G.R. No.

144025 December 27, 2002

SPS. RENE GONZAGA and LERIO GONZAGA, petitioners,

vs.
HON. COURT OF APPEALS, Second Division, Manila,
HON. QUIRICO G. DEFENSOR, Judge, RTC, Branch 36, Sixth Judicial Region, Iloilo City,
and LUCKY HOMES, INC., represented by WILSON JESENA, JR., as Manager, respondents.

DECISION

CORONA, J.:

Before this Court is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of Appeals dated December 29, 1999 and its
resolution dated June 1, 2000 in CA-G.R. SP No. 54587.

The records disclose that, sometime in 1970, petitioner-spouses purchased a parcel of land from private respondent Lucky Homes, Inc., situated in Iloilo and
containing an area of 240 square meters. Said lot was specifically denominated as Lot No. 19 under Transfer Certificate of Title (TCT) No. 28254 and was
mortgaged to the Social Security System (SSS) as security for their housing loan. Petitioners then started the construction of their house, not on Lot No. 19
but on Lot No. 18, as private respondent mistakenly identified Lot No. 18 as Lot No. 19. Upon realizing its error, private respondent, through its general
manager, informed petitioners of such mistake but the latter offered to buy Lot No. 18 in order to widen their premises. Thus, petitioners continued with the
construction of their house. However, petitioners defaulted in the payment of their housing loan from SSS. Consequently, Lot No. 19 was foreclosed by SSS
and petitioners’ certificate of title was cancelled and a new one was issued in the name of SSS. After Lot No. 19 was foreclosed, petitioners offered to swap
Lot Nos. 18 and 19 and demanded from private respondent that their contract of sale be reformed and another deed of sale be executed with respect to Lot
No. 18, considering that their house was built therein. However, private respondent refused. This prompted petitioners to file, on June 13, 1996, an action for
reformation of contract and damages with the Regional Trial Court of Iloilo City, Branch 36, which was docketed as Civil Case No. 17115.

On January 15, 1998, the trial court2 rendered its decision dismissing the complaint for lack of merit and ordering herein petitioners to pay private respondent
the amount of P10,000 as moral damages and another P10,000 as attorney’s fees. The pertinent conclusion of the trial court reads as follows:

"Aware of such fact, the plaintiff nonetheless continued to stay in the premises of Lot 18 on the proposal that he would also buy the same. Plaintiff however
failed to buy Lot 18 and likewise defaulted in the payment of his loan with the SSS involving Lot 19. Consequently Lot 19 was foreclosed and sold at public
auction. Thereafter TCT No. T-29950 was cancelled and in lieu thereof TCT No. T-86612 (Exh. ‘9’) was issued in favor of SSS. This being the situation
obtaining, the reformation of instruments, even if allowed, or the swapping of Lot 18 and Lot 19 as earlier proposed by the plaintiff, is no longer feasible
considering that plaintiff is no longer the owner of Lot 19, otherwise, defendant will be losing Lot 18 without any substitute therefore (sic). Upon the other
hand, plaintiff will be unjustly enriching himself having in its favor both Lot 19 which was earlier mortgaged by him and subsequently foreclosed by SSS, as
well as Lot 18 where his house is presently standing.

"The logic and common sense of the situation lean heavily in favor of the defendant. It is evident that what plaintiff had bought from the defendant is Lot 19
covered by TCT No. 28254 which parcel of land has been properly indicated in the instruments and not Lot 18 as claimed by the plaintiff. The contracts
being clear and unmistakable, they reflect the true intention of the parties, besides the plaintiff failed to assail the contracts on mutual mistake, hence the
same need no longer be reformed."3

On June 22, 1998, a writ of execution was issued by the trial court. Thus, on September 17, 1998, petitioners filed an urgent motion to recall writ of
execution, alleging that the court a quo had no jurisdiction to try the case as it was vested in the Housing and Land Use Regulatory Board (HLURB) pursuant
to PD 957 (The Subdivision and Condominium Buyers Protective Decree). Conformably, petitioners filed a new complaint against private respondent with
the HLURB. Likewise, on June 30, 1999, petitioner-spouses filed before the Court of Appeals a petition for annulment of judgment, premised on the ground
that the trial court had no jurisdiction to try and decide Civil Case No. 17115.

In a decision rendered on December 29, 1999, the Court of Appeals denied the petition for annulment of judgment, relying mainly on the jurisprudential
doctrine of estoppel as laid down in the case of Tijam vs. Sibonghanoy.4

Their subsequent motion for reconsideration having been denied, petitioners filed this instant petition, contending that the Court of Appeals erred in
dismissing the petition by applying the principle of estoppel, even if the Regional Trial Court, Branch 36 of Iloilo City had no jurisdiction to decide Civil
Case No. 17115.

At the outset, it should be stressed that petitioners are seeking from us the annulment of a trial court judgment based on lack of jurisdiction. Because it is not
an appeal, the correctness of the judgment is not in issue here. Accordingly, there is no need to delve into the propriety of the decision rendered by the trial
court.

Petitioners claim that the recent decisions of this Court have already abandoned the doctrine laid down in Tijam vs. Sibonghanoy.5 We do not agree. In
countless decisions, this Court has consistently held that, while an order or decision rendered without jurisdiction is a total nullity and may be assailed at any
stage, active participation in the proceedings in the court which rendered the order or decision will bar such party from attacking its jurisdiction. As we held
in the leading case of Tijam vs. Sibonghanoy:6

"A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, or estoppel by
deed or by record, and of estoppel by laches.

xxx

"It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain
such relief, repudiate, or question that same jurisdiction x x x x [T]he question whether the court had jurisdiction either of the subject matter of the action or
of the parties was not important in such cases because the party is barred from such conduct not because the judgment or order of the court is valid and
conclusive as an adjudication, but for the reason that such a practice can not be tolerated –– obviously for reasons of public policy."

Tijam has been reiterated in many succeeding cases. Thus, in Orosa vs. Court of Appeals;7 Ang Ping vs. Court of Appeals;8 Salva vs. Court of
Appeals;9 National Steel Corporation vs. Court of Appeals;10 Province of Bulacan vs. Court of Appeals;11 PNOC Shipping and Transport Corporation vs.
Court of Appeals,12 this Court affirmed the rule that a party’s active participation in all stages of the case before the trial court, which includes invoking the
court’s authority to grant affirmative relief, effectively estops such party from later challenging that same court’s jurisdiction.

In the case at bar, it was petitioners themselves who invoked the jurisdiction of the court a quo by instituting an action for reformation of contract against
private respondents. It appears that, in the proceedings before the trial court, petitioners vigorously asserted their cause from start to finish. Not even once did
petitioners ever raise the issue of the court’s jurisdiction during the entire proceedings which lasted for two years. It was only after the trial court rendered its
decision and issued a writ of execution against them in 1998 did petitioners first raise the issue of jurisdiction ─ and it was only because said decision was
unfavorable to them. Petitioners thus effectively waived their right to question the court’s jurisdiction over the case they themselves filed.

Petitioners should bear the consequence of their act. They cannot be allowed to profit from their omission to the damage and prejudice of the private
respondent. This Court frowns upon the undesirable practice of a party submitting his case for decision and then accepting the judgment but only if favorable,
and attacking it for lack of jurisdiction if not.13

Public policy dictates that this Court must strongly condemn any double-dealing by parties who are disposed to trifle with the courts by deliberately taking
inconsistent positions, in utter disregard of the elementary principles of justice and good faith. 14 There is no denying that, in this case, petitioners never raised
the issue of jurisdiction throughout the entire proceedings in the trial court. Instead, they voluntarily and willingly submitted themselves to the jurisdiction of
said court. It is now too late in the day for them to repudiate the jurisdiction they were invoking all along.

WHEREFORE, the petition for review is hereby DENIED.

SO ORDERED.
G.R. No. 75919 May 7, 1987

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE
DE MAISIP, respondents.

Tanjuatco, Oreta and Tanjuatco for petitioners.

Pecabar Law Offices for private respondents.

RESOLUTION

GANCAYCO, J.:

Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and another motion to refer the case to and to be heard
in oral argument by the Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the case for oral
argument is denied.

Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs.
Ramolete. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by considering the amount of damages sought in the original
complaint.

The environmental facts of said case differ from the present in that —

1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages. 2While the present case is an action for torts
and damages and specific performance with prayer for temporary restraining order, etc. 3

2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property, the declaration of ownership and
delivery of possession thereof to plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees arising therefrom in the
amounts specified therein. 4However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of
the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of
defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and
sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual,
compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of
payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent. The amount of damages sought is
not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff.5

3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The complaint was considered
as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated were treated as merely to the main cause of action.
Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 6

In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the complaint as well as the designation
thereof, it is both an action for damages and specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by
considering the action to be merely one for specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous.
Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the
amount of P78,750,000.00 which should be the basis of assessment of the filing fee.

4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was
immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985 for
the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any mention of the amount of damages in the body of the complaint.
The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the
present case and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the
amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of
P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said amended complaint was admitted.

On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the damages alleged in the
original complaint as it did not consider the damages to be merely an or incidental to the action for recovery of ownership and possession of real
property. 8 An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount
of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted. 9

In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be
the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment
was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the
proceedings thereafter had were proper and regular." 10 Hence, as the amended complaint superseded the original complaint, the allegations of damages in
the amended complaint should be the basis of the computation of the filing fee. 11

In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is
an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original
complaint.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of
filing in court . 12 Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither
can the amendment of the complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint that was duly filed
which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are
null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the
original complaint and not in the amended complaint.
The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of
omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint. This is
clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee.
This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through
another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in
obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that
petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The
design to avoid payment of the required docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this unethical practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case.
Any pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will
not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed.

WHEREFORE, the motion for reconsideration is denied for lack of merit.

SO ORDERED.
 G.R. No. 182435 August 13, 2012

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BA YLON, REMO BA YLON, JOSE BA YLON, ERIC BA YLON, FLORENTINO BA YLON, and
MA. RUBY BA YLON, Petitioners,
vs.
FLORANTE BA YLON, Respondent.

VILLARAMA, JR.,*

DECISION

REYES, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the Decision 1 dated October 26,
2007 rendered by the Court of Appeals (CA) in CA-G.R. CV No. 01746. The assailed decision partially reversed and set aside the Decision 2 dated October
20, 2005 issued ~y the Regional Trial Court (RTC), Tan jay City, Negros Oriental, Branch 43 in Civil Case No. 11657.

The Antecedent Facts

This case involves the estate of spouses Florentino Baylon and Maximina Elnas Baylon (Spouses Baylon) who died on November 7, 1961 and May 5, 1974,
respectively.3 At the time of their death, Spouses Baylon were survived by their legitimate children, namely, Rita Baylon (Rita), Victoria Baylon (Victoria),
Dolores Baylon (Dolores), Panfila Gomez (Panfila), Ramon Baylon (Ramon) and herein petitioner Lilia B. Ada (Lilia).

Dolores died intestate and without issue on August 4, 1976. Victoria died on November 11, 1981 and was survived by her daughter, herein petitioner Luz B.
Adanza. Ramon died intestate on July 8, 1989 and was survived by herein respondent Florante Baylon (Florante), his child from his first marriage, as well as
by petitioner Flora Baylon, his second wife, and their legitimate children, namely, Ramon, Jr. and herein petitioners Remo, Jose, Eric, Florentino and Ma.
Ruby, all surnamed Baylon.

On July 3, 1996, the petitioners filed with the RTC a Complaint 4 for partition, accounting and damages against Florante, Rita and Panfila. They alleged
therein that Spouses Baylon, during their lifetime, owned 43 parcels of land 5all situated in Negros Oriental. After the death of Spouses Baylon, they claimed
that Rita took possession of the said parcels of land and appropriated for herself the income from the same. Using the income produced by the said parcels of
land, Rita allegedly purchased two parcels of land, Lot No. 4709 6 and half of Lot No. 4706,7 situated in Canda-uay, Dumaguete City. The petitioners averred
that Rita refused to effect a partition of the said parcels of land.

In their Answer,8 Florante, Rita and Panfila asserted that they and the petitioners co-owned 229 out of the 43 parcels of land mentioned in the latter’s
complaint, whereas Rita actually owned 10 parcels of land 10 out of the 43 parcels which the petitioners sought to partition, while the remaining 11 parcels of
land are separately owned by Petra Cafino Adanza,11 Florante,12 Meliton Adalia,13 Consorcia Adanza,14 Lilia15 and Santiago Mendez.16 Further, they claimed
that Lot No. 4709 and half of Lot No. 4706 were acquired by Rita using her own money. They denied that Rita appropriated solely for herself the income of
the estate of Spouses Baylon, and expressed no objection to the partition of the estate of Spouses Baylon, but only with respect to the co-owned parcels of
land.

During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997, conveyed Lot No. 4709 and half of Lot No. 4706 to Florante. On July
16, 2000, Rita died intestate and without any issue. Thereafter, learning of the said donation inter vivos in favor of Florante, the petitioners filed a
Supplemental Pleading17 dated February 6, 2002, praying that the said donation in favor of the respondent be rescinded in accordance with Article 1381(4) of
the Civil Code. They further alleged that Rita was already sick and very weak when the said Deed of Donation was supposedly executed and, thus, could not
have validly given her consent thereto.

Florante and Panfila opposed the rescission of the said donation, asserting that Article 1381(4) of the Civil Code applies only when there is already a prior
judicial decree on who between the contending parties actually owned the properties under litigation.18

The RTC Decision

On October 20, 2005, the RTC rendered a Decision,19 the decretal portion of which reads:

Wherefore judgment is hereby rendered:

(1) declaring the existence of co-ownership over parcels nos. 1, 2, 3, 5, 7, 10, 13, 14, 16, 17, 18, 26, 29, 30, 33, 34, 35, 36, 40 and 41 described in
the complaint;

(2) directing that the above mentioned parcels of land be partitioned among the heirs of Florentino Baylon and Maximina Baylon;

(3) declaring a co-ownership on the properties of Rita Baylon namely parcels no[s]. 6, 11, 12, 20, 24, 27, 31, 32, 39 and 42 and directing that it
shall be partitioned among her heirs who are the plaintiffs and defendant in this case;

(4) declaring the donation inter vivos rescinded without prejudice to the share of Florante Baylon to the estate of Rita Baylon and directing that
parcels nos. 1 and 2 paragraph V of the complaint be included in the division of the property as of Rita Baylon among her heirs, the parties in this
case;

(5) excluding from the co-ownership parcels nos. 20, 21, 22, 9, 43, 4, 8, 19 and 37.

Considering that the parties failed to settle this case amicably and could not agree on the partition, the parties are directed to nominate a representative to act
as commissioner to make the partition. He shall immediately take [his] oath of office upon [his] appointment. The commissioner shall make a report of all the
proceedings as to the partition within fifteen (15) days from the completion of this partition. The parties are given ten (10) days within which to object to the
report after which the Court shall act on the commissioner report.

SO ORDERED.20 (Emphasis ours)

The RTC held that the death of Rita during the pendency of the case, having died intestate and without any issue, had rendered the issue of ownership insofar
as parcels of land which she claims as her own moot since the parties below are the heirs to her estate. Thus, the RTC regarded Rita as the owner of the said
10 parcels of land and, accordingly, directed that the same be partitioned among her heirs. Nevertheless, the RTC rescinded the donation inter vivos of Lot
No. 4709 and half of Lot No. 4706 in favor of Florante. In rescinding the said donation inter vivos, the RTC explained that:

However, with respect to lot nos. 4709 and 4706 which [Rita] had conveyed to Florante Baylon by way of donation inter vivos, the plaintiffs in their
supplemental pleadings (sic) assailed the same to be rescissible on the ground that it was entered into by the defendant Rita Baylon without the knowledge
and approval of the litigants [or] of competent judicial authority. The subject parcels of lands are involved in the case for which plaintiffs have asked the
Court to partition the same among the heirs of Florentino Baylon and Maximina Elnas.

Clearly, the donation inter vivos in favor of Florante Baylon was executed to prejudice the plaintiffs’ right to succeed to the estate of Rita Baylon in case of
death considering that as testified by Florante Baylon, Rita Baylon was very weak and he tried to give her vitamins x x x. The donation inter vivos executed
by Rita Baylon in favor of Florante Baylon is rescissible for the reason that it refers to the parcels of land in litigation x x x without the knowledge and
approval of the plaintiffs or of this Court. However, the rescission shall not affect the share of Florante Baylon to the estate of Rita Baylon.21

Florante sought reconsideration of the Decision dated October 20, 2005 of the RTC insofar as it rescinded the donation of Lot No. 4709 and half of Lot No.
4706 in his favor.22 He asserted that, at the time of Rita’s death on July 16, 2000, Lot No. 4709 and half of Lot No. 4706 were no longer part of her estate as
the same had already been conveyed to him through a donation inter vivos three years earlier. Thus, Florante maintained that Lot No. 4709 and half of Lot
No. 4706 should not be included in the properties that should be partitioned among the heirs of Rita.

On July 28, 2006, the RTC issued an Order23 which denied the motion for reconsideration filed by Florante.

The CA Decision

On appeal, the CA rendered a Decision24 dated October 26, 2007, the dispositive portion of which reads:

WHEREFORE, the Decision dated October 20, 2005 and Order dated July 28, 2006 are REVERSEDand SET ASIDE insofar as they decreed the
rescission of the Deed of Donation dated July 6, 1997 and the inclusion of lot no. 4709 and half of lot no. 4706 in the estate of Rita Baylon. The case
is REMANDED to the trial court for the determination of ownership of lot no. 4709 and half of lot no. 4706.

