form for such undertaking. On 23 December 1996 private
[1]

respondents moved for reconsideration of the order of dismissal but on 3 June

1997 the motion was denied by the trial court.
On 7 June 1997 private respondents appealed the order of dismissal to the
Court of Appeals. On 15 February 2000 the appellate court promulgated its
assailed Decision reversing the order of dismissal. The Court of Appeals ruled
[2]

that while the allegations in the complaint were insufficient for purposes of an
ordinary civil action for declaration of nullity of a certificate of title since the
actual date when private respondents became owners of Lots 1015 and 1017
prior to the issuance of the corresponding free patents and certificates of title
was not specifically indicated in the complaint, nonetheless the allegations
therein were comprehensive enough to constitute a cause of action for
reconveyance. The appellate court concluded: On this score, it was reversible
[3]

error for the lower court to have dismissed the complaint x x x because in an
action for reconveyance, what is sought is the transfer of the property which
has been wrongfully or erroneously registered in another persons name, to its
rightful and legal owner or to one with a better right x x x. The appellate court
[4]

likewise found substantial compliance in the certificate of non-forum

shopping by citing Cabardo v. Court of Appeals and Kavinta v. Court of
[5] [6]

Appeals. [7]

On 7 March 2000 petitioners moved for reconsideration of the CA Decision.

On 22 January 2001 the appellate court denied the motion for lack of merit,
hence this petition for review.
At the core of the instant petition is the issue of sufficiency of the complaint
filed by private respondents. Verily, does the complaint allege an action for
reversion which private respondents would have no right to file or institute? Or
does the complaint state a cause of action for declaration of nullity of the free
patents and certificates of title for Lot 1015 and Lot 1017, or alternatively a
cause of action for reconveyance of these two lots? Has the cause of action, if
any, prescribed? And does the certificate of non-forum shopping substantially
comply with the standard requirement?
First. The test of the sufficiency of the facts to constitute a cause of action
is whether admitting the facts alleged the court could render a valid judgment
upon the same in accordance with the prayer of the complaint. In answering [8]

this query, only the facts asserted in the complaint must be taken into account
without modification although with reasonable inferences therefrom. [9]

Applying the test to the case at bar, we rule that the complaint does not
allege an action for reversion which private respondents would obviously have
no right to initiate, but that it sufficiently states either a cause of action for
declaration of nullity of free patents and certificates of title over Lot 1015 and
Lot 1017 or alternatively a cause of action for reconveyance of these two pieces
of realty, wherein in either case private respondents are the real parties in
interest.
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
[10]

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.
Hence in Gabila v. Barriga1 where the plaintiff in his complaint admits that he
[11]

has no right to demand the cancellation or amendment of the defendants title

because even if the title were canceled or amended the ownership of the land
embraced therein or of the portion affected by the amendment would revert to
the public domain, we ruled that the action was for reversion and that the only
person or entity entitled to relief would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent
and certificate of title would require allegations of the plaintiffs ownership of the
contested lot prior to the issuance of such free patent and certificate of title as
well as the defendants 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
[12]

a pre-existing right of ownership over the parcel of land in question even before
the grant of title to the defendant. In Heirs of Marciano Nagano v. Court of
Appeals we ruled -
[13]

x x x x from the allegations in the complaint x x x private respondents claim

ownership of the 2,250 square meter portion for having possessed it in the concept of
an owner, openly, peacefully, publicly, continuously and adversely since 1920. This
claim is an assertion that the lot is private land x x x x Consequently, merely on the
basis of the allegations in the complaint, the lot in question is apparently beyond the
jurisdiction of the Director of the Bureau of Lands and could not be the subject of a
Free Patent. Hence, the dismissal of private respondents complaint was premature and
trial on the merits should have been conducted to thresh out evidentiary matters. It
would have been entirely different if the action were clearly for reversion, in which
case, it would have to be instituted by the Solicitor General pursuant to Section 101 of
C.A. No. 141 x x x x

It is obvious that private respondents allege in their complaint all the facts
necessary to seek the nullification of the free patents as well as the certificates
of title covering Lot 1015 and Lot 1017. Clearly, they are the real parties in
interest in light of their allegations that they have always been the owners and
possessors of the two (2) parcels of land even prior to the issuance of the
documents of title in petitioners favor, hence the latter could only have
committed fraud in securing them -

x x x x That plaintiffs are absolute and exclusive owners and in actual possession and
cultivation of two parcels of agricultural lands herein particularly described as follows
[technical description of Lot 1017 and Lot 1015] x x x x 3. That plaintiffs became
absolute and exclusive owners of the abovesaid parcels of land by virtue of
inheritance from their late father, Honorio Dacut, who in turn acquired the same from
a certain Blasito Yacapin and from then on was in possession thereof exclusively,
adversely and in the concept of owner for more than thirty (30) years x x x x 4. That
recently, plaintiff discovered that defendants, without the knowledge and consent of
the former, fraudulently applied for patent the said parcels of land and as a result
thereof certificates of titles had been issued to them as evidenced by certificate of title
No. P-19819 in the name of the Hrs. of Ambrocio Kionisala, and No. P-20229 in the
name of Isabel Kionisala x x x x 5. That the patents issued to defendants are null and
void, the same having been issued fraudulently, defendants not having been and/or in
actual possession of the litigated properties and the statement they may have made in
their application are false and without basis in fact, and, the Department of
Environment and Natural Resources not having any jurisdiction on the properties the
same not being anymore public but already private property x x x x

It is not essential for private respondents to specifically state in the

complaint the actual date when they became owners and possessors
of Lot 1015 and Lot 1017. The allegations to the effect that they were so
preceding the issuance of the free patents and the certificates of title, i.e., the
Department of Environment and Natural Resources not having any jurisdiction
on the properties the same not being anymore public but already private
property, are unquestionably adequate as a matter of pleading to oust the State
of jurisdiction to grant the lots in question to petitioners. If at all, the oversight in
not alleging the actual date when private respondents ownership thereof
accrued reflects a mere deficiency in details which does not amount to a failure
to state a cause of action. The remedy for such deficiency would not be a motion
to dismiss but a motion for bill of particulars so as to enable the filing of
appropriate responsive pleadings. [14]

With respect to the purported cause of action for reconveyance, it is settled

that in this kind of action the free patent and the certificate of title are respected
as incontrovertible. What is sought instead is the transfer of the property, in
[15]

this case the title thereof, which has been wrongfully or erroneously registered
in the defendants name. All that must be alleged in the complaint are two (2)
[16]

facts which admitting them to be true would entitle the plaintiff to recover title to
the disputed land, namely, (1) that the plaintiff was the owner of the land and,
(2) that the defendant had illegally dispossessed him of the same. [17]

We rule that private respondents have sufficiently pleaded (in addition to the
cause of action for declaration of free patents and certificates of title) an action
for reconveyance, more specifically, one which is based on implied trust. An
implied trust arises where the defendant (or in this case petitioners) allegedly
acquires the disputed property through mistake or fraud so that he (or they)
would be bound to hold and reconvey the property for the benefit of the person
who is truly entitled to it. In the complaint, private respondents clearly assert
[18]

that they have long been the absolute and exclusive owners and in actual
possession and cultivation of Lot 1015 and Lot 1017 and that they were
fraudulently deprived of ownership thereof when petitioners obtained free
patents and certificates of title in their names. These allegations certainly
measure up to the requisite statement of facts to constitute an action for
reconveyance.
Petitioners would nonetheless insist that private respondents should have
also alleged, in addition to possession in the concept of owner, openly,
peacefully, publicly, continuously and adversely for thirty (30) years at the least,
the statement that Lot 1015 and Lot 1017 have not passed to an innocent
purchaser for value. Petitioners also proffer the trifling argument that
(apparently in order to render sufficient for pleading purposes the allegations of
ownership) private respondents should have attached to their complaint the
documents which would prove the sources of their title to the disputed parcels
of land.
It is easy to see why the allegations demanded by petitioners are
unnecessary, even improper, in a complaint. Whether petitioners are innocent
purchasers for value of the contested lots is a matter of defense that private
respondents need not anticipate in their complaint; indubitably it lies upon
petitioners discretion to allege this fact in their answer perhaps to bar recovery
of the two pieces of realty. Moreover, private respondents do not have to
[19]

asseverate in the complaint the documents proving their alleged sources of title.
These matters are evidentiary details which undoubtedly find no place in a
complaint. Being matters of evidence proving the ultimate fact of ownership
averred by private respondents, the disclosure of such evidence must await
either the proceedings for discovery or pre-trial or even the trial proper. It should
also be stressed that in pleading the ownership of a parcel of land in an action
for recovery of ownership/possession thereof, all that plaintiff is required to state
in the complaint are -

x x x a disseisin and its continuance by the defendant x x x x Plaintiff was not

required and did not allege the source and kind of title under which it claimed, and
under the complaint, it was at liberty to introduce proof of any legal title which it
possessed. Conversely, the defendants were at liberty to introduce all legally
admissible evidence tending to show that title was not in the plaintiff. Hence, they had
the right to show that the legal title was in themselves. For, if legal title to the property
were shown to be in the defendants, the evidence of the plaintiff that title belonged to
it would certainly be met x x x x It must be furthermore remembered that x x x
plaintiff is allowed to make up his complaint in an action to recover possession of
land without disclosing the title which he intends to rely upon. [20]

Second. We rule that neither the action for declaration of nullity of free
patents and certificates of title of Lot 1015 and Lot 1017 nor the action for
reconveyance based on an implied trust of the same lots has prescribed. We
have ruled that a free patent issued over private land is null and void, and
produces no legal effects whatsoever. Quos nullum est, nullum producit
effectum. Moreover, private respondents claim of open, public, peaceful,
[21]

continuous and adverse possession of the two (2) parcels of land and its illegal
inclusion in the free patents of petitioners and in their original certificates of title,
also amounts to an action for quieting of title which is imprescriptible. [22]

The action for reconveyance based on implied trust, on the other hand,
prescribes only after ten (10) years from 1990 and 1991 when the free patents
and the certificates of title over Lot 1017 and Lot 1015, respectively, were
registered. Obviously the action had not prescribed when private respondents
filed their complaint against petitioners on 19 December 1995. At any rate, the
action for reconveyance in the case at bar is also significantly deemed to be an
action to quiet title for purposes of determining the prescriptive period on
account of private respondents allegations of actual possession of the disputed
lots. In such a case, the cause of action is truly imprescriptible.
[23] [24]

Third. We agree with the Court of Appeals that private respondents did not
altogether dispense with the certificate of non-forum shopping. What is involved
here is a certification several sentences short of the standard form as it only
states: That we have not filed any case in any court or bodies affecting the same
subject matter. While this manner of formulating the certification is indeed
deplorable, its presence in the complaint nonetheless shows the intention of
private respondents to comply with the standard form. Verily, we can only
presume innocent reasons - as there is no reason for pursuing a contrary belief
- for the omissions of the other standard statements therein. In Cabardo v. Court
of Appeals where the certificate of non-forum shopping was found deficient in
[25]

details we ruled -

x x x petitioners failure to state in the certificate of non-forum shopping that he

undertakes to inform the Court of any petition which might be filed, as required under
Revised Circular No. 28-91, may be overlooked since it does not appear that any
petition related to this case has ever been filed in any other court. On the other hand,
to dismiss the petition on this ground would be to uphold technicality over substantial
justice.