SO ORDERED.25

The CA held that before the petitioners may file an action for rescission, they must first obtain a favorable judicial ruling that Lot No. 4709 and half of Lot
No. 4706 actually belonged to the estate of Spouses Baylon and not to Rita. Until then, the CA asserted, an action for rescission is premature. Further, the CA
ruled that the petitioners’ action for rescission cannot be joined with their action for partition, accounting and damages through a mere supplemental
pleading. Thus:

If Lot No. 4709 and half of Lot No. 4706 belonged to the Spouses’ estate, then Rita Baylon’s donation thereof in favor of Florante Baylon, in excess of her
undivided share therein as co-heir, is void. Surely, she could not have validly disposed of something she did not own. In such a case, an action for rescission
of the donation may, therefore, prosper.

If the lots, however, are found to have belonged exclusively to Rita Baylon, during her lifetime, her donation thereof in favor of Florante Baylon is valid. For
then, she merely exercised her ownership right to dispose of what legally belonged to her. Upon her death, the lots no longer form part of her estate as their
ownership now pertains to Florante Baylon. On this score, an action for rescission against such donation will not prosper. x x x.

Verily, before plaintiffs-appellees may file an action for rescission, they must first obtain a favorable judicial ruling that lot no. 4709 and half of lot no. 4706
actually belonged to the estate of Spouses Florentino and Maximina Baylon, and not to Rita Baylon during her lifetime. Until then, an action for rescission is
premature. For this matter, the applicability of Article 1381, paragraph 4, of the New Civil Code must likewise await the trial court’s resolution of the issue
of ownership.

Be that as it may, an action for rescission should be filed by the parties concerned independent of the proceedings below. The first cannot simply be lumped
up with the second through a mere supplemental pleading. 26 (Citation omitted)

The petitioners sought reconsideration27 of the Decision dated October 26, 2007 but it was denied by the CA in its Resolution 28 dated March 6, 2008.

Hence, this petition.

Issue

The lone issue to be resolved by this Court is whether the CA erred in ruling that the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor
of Florante may only be rescinded if there is already a judicial determination that the same actually belonged to the estate of Spouses Baylon.

The Court’s Ruling

The petition is partly meritorious.

Procedural Matters

Before resolving the lone substantive issue in the instant case, this Court deems it proper to address certain procedural matters that need to be threshed out
which, by laxity or otherwise, were not raised by the parties herein.

Misjoinder of Causes of Action

The complaint filed by the petitioners with the RTC involves two separate, distinct and independent actions – partition and rescission. First, the petitioners
raised the refusal of their co-heirs, Florante, Rita and Panfila, to partition the properties which they inherited from Spouses Baylon. Second, in their
supplemental pleading, the petitioners assailed the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 made by Rita in favor of Florante pendente
lite.

The actions of partition and rescission cannot be joined in a single action.

By a joinder of actions, or more properly, a joinder of causes of action is meant the uniting of two or more demands or rights of action in one action, the
statement of more than one cause of action in a declaration. It is the union of two or more civil causes of action, each of which could be made the basis of a
separate suit, in the same complaint, declaration or petition. A plaintiff may under certain circumstances join several distinct demands, controversies or rights
of action in one declaration, complaint or petition.29
The objectives of the rule or provision are to avoid a multiplicity of suits where the same parties and subject matter are to be dealt with by effecting in one
action a complete determination of all matters in controversy and litigation between the parties involving one subject matter, and to expedite the disposition
of litigation at minimum cost. The provision should be construed so as to avoid such multiplicity, where possible, without prejudice to the rights of the
litigants.30

Nevertheless, while parties to an action may assert in one pleading, in the alternative or otherwise, as many causes of action as they may have against an
opposing party, such joinder of causes of action is subject to the condition, inter alia, that the joinder shall not include special civil actions governed by
special rules.31

Here, there was a misjoinder of causes of action. The action for partition filed by the petitioners could not be joined with the action for the rescission of the
said donation inter vivos in favor of Florante. Lest it be overlooked, an action for partition is a special civil action governed by Rule 69 of the Rules of Court
while an action for rescission is an ordinary civil action governed by the ordinary rules of civil procedure. The variance in the procedure in the special civil
action of partition and in the ordinary civil action of rescission precludes their joinder in one complaint or their being tried in a single proceeding to avoid
confusion in determining what rules shall govern the conduct of the proceedings as well as in the determination of the presence of requisite elements of each
particular cause of action.32

A misjoined cause of action, if not severed upon motion of a party or by the court sua sponte, may be adjudicated by the court together with the
other causes of action.

Nevertheless, misjoinder of causes of action is not a ground for dismissal. Indeed, the courts have the power, acting upon the motion of a party to the case or
sua sponte, to order the severance of the misjoined cause of action to be proceeded with separately. 33 However, if there is no objection to the improper joinder
or the court did not motu proprio direct a severance, then there exists no bar in the simultaneous adjudication of all the erroneously joined causes of action.
On this score, our disquisition in Republic of the Philippines v. Herbieto34 is instructive, viz:

This Court, however, disagrees with petitioner Republic in this regard. This procedural lapse committed by the respondents should not affect the jurisdiction
of the MTC to proceed with and hear their application for registration of the Subject Lots.

xxxx

Considering every application for land registration filed in strict accordance with the Property Registration Decree as a single cause of action, then the defect
in the joint application for registration filed by the respondents with the MTC constitutes a misjoinder of causes of action and parties. Instead of a single or
joint application for registration, respondents Jeremias and David, more appropriately, should have filed separate applications for registration of Lots No.
8422 and 8423, respectively.

Misjoinder of causes of action and parties do not involve a question of jurisdiction of the court to hear and proceed with the case. They are not even accepted
grounds for dismissal thereof. Instead, under the Rules of Court, the misjoinder of causes of action and parties involve an implied admission of the court’s
jurisdiction. It acknowledges the power of the court, acting upon the motion of a party to the case or on its own initiative, to order the severance of the
misjoined cause of action, to be proceeded with separately (in case of misjoinder of causes of action); and/or the dropping of a party and the severance of any
claim against said misjoined party, also to be proceeded with separately (in case of misjoinder of parties). 35 (Citations omitted)

It should be emphasized that the foregoing rule only applies if the court trying the case has jurisdiction over all of the causes of action therein
notwithstanding the misjoinder of the same. If the court trying the case has no jurisdiction over a misjoined cause of action, then such misjoined cause of
action has to be severed from the other causes of action, and if not so severed, any adjudication rendered by the court with respect to the same would be a
nullity.

Here, Florante posed no objection, and neither did the RTC direct the severance of the petitioners’ action for rescission from their action for partition. While
this may be a patent omission on the part of the RTC, this does not constitute a ground to assail the validity and correctness of its decision. The RTC validly
adjudicated the issues raised in the actions for partition and rescission filed by the petitioners.

Asserting a New Cause of Action in a Supplemental Pleading

In its Decision dated October 26, 2007, the CA pointed out that the said action for rescission should have been filed by the petitioners independently of the
proceedings in the action for partition. It opined that the action for rescission could not be lumped up with the action for partition through a mere
supplemental pleading.

We do not agree.

A supplemental pleading may raise a new cause of action as long as it has some relation to the original
cause of action set forth in the original complaint.

Section 6, Rule 10 of the Rules of Court reads:

Sec. 6. Supplemental Pleadings. – Upon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit him to serve a
supplemental pleading setting forth transactions, occurrences or events which have happened since the date of the pleading sought to be supplemented. The
adverse party may plead thereto within ten (10) days from notice of the order admitting the supplemental pleading.

In Young v. Spouses Sy,36 this Court had the opportunity to elucidate on the purpose of a supplemental pleading. Thus:

As its very name denotes, a supplemental pleading only serves to bolster or add something to the primary pleading. A supplement exists side by side with the
original. It does not replace that which it supplements. Moreover, a supplemental pleading assumes that the original pleading is to stand and that the issues
joined with the original pleading remained an issue to be tried in the action. It is but a continuation of the complaint. Its usual office is to set up new facts
which justify, enlarge or change the kind of relief with respect to the same subject matter as the controversy referred to in the original complaint.

The purpose of the supplemental pleading is to bring into the records new facts which will enlarge or change the kind of relief to which the plaintiff is
entitled; hence, any supplemental facts which further develop the original right of action, or extend to vary the relief, are available by way of supplemental
complaint even though they themselves constitute a right of action.37 (Citations omitted and emphasis ours)

Thus, a supplemental pleading may properly allege transactions, occurrences or events which had transpired after the filing of the pleading sought to be
supplemented, even if the said supplemental facts constitute another cause of action.
Admittedly, in Leobrera v. Court of Appeals,38 we held that a supplemental pleading must be based on matters arising subsequent to the original pleading
related to the claim or defense presented therein, and founded on the same cause of action. We further stressed therein that a supplemental pleading may not
be used to try a new cause of action.

However, in Planters Development Bank v. LZK Holdings and Development Corp.,39 we clarified that, while a matter stated in a supplemental complaint
should have some relation to the cause of action set forth in the original pleading, the fact that the supplemental pleading technically states a new cause of
action should not be a bar to its allowance but only a matter that may be considered by the court in the exercise of its discretion. In such cases, we stressed
that a broad definition of "cause of action" should be applied.

Here, the issue as to the validity of the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 made by Rita in favor of Florante is a new cause of
action that occurred after the filing of the original complaint. However, the petitioners’ prayer for the rescission of the said donation inter vivos in their
supplemental pleading is germane to, and is in fact, intertwined with the cause of action in the partition case. Lot No. 4709 and half of Lot No. 4706 are
included among the properties that were sought to be partitioned.

The petitioners’ supplemental pleading merely amplified the original cause of action, on account of the gratuitous conveyance of Lot No. 4709 and half of
Lot No. 4706 after the filing of the original complaint and prayed for additional reliefs, i.e., rescission. Indeed, the petitioners claim that the said lots form
part of the estate of Spouses Baylon, but cannot be partitioned unless the gratuitous conveyance of the same is rescinded. Thus, the principal issue raised by
the petitioners in their original complaint remained the same.

Main Issue: Propriety of Rescission

After having threshed out the procedural matters, we now proceed to adjudicate the substantial issue presented by the instant petition.

The petitioners assert that the CA erred in remanding the case to the RTC for the determination of ownership of Lot No. 4709 and half of Lot No. 4706. They
maintain that the RTC aptly rescinded the said donation inter vivos of Lot No. 4709 and half of Lot No. 4706 pursuant to Article 1381(4) of the Civil Code.

In his Comment,40 Florante asserts that before the petitioners may file an action for rescission, they must first obtain a favorable judicial ruling that Lot No.
4709 and half of Lot No. 4706 actually belonged to the estate of Spouses Baylon. Until then, Florante avers that an action for rescission would be premature.

The petitioners’ contentions are well-taken.

The resolution of the instant dispute is fundamentally contingent upon a determination of whether the donation inter vivos of Lot No. 4709 and half of Lot
No. 4706 in favor of Florante may be rescinded pursuant to Article 1381(4) of the Civil Code on the ground that the same was made during the pendency of
the action for partition with the RTC.

Rescission is a remedy to address the damage or injury caused to the contracting parties or third persons.

Rescission is a remedy granted by law to the contracting parties and even to third persons, to secure the reparation of damages caused to them by a contract,
even if it should be valid, by means of the restoration of things to their condition at the moment prior to the celebration of said contract.41 It is a remedy to
make ineffective a contract, validly entered into and therefore obligatory under normal conditions, by reason of external causes resulting in a pecuniary
prejudice to one of the contracting parties or their creditors.42

Contracts which are rescissible are valid contracts having all the essential requisites of a contract, but by reason of injury or damage caused to either of the
parties therein or to third persons are considered defective and, thus, may be rescinded.

The kinds of rescissible contracts, according to the reason for their susceptibility to rescission, are the following: first, those which are rescissible because of
lesion or prejudice;43 second, those which are rescissible on account of fraud or bad faith;44 and third, those which, by special provisions of law,45 are
susceptible to rescission.46

Contracts which refer to things subject of litigation is rescissible pursuant to Article 1381(4) of the Civil Code.

Contracts which are rescissible due to fraud or bad faith include those which involve things under litigation, if they have been entered into by the defendant
without the knowledge and approval of the litigants or of competent judicial authority. Thus, Article 1381(4) of the Civil Code provides:

Art. 1381. The following contracts are rescissible:

xxxx

(4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of
competent judicial authority.

The rescission of a contract under Article 1381(4) of the Civil Code only requires the concurrence of the following: first, the defendant, during the pendency
of the case, enters into a contract which refers to the thing subject of litigation; and second, the said contract was entered into without the knowledge and
approval of the litigants or of a competent judicial authority. As long as the foregoing requisites concur, it becomes the duty of the court to order the
rescission of the said contract.

The reason for this is simple. Article 1381(4) seeks to remedy the presence of bad faith among the parties to a case and/or any fraudulent act which they may
commit with respect to the thing subject of litigation.

When a thing is the subject of a judicial controversy, it should ultimately be bound by whatever disposition the court shall render. The parties to the case are
therefore expected, in deference to the court’s exercise of jurisdiction over the case, to refrain from doing acts which would dissipate or debase the thing
subject of the litigation or otherwise render the impending decision therein ineffectual.

There is, then, a restriction on the disposition by the parties of the thing that is the subject of the litigation. Article 1381(4) of the Civil Code requires that any
contract entered into by a defendant in a case which refers to things under litigation should be with the knowledge and approval of the litigants or of a
competent judicial authority.

Further, any disposition of the thing subject of litigation or any act which tends to render inutile the court’s impending disposition in such case, sans the
knowledge and approval of the litigants or of the court, is unmistakably and irrefutably indicative of bad faith. Such acts undermine the authority of the court
to lay down the respective rights of the parties in a case relative to the thing subject of litigation and bind them to such determination.
It should be stressed, though, that the defendant in such a case is not absolutely proscribed from entering into a contract which refer to things under litigation.
If, for instance, a defendant enters into a contract which conveys the thing under litigation during the pendency of the case, the conveyance would be valid,
there being no definite disposition yet coming from the court with respect to the thing subject of litigation. After all, notwithstanding that the subject thereof
is a thing under litigation, such conveyance is but merely an exercise of ownership.

This is true even if the defendant effected the conveyance without the knowledge and approval of the litigants or of a competent judicial authority. The
absence of such knowledge or approval would not precipitate the invalidity of an otherwise valid contract. Nevertheless, such contract, though considered
valid, may be rescinded at the instance of the other litigants pursuant to Article 1381(4) of the Civil Code.

Here, contrary to the CA’s disposition, the RTC aptly ordered the rescission of the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor of
Florante. The petitioners had sufficiently established the presence of the requisites for the rescission of a contract pursuant to Article 1381(4) of the Civil
Code. It is undisputed that, at the time they were gratuitously conveyed by Rita, Lot No. 4709 and half of Lot No. 4706 are among the properties that were
the subject of the partition case then pending with the RTC. It is also undisputed that Rita, then one of the defendants in the partition case with the RTC, did
not inform nor sought the approval from the petitioners or of the RTC with regard to the donation inter vivos of the said parcels of land to Florante.

Although the gratuitous conveyance of the said parcels of land in favor of Florante was valid, the donation inter vivos of the same being merely an exercise
of ownership, Rita’s failure to inform and seek the approval of the petitioners or the RTC regarding the conveyance gave the petitioners the right to have the
said donation rescinded pursuant to Article 1381(4) of the Civil Code.

Rescission under Article 1381(4) of the Civil Code is not preconditioned upon the judicial determination as
to the ownership of the thing subject of litigation.

In this regard, we also find the assertion that rescission may only be had after the RTC had finally determined that the parcels of land belonged to the estate
of Spouses Baylon intrinsically amiss. The petitioners’ right to institute the action for rescission pursuant to Article 1381(4) of the Civil Code is not
preconditioned upon the RTC’s determination as to the ownership of the said parcels of land.

It bears stressing that the right to ask for the rescission of a contract under Article 1381(4) of the Civil Code is not contingent upon the final determination of
the ownership of the thing subject of litigation. The primordial purpose of Article 1381(4) of the Civil Code is to secure the possible effectivity of the
impending judgment by a court with respect to the thing subject of litigation. It seeks to protect the binding effect of a court’s impending adjudication vis-à-
vis the thing subject of litigation regardless of which among the contending claims therein would subsequently be upheld. Accordingly, a definitive judicial
determination with respect to the thing subject of litigation is not a condition sine qua non before the rescissory action contemplated under Article 1381(4) of
the Civil Code may be instituted.

Moreover, conceding that the right to bring the rescissory action pursuant to Article 1381(4) of the Civil Code is preconditioned upon a judicial
determination with regard to the thing subject litigation, this would only bring about the very predicament that the said provision of law seeks to obviate.
Assuming arguendo that a rescissory action under Article 1381(4) of the Civil Code could only be instituted after the dispute with respect to the thing subject
of litigation is judicially determined, there is the possibility that the same may had already been conveyed to third persons acting in good faith, rendering any
judicial determination with regard to the thing subject of litigation illusory. Surely, this paradoxical eventuality is not what the law had envisioned.

Even if the donation inter vivos is validly rescinded, a determination as to the ownership of the subject parcels of land is still necessary.

Having established that the RTC had aptly ordered the rescission of the said donation inter vivos in favor of Florante, the issue that has to be resolved by this
Court is whether there is still a need to determine the ownership of Lot No. 4709 and half of Lot No. 4706.

In opting not to make a determination as to the ownership of Lot No. 4709 and half of Lot No. 4706, the RTC reasoned that the parties in the proceedings
before it constitute not only the surviving heirs of Spouses Baylon but the surviving heirs of Rita as well. As intimated earlier, Rita died intestate during the
pendency of the proceedings with the RTC without any issue, leaving the parties in the proceedings before the RTC as her surviving heirs. Thus, the RTC
insinuated, a definitive determination as to the ownership of the said parcels of land is unnecessary since, in any case, the said parcels of land would
ultimately be adjudicated to the parties in the proceedings before it.

We do not agree.

Admittedly, whoever may be adjudicated as the owner of Lot No. 4709 and half of Lot No. 4706, be it Rita or Spouses Baylon, the same would ultimately be
transmitted to the parties in the proceedings before the RTC as they are the only surviving heirs of both Spouses Baylon and Rita. However, the RTC failed
to realize that a definitive adjudication as to the ownership of Lot No. 4709 and half of Lot No. 4706 is essential in this case as it affects the authority of the
RTC to direct the partition of the said parcels of land. Simply put, the RTC cannot properly direct the partition of Lot No. 4709 and half of Lot No. 4706 until
and unless it determines that the said parcels of land indeed form part of the estate of Spouses Baylon.

It should be stressed that the partition proceedings before the RTC only covers the properties co-owned by the parties therein in their respective capacity as
the surviving heirs of Spouses Baylon. Hence, the authority of the RTC to issue an order of partition in the proceedings before it only affects those properties
which actually belonged to the estate of Spouses Baylon.

In this regard, if Lot No. 4709 and half of Lot No. 4706, as unwaveringly claimed by Florante, are indeed exclusively owned by Rita, then the said parcels of
land may not be partitioned simultaneously with the other properties subject of the partition case before the RTC. In such case, although the parties in the
case before the RTC are still co-owners of the said parcels of land, the RTC would not have the authority to direct the partition of the said parcels of land as
the proceedings before it is only concerned with the estate of Spouses Baylon.

WHEREFORE, in consideration of the foregoing disquisitions, the petition is PARTIALLY GRANTED. The Decision dated October 26, 2007 issued by
the Court of Appeals in CA-G.R. CV No. 01746 is MODIFIED in that the Decision dated October 20, 2005 issued by the Regional Trial Court, Tanjay City,
Negros Oriental, Branch 43 in Civil Case No. 11657, insofar as it decreed the rescission of the Deed of Donation dated July 6, 1997 is
hereby REINSTATED. The case is REMANDED to the trial court for the determination of the ownership of Lot No. 4709 and half of Lot No. 4706 in
accordance with this Decision.

SO ORDERED.
G.R. No. L-40428 December 17, 1975

FRANCISCO T. KOH, petitioner,

vs.
COURT OF APPEALS, HON. MANUEL V. ROMILLO, JR., District Judge, Court of First Instance of Ilocos Norte, Branch I, and JOSE P.
COLOMA, respondents.

Koh Law Offices for petitioner.

Ferdinand A. Valentin for respondents.

ESGUERRA, J.:

Petition for certiorari with writ of preliminary injunction to review and reverse the decision of the Court of Appeals (Eighth Division) in CA-G.R. No. SP-
03322, entitled "Francisco T. Koh, petitioner vs. Jose P. Coloma and Hon. Manuel V. Romillo, Jr., Judge of First Instance of Ilocos Norte, Branch I,
respondents". The appellate Court found "no grave abuse of discretion on the part of the respondent judge in not dismissing the complaint on the ground of
improper venue"; dismissed the petition for injunction and lifted the writ of preliminary injunction it previously issued against the respondents.

The undisputed facts contained in petitioner's brief as adopted in respondents' brief are:

On February 21, 1974, private respondent (Jose Coloma) filed a Complaint for damages against the herein petitioner in the Court of First
Instance of Ilocos Norte, Branch I, the same being docketed as Civil Case No. 5011-1 (Annex A of Amended Petition). On April 8, 1974,
petitioner filed a Motion to Dismiss the said Complaint on the grounds that the same fails to state a sufficient cause of action and that
venue has been improperly laid. (Annex B of Amended Petition) On May 8, 1974, petitioner filed a Manifestation before the lower court
apprising it that the copy of the Motion To Dismiss sent to private respondent (counsel for private respondent did not specify any address
in the Complaint other than his alleged address in San Nicolas, Ilocos Norte) was returned unserved by the Bureau of Post for the reason
that he was unknown in the said address. (San Nicolas, Ilocos Norte) Annexes "C" and "D" of Amended Petition.

On May 28, 1974, petitioner's counsel received a Notice from the lower court setting the hearing of the Motion To Dismiss for June 4,
1974. In response to this notice, petitioner on May 31, 1974 filed a Manifestation informing the lower court that he, was submitting the
motion without further arguments. Three (3) days before the scheduled hearing of the Motion to Dismiss, specifically on June 11, 1974,
counsel for petitioner received a copy of private respondents' opposition to his Motion To Dismiss. Finding that the private respondents
pleading required comment, on June 18, 1974, petitioner herein filed a Reply thereto (Annex G of Amended Petition).

On July 9, 1974, petitioner, thru counsel, received a copy of the Order of the lower court denying the Motion To Dismiss (Annex A of
Amended Petition. However from the registry return card of the corresponding pleadings, it was apparent that the Order denying our
Motion To Dismiss dated June 25, 1974 of the lower court aforementioned did not consider the facts and exhibits reflected in petitioner's
Reply To Opposition To Motion To Dismiss inasmuch as the same was received by the lower court on June 27, 1974 (2 days later) after
the Order had been issued (the petitionees pleadings in the said case were all filed with the court thru registered mail special delivery due
to the distance involved). For this reason, and within the period authorized by law, on July 11, 1974 petitioner filed a Motion For
Reconsideration of the said Order reiterating therein the matter stated in his Reply to Opposition which was not considered by the lower
court (Annex I of Amended Petition). This Motion for Reconsideration was opposed by private respondent.

In an Order dated July 19, 1974, the lower court issued an Order denying the Motion for Reconsideration filed by the petitioner.

From the Orders of the lower court dated June 25, 1974 and July 19, 1974, the petitioner herein instituted certiorari proceedings with
preliminary injunction before the Court of Appeal the same being docketed as CA-G.R. No. L-03322. For failure of the petitioner to
attach thereto certified true copies of the Orders appealed from by reason of their unavailability, the Court of Appeals dismissed the said
petition. However, on September 5, 1974, petitioner herein filed a Motion for Reconsideration of the resolution of the Court of Appeals
and on September 24, 1974, the said Motion was favorably acted upon and the petition was given due course. On October 9, 1974, the
Court of Appeals issued a writ of preliminary injunction in the said case enjoining the Court of First Instance of Ilocos Norte from further
proceeding thereon.

After the issues on the peticion were joined by the filing of the ANSWER for the respondents dated October 15, 1974, the case was set
for oral arguments after which the parties were required to submit, simultaneously, their respective memoranda. Only petitioner herein
filed his Memorandum in support of his petition. Private respondents did not submit their memorandum.

In a resolution dated March 19, 1975, the Court of Appeals dismiss the petition for certiorari and dissolved the writ of preliminary
injunction.

Hence this petition for review and reversal of said resolution of March 19, 1975.

The only issue raised before Us is whether or not respondent Appellate Court erred and thus committed grave abuse of discretion in dismissing the petition
for certiorari filed by petitioner before it; in holding that private respondent Jose P. Coloma is a resident of San Nicolas, Ilocos Norte, and thereby holding
that venue of the action before the Court of First Instance of Ilocos Norte was proper, and in finding that the complaint of private respondent Coloma in the
trial court recites a sufficient cause of action.

Respondent Appellate Court predicted its decision on the finding that despite the petitioner's receipt of a copy of the opposition to the petitioner's motion to
dismiss filed by private respondent Coloma in the trial court, petitioner failed to appear during the healing of his notion to dismiss the complaint on June 14,
1974; that "the parties were given the opportunity to adduce proofs and advance arguments to support their respective sides and on the basis of whatever were
adduced during the hearing, it rendered a ruling in the exercise of its jurisdiction; "that" the lower court in its ruling cited the evidence it relied upon and
doctrines which supported and justified its findings and conclusions;" that "considering that there is no showing of whimsical and capricious exercise of
discretion, it could be said that if ever there was an error committed by the respondent judge, it was an error of judgment in the exercise of his discretion
which is correctable by appeal;" and that it concurred with the lower court's order denying the motion to dismiss which is anchored on the argument that the
question of residence of a person is one of intent. In the instant case, the trial Court concluded that San Nicolas, Ilocos Norte, is the residencia of plaintiff as
contemplated in paragraph (b) Section 2 of Rule 4.

Under ordinary circumstances the foregoing reasoning and findings of the trial court and the respondent Appellate Court could be considered highly tenable
and justifiably defensible, but We simply cannot ignore petitioner's allegation in his motion to dismiss filed in the trial court that "this clearly is a nuisance
action brought before the Honorable Court to require the defendant (petitioner) to travel and appear in Laoag, Ilocos Norte" as well as the background of the
present case and compels Us to delve deeper into the possible motives of private respondent in choosing as situs for his claim for damages against petitioner
the rather relatively far Court of First Instance of Ilocos Norte.

It is clear that Civil Case No. 5011 (for Damages) (Annex "A" to this Petition) filed by private respondent Coloma in the Court of First Instance of Ilocos
Norte, wherein Coloma is asking for damages to the tune of P173,000.00 from petitioner for alleged "malicious, baseless, and unfounded criminal complaint"
filed by petitioner against Coloma, arose from the following alleged incidents, to wit:

That sometime on May 21, 1970, the defendant (petitioner) Francisco T. Koh filed before the Municipal Court of Mandaluyong, Rizal, a
complaint of Forcible Entry and Detainer against the plaintiff (private respondent Coloma) for the possession of a house and lot located at
480, Barangka Drive, Mandaluyong, Rizal, on which plaintiff (Coloma) and his family were all residing,

That to avert the ejectment of plaintiff (Coloma) and his family from the aforecited house, plaintiff (Coloma) and defendant (petitioner)
entered into a compromise settlement in court whereby plaintiff (Coloma) will pay to defendant (petitioner) the total amount of
P3,125.00,

That to insure the payment of the aforecited obligation plaintiff (Coloma) issued to defendant (petitioner) a Manila Banking Corporation
check No. 17010812 post-dated February 27, 1971;

That in post-dating the aforecited check, plaintiff (Coloma) explicitly explained to defendant (petitioner) that there is not sufficient funds
at the time in the Bank to cover the amount the necessity to post- date it with the expectation that Plaintiff (Coloma) will deposit the
necessary amount on or before the due date;

That for certain beyond the control of plaintiff (Coloma), he failed to deposit the required amount on the date due, so that defendant
(petitioner) Francisco T. Koh forcibly the plaintiff and his family from their aforecited residence the following day, February 28, 1971;

That defendant (petitioner), still not contented in having successfully evicted plaintiff (Coloma) mo his family from their residence,
defendant (petitioner) filed a criminal complaint against the plaintiff (Coloma) before the Fiscal's Office at Pasig, Rizal, over the Manila
Banking Corporation check in question, which complaint was later filed before the Court of First Instance of Rizal;

That defendant personally applied and actively participated in the criminal case as a private prosecutor in collaboration with the
prosecuting fiscal;

That the Court of First Instance of Rizal, upon motion of plaintiff (Coloma) dismissed said criminal complaint in its order dated Sept. 26,
1972.

Private respondent Coloma convinced the trial court, although he admitted that he is presently residing at No. 57 K-6th Street, Kamias, Quezon City, that he
could be considered a legal resident domiciled at San Nicolas, Ilocos Norte, because he was born and he grew up there; that his parents and his brothers and
sisters still live there; that their ancestral home and lands are situated there; that he studied in Ilocos Norte up to his graduation in the Ilocos Norte High
School; that if ever he came to Manila, it was for the purpose of pursuing a college carrer; that he goes home time and again to oversee their properties'
harvests as he is the oldest; that if he is staying in Quezon City now, it is because his wife is a government employee as staff nurse in the Philippine General
Hospital; and after her retirement, he and his family intends to return to his hometown of San Nicolas, Ilocos Norte, and establish his permanent home there.

On the other hand, petitioner contends that on May 8, 1974, he filed a Manifestation before the lower court apprising it that the copy of the motion to dismiss
was sent to private respondent Coloma (counsel for Coloma did not specify any address in the complaint) in his alleged address of San Nicolas, Ilocos Norte,
but the same was returned unserved by the Bureau of Posts for the reason that he (Coloma) was unknown in the said address of San Nicolas, Ilocos Norte
(Annex "C" and "D" of Amended Petition); that in pleadings under oath filed in several judicial proceedings involving petitioner and private respondent, the
latter asserted his actual and present residence as either 486 Barangka Drive, Mandaluyong, Rizal or No. 57, K-6th Kamias, Quezon City, Rizal, to wit:

1. Jose P. Coloma vs. Francisco T. Koh, Administrative Case No. 1060, Supreme Court;

2. Jose P. Coloma vs. Francisco T. Koh, Civil Case No. 14067, C.F.I. Rizal, Branch XI;

3. Jose P. Coloma, et al. vs. Francisco T. Koh, Civil Case No. 15450, C.F.I. Rizal, Branch VI;

4. Jose P. Coloma, et al. vs. Hon. Cesar C. Cruz, et al., C.F.I. Rizal, Civil Case No. 14687;

5. Jose P. Coloma, et al., vs. Hon. Presiding Justice Salvador V. Esguerra, et al., Supreme Court, G.R. No. L-35945;

6. Jose P. Coloma vs. Hon. Cesar C. Cruz, et al., C.F.I. Rizal, Civil Case No. 14140;

7. Jose P. Coloma, et al. vs Hon. V.M. Ruiz, et al., C.A.-G.R. No. SP-00329;

8. Francisco T. Koh vs. Hon. Guardson Lood, et al., C.A.-G.R. No.

00785-R;

9. Jose P. Coloma vs. Hon. Juan Enriquez, et al., G.R. No. L-36425;

that both private respondent Coloma and his wife Crisanta A. Coloma are registered voters in the Greater Manila Area, it appearing in Jose P. Coloma's
Voter's I.D. No. A- 4941010 and Mrs. Coloma's Voter's I.D. No. A-4941009 that they are residents of No. 486 Barangka Drive, Mandaluyong, Rizal; that the
complaint filed against petitioner for damages in the C. F. 1. of Ilocos Norte, was prepared in Manila, signed by a Manila lawyer, verified in Manila by
private respondent who showed his Residence Certificate issued in Manila (R.C.A-324643, issued on March 8, 1973, in Manila); that the filing of the
complaint for damages before the C.F.I. of Ilocos Norte was "purely for the purpose of harrassment and that venue of the action was improperly laid".

It is fundamental in the law governing venue of actions (Rule 4 of the Rules of Court) that the situs for bringing real and personal civil actions are fixed by
the rules to attain the greatest convenience possible to the parties litigants by taking into consideration the maximum accessibility to them of the courts of
justice. It is likewise undeniable that the term domicile is not exactly synonymous in legal contemplation with the term residence, for it is a established
principle in Conflict of Laws that domicile refers to the relatively more permanent abode of a person while residenceapplies to a temporary stay of a person
in a given place. In fact this distinction is very well emphasized in those cases where the Domiciliary Theory must necessarily supplant the Nationality
Theory in cases involving stateless persons.

This Court held in the case of Uytengsu vs. Republic, 50 O.G. 4781, October, 1954, reversing its previous stand in Larena v. Ferrer, 61 Phil. 36 and Nuval v.
Guray 52 Phil. 645, that —
 There is a difference between domicile and residence. Residence is used to indicate a place of abode, whether permanent or temporary;
domicile, denotes a fixed permanent residence to which when absent, one has the in ten petition of returning. A man may have a
residence in one place and a domicile in another. Residence is not domicile, but domicile is residence coupled with the intention to
remain for an unlimited time. A man can have but one domicile for one and the same purpose at any time, but he may have numerous
places of residence. His place of residence generally is his place of domicile, but is not by any means, necessarily so since no length of
residence without intention of remaining will constitute domicile. (Emphasis supplied)

We note that the law on venue in Courts of First Instance (Section 2, of Rule 4, Rules of Court) in referring to the parties utilizes the words "resides or may
be found," and not "is domiciled," thus:

Sec. 2(b) Personal actions — All other actions may be commenced and tried where the defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. (Emphasis supplied)

Applying the foregoing observation to the present case, We are fully convinced that private respondent Coloma's protestations of domicile in San Nicolas,
Ilocos, Norte, based on his manifested intention to return there after the retirement of his wife from government service to justify his bringing of an action for
damages against petitioner in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount importance is where he actually resided or
where he may be found at the time he brought the action, to comply substantially with the requirements of Sec. 2 (b) of Rule 4, Rules of Court, on venue of
personal actions. The admission of private respondent Coloma that when he brought the action for damages against petitioner in the C.F.I. of Ilocos Norte, he
was "residing at No. 57 K-6th Street, Kamias, Quezon City" is to Our mind absolutely fatal to all his contentions of good faith in bringing that action in a
distant place and at the same time quite revealing of his motive for doing so, when We take into consideration the basis of the action for damages against
petitioner which is the criminal prosecution for estafa against private respondent Coloma arising from a bank check he used to pay petitioner and was
dishonored for lack of funds; respondent Coloma's proven acts in having the civil complaint for damages prepared in Manila by a Manila lawyer, verified in
Manila and filed in Ilocos Norte C.F.I. and the numerous cases between petitioner and respondent Coloma in this Court, the Court of Appeals and the Rizal
Courts of First Instance wherein respondent Coloma swore under oath that he is a resident of 486 Barangka Drive, Mandaluyong, Rizal and No. 57, K-6th
Kamuning, Quezon City.