For the same reason that no case related to the complaint filed by private
respondents has been filed by them in any other court, we rule pro hac vice that
the contested certificate of non-forum shopping is substantial compliance with
the rules. Indeed to hold otherwise would only further delay the disposition of
the original dispute between petitioners and private respondents concerning the
ownership of Lot 1015 and Lot 1017. We note that their conflicting claims could
have been resolved by now if not for the erroneous application of the
elementary rules of pleading which resulted in the premature dismissal of the
complaint filed by private respondents. This Court need not repeat the fastidious
and unfounded adherence to technicality which already stalled for an
unfortunate seven (7) years more or less the proceedings in the trial court.
In sum, the grounds relied upon in petitioners desire to dismiss the
complaint of private respondents in Civil Case No. 95-312 cannot be impressed
with merit. By this decision, however, we are not foreclosing the presentation of
evidence during trial on the merits that Lot 1015 and Lot 1017 are not private
property and that private respondents are not truly the owners thereof. This and
other issues on the merits must follow where the preponderant evidence lies.
WHEREFORE, the instant Petition for Review is DENIED for lack of merit.
The Decision of the Court of Appeals dated 15 February 2000 reversing
the Order dismissing the Complaint in Civil Case No. 95-312 entitled Heirs
of Honorio Dacut, namely, Visaminda Orevillo, Violeta Dacut, Josephine Dacut
and Elizabeth Dacut v. Heirs of Ambrocio Kionisala, namely, Ana, Isabel,
Grace, Ophelia, Joven and Camilo, all surnamed Kionisala, and Isabel
Kionisala is AFFIRMED with the understanding that private respondents Heirs
of Honorio Dacut as plaintiffs therein may proceed on the basis of their causes
of action of declaration of nullity of free patents and certificates of titles and/or
reconveyance based on an implied trust, with claim for damages. The
proceedings in the trial court shall commence forthwith within thirty (30) days
from notice of the finality of this Decision without unnecessary delay.
SO ORDERED.
JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., et al.

versus

FIL-ESTATE LAND, INC., et al.

FACTS:

Juana Complex I Homeowners Association, Inc. (JCHA), together with

individual residents of Juana Complex I and other neighboring
subdivisions, instituted a complaint for damages, in its own behalf and as
a class suit representing the regular commuters and motorists of Juana
Complex I and neighboring subdivisions who were deprived of the use of
La Paz Road, against Fil-Estate Land, Inc.

Accordingly, JCHA, et al. also prayed for the immediate issuance of a

Temporary Restraining Order (TRO) or a writ of preliminary injunction
(WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in
their use of La Paz Road. Fil-Estate, et al. filed a motion to dismiss
arguing that the complaint failed to state a cause of action and that it
was improperly filed as a class suit.

They claim that the excavation of La Paz Road would not necessarily
give rise to a common right or cause of action for JCHA, etal. against
them since each of them has a separate and distinct purpose and each
may be affected differently than the others. With regard to the issuance
of the WPI, the defendants averred that JCHA, et al. failed to show that
they had a clear and unmistakable right to the use of La Paz Road; and
further claimed that La Paz Road was a torrens registered private road
and there was neither a voluntary nor legal easement constituted over it.

ISSUES:k/md
1. Whk/mdether or not the complaint was properly filed as a class
suit?gk/mdgk/mdddd

HELD:
1. The necessary elements for the maintenance of a class suit are:1)
the subject matter of controversy is one of common or general
interest to many persons;2) the parties affected are so numerous
that it is impracticable to bring them all to court; and3) the parties
bringing the class suit are sufficiently numerous or representative of
the class and can fully protect the interests of all concerned.

In this case, the suit is clearly one that benefits all commuters and
motorists who use La Paz Road. “The individuals sought to be
represented by private respondents in the suit are so numerous that it is
impracticable to join them all as parties and be named individually as
plaintiffs in the complaint.”

NOTES:
 Whether or not the complaint states a cause of action?

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. The test of
sufficiency of facts alleged in the complaint as constituting a cause of
action is whether or not admitting the facts alleged, the court could
render a valid verdict in accordance with the prayer of said complaint. In
the present case, the Court finds the allegations in the complaint
sufficient to establish a cause of action
 A writ of preliminary injunction is available to prevent a threatened
or continuous irremediable injury to parties before their claims can be
thoroughly studied and adjudicated. The requisites for its issuance
are: (1) the existence of a clear and unmistakable right that must be
protected; and (2) an urgent and paramount necessity for the writ to
prevent serious damage. For the writ to issue, the right sought to be
protected must be a present right, a legal right which must be shown
to be clear and positive. This means that the persons applying for the
writ must show that they have an ostensible right to the final relief
prayed for in their complaint.
 LAND BANK OF THE PHILIPPINES VS EDUARDO M. CACAYURAN
 MUNICIPALITY OF AGOO, LA UNION – INTERVENOR
 This is an amended decision by Justice Perlas-Bernabe

 This case is a Motion for Reconsideration filed by LBP.
 Facts:
 The Municipality of Agoo entered into two loans with LBP in order to finance a
Redevelopment Plan of the Agoo Public Plaza. The Sangguniang Bayan of the
Municipality authorized the mayor Eufranio Eriguel to enter into a P4M loan with LBP
for the Public Plaza and again for the amount of P28M to construct a commercial center
called Agoo People’s Center within the Plaza’s premises. The Municipality used as
collateral a 2,323.75 sqm lot at the south-eastern portion of the Plaza.
 Cacayuran and other residents opposed the redevelopment of the Plaza as well as the
means of the funding. They claim that these are highly irregular, violative of the law, and
detrimental to public interest resulting in the desecration of the public plaza.
Cacayuran’s request for the documents relating to the plaza’s redevelopment was not
granted. Cacayuran invokes his taxpayer right and files a complaint against LBP and
officers of the municipality but does not include the municipality itself as party-
defendant. He questioned the validity of the loan agreements and prays that the
redevelopment is enjoined.
 The municipal officers moved for the dismissal but were denied. LBP asserted that
Cacayuran did not have any cause of action because he was not privy to the loan
agreements.

 RTC Ruling:
 Subject loans are null and void. Resolutions approving the procurement were passed
irregularly and are thus ultra vires. Municipality is not bound so it is the officers that will
be held liable. Plaza lot is property for public use and not valid as collateral.
 LBP and the officers appealed to the CA. The municipal officers’ appeal is deemed
abandoned for failing to file an appellants’ brief. LBP was given due course.

 CA Ruling:
 RTC decision affirmed with modification: Vice-Mayor Antonio Eslao is free from personal
liability. Cacayuran has locus standi as resident and the issue is of transcendental
importance to public interest. Resolutions approving the loan are invalidly passed. Plaza
lot is invalid as collateral. Procurement is ultra vires
 LBP files petition for certiorari with SC.

 Proceedings Before the SC:
 LBP petition is denied and CA decision affirmed. LBP moves for reconsideration,
Municipality of Agoo files a Motion for Leave to Intervene with Pleading-In-Intervention
Attached praying to be included as party litigant. It contends that being a contracting
party to the subject loans, it is an indispensable party. Cacayuran insists that they are
not real party in interest because the complaint is against the municipal officers in their
personal capacity for their ultra vires acts not binding to the municipality.

 Issue Before the SC:
 WON the Municipality of Agoo should be deemed an indaspensible party to the case
and thus be ordered impleaded herein. – YES it is an indispensable party under Sec 7,
Rule 3 of the Rules of Court.

 SC Ruling:
 Sec 7, Rule 3 mandates that all indispensable parties are to be joined in a suit as it is the
party whose interest will be affected by the court’s action and without whom no final
determination of the case can be had. His legal presence is an absolute necessity.
Absence of the indispensable party renders all subsequent actions of the court null and
void for want of authority to act.
 Failure to implead any indispensable party is not a ground for the dismissal of the
complaint. The proper remedy is to implead them. In this case, Cacayuran failed to
implead the Municipality, a real party in interest and an indispensable party that stands
to be directly affected by any judicial resolution. It is the contracting party and the
owner of the public plaza. It stands to be benefited or injured by the judgment of the
case.
 The decision of the RTC, affirmed with modification by the CA, and finally affirmed by
the SC is not binding upon the Municipality as it was not impleaded as defendant in the
case.

  Subject motions are PARTLY GRANTED. Previous decisions are SET ASIDE. Instant case is
REMANDED to the RTC and Cacayuran is DIRECTED to implead all indispensable parties.
AQUILINO Q. PIMENTEL, JR., et al. v. SENATE COMMITTEE OF THE WHOLE
FACTS: On 8 October 2008, Senator Madrigal introduced P.S. Resolution 706,
which directed the Senate Ethics Committee to investigate the alleged double
insertion of P200 million by Senator Manny Villar into the C5 Extension Project.
After the election of Senator Juan Ponce Enrile as Senate President, the Ethics
Committee was reorganized, but the Minority failed to name its representatives to the
Committee, prompting a delay in the investigation. Thereafter, the Senate adopted the
Rules of the Ethics Committee.

In another privilege speech, Senator Villar stated he will answer the accusations before
the Senate, and not with the Ethics Committee. Senator Lacson, then chairperson of the
Ethics Committee, then moved that the responsibility of the Ethics Committee be
transferred to the Senate as a Committee of the Whole, which was approved by the
majority. In the hearings of such Committee, petitioners objected to the application of
the Rules of the Ethics Committee to the Senate Committee of the Whole. They also
questioned the quorum, and proposed amendments to the Rules. Senator Pimentel raised
the issue on the need to publish the rules of the Senate Committee of the Whole.

ISSUES:

[1] Is Senator Madrigal, who filed the complaint against Senator Villar, an
indispensable party in this petition?
[2] Is the petition premature for failure to observe the doctrine of primary
jurisdiction or prior resort?
[3] Is the transfer of the complaint against Senator Villar from the Ethics
Committee to the Senate Committee of the Whole violative of Senator Villar's
right to equal protection?
[4] Is the adoption of the Rules of the Ethics Committee as Rules of the Senate
Committee of the Whole violative of Senator Villar's right to due process and of
the majority quorum requirement under Art. VI, Section 16(2) of the
Constitution?
[5] Is publication of the Rules of the Senate Committee of the Whole required
for their effectivity?

HELD: [1] An indispensable party is a party who has an interest in the controversy or
subject matter that a final adjudication cannot be made, in his absence, without injuring
or affecting that interest. In this case, Senator Madrigal is not an indispensable party to
the petition before the Court. While it may be true that she has an interest in the outcome
of this case as the author of P.S. Resolution 706, the issues in this case are matters of
jurisdiction and procedure on the part of the Senate Committee of the Whole which can
be resolved without affecting Senator Madrigal's interest.

[2] The doctrine of primary jurisdiction does not apply to this case. The issues presented
here do not require the expertise, specialized skills and knowledge of respondent for
their resolution. On the contrary, the issues here are purely legal questions which are
within the competence and jurisdiction of the Court.

[3] While ordinarily an investigation about one of its members alleged irregular or
unethical conduct is within the jurisdiction of the Ethics Committee, the Minority
effectively prevented it from pursuing the investigation when they refused to nominate
their members to the Ethics Committee. The referral of the investigation to the
Committee of the Whole was an extraordinary remedy undertaken by the Ethics
Committee and approved by a majority of the members of the Senate, and not
violative of the right to equal protection.

[4] The adoption by the Senate Committee of the Whole of the Rules of the Ethics
Committee does not violate Senator Villar's right to due process. The Constitutional
right of the Senate to promulgate its own rules of proceedings has been recognized and
affirmed by this Court in Section 16(3), Article VI of the Philippine Constitution, which
states: "Each House shall determine the rules of its proceedings."