An examination of the cause of action contained in the civil complaint for damages filed by respondent Coloma against petitioner in Civil Case No. 5011 of
the Court of First Instance of Ilocos Norte raises lingering doubts in Our mind as to the existence of a valid and justified cause of action, for it prays for
P173,000.00 worth of alleged damages (actual, moral exemplary and attorney's fees) based on an alleged "malicious, baseless, and unfounded complaint"
filed by petitioner against respondent Coloma, when it could be seen from the civil complaint itself that the basis of the action for damages is the criminal
prosecution of respondent Coloma for the crime of estafa in the C.F.I. of Rizal because of the complaint of petitioner arising from the post-dated check
admittedly issued by respondent Coloma which was dishonored for lack of funds. It can readily be seen from the record that it was the Fiscal of Rizal who
filed the criminal complaint for estafa against respondent Coloma after preliminary investigation when the fiscal was convinced of the existence of a prima
facie case against Coloma. While it is true that petitioner was the offended party because the dishonored check was issued in his favor and that he acted as
private prosecutor when the case was filed in the C.F.I. of Rizal because there was no separate civil action filed against Coloma arising from the same cause
of alleged estafa, it certainly cannot be said that as offended party in the criminal case and by initiating the same criminal case against respondent Coloma he
(petitioner) was the one who filed the "malicious, baseless and unfounded complaint" against private respondent Coloma. To establish the filing of the
criminal case against Coloma by the Fiscal of Rizal as "malicious" is highly problematical because the Fiscal of Rizal conducted a preliminary investigation
on the same and if he in the exercise of his quasi-judicial duty believed there was a prima facie case against respondent Coloma that made him file the case,
his act cannot be called "malicious". We note here that the petitioner was not the one who filed the criminal case against the respondent Coloma, the former
being merely the offended party. The criminal complaint against respondent Coloma could hardly be termed "baseless and unfounded" because he himself
admitted that he issued a post-dated check that was dishonored. If the criminal complaint against him was dismiss by the C.F.I. of Rizal upon his own motion
and perchance by some reason of technicality or by reason of reasonable doubt, respondent Coloma is by no means absolved from the civil liability of
refunding the amount written in the dishonored check to the petitioner. The logical conclusion that could be derived from all the foregoing is that the criminal
complaint filed against respondent Coloma for Estafa by the Fiscal of Rizal is by no means "malicious", "baseless", and "unfounded" and, therefore, the
action for damages is without any basis and that respondent Coloma's civil complaint for damages filed in the C.F.I. of Ilocos Norte was without sufficient
cause of action.

We observe in the examination of the record of this case, that private respondent Coloma can go to the extent of resorting to other means while this case
pending in the respondent Court of Appeals to find a solution to another aspect of the raging controversy between petitioner and private respondent. As a
result of respondent Coloma's filing of a complaint for damages (Civil Case No. 5011) against petitioner in the C.F.I. of Ilocos Norte, wherein respondent
Coloma alleged that "he is a resident of the Municipality of San Nicolas, Province of Ilocos Norte," Petitioner filed in the Fiscal's Office of Manila a case of
perjury against respondent Coloma and the Investigating Fiscal in his resolution believed in the existence of a prima facie case against him. Respondent
Coloma was able to get a directive from the Secretary of Justice, dated Sept. 3, 1974, reversing the findings of the Investigating Fiscal and instructing the
City Fiscal of Manila to have the case "dismissed, immediately upon receipt hereof". At any rate, We are convinced that the misunderstanding between
petitioner and private respondent Coloma has gone to such an extent that it would not be surprising for respondent Coloma to be motivated by vengeance
when he filed his action for damages against the petitioner in the C.F.I. of Ilocos Norte in order to get even with and impose all kinds of inconveniences on
the petitioner. Otherwise,' it would have been easier and very much more convenient for both parties if the civil action for damages against petitioner had
been filed either in the C.F.I. of Quezon City or Pasig, Rizal, because both petitioner and private respondent are admittedly residing within the greater Manila
area.

WHEREFORE, the decision of the respondent Appellate Court is hereby reversed; the Orders dated June 25, 1974, and July 19, 1974, in Civil Case No.
5011-1 of the Court of the First Instance of Ilocos Norte are set aside; the complaint in the aforementioned case is hereby dismissed for improper venue and
lack of sufficient cause of action, and the respondent judge of the Court of First Instance of Ilocos Norte or his successor in office is restrained from further
proceeding with the hearing of said case.

With costs against private respondent Coloma.

SO ORDERED.
G.R. No. 167545 August 17, 2011

ATIKO TRANS, INC. and CHENG LIE NAVIGATION CO., LTD., Petitioners,
vs.
PRUDENTIAL GUARANTEE AND ASSURANCE, INC., Respondent.

DECISION

DEL CASTILLO, J.:

Where service of summons upon the defendant principal is coursed thru its co-defendant agent, and the latter happens to be a domestic corporation, the rules
on service of summons upon a domestic private juridical entity1must be strictly complied with. Otherwise, the court cannot be said to have acquired
jurisdiction over the person of both defendants. And insofar as the principal is concerned, such jurisdictional flaw cannot be cured by the agent’s subsequent
voluntary appearance.

This Petition for Review on Certiorari assails the December 10, 2004 Decision 2 of the Court of Appeals (CA) in CA-G.R. SP No. 82547 which affirmed the
April 8, 2003 Decision3 of the Regional Trial Court (RTC), Branch 150, Makati City. Said Decision of the RTC affirmed the August 6, 2002 Decision4 of the
Metropolitan Trial Court (MeTC), Branch 63, Makati City, which disposed as follows:

WHEREFORE, judgment is rendered declaring defendants Cheng Lie Navigation Co., Ltd. and Atiko Trans, Inc. solidarily liable to pay plaintiff Prudential
Guarantee & Assurance, Inc. the following amounts:

1. ₱205,220.97 as actual damages with interest of 1% per month from 14 December 1999 until full payment;

2. ₱10,000.00 as Attorney’s fees; and

3. Costs of suit.

SO ORDERED.5

Likewise assailed is the CA’s Resolution6 dated March 16, 2005 which denied the Motion for Reconsideration of the said December 10, 2004 Decision.

Factual Antecedents

On December 11, 1998, 40 coils of electrolytic tinplates were loaded on board M/S Katjana in Kaohsiung, Taiwan for shipment to Manila. The shipment was
covered by Bill of Lading No. KNMNI-151267 issued by petitioner Cheng Lie Navigation Co., Ltd. (Cheng Lie) with Oriental Tin Can & Metal Sheet
Manufacturing Co., Inc. (Oriental) as the notify party. The cargoes were insured against all risks per Marine Insurance Policy No. 20RN-18749/99 issued by
respondent Prudential Guarantee and Assurance, Inc. (Prudential).

On December 14, 1998, M/S Katjana arrived in the port of Manila. Upon discharge of the cargoes, it was found that one of the tinplates was damaged,
crumpled and dented on the edges. The sea van in which it was kept during the voyage was also damaged, presumably while still on board the vessel and
during the course of the voyage.

Oriental then filed its claim against the policy. Satisfied that Oriental’s claim was compensable, Prudential paid Oriental ₱205,220.97 representing the
amount of losses it suffered due to the damaged cargo.

Proceedings before the Metropolitan Trial Court

On December 14, 1999, Prudential filed with the MeTC of Makati City a Complaint 8 for sum of money against Cheng Lie and Atiko Trans, Inc. (Atiko). In
addition to the above undisputed facts, Prudential alleged that:

1. Plaintiff (Prudential) is a domestic insurance corporation duly organized and existing under the laws of the Philippines with office address at
Coyiuto House, 119 Carlos Palanca[,] Jr. St., Legaspi Village, Makati City;

2. Defendant Cheng Lie Navigation Co. Ltd., is [a] foreign shipping company doing business in the Philippines [thru] its duly authorized shipagent
defendant Atiko Trans Inc. which is a domestic corporation duly established and created under the laws of the Philippines with office address at 7th
Floor, Victoria Bldg., United Nation[s] Ave., Ermita, Manila, where both defendants may be served with summons and other court processes;

3. At all times material to the cause of action of this complaint, plaintiff was and still is engaged in, among others, marine insurance business;
Whereas Defendant Cheng Lie Navigation Co. Ltd. was and still is engaged in, among others, shipping, transportation and freight/cargo forwarding
business, and as such, owned, operated and/or chartered the ocean going vessel M/S "Katjana" as common carrier to and from any Philippine [port]
in international trade [thru] its duly authorized shipagent defendant Atiko Trans Inc. (Both defendants are hereinafter referred to as the
"CARRIER");

xxxx

9. Plaintiff, as cargo-insurer and upon finding that the consignee’s insurance claim was in order and compensable, paid the latter’s claim in the
amount of ₱205,220.97 under and by virtue of the aforesaid insurance policy, thereby subrogating herein plaintiff to all the rights and causes of
action appertaining to the consignee against the defendants;9

On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default, 10 alleging among others that on March 1, 2000 a copy of the summons was
served upon petitioners thru cashier Cristina Figueroa and that despite receipt thereof petitioners failed to file any responsive pleading. Acting on the motion,
the MeTC issued an Order11declaring Cheng Lie and Atiko in default and allowing Prudential to present its evidence ex-parte.

On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a Notice of Appeal12 dated November 4, 2002.

Proceedings before the Regional Trial Court and the Court of Appeals

In its Memorandum of Appeal,13 Atiko argued that Prudential failed to prove the material allegations of the complaint. Atiko asserted that Prudential failed to
prove by preponderance of evidence that it is a domestic corporation with legal personality to file an action; that Cheng Lie is a private foreign juridical
entity operating its shipping business in the Philippines thru Atiko as its shipagent; that Cheng Lie is a common carrier, which owns and operates M/S
Katjana; that Prudential was subrogated to the rights of Oriental; and, that Atiko can be held solidarily liable with Cheng Lie.
Although assisted by the same counsel, Cheng Lie filed its own Memorandum of Appeal 14 maintaining that the MeTC never acquired jurisdiction over its
person.

On April 8, 2003, the RTC rendered its Decision dismissing the appeal and affirming the Decision of the MeTC. Atiko and Cheng Lie challenged the RTC
Decision before the CA via a Petition for Review15 under Rule 42 of the Rules of Court but the appellate court affirmed the RTC’s Decision.

Hence, this petition.

Issues

In their Memorandum,16 petitioners raised the following issues:

1. WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY MAKATI RTC AND THE COURT OF APPEALS IS NULL
AND VOID FOR FAILURE TO ACQUIRE JURISDICTION OVER THE PERSONS OF THE PETITIONERS-DEFENDANTS CONSIDERING THAT
THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE 14 OF THE RULES OF COURT.

2. WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE MATERIAL ALLEGATIONS IN THE COMPLAINT EVEN
IN DEFAULT JUDGMENT OR WHETHER OR NOT IN DEFAULT JUDGMENT, ALL ALLEGATIONS IN THE COMPLAINT ARE DEEMED
CONTROVERTED, HENCE, MUST BE PROVED BY COMPETENT EVIDENCE.

2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS LEGAL PERSONALITY TO SUE EVEN IN DEFAULT
JUDGMENT.

2.2. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE THAT PETITIONER-DEFENDANT ATIKO IS THE

SHIPAGENT OF PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.

2.3. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND THE DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR
PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE OFFERED.

2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN DEFAULT ADDRESSED AND SENT TO ONLY ONE OF THE
DEFENDANTS WOULD BIND THE OTHER DEFENDANT TO WHOM THE MOTION WAS NOT ADDRESSED AND NOT SENT. 17

Our Ruling

The petition is partly meritorious. We shall first tackle the factual matters involved in this case, then proceed with the jurisdictional issues raised.

Petitioners raised factual matters which are not the proper subject of this appeal.

Petitioners contend that the lower courts grievously erred in granting the complaint because, even if they were declared in default, the respondent still has the
burden of proving the material allegations in the complaint by preponderance of evidence. Petitioners further argue that respondent miserably failed to
discharge this burden because it failed to present sufficient proof that it is a domestic corporation. Hence, respondent could not possibly maintain the present
action because only natural or juridical persons or entities authorized by law can be parties to a civil action. Petitioners also claim that respondent failed to
present competent proof that Cheng Lie is a foreign shipping company doing business in the Philippines thru its duly authorized shipagent Atiko. Lastly,
petitioners assert that respondent failed to prove that Cheng Lie is a common carrier which owned, operated and/or chartered M/S Katjana thru its duly
authorized shipagent Atiko. Petitioners emphasize that there is no proof, testimonial or otherwise, which would support the material allegations of the
complaint. They also insist that respondent’s witnesses do not have personal knowledge of the facts on which they were examined.

Respondent, for its part, assails the propriety of the remedy taken by the petitioners. It posits that petitioners advanced factual matters which are not the
proper subject of a petition for review on certiorari. Besides, the lower courts consistently held that the allegations in respondent’s complaint are supported
by sufficient evidence.

We agree with respondent.

A cursory reading of the issues raised readily reveals that they involve factual matters which are not within the province of this Court to look into. Well-
settled is the rule that in petitions for review on certiorari under Rule 45, only questions of law can be raised. While there are recognized exceptions to this
rule,18 none is present in this case. "[A]s a matter of x x x procedure, [this] Court defers and accords finality to the factual findings of trial courts, [especially]
when such findings were [affirmed by the RTC and the CA. These] factual determination[s], as a matter of long and sound appellate practice, deserve great
weight and shall not be disturbed on appeal x x x. [I]t is not the function of the Court to analyze and weigh all over again the evidence or premises supportive
of the factual holding of the lower courts."19

MeTC properly acquired jurisdiction over the person of Atiko.

Petitioners also argue that the MeTC did not acquire jurisdiction over the person of Atiko as the summons was received by its cashier, Cristina Figueroa.
They maintain that under Section 11, Rule 14 of the Rules of Court, when the defendant is a domestic corporation like Atiko, summons may be served only
upon its president, general manager, corporate secretary, treasurer or in-house counsel.

We are not persuaded. True, when the defendant is a domestic corporation, service of summons may be made only upon the persons enumerated in Section
11, Rule 14 of the Rules of Court.20 However, jurisdiction over the person of the defendant can be acquired not only by proper service of summons but also
by defendant’s voluntary appearance without expressly objecting to the court’s jurisdiction, as embodied in Section 20, Rule 14 of the Rules of Court, viz:

SEC. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion
to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance.

In the case at bench, when Atiko filed its Notice of Appeal, 21 Memorandum of Appeal,22 Motion for Reconsideration23 of the April 8, 2003 Decision of the
RTC, and Petition for Review,24 it never questioned the jurisdiction of the MeTC over its person. The filing of these pleadings seeking affirmative relief
amounted to voluntary appearance and, hence, rendered the alleged lack of jurisdiction moot. In Palma v. Galvez, 25 this Court reiterated the oft-repeated rule
that "the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment,
and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court."

Moreover, petitioners’ contention is a mere afterthought. It was only in their Memorandum26 filed with this Court where they claimed, for the first time, that
Atiko was not properly served with summons. In La Naval Drug Corporation v. Court of Appeals, 27 it was held that the issue of jurisdiction over the person
of the defendant must be seasonably raised. Failing to do so, a party who invoked the jurisdiction of a court to secure an affirmative relief cannot be allowed
to disavow such jurisdiction after unsuccessfully trying to obtain such relief. 28

It may not be amiss to state too that in our February 13, 2006 Resolution, 29 we reminded the parties that they are not allowed to interject new issues in their
memorandum.

MeTC did not acquire jurisdiction over the person of Cheng Lie.

Petitioners likewise challenge the validity of the service of summons upon Cheng Lie, thru Atiko. They claim that when the defendant is a foreign private
juridical entity which has transacted business in the Philippines, service of summons may be made, among others, upon its resident agent. In this case,
however, there is no proof that Atiko is the local agent of Cheng Lie.

On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6-SC,30 Section 12 of Rule 14 of the Rules of Court reads:

SEC. 12. Service upon foreign private juridical entity. – When the defendant is a foreign private juridical entity which has transacted business in the
Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government
official designated by law to that effect, or on any of its officers or agents within the Philippines.

Elucidating on the above provision of the Rules of Court, this Court declared in Pioneer International, Ltd. v. Guadiz, Jr. 31 that when the defendant is a
foreign juridical entity, service of summons may be made upon:

1. Its resident agent designated in accordance with law for that purpose;

2. The government official designated by law to receive summons if the corporation does not have a resident agent; or,

3. Any of the corporation’s officers or agents within the Philippines.

In the case at bench, no summons was served upon Cheng Lie in any manner prescribed above. It should be recalled that Atiko was not properly served with
summons as the person who received it on behalf of Atiko, cashier Cristina Figueroa, is not one of the corporate officers enumerated in Section 11 of Rule 14
of the Rules of Court. The MeTC acquired jurisdiction over the person of Atiko not thru valid service of summons but by the latter’s voluntary appearance.
Thus, there being no proper service of summons upon Atiko to speak of, it follows that the MeTC never acquired jurisdiction over the person of Cheng Lie.
To rule otherwise would create an absurd situation where service of summons is valid upon the purported principal but not on the latter’s co-defendant cum
putative agent despite the fact that service was coursed thru said agent. Indeed, in order for the court to acquire jurisdiction over the person of a defendant
foreign private juridical entity under Section 12, Rule 14 of the Rules of Court, there must be prior valid service of summons upon the agent of such
defendant.1avvphi1

Also, the records of this case is bereft of any showing that cashier Cristina Figueroa is a government official designated by law to receive summons on behalf
of Cheng Lie or that she is an officer or agent of Cheng Lie within the Philippines. Hence, her receipt of summons bears no significance insofar as Cheng Lie
is concerned. At this point, we emphasize that the requirements of the rule on summons must be strictly followed,32 lest we ride roughshod on defendant’s
right to due process.33

With regard to Cheng Lie’s filing of numerous pleadings, the same cannot be considered as voluntary appearance. Unlike Atiko, Cheng Lie never sought
affirmative relief other than the dismissal of the complaint on the ground of lack of jurisdiction over its person. From the very beginning, it has consistently
questioned the validity of the service of summons and the jurisdiction of the MeTC over its person.

It does not escape our attention though that Cheng Lie’s pleadings do not indicate that the same were filed by way of special appearance. But these, to our
mind, are mere inaccuracies in the title of the pleadings. What is important are the allegations contained therein which consistently resisted the jurisdiction of
the trial court. Thus, Cheng Lie cannot be considered to have submitted itself to the jurisdiction of the courts. 34

In fine, since the MeTC never acquired jurisdiction over the person of Cheng Lie, its decision insofar as Cheng Lie is concerned is void. 35

Cheng Lie was improperly declared in default.

Applying the above disquisition, the MeTC likewise erred in declaring Cheng Lie in default. Settled is the rule that a defendant cannot be declared in default
unless such declaration is preceded by a valid service of summons.36

WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed December 10, 2004 Decision of the Court of Appeals in CA-G.R. SP No.
82547 is AFFIRMED with the MODIFICATION that the judgment insofar as Cheng Lie Navigation Co., Ltd. is concerned is declared VOID for failure to
acquire jurisdiction over its person as there was improper service of summons.

SO ORDERED.
G.R. No. 183035 January 9, 2013

OPTIMA REALTY CORPORATION, Petitioner,

vs.
HERTZ PHIL. EXCLUSIVE CARS, INC., Respondent.

DECISION

SERENO, CJ.:

Before us is a Rule 45 Petition assailing the Decision 1 and Resolution2 of the Court of Appeals (CA) in CA-GR SP No. 99890, which reversed the
Decision3 and Resolution4 of the Regional Trial Court (RTC), Branch 13 7, Makati City in Civil Case No. 06-672. The RTC had affirmed in toto the 22 May
2006 Decision5 of the Metropolitan Trial Court (MeTC), Branch 64, Makati City in Civil Case No. 90842 evicting respondent Hertz Phil.

Exclusive Cars, Inc. (Hertz) and ordering it to pay back rentals and other arrearages to petitioner Optima Realty Corporation (Optima).

Optima is engaged in the business of leasing and renting out commercial spaces and buildings to its tenants. On 12 December 2002, it entered into a Contract
of Lease with respondent over a 131-square-meter office unit and a parking slot in the Optima Building for a period of three years commencing on 1 March
2003 and ending on 28 February 2006.6 On 9 March 2004, the parties amended their lease agreement by shortening the lease period to two years and five
months, commencing on 1 October 2003 and ending on 28 February 2006.7

Renovations in the Optima Building commenced in January and ended in November 2005. 8 As a result, Hertz alleged that it experienced a 50% drop in
monthly sales and a significant decrease in its personnel’s productivity. It then requested a 50% discount on its rent for the months of May, June, July and
August 2005.9

On 8 December 2005, Optima granted the request of Hertz.10 However, the latter still failed to pay its rentals for the months of August to December of 2005
and January to February 2006,11 or a total of seven months. In addition, Hertz likewise failed to pay its utility bills for the months of November and
December of 2005 and January and February of 2006, 12 or a total of four months.

On 8 December 2005, Optima wrote another letter to Hertz,13 reminding the latter that the Contract of Lease could be renewed only by a new negotiation
between the parties and upon written notice by the lessee to the lessor at least 90 days prior to the termination of the lease period.14 As no letter was received
from Hertz regarding its intention to seek negotiation and extension of the lease contract within the 90-day period, Optima informed it that the lease would
expire on 28 February 2006 and would not be renewed.15

On 21 December 2005, Hertz wrote a letter belatedly advising Optima of the former’s desire to negotiate and extend the lease. 16 However, as the Contract of
Lease provided that the notice to negotiate its renewal must be given by the lessee at least 90 days prior to the expiration of the contract, petitioner no longer
entertained respondent’s notice.

On 30 January 2006, Hertz filed a Complaint for Specific Performance, Injunction and Damages and/or Sum of Money with prayer for the issuance of a
Temporary Restraining Order (TRO) and Writ of Preliminary Injunction (Complaint for Specific Performance) against Optima. In that Complaint, Hertz
prayed for the issuance of a TRO to enjoin petitioner from committing acts that would tend to disrupt respondent’s peaceful use and possession of the leased
premises; for a Writ of Preliminary Injunction ordering petitioner to reconnect its utilities; for petitioner to be ordered to renegotiate a renewal of the Contract
of Lease; and for actual, moral and exemplary damages, as well as attorney’s fees and costs.

On 1 March 2006, Optima, through counsel, wrote Hertz a letter requiring the latter to surrender and vacate the leased premises in view of the expiration of
the Contract of Lease on 28 February 2006.17 It likewise demanded payment of the sum of ₱420,967.28 in rental arrearages, unpaid utility bills and other
charges.18 Hertz, however, refused to vacate the leased premises.19 As a result, Optima was constrained to file before the MeTC a Complaint for Unlawful
Detainer and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction (Unlawful Detainer Complaint) against Hertz.20

On 14 March 2006, Summons for the Unlawful Detainer Complaint was served on Henry Bobiles, quality control supervisor of Hertz, who complied with the
telephone instruction of manager Rudy Tirador to receive the Summons. 21

On 28 March 2006, or 14 days after service of the Summons, Hertz filed a Motion for Leave of Court to file Answer with Counterclaim and to Admit
Answer with Counterclaim (Motion for Leave to File Answer).22 In that Motion, Hertz stated that, "in spite of the defective service of summons, it opted to
file the instant Answer with Counterclaim with Leave of Court."23 In the same Motion, it likewise prayed that, in the interest of substantial justice, the
Answer with Counterclaim attached to the Motion for Leave to File Answer should be admitted regardless of its belated filing, since the service of summons
was defective.24

On 22 May 2006, the MeTC rendered a Decision,25 ruling that petitioner Optima had established its right to evict Hertz from the subject premises due to
nonpayment of rentals and the expiration of the period of lease.26 The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the Court hereby renders judgment for the plaintiff and against the defendant, ordering:

1. the defendant corporation and all persons claiming rights from it to immediately vacate the leased premises and to surrender possession thereof
to the plaintiff;

2. the defendant corporation to pay the plaintiff the amount of Four Hundred Twenty Thousand Nine Hundred Sixty Seven Pesos and 28/100
(P420,967.28) representing its rentals arrearages and utility charges for the period of August 2005 to February 2006, deducting therefrom
defendant’s security deposit;

3. the defendant corporation to pay the amount of Fifty Four Thousand Two Hundred Pesos (P54,200.00) as a reasonable monthly compensation
for the use and occupancy of the premises starting from March 2006 until possession thereof is restored to the plaintiff; and

4. the defendant corporation to pay the amount of Thirty Thousand Pesos (P30,000.00) as and for attorney’s fees; and

5. the cost of suit.

SO ORDERED.27

Hertz appealed the MeTC’s Decision to the RTC.28

Finding no compelling reason to warrant the reversal of the MeTC’s Decision, the RTC affirmed it by dismissing the appeal in a Decision 29 dated 16 March
2007.

On 18 June 2007, the RTC denied respondent’s Motion for Reconsideration of its assailed Decision.30

Hertz thereafter filed a verified Rule 42 Petition for Review on Certiorari with the CA. 31

On appeal, the CA ruled that, due to the improper service of summons, the MeTC failed to acquire jurisdiction over the person of respondent Hertz. The
appellate court thereafter reversed the RTC and remanded the case to the MeTC to ensure the proper service of summons. Accordingly, the CA issued its 17
March 2008 Decision, the fallo of which reads:

WHEREFORE, premises considered, the May 22, 2006 Decision of the Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842, and
both the March 16, 2007 Decision, as well as the June 18, 2007 Resolution, of the Regional Trial Court of Makati City, Branch 137, in Civil Case No. 06-
672, are hereby REVERSED, ANNULLED and SET ASIDE – due to lack of jurisdiction over the person of the defendant corporation HERTZ. This case is
hereby REMANDED to the Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842, which is DIRECTED to ensure that its Sheriff
properly serve summons to only those persons listed in Sec. 11, Rule 14 of the Rules of Civil Procedure in order that the MTC could acquire jurisdiction over
the person of the defendant corporation HERTZ.

SO ORDERED.32

Petitioner’s Motion for Reconsideration of the CA’s Decision was denied in a Resolution dated 20 May 2008. 33

Aggrieved by the ruling of the appellate court, petitioner then filed the instant Rule 45 Petition for Review on Certiorari with this Court.34

THE ISSUES

As culled from the records, the following issues are submitted for resolution by this Court:

1. Whether the MeTC properly acquired jurisdiction over the person of respondent Hertz;

2. Whether the unlawful detainer case is barred by litis pendentia; and

3. Whether the ejectment of Hertz and the award of damages, attorneys fees and costs are proper.

THE COURT’S RULING

We grant the Petition and reverse the assailed Decision and Resolution of the appellate court.

The MeTC acquired jurisdiction over the person of respondent Hertz.

In civil cases, jurisdiction over the person of the defendant may be acquired either by service of summons or by the defendant’s voluntary appearance in
court and submission to its authority.35

In this case, the MeTC acquired jurisdiction over the person of respondent Hertz by reason of the latter’s voluntary appearance in court.

In Philippine Commercial International Bank v. Spouses Dy, 36 we had occasion to state:

Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes exerted over his person, or his
voluntary appearance in court. As a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is
by reason of this rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of
a default judgment, and to lift order of default with motion for reconsideration, is considered voluntary submission to the court's jurisdiction. This, however,
is tempered by the concept of conditional appearance, such that a party who makes a special appearance to challenge, among others, the court's jurisdiction
over his person cannot be considered to have submitted to its authority.

Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly made, i.e., set forth in an unequivocal
manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instances where a pleading or motion seeking
affirmative relief is filed and submitted to the court for resolution. (Emphases supplied)

In this case, the records show that the following statement appeared in respondent’s Motion for Leave to File Answer:

In spite of the defective service of summons, the defendant opted to file the instant Answer with Counterclaim with Leave of Court, upon inquiring from the
office of the clerk of court of this Honorable Court and due to its notice of hearing on March 29, 2005 application for TRO/Preliminary Mandatory Injunction
was received on March 26, 2006. (Emphasis supplied)37

Furthermore, the Answer with Counterclaim filed by Hertz never raised the defense of improper service of summons. The defenses that it pleaded were
limited to litis pendentia, pari delicto, performance of its obligations and lack of cause of action. 38 Finally, it even asserted its own counterclaim against
Optima.39

Measured against the standards in Philippine Commercial International Bank, these actions lead to no other conclusion than that Hertz voluntarily appeared
before the court a quo. We therefore rule that, by virtue of the voluntary appearance of respondent Hertz before the MeTC, the trial court acquired
jurisdiction over respondent’s.

II
The instant ejectment case is not barred by litis pendentia. Hertz contends that the instant case is barred by litis pendentia because of the pendency of its
Complaint for Specific Performance against Optima before the RTC.

We disagree.

Litis pendentia requires the concurrence of the following elements:

(1) Identity of parties, or at least their representation of the same interests in both actions;

(2) Identity of rights asserted and reliefs prayed for, the relief 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. 40

Here, while there is identity of parties in both cases, we find that the rights asserted and the reliefs prayed for under the Complaint for Specific Performance
and those under the present Unlawful Detainer Complaint are different. As aptly found by the trial court:

The Complaint for Specific Performance] seeks to compel plaintiff-appellee Optima to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the
leased premises; and (3) pay damages. On the other hand, the unlawful detainer case sought the ejectment of defendant-appellant Hertz from the leased
premises and to collect arrears in rentals and utility bills.41

As the rights asserted and the reliefs sought in the two cases are different, we find that the pendency of the Complaint for Specific Performance is not a bar to
the institution of the present case for ejectment.

III

The eviction of respondent and the award of damages,

attorney’s fees and costs were proper.

We find that the RTC’s ruling upholding the ejectment of Hertz from the building premises was proper. First, respondent failed to pay rental arrearages and
utility bills to Optima; and, second, the Contract of Lease expired without any request from Hertz for a renegotiation thereof at least 90 days prior to its
expiration.

On the first ground, the records show that Hertz failed to pay rental arrearages and utility bills to Optima. Failure to pay timely rentals and utility charges is
an event of default under the Contract of Lease,42 entitling the lessor to terminate the lease.

Moreover, the failure of Hertz to pay timely rentals and utility charges entitles the lessor to judicially eject it under the provisions of the Civil Code.43

On the second ground, the records likewise show that the lease had already expired on 28 February 2006 because of Hertz’s failure to request a renegotiation
at least 90 days prior to the termination of the lease period.

The pertinent provision of the Contract of Lease reads:

x x x. The lease can be renewed only by a new negotiation between the parties upon written notice by the LESSEE to be given to the LESSOR at least 90
days prior to termination of the above lease period.44

As the lease was set to expire on 28 February 2006, Hertz had until 30 November 2005 within which to express its interest in negotiating an extension of the
lease with Optima. However, Hertz failed to communicate its intention to negotiate for an extension of the lease within the time agreed upon by the parties.
Thus, by its own provisions, the Contract of Lease expired on 28 February 2006.1âwphi1

Under the Civil Code, the expiry of the period agreed upon by the parties is likewise a ground for judicial ejectment. 45

As to the award of monthly compensation, we find that Hertz should pay adequate compensation to Optima, since the former continued to occupy the leased
premises even after the expiration of the lease contract. As the lease price during the effectivity of the lease contract was P54,200 per month, we find it to be
a reasonable award.

Finally, we uphold the award of attorney's fees in the amount of P30,000 and judicial costs in the light of Hertz's unjustifiable and unlawful retention of the
leased premises, thus forcing Optima to file the instant case in order to protect its rights and interest.

From the foregoing, we find that the MeTC committed no reversible error in its 22 May 2006 Decision, and that the RTC committed no reversible error
either in affirming the MeTC's Decision.

WHEREFORE, in view of the foregoing, the instant Rule 45 Petition for Review is GRANTED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 99890 are hereby REVERSED and SET ASIDE. The Decision of the Regional Trial Court, Branch 13 7, Makati City in Civil
Case No. 06-672 affirming in toto the Decision of the Metropolitan Trial Court, Branch 64, Makati City in Civil Case No. 90842 is hereby REINSTATED
and AFFIRMED.

SO ORDERED.
G.R. No. 228617, September 20, 2017

PLANTERS DEVELOPMENT BANK, Petitioner, v. SPOUSES VICTORIANO AND MELANIE RAMOS, Respondents.

DECISION

REYES, JR., J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision 1 dated July 5, 2016 and Resolution2 dated
December 7, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 140264.

Antecedent Facts

The facts show that in July 2012, Spouses Victoriano and Melanie Ramos (Spouses Ramos) applied for several credit lines with Planters Development Bank
(PDB) for the construction of a warehouse in Barangay Santo Tomas, Nueva Ecija. 3 The said application was approved for P40,000,000.00, secured by Real
Estate Mortgage4 dated July 25, 2012 over properties owned by the spouses, particularly covered by Transfer Certificate of Title (TCT) Nos. 048-
2011000874 and 048-2011000875.

Subsequently, Spouses Ramos requested for additional loan and PDB allegedly promised to extend them a further loan of P140,000,000.00, the amount they
supposed was necessary for the completion of the construction of the warehouse with a capacity of 250,000 cavans of palay. 5 Despite the assurance of the
bank, only P25,000,000.00 in additional loan was approved and released by PDB, which was secured by a Real Estate Mortgage6 over four (4) real properties
covered by TCT Nos. 048-2012000909, 048-2012000443, 048-2012000445, and 048-2012000446.

Due to financial woes, Spouses Ramos were not able to pay their obligations as they fell due. They appealed to PDB for the deferment of debt servicing and
requested for a restructuring scheme but the parties failed to reach an agreement.

On April 23, 2014, PDB filed a Petition for Extra-judicial Foreclosure of Real Estate Mortgage under Act 3135, as amended, before the Regional Trial Court
of San Jose City, Nueva Ecija, which was docketed as EJF-2014-112-SJC. A Notice to Parties of Sheriff's Public Auction Sale dated May 7, 2014 was
thereafter issued.7

On June 18, 2014, Spouses Ramos filed a Complaint 8 for Annulment of Real Estate Mortgages and Promissory Notes, Accounting and Application of
Payments, Injunction with Preliminary Injunction and Temporary Restraining Order against PDB and its officers, namely, Ma. Agnes J. Angeles, Virgilio I.
Libunao, Carmina S. Magallanes and Norberto P. Siega, also before the RTC of San Jose City, Nueva Ecija, which was docketed as Civil Case No. 2014-
485-SJC.

Instead of filing an Answer, PDB filed an Urgent Motion 9 to Dismiss, alleging that the venue of the action was improperly laid considering that the real
estate mortgages signed by the parties contained a stipulation that any suit arising therefrom shall be filed in Makati City only.10 It further noted that the
complaint failed to state a cause of action and must therefore be dismissed.11

Ruling of the RTC

In an Omnibus Order12 dated November 17, 2014, the RTC denied the Urgent Motion to Dismiss, the pertinent portions of which read as follows:

I. The Venue is Improperly Laid

Pursuant to autonomy of contract, Venue can be waived. Rule 5, Section 4(d) of the 1997 Rules of Civil Procedure allows parties to validly agree in writing
before the filing of the action on the exclusive venue thereof. Indeed, on the defendants they have the contract where the venue allegedly agreed upon by
them with the plaintiffs is Makati City. However, one of the contentions of the plaintiffs is that the contracts between them and the defendants take the form
of an adhesion contract (par. 20, Complaint). As such, this Court has to apply Section 1, Rule 4 of the 1997 Rules of Civil Procedure regarding the venue of
real actions to avoid ruling on the merits without any evidence that would sufficiently support the same.