[5] The Constitution does not require publication of the internal rules of the House or
Senate. Since rules of the House or the Senate that affect only their members are internal
to the House or Senate, such rules need not be published,unless such rules expressly
provide for their publication before the rules can take effect. Hence, in this particular
case, the Rules of the Senate Committee of the Whole itself provide that the Rules must
be published before the Rules can take effect. Thus, even if publication is not required
under the Constitution, publication of the Rules of the Senate Committee of the Whole
is required because the Rules expressly mandate their publication. PARTIALLY
GRANTED.
Lagunilla vs Velasco
[G.R. 169276 June 16, 2009]

FACTS:
 - Fr. Patricio, Magdalena, Venancio, Macaria ( all surnamed Monis) and Andrea Monis
Velasco are siblings
- Venancio had two children (herein petitioners) : Dionisia Monis Lagunilla and Rafael
Monis.
- Fr. Patricio and Magdalena acquired several properties in La Union and one in
Quezon City.The Q.C. property was co-owned by Patricio and Magdalena with
Spouses Andrea Monis-Velasco and Pedro Velasco.
- After death of Patricio and Magdalena, Andrea and Macaria executed a deed of
extrajudicial settlement with Donation and donated it to Andrea’s Son : Pedro Monis
Velasco Jr.

PROCEDURE:

- Petitioners, Dionisia and Rafael instituted an action for Annulment of Documents

and Damages before RTC on the ground of the alleged fraudulent act committed by
Andrea and Macaria that they misrepresented themselves as the only surviving heirs
of Patricio and Magdalena.
- Petitioners alleged that they have the right to represent their deceased father
Venancio (being nephew and niece of Patricio and Magdalena) and that they have
rights as co heirs to the QC Property. They further sought the cancellation of the title
and tax declarations.
- Respondents countered that nowhere in the deed did they assert to be the only
surviving heirs, they also added that the petitioners already received advances of
their share of the properties and that there still other properties not yet partitioned
from which the petitioners could obtain reparation.
- No amicable settlement was reached during the pre trial.
- Petitioners moved for the amendment of the complaint to implead Pedro (donee)
raising that he is an indispensable party. RTC denied the motion.
- RTC decided in favor of respondents: Art 887 NCC Petitioners are not compulsory
heirs. Declaration of respondents that they were the only heirs is a valid way of non
recognition of petitioners’ claim.
- CA affirmed RTC: ruled that the petitioners are heirs but they are not compulsory
heirs and that they cannot invoke bad faith.
- Appellate court refused to annul the contractin view of the other properties
previously received by the petitioners. CA also held that prayer for annulment of
donation was belatedly raised by the petitioners.

ISSUE/S:
 - WoN Pedro (donee) is an indispensable party.

RULING:

- The general rule with reference to parties to a civil action pursuant to Section 7 Rule
3 of Rules of Court requires the joinder of all necessary parties and the joinder of all
indispensable partiesunder any and all conditions.
- Jurispridence holds that an indispensable party is a party who has interest in the
controversy or subject matter that a final adjudication cannot be made in his
absence without injuring or affecting that interest. An indispensable party is one
who must be included in an action before it may properly go forward.
- A person is not indispensable if his interest in controversy or subject matter is
seperable.
- CA held that the petitioner’s sole desire was the annulment of the extrajudicial
settlement which is separated from the issue of donation.
- SC disagrees with CA: Pedro is an indispensable party.
- At the time of filing of the complaint the title of the Quezon City property was
already transferred to Pedro.
- Even if the court will only resolve the validity of the extrajudicial settlement, there
would be no final adjudication of the case without involving Pedro’s interest. His
interest in the controversy and the subject matter is not separable from the
interests of the other parties.
- Well settled is the rule that joinder of indispensable parties is mandatory. It is a
condition sine qua non to the exercise of judicial power. Without the presence of
indispensable parties, the judgment of the court cannot attain finality.
- Nevertheless the non joinder of indispensable parties is not a ground for dismissal of
an action. The remedy is to implead the non party claimed to be indispensable.
- Parties may be added by order of the court on motion of the party or on its own
initiative at any stage. If the plaintiff refuses to implead an indispensable party then
the court may dismiss the complaint.
● Well-settled is the rule that joinder of indispensable parties is mandatory. It is a condition sine qua
non to the exercise of judicial power. The absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to the absent parties but
even as to those present. Without the presence of indispensable parties to the suit, the judgment of the
court cannot attain finality. One who is not a party to a case is not bound by any decision of the
court; otherwise, he will be deprived of his right to due process. (Lagunilla and Monis vs. Velasco
and Monis, G.R. No. 169276, June 16, 2009)

FALLO

WHEREFORE, the Decision of the Court of Appeals dated July 13, 2005 in CA-
G.R. CV No. 56998 is SET ASIDE.Let the case be REMANDED to the Regional Trial
Court for the inclusion of Pedro Velasco, Jr. as an indispensable party, and for
further proceedings.

A. M. No. 09-6-9-SC RE: Query of Mr.

Prioreschi Re Exemption from Legal and
Filing Fees of the Good Shepherd
Foundation, Inc
FACTS:

In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C. Prioreschi,
administrator of the Good Shepherd Foundation, Inc., wrote that it be granted the same
exemption from paying docket fees as that of poor litigants.

ISSUE:

Should an incorporated foundation (serving indigent litigants) be exempted from paying docket
fees?

RULING:

NO. The Good Shepherd Foundation, Inc., being a corporation invested by the State with a
juridical personality separate and distinct from that of its members, is a juridical person. Among
others, it has the power to acquire and possess property of all kinds as well as incur obligations
and bring civil or criminal actions, in conformity with the laws and regulations of their
organization. As a juridical person, therefore, it cannot be accorded the exemption from legal and
filing fees granted to indigent litigants.

There are other reasons that warrant the rejection of the request for exemption in favor of a
juridical person. For one, extending the exemption to a juridical person on the ground that it
works for indigent and underprivileged people may be prone to abuse (even with the imposition
of rigid documentation requirements), particularly by corporations and entities bent on
circumventing the rule on payment of the fees. Also, the scrutiny of compliance with the
documentation requirements may prove too time-consuming and wasteful for the courts.
Pangcatan vs Maghuyop

GR. NO. 194412, November 16, 2016

FACTS:

Pangcatan commenced Civil Case No. 1888-02 in the RTC to recover various damages he had
suffered in April 2002 from the vehicular accident caused by the negligence of the defendants. Defendants
Alexandro "Dodong" Maghuyop and Belindo Bankiao, the petitioners in G.R. No. 194568, were
respectively the owner and driver of the passenger van that Pangcatan had hired to transport him and the
goods he had purchased in Pagadian City to his store in Margosatubig, Zamboanga del Sur. Based on the
police report on the vehicular accident, Bankiao had stopped his vehicle in the middle of the right lane of
the highway in order to call for more passengers when the dump truck of defendant Engr. Arnulfo Garcia
then driven by defendant Eldefonso Densing suddenly bumped the rear of the van, causing Pangcatan to
lose consciousness. After Pangcatan regained consciousness in the hospital, he discovered that his right
leg had been fractured, and that he had lost all the goods he had bought in Pagadian City. Pangcatan's
complaint alleged that his estimated daily income before the accident was P400.00/day; that because of
his injury, he could never sell again or engage in any other business; and that his medical bills and the
costs of his surgical operation would easily run up to P500,000.00. When he filed his complaint in
September 2002, Pangcatan also filed his Ex Parte Motion for Leave to File Case as Pauper Litigant, which
the RTC granted through its order of September 4, 2002 under the condition that the filing fees would
constitute a first lien on any favorable monetary judgment that he would recover from the suit. Maghuyop
and Bakiao did not file their answer subsequently, and were declared in default as a consequence.

ISSUE:

Whether or not Pangcatan was exempt from the payment of filing and docket fees as an indigent
litigant?

RULING:

Pangcatan was represented from the start by the Public Attorney's Office (PAO). The exemption
of the clients of the PAO like him from the payment of the legal fees was expressly declared by law for the
first time in Republic Act No. 9406,27 particularly its amendment of Section 16-D of the Administrative
Code of 1987, as follows: Section 16-D. Exemption from Fees and Costs of the Suit. – The clients of the
PAO shall be exempt from payment of docket and other fees incidental to instituting an action in court
and other quasi-judicial bodies, as an original proceeding or on appeal. The costs of the suit, attorney's
fees and contingent fees imposed upon the adversary of the PAO clients after a successful litigation shall
be deposited in the National Treasury as trust fund and shall be disbursed for special allowances of
authorized officials and lawyers of the PAO.
 The exemption of clients of the PAO from the payment of the legal fees under Republic Act No.
9406 and OCA Circular No. 121-2007 was not yet a matter of law at the time Pangcatan initiated Civil Case
No. 1888-02 on September 4, 2002. Yet, we cannot avoid applying the exemption in his favor for purposes
of this case. The remand to the RTC for the purpose of determining the factual basis for the exemption
would be superfluous. To start with, the exemption, being a matter of procedure, can be retrospectively
applied to his case. It is fundamental wisdom, indeed, that procedural laws do not come within the legal
conception of a retroactive law, or the general rule against the retroactive operation of statutes, and, as
such, they may be given retroactive effect on actions pending and undetermined at the time of their
passage. Doing so will not violate any right of a person who may feel that he is adversely affected,
inasmuch as there are no vested rights in rules of procedure.31 And, secondly, if the ultimate objective to
be served by all courts is the administration of justice, the remand of the case after the trial by the RTC
would be unreasonable and burdensome on all the parties as well as on the trial court.

PETITION GRANTED.

PROVREM---------

SILANGAN TEXTILE MANUFACTURING CORPORATION vs. HON. AVELINO G.

DEMETRIA
G.R. No. 166719 March 12, 2007

Facts:
Luzon Spinning Mills, Incorporated (LSMI) filed a Complaint for Collection of Sum of Money
with a petition for the issuance of preliminary attachment against Silangan Textile Manufacturing
Corporation (STMC). This arose from the non-payment of the yarns ordered by STMC due to the
dishonoured post-dated checks they issued. The checks were dishonoured for the reason "Drawn
Against Insufficient Fund" (DAIF).
The RTC issued a writ of preliminary attachment against STMC’s properties. A notice of
attachment on the 2 properties of STMC covered by Transfer Certificates of Title was issued.
Apparently, LSMI had already previously instituted before the Municipal Trial Court criminal
cases against the Silangans for violation of Batas Pambansa Blg. 22. STMC filed a Motion, praying
to dismiss the civil Complaint before the RTC, to cite STMC’s lawyer for contempt for forum
shopping, and to discharge the writ of preliminary attachment issued by the trial court. After LSMI
filed its Comment/Opposition to the motion of STMC, the RTC resolved the said motion by
denying it for lack of merit.
The RTC ruled that record show that the contents of the affidavit required for the issuance of
preliminary attachment were incorporated on the complaint, verified and certified as correct by
Mr. Vicente Africa, J. Thus, there was substantial compliance of Section 3, Rule 57 of the Rules
of Court which provides for the requisites required for the issuance of a writ of preliminary
attachment.
The Motion for Reconsideration and Motion to Discharge Attachment and Admit Counter-
bond filed by STMC were denied by the RTC.
The Court of Appeals dismissed the Petition for Certiorari filed by STMC. Likewise, the Motion
for Reconsideration by STMC was denied.
Hence, the instant petition.

Issue:
Whether or not the writ of preliminary attachment issued by the RTC be lifted.

Ruling:
Yes.
Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the
attaching party to realize upon relief sought and expected to be granted in the main or principal
action. Being an ancillary or auxiliary remedy, it is available during the pendency of the action
which may be resorted to by a litigant to preserve and protect certain rights and interests therein
pending rendition, and for purposes of the ultimate effects, of a final judgment in the case. They
are provisional because they constitute temporary measures availed of during the pendency of the
action and they are ancillary because they are mere incidents in and are dependent upon the result
of the main action.
A writ of preliminary attachment is a species of provisional remedy. As such, it is a collateral
proceeding, permitted only in connection with a regular action, and as one of its incidents; one of
which is provided for present need, or for the occasion; that is, one adapted to meet a particular
exigency. On the basis of the preceding discussion and the fact that we find the dismissal of Civil
Case No. 00-00420 to be in order, the writ of preliminary attachment issued by the trial court in
the said case must perforce be lifted.