II. The Complaint Fails to State a Cause of Action.

With such an issue raised, the Court examined the records and it has to tell the defendants that in civil cases before the Court orders the issuance of summons,
it looks on whether or not the facts alleged on the Complaint are sufficient to constitute a cause of action and not whether the allegations of fact are true.
Hence, as summons were issued in this case, the Court had already found that the allegations in the Complaint are sufficient to constitute a cause of action.

xxxx

FOREGOING CONSIDERED, the Motion to Dismiss is hereby DENIED.

xxxx

SO ORDERED.13

Unyielding, PDB filed a motion for reconsideration of the Omnibus Order dated November 17, 2014, instead of filing an answer to the complaint. This
prompted Spouses Ramos to file a motion to declare PDB in default. Subsequently, in an Order14 dated February 20, 2015, the RTC denied both motions,
ratiocinating thus:

Necessarily, the defendants were allowed to Isle Motion to Dismiss before filing an Answer or responsive pleading. As a consequence of the Motion to
Dismiss that the defendants filed, the running of the period during which the rules required her to file her Answer was deemed suspended. When the Court
denied the Motion to Dismiss, therefore the defendants had the balance of the period for filing an Answer under Section 4, Rule 16 within which to file the
same but in no case less than five days, computed from the receipt of the notice of denial of the Motion to Dismiss. x x x x
xxxx

However, after the Court denied the Motion to Dismiss, the defendants filed Motion for Reconsideration which is not precluded by the rules. Only after this
Court shall have denied it would the defendants become bound to file the Answer to the Complaint. It is only if the defendants failed to file Answer after the
period given by the foregoing rules would the plaintiff be entitled to have the defendants be declared in default. This was the same ruling of the Supreme
Court in the case of Narciso v. Garcia, G.R. No. 196877, November 12, 2012.

With regard to the Motion for Reconsideration of the Omnibus Order dated November 17, 2014, there being no new arguments presented, the Court finds no
cogent reason to reconsider and reverse the said Omnibus Order.

WHEREFORE, the Motion to Declare Defendants in Default and the Motion for Reconsideration are hereby DENIED.

SO ORDERED.15

Aggrieved, PDB filed a petition for certiorari with the CA, imputing grave abuse of discretion on the RTC for denying its motion to dismiss, despite the fact
that the venue was clearly improperly laid.

Ruling of the CA

In a Decision16 dated July 5, 2016, the CA denied the petition, the pertinent portion of which reads as follows:

The order of the public respondent in denying the motion to dismiss and the consequent denial of the motion for reconsideration is correct and judicious.
Petitioner anchors its claim on the validity of the mortgage, and thereby the provisional therein on venue must be upheld. On the other hand, respondents
anchor its claim on the invalidity of the mortgage, and thereby the complaint is filed in the proper venue. Clearly, no valid judgment can be passed upon the
allegations of both parties.17

Thus, having found no grave abuse on the part of the public respondent in denying the motion to dismiss and the resulting denial of the motion for
reconsideration, We find no cogent reason to disturb or modify the assailed Decision. What the petitioners should have done was to file an answer to the
petition filed in the trial court, proceed to the hearing and appeal the decision of the court if adverse to them.18

WHEREFORE, premises considered, the petition is DENIED. The Omnibus Order dated 17 November 2014 and the Order dated 20 February 2015 is
hereby AFFIRMED in TOTO.

IT IS SO ORDERED.19

PDB filed a motion for reconsideration but the CA denied the same in its Resolution dated December 7, 2016, the dispositive portion of which reads, thus:

WHEREFORE, in view of the foregoing, the motion for reconsideration is hereby DENIED.

IT IS SO ORDERED.20

Unyielding, PDB filed the present petition with this Court, reiterating its claim that the CA erred in affirming the order of the RTC, which denied the motion
to dismiss despite the improper venue of the case. It argues that since there is a stipulation on venue, the same should govern the parties.

Ruling of this Court

The petition is meritorious.

Rule 4 of the Rules of Civil Procedure provides the rules on venue in filing an action, to wit:

RULE 4

Venue of Actions

Section 1. Venue of real actions. — Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper
court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or
a portion thereof, is situated.

Section 2. Venue of personal actions. — All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where
the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff.

xxxx

Section 4. When Rule not applicable. — This Rule shall not apply.

(a) In those cases where a specific rule or law provides otherwise; or

(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof
Based on the foregoing, the general rules on venue admit of exceptions in Section 4 thereof, i.e., where a specific rule or law provides otherwise, or when the
parties agreed in writing before the filing of the action on the exclusive venue thereof.

Stipulations on venue, however, may either be permissive or restrictive. "Written stipulations as to venue may be restrictive in the sense that the suit may be
filed only in the place agreed upon, or merely permissive in that the parties may file their suit not only in the place agreed upon but also in the places fixed by
law. As in any other agreement, what is essential is the ascertainment of the intention of the parties respecting the matter." 21

Further, in Unimasters Conglomeration, Inc. v. Court of Appeals,22 the Court elaborated, thus:

Since convenience is the raison d'etre of the rules of venue, it is easy to accept the proposition that normally, venue stipulations should be deemed permissive
merely, and that interpretation should be adopted which most serves the parties' convenience. In other words, stipulations designating venues other than those
assigned by Rule 4 should be interpreted as designed to make it more convenient for the parties to institute actions arising from or in relation to their
agreements; that is to say, as simply adding to or expanding the venues indicated in said Rule 4.

On the other hand, because restrictive stipulations are in derogation of this general policy, the language of the parties must be so clear and categorical as to
leave no doubt of their intention to limit the place or places, or to fix places other than those indicated in Rule 4, for their actions. x x x. 23

In view of the predilection to view a stipulation on venue as merely permissive, the parties must therefore employ words in the contract that would clearly
evince a contrary intention. In Spouses Lantin v. Judge Lantion,24 the Court emphasized that "the mere stipulation on the venue of an action is not enough to
preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or
restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place."25

In the instant case, there is an identical stipulation in the real estate mortgages executed by the parties, pertaining to venue. It reads as follows:

18. In the event of suit arising from out of or in connection with this mortgage and/or the promissory note/s secured by this mortgage, the parties hereto agree
to bring their causes of action exclusively in the proper court/s of Makati, Metro Manila, the MORTGAGOR waiving for this purpose any other
venue.26 (Emphasis ours)

In Spouses Lantin, the Court ruled that "the words exclusively and waiving for this purpose any other venue are restrictive."27 Therefore, the employment of
the same language in the subject mortgages signifies the clear intention of the parties to restrict the venue of any action or suit that may arise out of the
mortgage to a particular place, to the exclusion of all other jurisdictions.

In view of the foregoing, the RTC should have granted the Urgent Motion to Dismiss filed by PDB on the ground that the venue was improperly laid. The
complaint being one for annulment of real estate mortgages and promissory notes is in the nature of a personal action, the venue of which may be fixed by
the parties to the contract. In this case, it was agreed that any suit or action that may arise from the mortgage contracts or the promissory notes must be filed
and tried in Makati only. Not being contrary to law or public policy, the stipulation on venue, which PDB and Spouses Ramos freely and willingly agreed
upon, has the force of law between them, and thus, should be complied with in good faith. 28

The CA, however, ruled that the RTC correctly denied the motion to dismiss in view of the contradicting claim of the parties on the validity of the mortgage
contracts, which, in turn, affects the enforceability of the stipulation on venue. The CA agreed with the RTC that the ruling on the validity of the stipulation
on venue depends on whether the mortgage is valid which means there has to be full-blown hearing and presentation of evidence. It added that what PDB
should have done was to file an answer to the complaint, proceed to trial and appeal the decision, if adverse to them.29

The ruling of the CA renders meaningless the very purpose of the stipulation on venue. In Unimasters, the Court emphasized:

Parties may by stipulation waive the legal venue and such waiver is valid and effective being merely a personal privilege, which is not contrary to public
policy or prejudicial to third persons. It is a general principle that a person may renounce any right which the law gives unless such renunciation would be
against public policy.30

In the present case, Spouses Ramos had validly waived their right to choose the venue for any suit or action arising from the mortgages or promissory notes
when they agreed to the limit the same to Makati City only and nowhere else. True enough, the stipulation on the venue was couched in a language showing
the intention of the parties to restrict the filing of any suit or action to the designated place only. It is crystal clear that the intention was not just to make the
said place an additional forum or venue but the only jurisdiction where any suit or action pertaining to the mortgage contracts may be filed. There being no
showing that such waiver was invalid or that the stipulation on venue was against public policy, the agreement of the parties should be upheld. It is therefore
a grave abuse of discretion on the part of the RTC to deny the motion to dismiss filed by PDB on the ground of improper venue, especially when the said
issue had been raised at the most opportune time, that is, within the time for but before the filing of an answer. The CA should have given this matter a more
serious consideration and not simply brushed it aside.

Moreover, Spouses Ramos never really assailed the validity of the mortgage contracts and promissory notes. Apparently, what they were only claiming was
that the said contracts contain stipulations which are illegal, immoral and otherwise contrary to customs or public policy. 31 For instance, they alleged that the
interest was pegged at an excessive rate of 8% which the bank unilaterally increased to 9%. They likewise claimed that the penalty interest rate of 3% was
unconscionable. Further, they claimed that the escalation clause provided in the mortgage contracts was violative of Presidential Decree No. 1684.32These
matters, however, do not affect the validity of the mortgage contracts. Thus, with all the more reason that the stipulation on venue should have been upheld
pursuant to the ruling of the Court in Briones v. Court of Appeals,33viz.:

[I]n cases where the complaint assails only the terms, conditions, and/or coverage of a written instrument and not its validity, the exclusive venue stipulation
contained therein shall still be binding on the parties, and thus, the complaint may be properly dismissed on the ground of improper venue. Conversely,
therefore, a complaint directly assailing the validity of the written instrument itself should not be bound by the exclusive venue stipulation contained therein
and should be filed in accordance with the general rules on venue. To be sure, it would be inherently consistent for a complaint of this nature to recognize the
exclusive venue stipulation when it, in fact, precisely assails the validity of the instrument in which such stipulation is contained.34

Spouses Ramos impliedly admitted the authenticity and due execution of the mortgage contracts. They do not claim to have been duped into signing the
mortgage contracts or that the same was not their free and voluntary act. While they may have qualms over some of the terms stated therein, the same do not
pertain to the lack of any of the essential elements of a contract that would render it void altogether. Such being the case, the stipulation on venue stands and
should have been upheld by RTC and the CA.

WHEREFORE, the Decision dated July 5, 2016 and Resolution dated December 7, 2016 of the Court of Appeals in CA-G.R. SP No. 140264
are REVERSED and SET ASIDE. Civil Case No. 2014-485-SJC is hereby DISMISSED on the ground of improper venue.

SO ORDERED.
G.R. No. 190071 August 15, 2012

UNION BANK OF THE PHILIPPINES, Petitioner,

vs.
MAUNLAD HOMES, INC. and all other persons or entities claiming rights under it, Respondents.

VILLARAMA, JR.,*

DECISION

BRION, J.:

Before the Court is the petition for review on certiorari1 under Rule 45 of the Rules of Court filed by petitioner Union Bank of the Philippines (Union Bank),
assailing the decision dated October 28, 20092 of the Court of Appeals (CA) in CA-G.R. SP No. 107772.

THE FACTS

Union Bank is the owner of a commercial complex located in Malolos, Bulacan, known as the Maunlad Shopping Mall.

Sometime in August 2002, Union Bank, as seller, and respondent Maunlad Homes, Inc. (Maunlad Homes), as buyer, entered into a contract to sell3 involving
the Maunlad Shopping Mall. The contract set the purchase price at ₱ 151 million, ₱ 2.4 million of which was to be paid by Maunlad Homes as down payment
payable on or before July 5, 2002, with the balance to be amortized over the succeeding 180-month period.4 Under the contract, Union Bank authorized
Maunlad Homes to take possession of the property and to build or introduce improvements thereon. The parties also agreed that if Maunlad Homes violates
any of the provisions of the contract, all payments made will be applied as rentals for the use and possession of the property, and all improvements
introduced on the land will accrue in favor of Union Bank. 5 In the event of rescission due to failure to pay or to comply with the terms of the contract,
Maunlad Homes will be required to immediately vacate the property and must voluntarily turn possession over to Union Bank.6

When Maunlad Homes failed to pay the monthly amortization, Union Bank sent the former a Notice of Rescission of Contract7 dated February 5, 2003,
demanding payment of the installments due within 30 days from receipt; otherwise, it shall consider the contract automatically rescinded. Maunlad Homes
failed to comply. Hence, on November 19, 2003, Union Bank sent Maunlad Homes a letter demanding payment of the rentals due and requiring that the
subject property be vacated and its possession turned over to the bank. When Maunlad Homes continued to refuse, Union Bank instituted an ejectment suit
before the Metropolitan Trial Court (MeTC) of Makati City, Branch 64, on February 19, 2004. Maunlad Homes resisted the suit by claiming, among others,
that it is the owner of the property as Union Bank did not reserve ownership of the property under the terms of the contract. 8 By virtue of its ownership,
Maunlad Homes claimed that it has the right to possess the property.

On May 18, 2005, the MeTC dismissed Union Bank’s ejectment complaint. 9 It found that Union Bank’s cause of action was based on a breach of contract
and that both parties are claiming a better right to possess the property based on their respective claims of ownership of the property.

The MeTC ruled that the appropriate action to resolve these conflicting claims was an accion reivindicatoria, over which it had no jurisdiction.

On appeal, the Regional Trial Court (RTC) of Makati City, Branch 139, affirmed the MeTC in its decision dated July 17, 2008; 10 it agreed with the MeTC
that the issues raised in the complaint extend beyond those commonly involved in an unlawful detainer suit. The RTC declared that the case involved a
determination of the rights of the parties under the contract. Additionally, the RTC noted that the property is located in Malolos, Bulacan, but the ejectment
suit was filed by Union Bank in Makati City, based on the contract stipulation that "the venue of all suits and actions arising out or in connection with the
Contract to Sell shall be in Makati City."11 The RTC ruled that the proper venue for the ejectment action is in Malolos, Bulacan, pursuant to the second
paragraph of Section 1, Rule 4 of the Rules of Court, which states:

Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper
court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.

Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or
a portion thereof, is situated. [emphasis ours]

The RTC declared that Union Bank cannot rely on the waiver of venue provision in the contract because ejectment is not an action arising out of or
connected with the contract.

Union Bank appealed the RTC decision to the CA through a petition for review under Rule 42 of the Rules of Court. The CA affirmed the RTC decision in
its October 28, 2009 decision,12 ruling that Union Bank’s claim of possession is based on its claim of ownership which in turn is based on its interpretation of
the terms and conditions of the contract, particularly, the provision on the consequences of Maunlad Homes’ breach of contract. The CA determined that
Union Bank’s cause of action is premised on the interpretation and enforcement of the contract and the determination of the validity of the rescission, both of
which are matters beyond the jurisdiction of the MeTC. Therefore, it ruled that the dismissal of the ejectment suit was proper. The CA, however, made no
further ruling on the issue of venue of the action.

From the CA’s judgment, Union Bank appealed to the Court by filing the present petition for review on certiorariunder Rule 45 of the Rules of Court.

THE PARTIES’ ARGUMENTS

Union Bank disagreed with the CA’s finding that it is claiming ownership over the property through the ejectment action. It claimed that it never lost
ownership over the property despite the execution of the contract, since only the right to possess was conceded to Maunlad Homes under the contract; Union
Bank never transferred ownership of the property to Maunlad Homes. Because of Maunlad Homes’ failure to comply with the terms of the contract, Union
Bank believes that it rightfully rescinded the sale, which rescission terminated Maunlad Homes’ right to possess the subject property. Since Maunlad Homes
failed to turn over the possession of the subject property, Union Bank believes that it correctly instituted the ejectment suit.

The Court initially denied Union Bank’s petition in its Resolution dated March 17, 2010. 13 Upon motion for reconsideration filed by Union Bank, the Court
set aside its Resolution of March 17, 2010 (in a Resolution dated May 30, 2011 14 ) and required Maunlad Homes to comment on the petition.

Maunlad Homes contested Union Bank’s arguments, invoking the rulings of the lower courts. It considered Union Bank’s action as based on the propriety of
the rescission of the contract, which, in turn, is based on a determination of whether Maunlad Homes indeed failed to comply with the terms of the contract;
the propriety of the rescission, however, is a question that is within the RTC’s jurisdiction. Hence, Maunlad Homes contended that the dismissal of the
ejectment action was proper.

THE COURT’S RULING

 We find the petition meritorious.