Sievert v CA
G.R. No. 84034. December 22, 1988
TOPIC: Preliminary Attachment: may be granted ex parte
PONENTE: Justice Feliciano
FACTS:
1. Petitioner Alberto Sievert a citizen and resident of the Philippines received by mail a Petition for
Issuance of a Preliminary Attachment filed with the Regional Trial Court of Manila
2. Petitioner had not previously received any summons and any copy of a complaint against him

3. On the day set for hearing of the Petition for a Preliminary Writ of Attachment, petitioner’s counsel
went before the trial court and entered a special appearance for the limited purpose of objecting to the
jurisdiction of the court and filed a written objection to the jurisdiction of the trial court to hear or act
upon the Petition for Issuance of a Preliminary Writ of Attachment.

4. Petitioner prayed for denial of that Petition for lack of jurisdiction over the person of the petitioner
(defendant therein) upon the ground that since no summons had been served upon him in the main case,
no jurisdiction over the person of the petitioner had been acquired by the trial court

5. RTC DECISION: Denied petitioner’s objection and ordered that “petitioner is given five (5) days from
today within which to submit her further position why the writ should not be issued, upon the receipt of
which or expiration of the period, the pending incident shall be considered submitted for resolution.”

6. Petitioner filed a Petition for Certiorari with the Court of Appeals. It was dismissed hence the Petition
for Review on Certiorari.

ISSUE: Whether a court which has not acquired jurisdiction over the person of the defendant in the main
case, may bind such defendant or his property by issuing a writ of preliminary attachment?

HELD: NO. A court which has not acquired jurisdiction over the person of defendant, cannot bind that
defendant whether in the main case or in any ancillary proceeding such as attachment proceedings. The
service of a petition for preliminary attachment without the prior or simultaneous service of summons
and a copy of the complaint in the main case — and that is what happened in this case — does not of
course confer jurisdiction upon the issuing court over the person of the defendant.

RATIO:
 There is no question that a writ of preliminary attachment may be applied for a plaintiff "at the
commencement of the action or at any time thereafter" in the cases enumerated in Section 1 of
Rule 57 of the Revised Rules of Court.

 The critical time which must be identified is, rather, when the trial court acquires authority under
law to act coercively against the defendant or his property in a proceeding in attachment. We
believe and so hold that critical time is the time of the vesting of jurisdiction in the court over the
person of the defendant in the main case.

 Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the
attaching party to realize upon relief sought and expected to be granted in the main or principal
action.

 Ordinarily, the prayer in a petition for a writ of preliminary attachment is embodied or

incorporated in the main complaint itself as one of the forms of relief sought in such complaint.
Thus, valid service of summons and a copy of the complaint will in such case vest jurisdiction in
the court over the defendant both for purposes of the main case and for purposes of the ancillary
 remedy of attachment. In such case, notice of the main case is at the same time notice of the
auxiliary proceeding in attachment.

 Where, however, the petition for a writ of preliminary attachment is embodied in a discrete
pleading, such petition must be served either simultaneously with service of summons and a copy
of the main complaint, or after jurisdiction over the defendant has already been acquired by such
service of summons.

 Notice of the separate attachment petition is not notice of the main action.

It is basic that the requirements of the Rules of Court for issuance of preliminary attachment must be
strictly and faithfully complied with in view of the nature of this provisional remedy.

CASE LAW/ DOCTRINE:

Jurisdiction, whether ratione personae or ratione materiae in an attachment proceeding is ancillary to
jurisdiction ratione personae or ratione materiae in the main action against the defendant. If a court has
no jurisdiction over the subject matter or over the person of the defendant in the principal action, it simply
has no jurisdiction to issue a writ of preliminary attachment against the defendant or his property.

Torres vs Nicanor Satsatin and children

Facts:

This is a case for collection of sum of money. Petitioners are siblings who each own adjacent tract of
land covered by TCTs. Their mother was enticed by respondent to sell their respective lands and
authorized him to negotiate the sale of the properties. Subsequently the respondent offered to sell the
properties to Solar who agreed to purchase the subject lands then he remitted the amount in partial but
along the way failed to remit the rest thus leaving a balance to the petitioners.

Petitioners:

Such nonpayment lead the petitioners to file an ex parte motion for the issuance of the writ of the
preliminary attachment alleging respondents are about to depart the Philippines; that they have both
real and personal properties in the country; and that there is no other sufficient security for the said
claim. They even posted a bond and requested for deputation of Sheriff.

On appeal to SC, they claim that the writ can only be dissolved by filing a counter-bond which the
respondents are not allowed to do so because it would

tantamount to a trial on the merits.

Regional Trial Court:

Granted the motion (November 15, 2002) hence the court ordered the sheriff to attach the estate,
real or personal of the respondents not exempt from execution. A copy of the writ of attachment
was subsequently served (November 19) upon the respondents and on the same day, the sheriff
levied the properties (household appliances, cars and parcel of lands). On November 21,
summons, together with the copy of the complaint was served upon the respondents.

Respondents:

Filed a motion to discharge the writ because the bond was issued before the issuance of the writ; the
writ was issued before the summons was received by them; the sheriff did not serve copies of the
application for attachment, order of attachment, plaintiffs' affidavit, and attachment bond, to the
respondents; the sheriff did not submit a sheriff's return in violation of the Rules; and that the bond
issued in favor of the petitioners was defective, because the bonding company failed to obtain the
proper clearance that it can transact business with the RTC hence they offered to post a counter-bond
for the lifting of the writ of attachment. In sum, they claim that the writ was improper and irregular
having been issued and enforced without the lower court acquiring jurisdiction over the persons of the
respondents. They maintained that the writ of attachment was implemented without serving upon them
the summons together with the complaint.

Regional Trial Court:

Denied the motion but directed the respondents to post a counter-bond.

Court of Appeals:

Favored the respondents and rued that the RTC gravely abused its discretion.

Issue:

Whether or not the lifting/discharge of the writ by the CA was proper?

SUPREME COURT:

YES.

Ratio:

A writ of preliminary attachment is a provisional remedy issued upon order of the court where
an action is pending to be levied upon the property or properties of the defendant therein, the
same to be held thereafter by the sheriff as security for the satisfaction of whatever judgment that
might be secured in the said action by the attaching creditor against the defendant.

Further, in acquiring jurisdiction there is a distinction between the issuance and implementation of the
writ:

Issuance-The provisional remedy can be availed of at the commencement of the action or before entry
of judgment. This refers to the date of filing of the complaint with reference to a time before summons
is served or even before summons issues.

Implementation- jurisdiction is acquired over the defendant by service of summons or other coercive
process or his voluntary submission to the court’s authority. Hence when the sheriff or other proper
officer commences implementation of the writ of attachment, it is essential that he serve on the
defendant not only a copy of the applicant's affidavit and attachment bond, and of the order of
attachment but also the summons addressed to said defendant as well as a copy of the complaint.

Stages of attachment:

1) Court issues order granting the application;

2) Writ is pursuant to the order granting the writ; and

3) Writ is implemented.

NB: In the first two, no need to acquire jurisdiction first but the third one, jurisdiction is required
otherwise any action will not bind the defendant.

In this case, there has been grave abuse of discretion in approving the bond posted by petitioners
because of noncompliance of all the requisites. In accepting surety bond, every bond should be
accompanied by a clearance from the Supreme Court showing that the company concerned is qualified
to transact business which is valid only for thirty (30) days from the date of its issuance. In this case, the
RTC was not one of the RTCs were said bond can be accepted.

Also, the writ was issued on November 15, implemented on November 19 but the summons was served
was served only on November 21. Therefore, the court did not validly acquire jurisdiction as to the
implementation of the wit.
Discharge of the writ:

1) Filing a counter-bond; OR

2) Quash the attachment on the ground that it was irregularly or improperly issued.

Lastly, the preliminary writ of attachment must be served after or simultaneous with the service of
summons on the defendant whether by personal service, substituted service or by publication. The
subsequent service of summons does not confer a retroactive acquisition of jurisdiction over the person
because the law does not allow for retroactivity of a belated service.

Davao Light & Power Co. Inc. v CA (204

SCRA 343)
Facts:
Davao Light and Power Inc, Co. filed a complaint for recovery of sum of money and damages against
Queensland Hotel and Teodorico Adarna. The complaint contained an ex parte application for a writ of
preliminary attachment.

Judge Nartatez granted the writ and fixed the attachment bond at around P4Million. The summons, copy
of complaint, writ of attachment, copy of attachment bond were served upon Queensland and Adarna.
Pursuant to the writ, the Sheriff seized the properties of the latter.

Queensland and Adarna filed a motion to discharge the attachment for lack of jurisdiction to issue the
same because at the time the order of attachment was promulgated (May 3, 1989) and the attachment
writ issued (May 11,1989), the Trial Court had not yet acquired jurisdiction over cause and person of
defendants.

Trial Court denied the motion to discharge.

CA annulled the Trial Court’s Order. Davao seeks to reverse CA’s order.

Issue:
Whether or not preliminary attachment may issue ex parte against a defendant before acquiring
jurisdiction over his person.

Held:
Yes. Rule 57 speaks of the grant of the remedy “at the commencement of the action or at any time
thereafter” What the rule is saying is that after an action is properly commenced (by filing of the complaint
and payment of all requisite docket and other fees), the plaintiff may apply for and obtain a writ of
preliminary attachment. This he may do so, before or after, the summons to the defendant.
The CA decision is reversed and the writ of attachment issued by Judge Nartatez is reinstated.

**
Preliminary Attachment – provisional remedy in virtue of which a plaintiff or other party may, at the
commencement of the action or at any time thereafter, have the property of the adverse party taken into
custody of court as security for satisfaction of judgment to be recovered.

Nature of Attachment: a remedy which is purely statutory in respect of which the law requires a strict of
construction of the provisions granting it. No principle, whether statutory or through jurisprudence,
prohibits its issuance by any court before the acquisition of jurisdiction over the person.
Held
Yes. A writ of preliminary attachment may be issued before the court acquires jurisdiction over the person
of the defendant.

Ratio Decidendi
The court may validly issue a writ of preliminary injunction prior to the acquisition of jurisdiction over the
person of the defendant. There is an appreciable period of time between the commencement of the action
(takes place upon the filing of an initiatory pleading) and the service of summons to the defendant. In the
meanwhile, there are a number of actions which the plaintiff or the court may validly take, including the
application for and grant of the provisional remedy of preliminary attachment. There is nothing in the law
which prohibits the court from granting the remedy prior to the acquisition of jurisdiction over the person of
the defendant. In fact, Rule 57 of the Rules of Court allows the granting of a writ of preliminary injunction at
the commencement of the suit. In the cases of Toledo v. Burgos and Filinvest Credit Corporation v. Relova,
it was held that notice and hearing are not prerequisites to the issuance of a writ of preliminary attachment.
Further, in the case of Mindanao Savings & Loan Association, Inc. v. Court of Appeals, it was ruled that
giving notice to the defendant would defeat the purpose of the remedy by affording him or her the
opportunity to dispose of his properties before the writ can be issued.

A preliminary attachment may be discharged with the same ease as obtaining it. In any case, the ease of
availing the provisional remedy of preliminary attachment is matched by the ease with which it can be
remedied by either the posting of a counterbond, or by a showing of its improper or irregular issuance. The
second means of defeating a preliminary attachement, however, may not be availed of if the writ was issued
upon a ground which is at the same time the applicant's cause of action.

Preliminary attachment not binding until jurisdiction over the person of the defendant is acquired. The writ
of preliminary attachment, however, even though validly issued, is not binding upon the defendant until
jurisdiction over his person is first acquired.

ADLAWAN vs. TOMOL (1990)

FACTS:

 Adlawan, a private contractor, was awarded by the NIA and the BPH (DPWH) contracts for the construction of various infrastructure projects of the government.
 Adlawan sought financial assistance and support from Aboitiz.
 For failure of Adlawan to pay the installments and amortizations, Aboitiz filed before the CFI of Cebu a complaint for the collection of a sum of money and damages including
an ex-parte application for the issuance of a writ of preliminary attachment against the property of Adlawan.
 The Executive Judge without notice and hearing issued an order directing the issuance of a writ of preliminary attachment against all the properties of Adlawan, real and personal,
upon the filing of an attachment bond for P4M.
 The case was raffled to Judge Tomol. Writs of preliminary attachment were issued addressed to the Sheriffs of Cebu, Davao City, Quezon City, Davao del Sur and Davao del Norte,
directing them to attach the real and personal properties of Adlawan within their respective jurisdictions.
 Subsequently, Aboitiz filed an Urgent Ex-parte Motions asking the court that it be allowed to take possession and custody of the attached properties to protect its interest and to
avoid any damage or deterioration considering that the sheriff has no proper place to store or deposit said properties. This was granted by respondent Judge.
 Meanwhile, Adlawan before submitting an answer to the complaint, filed a Motion for a Bill of Particulars and to Set Aside the Ex-Parte Writ of Preliminary Attachment which was
opposed by Aboitz.
 Finding that the discharge of the writ of attachment is unavoidable on the ground that it was issued ex-parte, without notice and hearing, based principally on the alleged removal
or disposition by the defendants of their properties with intent to defraud the plaintiff, which allegation was limited to a bare assertion and not persuasively substantial, Judge
issued an Order lifting and vacating the Order of attachment
 Aboitiz filed an Urgent Ex-Parte Motion praying for a stay of the Order dissolving the writ of preliminary attachment, thus maintaining the status quo. Aboitiz further prayed for
the court to direct the sheriff of Davao City to desist and/or stop the enforcement or implementation of the order lifting the attachment and to grant them 15 days to elevate the
matter to the Appellate Court.
 Judge Tomol issued on the same day an Order granting the motion prayed for by Aboitiz.
 In the meantime, 3 Deputy Sheriffs of Cebu implemented the Order lifting the Writ of Attachment and were able to pull out some personal properties of Adlawan. They were not
able to take out all the attached properties in view of the subsequent Order of judge to stay its implementation.
 As Adlawan’s Motion for a Bill of Particulars was not immediately acted upon, he was not able to file an answer or interpose any counterclaim. For this reason, Adlawan filed an
Application for Award of Damages asking for a reasonable rental on the attached heavy construction equipment, machineries and other properties at the rate of P30k per day
from the date of seizure until said properties are actually returned to his possession and control.
 Before the court a quo could act on the motions of Adlawan, and before he could file an answer, his motion for a bill of particulars not having been acted upon, Aboitiz filed a
Notice of Dismissal or Withdrawal of Complaint. Judge Tomol issued an Order confirming the dismissal of the case.
 Adlawan filed a Motion praying for the issuance of an order to the Provincial Sheriff of Cebu to implement and enforce the Order of respondent Judge dissolving the writ of
preliminary attachment and to secure the delivery of the attached properties to Adlawan. Judge issued an Order denying the Motion in view of the institution by Aboitiz of a civil
case for delivery of Personal Properties with Replevin and Damages before the CFI of Cebu, and the filing of petitioner Adlawan of a case for damages before the CFI of Cebu, in
connection with the seizure of his properties under the writ of preliminary attachment.
 With regard to the replevin case filed by Aboitiz, the CFI of Cebu, issued an Order for the seizure and delivery of the properties described to Aboitiz. The seized properties were
thus delivered to Aboitiz by the Clerk of Court and Ex-officio Provincial Sheriff.
  Adlawan filed an Omnibus Motion to reconsider, dissolve and set aside the Writ of Seizure and Replevin and to direct that the properties seized be returned as well as to dismiss
the complaint. In support of this motion, Adlawan alleged, among others, that Aboitiz's office is in Cebu City while Adlawan is a resident of mainland Cebu, particularly Minglanilla
therefore the CFI of Cebu stationed in Lapu-Lapu should not accept the case.
o Furthermore, he alleged that the same personal properties seized are in custodia legis by virtue of a writ of preliminary attachment issued by the CFI of Cebu,
presided by Judge Tomol.
 Judge Dulay of the CFI Lapu-Lapu denied the Omnibus Motion for lack of merit.
 Hence, the present petition for certiorari and mandamus impleading Judge Tomol and Judge Dulay in Lapu-Lapu City and Aboitiz.

ISSUE: WON after the attachment of Adlawan's properties was dissolved and discharged because it was found by Judge to be wrongful and illegal, it constitutes grave and manifest abuse of
discretion on the part of the same judge TO REFUSE to implement his own order for the return of the attached properties to Adlawan simply because Aboitiz suddenly dismissed its complaint
DECISION: YES. Adlawan wins.
HELD:

 Adlawan's properties were attached on the strength of the writs of preliminary attachment issued without notice and hearing by the executive judge. These attached properties
were given to the custody of Aboitiz. Adlawan then filed a Motion to Dissolve the Writ of Attachment which was granted by Judge Tomol. Thus, Adlawan was able to recover some
of his properties. But on the following day, this order was stayed by the same judge leaving the rest the properties with Aboitiz. Later, Aboitiz withdrew its complaint which was
confirmed by rJudge Tomol. Adlawan filed a motion to have the rest of his properties returned but judge refused to act on said motion due to cases filed by both parties in the
different branches of the Court of First Instance of Cebu relating to the same case.
 There is no question that Judge Tomol lifting and vacating the order granting the writ of preliminary attachment is a valid order. The execution of aforesaid order was stayed for a
period of 15 days on motion of the plaintiff to enable the latter to question the propriety or impropriety of the same in the appellate court. Instead, plaintiff filed a civil case for
delivery of Personal Properties with Replevin and Damages with another branch of the CFI of Cebu. Accordingly, having failed to appeal or question the aforementioned order in
the appellate court as originally manifested, the same became final and executory.
 Section 1, Rule 39 of the Revised Rules of Court provides:
 Execution upon final judgment or orders. — Execution shall issue upon a judgment or order that finally disposes of the action or proceeding. Such
execution shall issue as a matter of right upon the expiration of the period to appeal therefrom if no appeal has been perfected.
 It is basic that once a judgment becomes final, the prevailing party is entitled as a matter of right to a Writ of Execution, and the issuance thereof is the Court's ministerial duty.
 A writ of preliminary attachment is a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant
therein, the same to be held thereafter by the Sheriff as security for the satisfaction of whatever judgment might be secured in said action by the attaching creditor against the
defendant.
 The purpose and function of an attachment or garnishment is two-fold.
o First, it seizes upon property of an alleged debtor in advance of final judgment and holds it subject to appropriation thus prevents the loss or dissipation of the
property by fraud or otherwise.
o Second, it subjects to the payment of a creditor's claim property of the debtor in those cases where personal service cannot be obtained upon the debtor.
 Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to realize upon relief sought and expected to be granted in the main
or principal pal action.
 The remedy of attachment is adjunct to the main suit, therefore, it can have no independent existence apart from a suit on a claim of the plaintiff against the defendant.
 Thus, this Court ruled that upon levy by attachment of the property in question by order of the Court, said property fell into custodia legis of that court for purposes of that civil
case only.
 Courts have no jurisdiction to order the delivery of personal property (replevin) to the plaintiff if the property is under attachment. Only courts having supervisory control or
superior jurisdiction in the premises, have the right to interfere with and change possession of property in custodia legis.
 The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the property a lien by which the property is brought under the jurisdiction
of the court issuing the writ. It is brought into custodia legis under the sole control of such court.
 That the writ of preliminary attachment issued is already dissolved and rendered non-existent in view of the withdrawal of the complaint by Aboitiz. More importantly, even if the
writ of attachment can be considered independently of the main case, the same, having been improperly issued as found by Judge Tomol himself, is null and void and cannot be
a justification for holding properties in custodia legis any longer.
 When Aboitiz withdrew its complaint, the attachment ceased to have a leg to stand on. The attached properties of Adlawan which are in the custody of Aboitiz should be returned.

Liberty Insurance Corporation v. CA

G.R. No. 104405 May 13, 1993

DOCTRINES:
A debt is fraudulently contracted if at the time of contracting it the debtor has a preconceived plan or
intention not to pay, as it is in this case. Fraud is a state of mind and need not be proved by direct evidence
but may be inferred from the circumstances attendant in each case.

When the preliminary attachment is issued upon a ground which is at the same time the applicant's cause of action,
the only way it can be dissolved is by a counterbond because the hearing on a motion for dissolution would be
tantamount to a trial on the merits FACTS:
Jose H. Imperial Organizations, Pty. Thru Atty. Jose H. Imperial entered into an agreement with Coca-Cola
Bottlers Philippines to promote two concerts featuring "Earth, Wind and Fire" with Coca-Cola sponsoring
the concerts and the former promoting the same.
o To ensure compliance to the terms, Imperial Organizations put up a performance bond, upon
application with Liberty Insurance, in the amount of P3M. This guarantees the return to Coca-
cola of “whatever portion of the cash sponsorship and cash advances to be made by Coca-cola
 to finance the holding of the concerts…”
o In turn, Liberty Insurance required Imperial Organizations, Jose Imperial, Atilla Arkin and Carmen
Madlangbayan to execute an indemnity agreement in its favour to indemnify it for any and all
damages which it may incur by reason of the bund.
While the concerts took place, Imperial org and private respondents failed to comply with their
obligations, as a result of which petitioner Liberty Insurance paid to Coca-cola the P3M bond.
Petitioner Liberty made demands upon the private respondents based on the indemnity bond but to no
avail.
Petitioner filed with RTC a complaint for damages with application for the issuance of a writ of
preliminary attachment against respondents.

RTC:

RTC (presided by Judge De Leon)issued Order allowing issuance of writ, stating:

There could have been fraud committed by defendants Arkin and Madlangbayan in promising
to give as security or collateral to their indemnity agreement, which caused Liberty to release the security bond
when as it turns out, the TCT of a parcel of land supposedly issued by Reg. of Deeds was fake and the Mercedes
Benz was already encumbered.
o Fraud existed when the obligation was contracted in line with Sec. 1, par (d), Rule 57.
Arkin filed a motion to Quash/recall Writ of Attachment but this was denied (this time Judge Flojo).
Arkin filed MR (after more than 1 year). Judge Flojo reversed the prior Order of denial of the Motion to
Quash and thus directed the lifting of the writ of preliminary attachment because:
o A close examination of the evidence shows that the delivery of the “fake collaterals” were made
2 days after the issuance of the surety bond. Thus it was not prior or simultaneous with the
execution of the Surety bond.
o On the claim that Arkin removed or disposed of his property with intent to defraud his creditors,
plaintiff did not prove the intent of Arkin to defraud creditors.
Aggrieved, Petitioner filed Petition for Certiorari with the CA.

CA
Dismissed petition on the ground that petitioner did not file MR.
Hence this present petition.

RELEVANT PROVISION:
Rule 57, Sec. 1. Grounds upon which attachment may issue. —

(d): In an action against a party who has been guilty of a fraud of contracting the debt or incurring the obligation
upon which the action is brought, or in concealing or disposing of the property for the taking, detention or
conversion of which the action is brought;

ISSUE:
Whether or not the writ of preliminary attachment in question was properly or regularly issued – NO.