The authority of the MeTC to interpret contracts in an unlawful detainer action

In any case involving the question of jurisdiction, the Court is guided by the settled doctrine that the jurisdiction of a court is determined by the nature of the
action pleaded by the litigant through the allegations in his complaint. 15

Unlawful detainer is an action to recover possession of real property from one who unlawfully withholds possession after the expiration or termination of his
right to hold possession under any contract, express or implied. The possession of the defendant in unlawful detainer is originally legal but became illegal
due to expiration or termination of the right to possess.16 Under Section 1, Rule 70 of the Rules of Court, the action must be filed "within one (1) year after
the unlawful deprivation or withholding of possession." Thus, to fall within the jurisdiction of the MeTC, the complaint must allege that –

1. the defendant originally had lawful possession of the property, either by virtue of a contract or by tolerance of the plaintiff; 2. eventually, the
defendant’s possession of the property becameillegal or unlawful upon notice by the plaintiff to defendant of the expiration or the termination of
the defendant’s right of possession;

3. thereafter, the defendant remained in possession of the property and deprived the plaintiff the enjoyment thereof; and

4. within one year from the unlawful deprivation or withholding of possession, the plaintiff instituted the complaint for ejectment.17

Contrary to the findings of the lower courts, all four requirements were alleged in Union Bank’s Complaint. Union Bank alleged that Maunlad Homes
"maintained possession of the subject properties" pursuant to the Contract to Sell.18 Maunlad Homes, however, "failed to faithfully comply with the terms of
payment," prompting Union Bank to "rescind the Contract to Sell in a Notice of Rescission dated February 5, 2003."19 When Maunlad Homes "refused to
turn over and vacate the subject premises,"20 Union Bank sent another Demand Letter on November 19, 2003 to Maunlad Homes requiring it (1) "[t]o pay the
equivalent rentals-in-arrears as of October 2003 in the amount of ₱ 15,554,777.01 and monthly thereafter until the premises are fully vacated and turned
over" to Union Bank, and (2) to vacate the property peacefully and turn over possession to Union Bank. 21 As the demand went unheeded, Union Bank
instituted an action for unlawful detainer before the MeTC on February 19, 2004, within one year from the date of the last demand. These allegations clearly
demonstrate a cause of action for unlawful detainer and vested the MeTC jurisdiction over Union Bank’s action.

Maunlad Homes denied Union Bank’s claim that its possession of the property had become unlawful. It argued that its failure to make payments did not
terminate its right to possess the property because it already acquired ownership when Union Bank failed to reserve ownership of the property under the
contract. Despite Maunlad Homes’ claim of ownership of the property, the Court rules that the MeTC retained its jurisdiction over the action; a defendant
may not divest the MeTC of its jurisdiction by merely claiming ownership of the property. 22 Under Section 16, Rule 70 of the Rules of Court, "when the
defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the
issue of ownership shall be resolved only to determine the issue of possession." Section 18, Rule 70 of the Rules of Court, however, states that "the judgment
x x x shall be conclusive with respect to the possession only and shall in no wise bind the title or affect the ownership of the land or building."

The authority granted to the MeTC to preliminarily resolve the issue of ownership to determine the issue of possession ultimately allows it to interpret and
enforce the contract or agreement between the plaintiff and the defendant. To deny the MeTC jurisdiction over a complaint merely because the issue of
possession requires the interpretation of a contract will effectively rule out unlawful detainer as a remedy. As stated, in an action for unlawful detainer, the
defendant’s right to possess the property may be by virtue of a contract, express or implied; corollarily, the termination of the defendant’s right to possess
would be governed by the terms of the same contract. Interpretation of the contract between the plaintiff and the defendant is inevitable because it is the
contract that initially granted the defendant the right to possess the property; it is this same contract that the plaintiff subsequently claims was violated or
extinguished, terminating the defendant’s right to possess. We ruled in Sps. Refugia v. CA23that –

where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on
which the claim of possession is premised, the inferior court may likewise pass upon these issues.

The MeTC’s ruling on the rights of the parties based on its interpretation of their contract is, of course, not conclusive, but is merely provisional and is
binding only with respect to the issue of possession.

Thus, despite the CA’s opinion that Union Bank’s "case involves a determination of the rights of the parties under the Contract to Sell," 24 it is not precluded
from resolving this issue. Having acquired jurisdiction over Union Bank’s action, the MeTC can resolve the conflicting claims of the parties based on the
facts presented and proved.

The right to possess the property was extinguished when the contract to sell failed to materialize

Maunlad Homes acquired possession of the property based on its contract with Union Bank. While admitting that it suspended payment of the
installments,25 Maunlad Homes contended that the suspension of payment did not affect its right to possess the property because its contract with Union Bank
was one of sale and not to sell; hence, ownership of the

property has been transferred to it, allowing it to retain possession notwithstanding nonpayment of installments. The terms of the contract, however, do not
support this conclusion.

Section 11 of the contract between Union Bank and Maunlad Homes provides that "upon payment in full of the Purchase Price of the Property x x x, the
SELLER shall execute and deliver a Deed of Absolute Sale conveying the Property to the BUYER." 26 "Jurisprudence has established that where the seller
promises to execute a deed of absolute sale upon the completion by the buyer of the payment of the price, the contract is only a contract to sell."27The
presence of this provision generally identifies the contract as being a mere contract to sell.28 After reviewing the terms of the contract between Union Bank
and Maunlad Homes, we find no reasonable ground to exempt the present case from the general rule; the contract between Union Bank and Maunlad Homes
is a contract to sell.

In a contract to sell, the full payment of the purchase price is a positive suspensive condition whose non-fulfillment is not a breach of contract, but merely an
event that prevents the seller from conveying title to the purchaser. "The non-payment of the purchase price renders the contract to sell ineffective and
without force and effect."29 Maunlad Homes’ act of withholding the installment payments rendered the contract ineffective and without force and effect, and
ultimately deprived itself of the right to continue possessing Maunlad Shopping Mall.

The propriety of filing the unlawful detainer action in Makati City pursuant to the venue stipulation in the contract

Maunlad Homes questioned the venue of Union Bank’s unlawful detainer action which was filed in Makati City while the contested property is located in
Malolos, Bulacan. Citing Section 1, Rule 4 of the Rules of Court, Maunlad Homes claimed that the unlawful detainer action should have been filed with the
municipal trial court of the municipality or city where the real property involved is situated. Union Bank, on the other hand, justified the filing of the
complaint with the MeTC of Makati City on the venue stipulation in the contract which states that "the venue of all suits and actions arising out of or in
connection with this Contract to Sell shall be at Makati City."30
While Section 1, Rule 4 of the Rules of Court states that ejectment actions shall be filed in "the municipal trial court of the municipality or city wherein the
real property involved x x x is situated," Section 4 of the same Rule provides that the rule shall not apply "where the parties have validly agreed in writing
before the filing of the action on the exclusive venue thereof." Precisely, in this case, the parties provided for a different venue. In Villanueva v. Judge
Mosqueda, etc., et al.,31 the Court upheld the validity of a stipulation in a contract providing for a venue for ejectment actions other than that stated in the
Rules of Court. Since the unlawful detainer action is connected with the contract, Union Bank rightfully filed the complaint with the MeTC of Makati City.

WHEREFORE, we hereby GRANT the petition and SET ASIDE the decision dated October 28, 2009 of the Court of Appeals in CA-G.R. SP No. 107772.
Respondent Maunlad Homes, Inc. is ORDERED TO VACATE the Maunlad Shopping Mall, the property subject of the case, immediately upon the finality
of this Decision. Respondent Maunlad Homes, Inc. is further ORDERED TO PAY the rentals-in-arrears, as well as rentals accruing in the interim until it
vacates the property.

The case is REMANDED to the Metropolitan Trial Court of Makati City, Branch 64, to determine the amount of rentals due. In addition to the amount
determined as unpaid rent, respondent Maunlad Homes, Inc. is ORDERED TO PAY legal interest of six percent (6o/o) per annum, from November 19,
2003, when the demand to pay and to vacate was made, up to the finality of this Decision. Thereafter, an interest of twelve percent ( 12%) per annum shall be
imposed on the total amount due until full payment is made.

SO ORDERED.
G.R. No. 108538 January 22, 1996

LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners,

vs.
THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, respondents.

DECISION

MENDOZA, J.:

Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for partition filed against her and her husband, who is also her
attorney, summons intended for her may be served on her husband, who has a law office in the Philippines. The Regional Trial Court of Manila, Branch 48,
said no and refused to declare Lourdes A. Valmonte in default, but the Court of Appeals said yes. Hence this petition for review on certiorari.

The facts of the case are as follows:

Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both residents of 90222 Carkeek Drive South Seattle,
Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting
for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini Ermita,
Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes A. Valmonte, filed a complaint for partition of real property
and accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48. The
subject of the action is a three-door apartment located in Paco, Manila.

In her Complaint, private respondent alleged:

The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are
spouses, of legal age and at present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for purposes of this complaint may
be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant
Lourdes Arreola Valmonte's spouse holds office and where he can be found.

Apparently, the foregoing averments were made on the basis of a letter previously sent by petitioner Lourdes A. Valmonte to private respondent's counsel in
which, in regard to the partition of the property in question, she referred private respondent's counsel to her husband as the party to whom all communications
intended for her should be sent. The letter reads:

July 4, 1991

Dear Atty. Balgos:

This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please address all communications to my lawyer, Atty.
Alfredo D. Valmonte, whose address, telephone and fax numbers appear below.

c/o Prime Marine

Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone: 521-1736
Fax: 521-2095

Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte
accepted the summons, insofar as he was concerned, but refused to accept the summons for his wife, Lourdes A. Valmonte, on the ground that he was not
authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner
Lourdes A. Valmonte.

Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this
reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the
private respondent's motion.

In its Order dated July 3, 1992, the trial court, denied private respondent's motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992. Whereupon, private respondent filed a petition for certiorari, prohibition and mandamus with
the Court of Appeals.

On December 29, 1992, the Court of Appeals rendered a decision granting the petition and declaring Lourdes A. Valmonte in default. A copy of the appellate
court's decision was received by petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and on January 21, 1993 in Seattle, Washington.
Hence, this petition.

The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte was validly served with summons. In holding that she had
been, the Court of Appeals stated:1

[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the aforementioned counsel of Dimalanta to address all
communications (evidently referring to her controversy with her sister Mrs. Dimalanta over the Paco property, now the subject of the instant case) to her
lawyer who happens also to be her husband. Such directive was made without any qualification just as was her choice/designation of her husband Atty.
Valmonte as her lawyer likewise made without any qualification or reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his being his
wife's attorney (at least with regard to the dispute vis-a-vis (sic) the Paco property) would appear to be feeble or trifling, if not incredible.

This view is bolstered by Atty. Valmonte's subsequent alleged special appearance made on behalf of his wife. Whereas Mrs. Valmonte had manifestly
authorized her husband to serve as her lawyer relative to her dispute with her sister over the Paco property and to receive all communications regarding the
same and subsequently to appear on her behalf by way of a so-called special appearance, she would nonetheless now insist that the same husband would
nonetheless had absolutely no authority to receive summons on her behalf. In effect, she is asserting that representation by her lawyer (who is also her
husband) as far as the Paco property controversy is concerned, should only be made by him when such representation would be favorable to her but not
otherwise. It would obviously be inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has the authority to
represent her when an advantage is to be obtained by her and to deny such authority when it would turn out to be her disadvantage. If this be allowed, Our
Rules of Court, instead of being an instrument to promote justice would be made use of to thwart or frustrate the same.

xxx xxx xxx

Turning to another point, it would not do for Us to overlook the fact that the disputed summons was served not upon just an ordinary lawyer of
private respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is not all, the same lawyer/husband happens to be also her co-
defendant in the instant case which involves real property which, according to her lawyer/husband/co-defendant, belongs to the conjugal
partnership of the defendants (the spouses Valmonte). It is highly inconceivable and certainly it would be contrary to human nature for the
lawyer/husband/co-defendant to keep to himself the fact that they (the spouses Valmonte) had been sued with regard to a property which, he claims
to be conjugal. Parenthetically, there is nothing in the records of the case before Us regarding any manifestation by private respondent Lourdes A.
Valmonte about her lack of knowledge about the case instituted against her and her lawyer/husband/co-defendant by her sister Rosita. . . .

PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given due course. This Court hereby Resolves to
nullify the orders of the court a quo dated July 3, 1992 and September 23, 1992 and further declares private respondent Lourdes Arreola Valmonte
as having been properly served with summons.

Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in refusing to apply the provisions of Rule 14, §17 of the Revised
Rules of Court and applying instead Rule 14, §8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because even if
Rule 14, §8 is the applicable provision, there was no valid substituted service as there was no strict compliance with the requirement by leaving a copy of the
summons and complaint with petitioner Alfredo D. Valmonte. Private respondent, upon the other hand, asserts that petitioners are invoking a technicality and
that strict adherence to the rules would only result in a useless ceremony.

We hold that there was no valid service of process on Lourdes A. Valmonte.

To provide perspective, it will be helpful to determine first the nature of the action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte
by private respondent, whether it is an action in personam, in rem or quasi in rem. This is because the rules on service of summons embodied in Rule 14
apply according to whether an action is one or the other of these actions.

In an action in personam, personal service of summons or, if this is not possible and he cannot be personally served, substituted service, as provided in Rule
14, §§7-82 is essential for the acquisition by the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the authority
of the court.3 If defendant cannot be served with summons because he is temporarily abroad, but otherwise he is a Philippine resident, service of summons
may, by leave of court, be made by publication. 4 Otherwise stated, a resident defendant in an action in personam, who cannot be personally served with
summons, may be summoned either by means of substituted service in accordance with Rule 14, §8 or by publication as provided in §§ 17 and 18 of the
same Rule.5

In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in personam cannot be brought because
jurisdiction over his person is essential to make a binding decision.

On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long
as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the country, summons may be served exterritorially in
accordance with Rule 14, §17, which provides:

§17. Extraterritorial service. - When the defendant does not reside and is not found in the Philippines and the action affects the personal status of
the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or
contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under
section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of
the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court
may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within
which the defendant must answer..

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal status of the plaintiff
who is domiciled in the Philippines or the property litigated or attached.

Service of summons in the manner provided in §17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play
or due process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or
in which he has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded. 6

Applying the foregoing rules to the case at bar, private respondent's action, which is for partition and accounting under Rule 69, is in the nature of an
action quasi in rem. Such an action is essentially for the purpose of affecting the defendant's interest in a specific property and not to render a judgment
against him. As explained in the leading case of Banco Español Filipino v. Palanca :7

[An action quasi in rem is] an action which while not strictly speaking an action in rem partakes of that nature and is substantially such. . . . The action quasi
in rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property. All proceedings having for their sole object the sale or other disposition of the
property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered in these
proceedings is conclusive only between the parties.

As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, §17.
Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in
such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last
known address of the defendant; or (3) in any other manner which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes, the question is
whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, "in any . . . manner the court may deem
sufficient."

We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign
country where the defendant resides.8 Moreover, there are several reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be considered a
valid service of summons on petitioner Lourdes A. Valmonte. In the first place, service of summons on petitioner Alfredo D. Valmonte was not made upon
the order of the court as required by Rule 14, §17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to
be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, §17. As
provided in §19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the
grounds for the application.

Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes A. Valmonte was not given ample time to file her Answer
which, according to the rules, shall be not less than sixty (60) days after notice. It must be noted that the period to file an Answer in an action against a
resident defendant differs from the period given in an action filed against a nonresident defendant who is not found in the Philippines. In the former, the
period is fifteen (15) days from service of summons, while in the latter, it is at least sixty (60) days from notice.

Strict compliance with these requirements alone can assure observance of due process. That is why in one case,9although the Court considered publication in
the Philippines of the summons (against the contention that it should be made in the foreign state where defendant was residing) sufficient, nonetheless the
service was considered insufficient because no copy of the summons was sent to the last known correct address in the Philippines..

Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that service of summons upon the
defendant's husband was binding on her. But the ruling in that case is justified because summons were served upon defendant's husband in their conjugal
home in Cebu City and the wife was only temporarily absent, having gone to Dumaguete City for a vacation. The action was for collection of a sum of
money. In accordance with Rule 14, §8, substituted service could be made on any person of sufficient discretion in the dwelling place of the defendant, and
certainly defendant's husband, who was there, was competent to receive the summons on her behalf. In any event, it appears that defendant in that case
submitted to the jurisdiction of the court by instructing her husband to move for the dissolution of the writ of attachment issued in that case.

On the other hand, in the case of Gemperle v. Schenker, 10 it was held that service on the wife of a nonresident defendant was found sufficient because the
defendant had appointed his wife as his attorney-in-fact. It was held that although defendant Paul Schenker was a Swiss citizen and resident of Switzerland,
service of summons upon his wife Helen Schenker who was in the Philippines was sufficient because she was her husband's representative and attorney-in-
fact in a civil case, which he had earlier filed against William Gemperle. In fact Gemperle's action was for damages arising from allegedly derogatory
statements contained in the complaint filed in the first case. As this Court said, "[i]n other words, Mrs. Schenker had authority to sue, and had actually sued,
on behalf of her husband, so that she was, also, empowered to represent him in suits filed against him, particularly in a case, like the one at bar, which is a
consequence of the action brought by her on his behalf" 11 Indeed, if instead of filing an independent action Gemperle filed a counterclaim in the action
brought by Mr. Schenker against him, there would have been no doubt that the trial court could have acquired jurisdiction over Mr. Schenker through his
agent and attorney-in-fact, Mrs. Schenker.

In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. Although she wrote private res- pondent's
attorney that "all communications" intended for her should be addressed to her husband who is also her lawyer at the latter's address in Manila, no power of
attorney to receive summons for her can be inferred therefrom. In fact the letter was written seven months before the filing of this case below, and it appears
that it was written in connection with the negotiations between her and her sister, respondent Rosita Dimalanta, concerning the partition of the property in
question. As is usual in negotiations of this kind, the exchange of correspondence was carried on by counsel for the parties. But the authority given to
petitioner's husband in these negotiations certainly cannot be construed as also including an authority to represent her in any litigation.

For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila,
Branch 48 are REINSTATED.

SO ORDERED.
G.R. No. 175507 October 8, 2014

RAMON CHING AND POWING PROPERTIES, INC., Petitioners,

vs.
JOSEPH CHENG, JAIME CHENG, MERCEDES IGNE1 AND LUCINA SANTOS, Respondents.

DECISION

LEONEN, J.:

Rule 17 of the Rules of Civil Procedure governs dismissals of actions at the instance of the plaintiff. Hence, the "two-dismissal rule" under Rule 17, Section 1
of the Rules of Civil Procedure will not apply if the prior dismissal was done at the instance of the defendant.