HELD:
The ground used as basis for the application for preliminary attachment was Rule 57 Section 1(d) “In an
action against a party who has been guilty of a fraud of contracting the debt or incurring the obligation
upon which the action is brought, or in concealing or disposing of the property for the taking, detention or
 conversion of which the action is brought;”
o To sustain an attachment on this ground, it must be shown that the debtor in contracting the
debt or incurring the obligation intended to defraud the creditor.
o The fraud must relate to the execution of the agreement and must have been the reason which
induced the other party into giving consent which he would not have otherwise given.
o Fraud should be committed upon contracting the obligation sued upon.
As applied in the case at bar,
o It has been established that all the collaterals given by the respondent Arkin as security for the
bond were either fraudulent or heavily encumbered.
o It has also been proven that subsequent to the issuance of the surety bond, Arkin started
disposing of his other properties:
 the motor vehicle given as collateral,
 his two other condominium units were also alienated in favor of a company of which
respondent Arkin is the president.
o All these circumstances unerringly point to the devious scheme of respondent Arkin to defraud
petitioner.
o It is clear that fraud was present when private respondent, among others, entered into an
indemnity agreement with petitioner. The actuations of respondent Arkin indubitably lead to the
conclusion that he never entertained the idea of fulfilling his obligations under the agreement
and was bent on defrauding petitioner from the very beginning.
 The Court ruled what “has been attended by irregularity is the assailed order of respondent judge lifting
the writ of attachment based on grounds which are contradicted by the evidence on record.”
However, despite the irregular issuance of the attachment, Arkin is not allowed to file a motion to
dissolve the attachment on the ground that the writ has been improperly or irregularly issued.
As held in Mindanao Savings and Loan v. CA, when the preliminary attachment is issued
upon a ground which is at the same time the applicant's cause of action: e.g., . . . an
action against a party who has been guilty of fraud in contracting the debt or incurring the
obligation upon which the action is brought, the defendant is not allowed to file a motion to
dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the
factual averments in the plaintiff's application and affidavits on which the writ was based
and consequently that the writ based therein had been improperly, or irregularly, issued
o the reason being that the hearing on such motion for
dissolution of the writ would be tantamount to a trial on
the merits. In other words, the merits of the action would
be ventilated at a mere hearing of a motion, instead of the
regular trial. Therefore, when the writ of attachment is of
this nature, the only way it can be dissolved is by a
counterbond.
Side issue: Petitioner's failure to file a motion for reconsideration in the trial court before commencing
certiorari proceedings in the Court of Appeals is not fatal considering the existence of special circumstances
that warrant immediate and more direct action

Disposition: Petition is GRANTED.

Arevalo v. Planters Development Bank

PETITIONER: Spouses Daisy and Socrates Arevalo
RESPONDENT: Planters Development Bank and the Register of Deeds of Parañaque City

SUMMARY: Petitioners obtained from respondent Bank a ₱2,100,000 loan secured by a mortgage on their property situated in
Muntinlupa. Due to their failure to pay the loaned amount, the Bank undertook to extra-judicially foreclose the mortgage. Petitioners
filed the First Complaint wherein they asked for the nullification of interests, penalties and other charges, as well as for specific
performance with an application for a TRO and writ of preliminary injunction to enjoin the then impending auction sale. During
the pendency of the First Complaint, petitioners filed yet another Complaint with the trial court. This time, they prayed for the
nullification of the real estate mortgage, the extra-judicial foreclosure sale, and the subsequent proceedings, with a prayer for
preliminary injunction and TRO.

DOCTRINE: Petitioners have committed two distinct acts of forum-shopping, namely: (1) Direct contempt—petitioners willfully
and deliberately went to different courts to avail themselves of multiple judicial remedies founded on similar facts and raising
substantially similar reliefs, and (2) Indirect contempt—they did not comply with their undertaking to report the filing of the
Second Complaint within five days from its filing.
FACTS:
1. Petitioners obtained from respondent Bank a ₱2,100,000 loan secured by a mortgage on their property situated in Muntinlupa.
Due to their failure to pay the loaned amount, the Bank undertook to extra-judicially foreclose the mortgage. The Clerk of Court
issued a Notice of Sheriff’s Sale and set the auction sale on 21 and 28 April 2009.

2. Petitioners thereafter filed the First Complaint wherein they asked for the nullification of interests, penalties and other charges,
as well as for specific performance with an application for a temporary restraining order (TRO) and writ of preliminary injunction
to enjoin the then impending auction sale of their Muntinlupa property.

3. During the hearing of petitioners’ application for preliminary injunction, the trial court ruled that, as a precondition for the
issuance of the writ and pursuant to the Procedure on Foreclosure, petitioners were directed to pay 12% per annum interest on the
principal obligation as stated in the application for foreclosure sale. Otherwise, the writ shall not issue.

4. Petitioners moved for reconsideration, but their motion was denied. Consequently, they did not pay the required interest; thus,
no writ of preliminary injunction was issued in their favor.

5. Aggrieved, petitioner Spouses Arevalo filed a Rule 65 Petition with the CA to assail the Orders of the trial court involving the
non-issuance of the injunctive writ.

6. The trial court granted the motion to dismiss the first action by the bank for lack of cause of action. Petitioner Spouses Arevalo
then proceeded again to the CA to appeal the dismissal of the main case. The record does not reveal the status of the case.

7. With regard to the Rule 65 Petition to the CA questioning the non-issuance of the writ, the CA rendered the present assailed
Decision affirming the applicability of Section 2 of the Procedure on Foreclosure. It ruled that the trial court was correct in
refusing to issue the writ due to petitioners’ inexplicable failure and even stubborn refusal to pay the accrued interest at 12% per
annum. The CA held that the words used by petitioners in their First Complaint, such as “manifestly unjust,” “purely potestative
condition,” “void ab initio,”—all of which pertained to interest imposed by the Bank—undeniably meant that petitioners were
challenging the interest for being unconscionable.

8. Petitioners moved for reconsideration, but the CA denied their motion.

9 Aggrieved, they filed the instant Rule 45 Petition to assail the Decision of the CA affirming the non-issuance of the injunctive
writ.

10. There are thus two cases arising from similar facts and circumstances; more particularly, the instant Rule 45 Petition and the
appeal of the dismissal of the main case with the CA. It appears on record also that on 12 November 2010, petitioners filed yet
another Complaint dated 11 November 2010 (Second Complaint) with the trial court. This time, they prayed for the nullification
of the real estate mortgage, the extra-judicial foreclosure sale, and the subsequent proceedings, with a prayer for preliminary
injunction and TRO.

ISSUE:
WON petitioners are guilty of forum-shopping and should consequently be punished for contempt. YES

RULING:
The Petition is DENIED. petitioners are required to SHOW CAUSE, within fifteen (15) days from receipt of this Decision, why
they should not be held in contempt.

RATIO:
Petitioners have committed two distinct acts of forum-shopping, namely: (1) Direct contempt—petitioners willfully and
deliberately went to different courts to avail themselves of multiple judicial remedies founded on similar facts and raising
substantially similar reliefs, and (2) Indirect contempt—they did not comply with their undertaking to report the filing of the Second
Complaint within five days from its filing.

Forum shopping is the act of litigants who repetitively avail themselves of multiple judicial remedies in different fora,
simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances;
and raising substantially similar issues either pending in or already resolved adversely by some other court; or for the purpose of
increasing their chances of obtaining a favorable decision, if not in one court, then in another. The rationale against forum-shopping
is that a party should not be allowed to pursue simultaneous remedies in two different courts, for to do so would constitute abuse
of court processes which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to
the congestion of the heavily burdened dockets of the courts.

Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in one case will amount to res
judicata in another. Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such
parties as those representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, such that any judgment
that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case.

What is essential in determining the existence of forum-shopping is the vexation caused the courts and litigants by a party
who asks different courts and/or administrative agencies to rule on similar or related causes and/or grant the same or substantially
similar reliefs, in the process creating the possibility of conflicting decisions being rendered upon the same issues.

A comparison of the reliefs sought by petitioners in the instant Petition and in their Second Complaint confirms that they are
substantially similar on two points: (1) revocation and cancellation of the Certificate of Sale and (2) permanent injunction on any
transfer and/or consolidation of title in favor of respondent Bank. These similarities undoubtedly create the possibility of conflicting
decisions from different courts:

Aside from the fact that petitioners sought substantially similar reliefs from different courts, they likewise failed to disclose to this
Court the filing of their Second Complaint within five (5) days from its filing, in violation of their previous undertaking to do so.

Every litigant is required to notify the court of the filing or pendency of any other action or such other proceeding involving the
same or similar action or claim within five (5) days of learning of that fact. Petitioners claim that it was merely due to inadvertence
that they failed to disclose the said filing within five (5) days, contrary to their undertaking.

RULE 7

Sec. 5. Certification against forum shopping.

The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or
in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action
or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no
such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the
present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been
filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice
and shall constitute direct contempt, as well as a cause for administrative sanctions.

Purpose of Writ
PNB v. RJ Ventures Realty and Development Corp.
Main action: Complaint for Injunction with Prayer for Issuanceof TRO and Writ of Preliminary Injunction
filed by RJ VenturesRealty & Dev’t Corporation (RJVRD) and Rajah BroadcastingNetwork (RBN)

RJRVD is the assignee of the rights to a deed of sale betweenFirst Women’s Credit Corporation (FWCC)
and PNB involvingthe Buendia Property. To finance the payment of the
balanceof the purchase price (Php 3.64B), an arrangement wasagreed upon where PNB would lend
an amount equivalent to10% of the purchase price to RBN, the latter being an
affiliatecompany of RJVRD, which amount will be available forrelending to RJVRD.

To secure the loan, RBN assigned in favor of PNB all its rightsand interest over radio and television
frequencies issued bythe Nat’l Telecommunications Commission. RBN and RJVVRDfailed to fulfil their
respective obligations in the contract of loan and of sale, respectively, despite demands from PNB.

As a consequence, the Buendia property was extrajudiciallysold at public auction for the amont of
Php2.8B. Meanwhile,RBN received a Notice of Extrajudicial Sale from PNB,specifying therein that its
radio facilities in Baguio will beforeclosed and taken over by PNB.

In support of its Application for the Issuance of a TRO and aWPI, respondents allege that RJVRD and RNB
would suffergreat and irreparable injury by the extrajudicial foreclosure of the property and the
take over of RBN’s radio facilities inBaguio.

On 27 May 99, the WPI was granted by the RTC. It was laterlifted on 28 July 99, and rectified on 29 July
99.

Issue: Whether or not RJVRD and RBN are entitled to the Writ of Preliminary Injunction.

Held:

As to purpose of the writ:

The sole object of a preliminaryinjunction is to maintain the status quo until the merits can be heard .A
preliminary injunction is an order granted at any stage of an actionprior to judgment of final order,
requiring a party, court, agency orperson to refrain from a particular act or acts. It is a
preservativeremedy to ensure the protection of a party’s substantive rights orinterests pending the final
judgment in the principal action. A plea foran injunctive writ lies upon the existence of a claimed
emergency orextraordinary situation which should be avoided for otherwise, theoutcome of a litigation
would be useless as far as the party applyingfor the writ is concerned.

Requisites:

For a WPI to issue, the ff requisites must be present, towit: (1) the existence of a clear and unmistakable
right that must beprotected, and (2) an urgent and paramount necessity for the writ toprevent serious
damage. The very foundation of the jurisdiction toissue a writ of injunction rests in the existence of a
cause of actionand in the probability of irreparable injury, inadequacy of pecuniary estimation and the
prevention of multiplicity of suits.

Merits of the case:

Respondents were able to establish a clear and unmistakable right to the possession of the subject
collaterals. Asowner of the subject collaterals that stand to be extrajudiciallyforeclosed, respondents are
entitled to the possession and protection thereof.

Further, there is an urgent and paramount necessity to preventserious damage. The term irreparable
injury has a definite meaning in law. It does not have reference to the amount of damages that maybe
caused but rather to the difficulty of measuring the damages inflicted. The direct and inevitable result
would be the stoppage of the operations of respondents’ radio stations, consequently, losing its
listenership, and tarnishing the image that it has built over time. It does not stretch one’s imagination to
see that the cost of a destroyed image is significantly the loss of its good name and reputation. The
value of a radio station’s image and reputation are not quantifiable in terms of monetary value

Australian Professional Realty, Inc., Jesus Garcia, And

Lydia Marciano, Petitioners, Vs. Municipality of Padre
Garcia Batangas
Facts

: Fire razed to the ground the old public market of respondent Municipality of Padre Garcia,Batangas.
The municipal government, invited petitioner Australian Professional Realty, Inc. (APRI) to rebuild the
public market and construct a shopping center. A Memorandum of Agreement (MOA) was executed
between petitioner APRI and respondent, represented by Mayor Gutierrez. Victor Reyes was elected as
municipal mayor of respondent. Respondent, through Mayor Reyes, initiated Complaint for Declaration
of Nullity of Memorandum of Agreement with Damages before the Regional Trial Court (RTC) of Rosario,
Batangas. The RTC issued an Order declaring petitioners in default and allowing respondent to present
evidence ex parte. The RTC ruled that the Memorandum of Agreement is hereby declared null and void
for being contrary to law and public policy and the structures found within the unfinished PADRE
GARCIASHOPPING CENTER are hereby declared forfeited in favor of the Municipality of Padre
Garcia. After learning of the adverse judgment, petitioners filed a Petition for Relief from Judgment. This
Petition was denied by the RTC. Petitioners later filed before the CA a Petition for Certiorari and
Prohibition. Also, petitioners filed before the CA a Motion for the Issuance of Status Quo Order and
Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction. The
CA issued a Resolution denying the said motion.

Issue

: Whether the CA committed grave abuse of discretion in denying petitioners’ Motion for the

Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining Order and/or Writ
ofPreliminary Injunction (Motion for Injunction).
Ruling:

NO. The CA did not commit grave abuse of discretion. Essential to granting the injunctive relief is the
existence of an urgent necessity for the writ in order to prevent serious damage. A TRO issues only if the
matter is of such extreme urgency that grave injustice and irreparable injury would arise unless it is
issued immediately. Thus, to be entitled to the injunctive writ, petitioners must show that (1) there
exists clear and unmistakable right to be protected; (2) this right is directly threatened by an act sought
to be enjoined; (3) the invasion of the right is material and substantial; and (4) there is an urgent and
paramount necessity for the writ to prevent serious and irreparable damage. In this case, no grave
abuse of discretion can be imputed to the CA. This is so because APRI has nuclear legal right. A perusal
of the Motion for Injunction and its accompanying Affidavit filed before the CA shows that petitioners
rely on their alleged right to the full and faithful execution of the MOA. However, their rights under the
MOA have already been declared inferior or inexistent in relation to respondent in the RTC case, under
a judgment that has become final and executory.

At the very least,their rights under the MOA are precisely disputed by respondent. Hence, there can be
no "clear andunmistakable" right in favor of petitioners to warrant the issuance of a writ of injunction.
Where the complainant’s right or title is doubtful or disputed, injunction is not proper.

Department of Foreign Affairs and Bangko Sentral ng Pilipinas vs. Falcon and BCA International
Corporation; G.R. No. 176657; September 1, 2010.

The Philippine Department of Foreign Affairs (“DFA”) implemented its Machine

Readable Passport and Visa Project (the “MRPV Project”) under the Build-Operate-andTransfer (“BOT”) scheme. Pursuant to
the BOT Law, having found that BCA

International Corporation (“BCA”) submitted the sole complying bid, direct negotiations
were commenced between DFA and BCA for the MRPV Project. In compliance with the
Notice of Award and the BOT Law, BCA incorporated a project company, the Philippine
Passport Corporation (“PPC”) to undertake and implement the MRPV Project.
Consequently, on February 8, 2001 a Build-Operate-Transfer Agreement (“BOT
Agreement”) was entered into by the DFA and the PPC. Later, an Amended BOT
Agreement was entered into by the DFA and BCA with the conformity of PPC. Then, an
Assignment Agreement was executed by BCA and PPC, whereby BCA assigned and
ceded its rights, title, interest and benefits arising from the Amended BOT Agreement to
PPC.

On December 9, 2005, the DFA sent a Notice of Termination to BCA and PPC due to
their alleged failure to submit proof of financial capability to complete the entire MRPV
Project in accordance with the financial warranty under Section 5.02 (A) of the Amended
BOT Agreement. On December 14, 2005, BCA sent a letter to the DFA demanding that
it immediately reconsider and revoke its previous notice of termination, otherwise, BCA
would be compelled to declare the DFA in default pursuant to the Amended BOT
Agreement.

As the impasse remained unresolved, BCA filed a Request for Arbitration dated April 7,
2006 with the Philippine Dispute Resolution Center, Inc. (PDRCI), pursuant to Section
19.02 of the Amended BOT Agreement which provides:
Section 19.02. Failure to Settle Amicably — If the Dispute cannot be settled
amicably within ninety (90) days by mutual discussion as contemplated under
Section 19.01 herein, the Dispute shall be settled with finality by an arbitrage
tribunal operating under International Law, hereinafter referred to as the
"Tribunal", under the UNCITRAL Arbitration Rules contained in Resolution
31/98 adopted by the United Nations General Assembly on December 15, 1976,
and entitled "Arbitration Rules on the United Nations Commission on the
International Trade Law". The DFA and the BCA undertake to abide by and
implement the arbitration award. The place of arbitration shall be Pasay City,
Philippines, or such other place as may mutually be agreed upon by both parties.
The arbitration proceeding shall be conducted in the English language.

Thereafter, the DFA and the Bangko Sentral ng Pilipinas (“BSP”) entered into a
Memorandum of Agreement for the latter to provide the former passports compliant
with international standards. The BSP then solicited bids for the supply, delivery,
installation and commissioning of a system for the production of Electronic Passport
Booklets or e-Passports.
Thus, BCA filed a Petition for Interim Relief under Section 28 of the Alternative Dispute
Resolution Act of 2004 (the “ADR Act of 2004”), with the Regional Trial Court of Pasig
City. In that petition, BCA prayed for, among others, that the trial court grant interim
relief to BCA prior to the constitution of the arbitral tribunal in the form an order
temporarily restraining the DFA and BSP and their agents (i) from awarding a new
contract to implement the MRPV Project, or any similar electronic passport or visa
project; or (ii) if such contract has been awarded, from implementing such MRPV Project
or similar projects until further orders from the court.

On January 23, 2007, the trial court ordered the issuance of a temporary restraining order
restraining the DFA and the BSP and their agents from awarding a new contract to
implement the MVPV Project or any similar electronic passport or visa project, or if such
contract has been awarded, from implementing such or similar projects.
After hearing, the trial court issued an Order granting BCA's application for preliminary
injunction. Hence, the DFA and the BSP filed a Petition before the Supreme Court
assailing the order of the trial court and the issuance of the writ of preliminary injunction.
The Supreme Court noted that under Section 28 of the ADR Act of 2004, the grant of an
interim measure of protection by the proper court before the constitution of an arbitral
tribunal is allowed.

The Supreme Court also stated that the ADR Act of 2004 is a general law applicable to all
matters and controversies to be resolved through alternative dispute resolution methods.
This law allows a Regional Trial Court to grant interim or provisional relief, including
preliminary injunction, to parties in an arbitration case prior to the constitution of the
arbitral tribunal. This general statute, however, must give way to a special law governing
national government projects, namely, Republic Act No. 8975 which prohibits courts,
except the Supreme Court, from issuing a temporary restraining order and/or a writ of
preliminary injunction in cases involving national government projects.

However, the Supreme Court found that DFA and BSP failed to prove that the MRPV
Project is a “national government project” as defined in Republic Act No. 8975 and thus,
the trial court had jurisdiction to issue the injunction. As to whether the issuance of the
injunction was proper, the Supreme Court, after considering the arguments of the parties,
held that the issuance of the injunction by the trial court was not warranted and
amounted to grave abuse of discretion.

The Supreme Court emphasized that its decision touches only on the issues of (a) the
jurisdiction of the trial court to issue a writ of preliminary injunction as an interim relief
under the factual milieu of this case; and (b) the entitlement of BCA to injunctive relief.
The merits of the DFA and BCA's dispute regarding the termination of the Amended
BOT Agreement must be threshed out in the proper arbitration proceedings. The civil
case pending before the trial court is purely for the grant of interim relief since the main
case is to be the subject of arbitration proceedings.
The Supreme Court noted that during the pendency of this case, the arbitration case was
dismissed by the PDRCI for lack of jurisdiction, in view of the lack of agreement
between the parties to arbitrate before the PDRCI. The Supreme Court held that in view
of intervening circumstances, BCA can no longer be granted injunctive relief and the civil
case before the trial court should be accordingly dismissed. However, this is without
prejudice to the parties resolving the main controversy in arbitration proceedings, in
accordance with the provisions of the Amended BOT Agreement, which should proceed
with dispatch.

Cayabyab v. Jaime Dimson GR 223862 July 10 2017

Before the Court is a petition for review on certiorari1 assailing the Decision2 dated December 18,
2015 and the Resolution3 dated March 21, 2016 of the Court of Appeals (CA) in CA-G.R. SP No.
138699, which directed the Regional Trial Court (RTC) of Guagua, Pampanga, Branch 51 to issue a
temporary restraining order (TRO) against the Cease and Desist Order4 (CDO) and the Closure
Order5 of petitioner Mayor Mylyn P. Cayabyab (Mayor Cayabyab) upon posting of a bond to be
determined by the RTC.

The Facts

Respondent Jaime C. Dimson (Dimson) is the owner of a poultry farm located in Barangay Prado
Siongco, Lubao, Pampanga (subject poultry farm) which had been operating for more than 30 years.
In January 2014, he applied for a barangay clearance with the office of petitioner Prado Siongco
Barangay Chairman Angelito L. David (Chairman David), preparatory to his application for a
business permit, and was informed that the issuance thereof is conditioned on a prior ocular
inspection of the subject poultry farm by the Office of the Mayor of Lubao, Pampanga, Mayor
Cayabyab. However, despite the conduct of an ocular inspection, Chairman David refused to issue
the clearance; hence, no business permit was issued in favor ofDimson.6

On April 29, 2014, Dimson received7 a CDO8 dated April 28, 2014 from the Office of Mayor
Cayabyab, directing him to desist from further conducting any poultry farming on the grounds
of: (a) lack of a Barangay Business Permit and a Mayor's Permit; (b) lack of a pollution control
officer; (c) foul odor being emitted by the subject poultry farm that offended passing motorists, and
for which complaints were filed by those affected; and (d) the said poultry farm being situated only
five (5) meters away from the national road, in violation of the 500-meter minimum distance
requirement under the Code of Sanitation of the Philippines (Sanitation Code).9

In his motion for reconsideration,10 Dimson denied that there was foul odor coming from his poultry
farm, at the same time, manifesting that he had already employed a pollution control officer.11 Said
motion was denied by Lubao Acting Mayor Robertito V. Diaz in a letter12 dated May 20, 2014.
Dissatisfied, Dimson filed another motion for reconsideration,13 contending that the subject poultry
farm is not a nuisance per se that can be abated by the local government without the intervention of
the courts.14 The motion was denied by Mayor Cayabyab in a letter15 dated June 13, 2014, which
clarified that the CDO was primarily issued on the lack of the requisite Barangay Business Permit
and Mayor's Permit. Thereafter, a Closure Order16 dated June 20, 2014 was issued by Mayor
Cayabyab effectively shutting down the subject poultry farm.17

The RTC Proceedings

Aggrieved, Dimson filed a Petition for Certiorari, Mandamus, Prohibition (With Application for
Preliminary Mandatory Injunction)18 and prayed for the issuance of a TRO against Mayor Cayabyab
and Chairman David (petitioners) before the RTC of Guagua, Pampanga, docketed as Sp. Civil
Case No. G-14-685, which was raffled to Branch 52. He maintained that his poultry farm is not a
nuisance per se that can be summarily abated; hence, respondents grossly abused their discretion
when they withheld his permits, and issued the CDO and Closure Order.19

In their defense,20 respondents averred that: (a) the non-issuance of the Barangay Business Permit
was based on valid grounds as there were written complaints against the operation of the poultry
farm, and a public hearing was conducted thereon; (b) the non-issuance of the Mayor's Permit was
justified considering the lack of a Barangay Business Permit; (c) the issuance of the CDO and
Closure Order was justified and in accordance with due process; and (d) the poultry farm violated
not only the Sanitation Code but also the Comprehensive Land Use Plan and Zoning Ordinance
requiring poultry farms to be 500 meters away from the major roads and/or highways.21

In an Order22 dated October 2, 2014, the RTC denied Dimson's application for TRO for failure to
establish a clear and unmistakable right to the said issuance and to show that he will suffer
irreparable injury. Moreover, the RTC opined that the issue of whether or not petitioners have the
right to order the closure of the subject farm is best threshed out in the main case. It likewise ruled
that the TRO can no longer serve its purpose as the act sought to be restrained was already fait
accompli, since a notice of closure was already posted on the concrete wall of the subject poultry
farm effective September 29, 2014.23

Due to the Presiding Judge's voluntary inhibition in the case, the same was re-raffled to Branch 51 of
the same RTC.24

Dimson filed a motion for reconsideration which was, however, denied in an Order25 dated December
22, 2014. Unperturbed, Dimson filed a petition for certiorari26 before the CA, seeking to set aside the
Orders dated October 2, 2014 and December 22, 2014, docketed as CA-G.R. SP No. 138699.27

The CA Ruling

In a Decision28 dated December 18, 2015, the CA granted the petition, and directed the RTC to issue
a TRO against the implementation of the CDO and the Closure Order of Mayor Cayabyab.29

The CA ruled that the RTC gravely abused its discretion in denying Dimson's application for a TRO
which was essentially rooted on a determination of whether the subject poultry farm is a
nuisance per se or a nuisance per accidens. Considering that poultry farming is a legitimate
business, by its nature alone, the same can only be a nuisance per accidens if in the course of its
operations, it should become objectionable to such extent that it offends some laws, public policy, or
should become a danger to public health and welfare. It may only be abated on the strength of
judicial fiat.30

Consequently, the CA held that Dimson was able to establish the concurrence of the requisites for
the issuance of injunctive relief, to wit: (a) he has the right to engage in poultry farming; (b) the
issuance of the CDO and the closure order would work injustice to him; and (c) the issuance of the
said orders which amounted to an abatement of his poultry enterprise without the required judicial
intervention violates his rights, which cannot be justified under the general welfare clause.31

The CA likewise held that the issuance of a TRO cannot be denied on the ground of fait
accompli since the acts complained of is a continuing prohibition on an otherwise legitimate
business. Hence, Dimson could still resume his operations in the meantime, or until a final decision
on the merits of the main case is rendered by the RTC, and the status quo ante may still be attained,
and, thereafter, preserved.32
Dissatisfied, petitioners filed a motion for reconsideration,33 which was, however, denied in a
Resolution34 dated March 21, 2016; hence, the instant petition. 1âw phi 1

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA committed reversible error in
directing the issuance of a TRO against the implementation of the CDO and the Closure Order of
Mayor Cayabyab.

The Court's Ruling

The Court grants the petition.

"A writ of preliminary injunction and a TRO are injunctive reliefs and preservative remedies for the
protection of substantive rights and interests."35 To be entitled to the injunctive writ, the applicant
must show that: (a) there exists a clear and unmistakable right to be protected; (b) this right is
directly threatened by an act sought to be enjoined; (c) the invasion of the right is material and
substantial; and (d) there is an urgent and paramount necessity for the writ to prevent serious and
irreparable damage. The grant or denial of an injunctive relief in a pending case rests on the sound
discretion of the court since the assessment and evaluation of evidence towards that end involve
findings of fact left for the conclusive determination of the said court.36 "Hence, the exercise of judicial
discretion by a court in injunctive matters must not be interfered with, except when there is grave
abuse of discretion."37 The burden is, thus, on the applicant to show that there is meritorious ground
for the issuance of a TRO in his favor,38 since an application for injunctive relief is construed strictly
against him.39 Here, Dimson failed to sufficiently show the presence of the requisites to warrant the
issuance of a TRO against the CDO and the Closure Order of Mayor Cayabyab.

Preliminarily, it must be clarified that contrary to the CA's ruling,40 the grant or denial of Dimson's
application for TRO was not essentially rooted on a determination of whether the subject poultry
farm is a nuisance per se or a nuisance per accidens, but rather on whether or not there was an
ostensible showing of a sufficient justification for the issuance of the CDO and the Closure Order.
Corollary is the issue of whether or not there were prima facie valid reasons for the withholding of
the barangay clearance, which is a prerequisite to the renewal of Dimson's business permit to
operate.

A business permit must be secured from the municipal business permits and licensing office in order
for the business to legally operate in the locality.41 While poultry farming is admittedly a legitimate
business, it cannot operate without a business permit, which expires on the 31st of December of
every year and must be renewed before the end of January of the following year.

In the present case, there is no showing that Dimson filed any application for renewal of his business
permit to operate the subject poultry farm in 2014, apparently due to his failure to secure the
necessary barangay clearance which was not issued based on complaints of foul odor being emitted
by the said farm. Records show that complaints from neighboring barangays were received by the
office of Mayor Cayabyab bewailing the foul odor coming from the said farm,42 which was confirmed
upon ocular inspection conducted by the Health and Sanitation Office of the Municipality of Lubao,
Pampanga.43 Settled is the rule that acts of public officers are presumed to be regular and valid,
unless sufficiently shown to be otherwise.44 In this case, Dimson was unable to refute the finding that
foul odor is being emitted by his farm, having failed to present the inspection report of the sanitary
officer who purportedly did not note any such foul smell in the fann.45 Not having passed the
necessary sanitation standard, there was, therefore, a prima facie valid reason for the withholding of
the required barangay clearance, which is a prerequisite to the renewal of Dimson's business permit
to operate.

Having failed to apply for and secure the necessary business pennit to operate in 2014 on account
of his inability to obtain the required barangay clearance due to non-compliance with a requirement
standard,46 Dimson may not legally operate in the Municipality of Lubao, Pampanga, thereby,
warranting the issuance by Mayor Cayabyab of the CDO and the Closure Order. Accordingly, no
error, much less grave abuse of discretion can be ascribed on the RTC in denying Dimson's
application for the issuance of a TRO against the said orders. In the absence of a business permit,
Dimson has no clear legal right to resume his operations pending final determination by the RTC of
the merits of the main case for certiorari, mandamus, and prohibition. A clear legal right means one
clearly founded in or granted by law or is enforceable as a matter of law, which is not extant in the
present case. It is settled that the possibility of irreparable damage without proof of an actual existing
right is not a ground for the issuance of an injunctive relief.47

In fine, it was grave error for the CA to order the issuance of a TRO against the implementation of
the CDO and the Closure Order of Mayor Cayabyab. A court may issue injunctive relief against acts
of public officers only when the applicant has made out a case of invalidity or irregularity strong
enough to overcome the presumption of validity or regularity, and has established a clear legal right
to the remedy sought,48 which was not shown here.

WHEREFORE, the petition is GRANTED. The Decision dated December 18, 2015 and the
Resolution dated March 21, 2016 of the Court of Appeals in CA-G.R. SP No. 138699 are
hereby SET ASIDE.

SO ORDERED.

Ravago v. Esso Eastern Marine & Trans-Global

Facts:

- Trans-Global Maritime Agency is the Phil agent of Singapore-based Esso Eastern Marine (now
Petroleum Shipping)
- Ravago was hired as a seaman onboard various Esso vessels (34 separate and unconnected
fixed-period contracts, by 3 different companies Esso Tankers, Esso Intl Shipping, Esso Eastern
Marine; total of 22 years)
- Under a new contract, he was ordered to report on Sept 1992 for a medical pre-employment
examination which he passed and attended the pre-departure orientation seminar after
- On Oct 1992, a stray bullet hit Ravago on the left leg while waiting for a bus ride in Cubao
- His wife informed EIS of the incident for the purpose of availing medical benefits
- The doctor opined that Ravago would not be able to cope with the job of a seaman and
suggested that he be given a desk job. Ravago’s left leg became shorter and resulted in a limp
when walking
- Instead of rehiring him, and after Ravago’s execution of a Quitclaim, EIS paid him his Career
Employment Incentive Plant and tax refund amounting to 162k
- Ravago filed a complaint for illegal dismissal with prayer for reinstatement with POEA
- LA: illegally dismissed
o Ravago was a regular employee because he was engaged to perform activities which
were necessary and desirable in the usual trade or business of employer;
o Services were repeatedly contracted
 o Employer cannot terminate worker without finding by public health authority that the
disease is of such nature or at such stage that it cannot be cured within 6 months
- NLRC: affirmed
o Quitclaim cannot be considered a waiver of his right to question the validity of his
dismissal and seek reliefs
- Esso Eastern Marine and Trans-Global filed with the CA:
o Petition for certiorari
o Urgent Application for the issuance of a TRO and writ of preliminary injunction which it
granted
- Ravago filed a motion to set aside Resolution granting TRO, arguing that the case was a labor
dispute wherein an injunction is proscribed under Art. 254
- Respondents countered that the case did not involve a labor dispute but a money claim against
an employer as a result of termination of employment
- CA: reversed NLRC decision
o Injunction made permanent
o Seafarers are contractual employees whose terms of employment are fixed for a certain
period of time. The fact that Ravago was not rehired upon the completion of his
contract did not result in his illegal dismissal; hence he was not entitled to
reinstatement or separation pay
o An injunction is a preservative remedy issued for the protection of a substantive right or
interest, an antidote resorted to only when there is pressing necessity to avoid injurious
consequences which cannot be rendered under any standard compensation
Issue(1):

w/n the CA erred in issuing a restraining order and the writ of preliminary injunction

Held:

Reliance on Art. 254 is misplaced. The law proscribes the issuance of injunctive relief only in those cases
involving or growing out of a labor dispute. Moreover, said article specifically provides that the NLRC
may grant injunctive relief under Art. 218 thereof.

The case at bar neither involves nor grows out of a labor dispute. It did not involve the fixing of terms or
conditions of employment or representation of persons with respect thereto. Ravago’s complaint
revolves around the issue of his alleged dismissal from office and his claim for backwages, damages and
attorney’s fees.

Besides, the anti-injunction policy of the Labor Code, basically is freedom at the workplace. It is more
appropriate in the promotion of the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation as modes of settling labor and industrial disputes.

Generally, an injunction is a preservative remedy for the protection of a person’s substantive

rights/interests. It is not a cause of action in itself but a mere provisional remedy, an appendage to the
main suit. Pressing necessity requires that it should be resorted only to avoid injurious consequences
which cannot be remedied under any measure of consideration. The application of an injunctive writ
rests upon the presence of an exigency or of an exceptional reason before the main case can be
regularly heard. The indispensable conditions for granting such temporary injunctive relief are:
 a. that the complaint alleges facts which appear satisfactory to establish a proper basis for
injunction, and
b. that on the entire showing from the contending parties, the injunction is reasonably necessary
to protect the legal rights of the plaintiff pending the litigation.

Case at bar: Respondents’ petition contains facts sufficient to warrant the issuance of an injunction
under Art. 218(3) of the Labor Code. Further, respondents had already posted a surety bond more than
adequate to cover the judgment award.