This is a petition for review on certiorari assailing the decision 2 and resolution3 of the Court of Appeals in CA-G.R. SP. No. 86818, which upheld the (1)
order4 dated November 22, 2002 dismissing Civil Case No. 02-103319 without prejudice, and (2) the omnibus order5 dated July 30, 2004, which denied
petitioners’ motion for reconsideration. Both orders were issued by the Regional Trial Court of Manila, Branch 6. 6

The issues before this court are procedural. However, the factual antecedents in this case, which stemmed from a complicated family feud, must be stated to
give context to its procedural development.

It is alleged that Antonio Ching owned several businesses and properties, among which was Po Wing Properties, Incorporated (Po Wing Properties).7 His
total assets are alleged to have been worth more than 380 million. 8 It is also alleged that whilehe was unmarried, he had children from two women. 9

Ramon Ching alleged that he was the only child of Antonio Ching with his common-law wife, Lucina Santos.10 She, however, disputed this. She maintains
that even ifRamon Ching’s birth certificate indicates that he was Antonio Ching’s illegitimate child, she and Antonio Ching merely adopted him and treated
him like their own.11

Joseph Cheng and Jaime Cheng, on the other hand, claim to be Antonio Ching’s illegitimate children with his housemaid, Mercedes Igne. 12 While Ramon
Ching disputed this,13 both Mercedes and Lucina have not.14

Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996, he entrusted her with the distribution of his estate to his heirs if something were to
happen to him. She alleged that she handed all the property titles and business documents to Ramon Ching for safekeeping. 15 Fortunately, Antonio Ching
recovered from illness and allegedly demanded that Ramon Ching return all the titles to the properties and business documents.16

On July 18, 1996, Antonio Ching was murdered.17 Ramon Ching allegedly induced Mercedes Igne and her children, Joseph Cheng and Jaime Cheng, to sign
an agreement and waiver18 to Antonio Ching’s estate in consideration of ₱22.5 million. Mercedes Igne’s children alleged that Ramon Ching never paid
them.19 On October 29, 1996, Ramon Ching allegedly executed an affidavit of settlement of estate, 20 naming himself as the sole heir and adjudicating upon
himself the entirety of Antonio Ching’s estate.21

Ramon Ching denied these allegationsand insisted that when Antonio Ching died, the Ching family association, headed by Vicente Cheng, unduly influenced
him to give Mercedes Igne and her children financial aid considering that they served Antonio Ching for years. It was for this reason that an agreement and
waiver in consideration of 22.5 million was made. He also alleged that hewas summoned by the family association to execute an affidavit of settlement of
estate declaring him to be Antonio Ching’s sole heir.22

After a year of investigating Antonio Ching’s death, the police found Ramon Ching to be its primary suspect. 23Information24 was filed against him, and a
warrant of arrest25 was issued.

On October 7, 1998, Joseph Cheng, Jaime Cheng, and Mercedes Igne (the Chengs) filed a complaint for declaration of nullity of titles against Ramon Ching
before the Regional Trial Court of Manila. This case was docketed as Civil Case No. 98-91046 (the first case).26

On March 22, 1999, the complaint was amended, with leave of court, to implead additional defendants, including Po Wing Properties, of which Ramon
Ching was a primary stockholder.The amended complaint was for "Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and the
Certificates of Title Issued by Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction."27 Sometime after,
Lucina Santos filed a motion for intervention and was allowed to intervene.28

After the responsive pleadings had been filed, Po Wing Properties filed a motion to dismiss on the ground of lack of jurisdiction of the subject matter.29

On November 13, 2001, the Regional Trial Court of Manila, Branch 6, granted the motion to dismiss on the ground of lack of jurisdiction over the subject
matter.30 Upon motion of the Chengs’ counsel, however, the Chengs and Lucina Santos were given fifteen (15) days to file the appropriate pleading. They
did not do so.31

On April 19, 2002, the Chengs and Lucina Santos filed a complaint for "Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and the
Certificates of Title Issued by Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction" against Ramon
Ching and Po Wing Properties.32This case was docketed as Civil Case No. 02-103319 (the second case) and raffled to Branch 20 of the Regional Trial Court
of Manila.33 When Branch 20 was made aware of the first case, it issued an order transferring the case to Branch 6, considering that the case before it
involved substantially the same parties and causes of action.34

On November 11, 2002, the Chengs and Lucina Santos filed a motion to dismiss their complaint in the second case, praying that it be dismissed without
prejudice.35

On November 22, 2002, Branch 6 issued an order granting the motion to dismiss on the basis that the summons had not yet been served on Ramon Ching and
Po Wing Properties, and they had not yet filed any responsive pleading. The dismissal of the second case was made without prejudice. 36

On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion for reconsideration of the order dated November 22, 2002. They argue that the
dismissal should have been with prejudice under the "two dismissal rule" of Rule 17, Section 1 of the 1997 Rules of Civil Procedure, in view of the previous
dismissal of the first case.37

During the pendency of the motion for reconsideration, the Chengs and Lucina Santos filed a complaint for "Disinheritance and Declaration of Nullity of
Agreement and Waiver, Affidavit of Extra judicial Agreement, Deed of Absolute Sale, and Transfer Certificates of Title with Prayer for TRO and Writ of
Preliminary Injunction" against Ramon Ching and Po Wing Properties. This case was docketed as Civil Case No. 02-105251(the third case) and was
eventually raffled to Branch 6.38
On December 10, 2002, Ramon Ching and Po Wing Properties filed their comment/opposition to the application for temporary restraining order in the third
case. They also filed a motion to dismiss on the ground of res judicata, litis pendencia, forum-shopping, and failure of the complaint to state a cause of action.
A series of responsive pleadings were filed by both parties.39

On July 30, 2004, Branch 6 issued an omnibus order40 resolving both the motion for reconsideration in the second case and the motion to dismiss in the third
case. The trial court denied the motion for reconsideration and the motion to dismiss, holding that the dismissal of the second case was without prejudice and,
hence, would not bar the filing of the third case.41 On October 8, 2004, while their motion for reconsideration in the third case was pending, Ramon Ching
and Po Wing Properties filed a petition for certiorari (the first certiorari case) with the Court of Appeals, assailing the order dated November 22,2002 and the
portion of the omnibus order dated July 30, 2004, which upheldthe dismissal of the second case.42

On December 28, 2004, the trial court issued an order denying the motion for reconsideration in the third case. The denial prompted Ramon Ching and Po
Wing Properties to file a petition for certiorari and prohibition with application for a writ of preliminary injunction or the issuance of a temporary restraining
order (the second certiorari case) with the Court of Appeals.43

On March 23, 2006, the Court of Appeals rendered the decision 44 in the first certiorari case dismissing the petition. The appellate court ruled that Ramon
Ching and Po Wing Properties’ reliance on the "two-dismissal rule" was misplaced since the rule involves two motions for dismissals filed by the plaintiff
only. In this case, it found that the dismissal of the first case was upon the motion of the defendants, while the dismissal of the second case was at the
instance of the plaintiffs.45

Upon the denial of their motion for reconsideration, 46 Ramon Ching and Po Wing Properties filed this present petition for review47 under Rule 45 of the
Rules of Civil Procedure.

Ramon Ching and Po Wing Properties argue that the dismissal of the second case was with prejudice since the non-filing of an amended complaint in the first
case operated as a dismissal on the merits.48 They also argue that the second case should be dismissed on the ground of res judicata since there was a previous
final judgment of the first case involving the same parties, subject matter, and cause of action. 49

Lucina Santos was able to file a comment50 on the petition within the period required.51 The Chengs, however, did not comply.52 Upon the issuance by this
court of a show cause order on September 24, 2007, 53 they eventually filed a comment with substantially the same allegations and arguments as that of
Lucina Santos’.54

In their comment, respondents allege that when the trial court granted the motion to dismiss, Ramon Ching’s counsel was notified in open court that the
dismissal was without prejudice. They argue that the trial court’s order became final and executory whenhe failed to file his motion for reconsideration
within the reglementary period.55

Respondents argue that the petition for review should be dismissed on the ground of forum shopping and litis pendencia since Ramon Ching and Po Wing
Properties are seeking relief simultaneously in two forums by filing the two petitions for certiorari, which involved the same omnibus order by the trial
court.56 They also argue that the "two-dismissal rule" and res judicata did not apply since (1) the failure to amend a complaint is not a dismissal, and (2) they
only moved for dismissal once in the second case.57

In their reply,58 petitioners argue that they did not commit forum shopping since the actions they commenced against respondents stemmed from the
complaints filed against them in the trial courts.59 They reiterate that their petition for review is only about the second case; it just so happened that the
assailed omnibus order resolved both the second and third cases.60

Upon the filing of the parties’ respective memoranda,61 the case was submitted for decision.62

For this court’s resolution are the following issues:

I. Whether the trial court’s dismissal of the second case operated as a bar to the filing of a third case, asper the "two-dismissal rule"; and

II. Whether respondents committed forum shopping when they filed the third case while the motion for reconsideration of the second case was still
pending.

The petition is denied.

The "two-dismissal rule" vis-à-vis

the Rules of Civil Procedure

Dismissals of actions are governed by Rule 17 of the 1997 Rules of Civil Procedure. The pertinent provisions state:

RULE 17
DISMISSAL OF ACTIONS

SEC. 1. Dismissal upon notice by plaintiff. — A complaint may be dismissed by the plaintiff by filing a notice of dismissal at any time before service of the
answer or of a motion for summary judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal. Unless otherwise stated
in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once
dismissed in a competent court an action based on or including the same claim.

SEC. 2. Dismissal upon motion of plaintiff. — Except as provided in the preceding section, a complaint shall not be dismissed at the plaintiff's instance save
upon approval of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the
service upon him of the plaintiff’s motion for dismissal, the dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the right
of the defendant to prosecute his counterclaim in a separate action unless within fifteen (15) days from notice of the motion he manifests his preference to
have his counterclaim resolved in the same action. Unless otherwise specified in the order, a dismissal under this paragraph shall be without prejudice. A
class suit shall not be dismissed or compromised without the approval of the court.

SEC. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on
the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the
same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court. (Emphasis
supplied)
The first section of the rule contemplates a situation where a plaintiff requests the dismissal of the case beforeany responsive pleadings have been filed by the
defendant. It is donethrough notice by the plaintiff and confirmation by the court. The dismissal is without prejudice unless otherwise declared by the court.

The second section of the rule contemplates a situation where a counterclaim has been pleaded by the defendant before the service on him or her of the
plaintiff’s motion to dismiss. It requires leave of court, and the dismissal is generally without prejudice unless otherwise declared by the court.

The third section contemplates dismissals due to the fault of the plaintiff such as the failure to prosecute. The case is dismissed either upon motion of the
defendant or by the court motu propio. Generally, the dismissal is with prejudice unless otherwise declared by the court.

In all instances, Rule 17 governs dismissals at the instance of the plaintiff, not of the defendant. Dismissals upon the instance of the defendant are generally
governed by Rule 16, which covers motions to dismiss.63

In Insular Veneer, Inc. v. Hon. Plan,64 Consolidated Logging and Lumber Mills filed a complaint against Insular Veneer to recover some logs the former had
delivered to the latter. It also filed ex partea motion for issuance of a restraining order. The complaint and motion were filed in a trial court in Isabela.65

The trial court granted the motion and treated the restraining order as a writ of preliminary injunction. When Consolidated Logging recovered the logs, it
filed a notice of dismissal under Rule 17, Section 1 of the 1964 Rules of Civil Procedure.66

While the action on its notice for dismissal was pending, Consolidated Logging filed the same complaint against Insular Veneer, this time in a trial court in
Manila. It did not mention any previous action pending in the Isabela court. 67

The Manila court eventually dismissed the complaint due to the nonappearance of Consolidated Logging’s counsel during pre-trial. Consolidated Logging
subsequently returned to the Isabela court to revive the same complaint. The Isabela court apparently treated the filing of the amended complaint as a
withdrawal of its notice of dismissal.68

Insular Veneer also filed in the Isabela court a motion to dismiss, arguing that the dismissal by the Manila court constituted res judicataover the case. The
Isabela court, presided over by Judge Plan, denied the motion to dismiss. The dismissal was the subject of the petition for certiorari and mandamus with this
court.69

This court stated that:

In resolving that issue, we are confronted with the unarguable fact that Consolidated Logging on its volition dismissed its action for damages and injunction
in the Isabela court and refiled substantially the same action in the Manila court. Then, when the Manila court dismissed its action for failure to prosecute, it
went hack [sic] to the Isabela court and revived its old action by means of an amended complaint.

Consolidated Logging would liketo forget the Manila case, consign it to oblivion as if it were a bad dream, and prosecute its amended complaint in the
Isabela court as if nothing had transpired in the Manila court. We hold that it cannot elude the effects of its conduct in junking the Isabela case and in giving
that case a reincarnation in the Manila court.

Consolidated Logging’ [sic] filed a new case in Manila at its own risk. Its lawyer at his peril failed toappear at the pre-trial.70

This court ruled that the filing of the amended complaint in the Isabela court was barred by the prior dismissal of the Manila court, stating that:

The provision in section 1(e), Rule 16 of the Rules of Court that an action may be dismissed because "there is another action pending between the same
parties for the same cause" presupposes that two similar actions are simultaneously pending in two different Courts of First Instance. Lis pendensas a ground
for a motion to dismiss has the same requisites as the plea of res judicata.

On the other hand, when a pleading is amended, the original pleading is deemed abandoned. The original ceases to perform any further function as a
pleading. The case stands for trial on the amended pleading only. So, when Consolidated Logging filed its amended complaint dated March 16, 1970 in Civil
Case No. 2158, the prior dismissal order dated January 5, 1970 in the Manila case could he [sic] interposed in the Isabela court to support the defense of res
judicata.71

As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except when it is the second time that the plaintiff caused its dismissal.
Accordingly, for a dismissal to operate as an adjudication upon the merits, i.e, with prejudice to the re-filing of the same claim, the following requisites must
be present:

(1) There was a previous case that was dismissed by a competent court;

(2) Both cases were based on or include the same claim;

(3) Both notices for dismissal werefiled by the plaintiff; and

(4) When the motion to dismiss filed by the plaintiff was consented to by the defendant on the ground that the latter paid and satisfied all the claims
of the former.72

The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."73 When a complaint is dismissed a second time, the plaintiff is now barred from
seeking relief on the same claim.

The dismissal of the second case was without prejudice in view of the "two-dismissal rule"

Here, the first case was filed as an ordinary civil action. It was later amended to include not only new defendants but new causes of action that should have
been adjudicated in a special proceeding. A motion to dismiss was inevitably filed by the defendants onthe ground of lack of jurisdiction.

The trial court granted that motion to dismiss, stating that:

A careful perusal of the allegations of the Amended Complaint dated February 10, 1999, filed by Plaintiff Joseph Cheng, show that additional causes of
action were incorporated i.e. extra-judicial settlement of the intestate estate of Antonio Ching and receivership, subject matters, which should be threshed out
in a special proceedings case. This is a clear departure from the main cause of action in the original complaint which is for declaration of nullity of certificate
of titles with damages. And the rules of procedure which govern special proceedings case are different and distinct from the rules of procedure applicable in
an ordinary civil action.
In view of the afore-going, the court finds the Motion to Dismiss filed by Atty. Maria Lina Nieva S. Casals to be meritorious and the Court is left with no
alternative but to dismiss as it hereby dismisses the Amended Complaint.

However, on motion of Atty. Mirardo Arroyo Obias, counsel for the plaintiffs, he is given a period of fifteen (15) days from today, within which to file an
appropriate pleading, copy furnished to all the parties concerned.

....

SO ORDERED.74

Petitioners are of the view that when Atty. Mirardo Arroyo Obias failed to file the appropriate pleading within fifteen (15) days, he violated the order of the
court. This, they argue, made the original dismissal an adjudication upon the merits, in accordance with Rule 17, Section 3, i.e., a dismissal through the
default of the plaintiff. Hence, they argue that when respondents filed the second case and then caused its dismissal, the dismissal should have been with
prejudice according to Rule 17, Section 1, i.e., two dismissals caused by the plaintiff on the same claim. Unfortunately, petitioners’ theory is erroneous.

The trial court dismissed the first case by granting the motion to dismiss filed by the defendants. When it allowed Atty. Mirardo Arroyo Obias a period of
fifteen (15) days tofile an appropriate pleading, it was merely acquiescing to a request made bythe plaintiff’s counsel that had no bearing on the dismissal of
the case.

Under Rule 17, Section 3, a defendant may move to dismiss the case if the plaintiff defaults; it does not contemplate a situation where the dismissal was due
to lack of jurisdiction. Since there was already a dismissal prior to plaintiff’s default, the trial court’s instruction to file the appropriate pleading will not
reverse the dismissal. If the plaintiff fails to file the appropriate pleading, the trial court does not dismiss the case anew; the order dismissing the case still
stands.

The dismissal of the first case was done at the instance of the defendant under Rule 16, Section 1(b) of the Rules of Civil Procedure, which states:

SECTION 1. Grounds.— Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on
any of the following grounds:

....

(b) That the court has no jurisdiction over the subject matter of the claim;

....

Under Section 5 of the same rule,75 a party may re-file the same action or claim subject to certain exceptions.

Thus, when respondents filed the second case, they were merely refiling the same claim that had been previously dismissed on the basis of lack of
jurisdiction. When they moved to dismiss the second case, the motion to dismiss can be considered as the first dismissal at the plaintiff’s instance.

Petitioners do not deny that the second dismissal was requested by respondents before the service of any responsive pleadings. Accordingly, the dismissal at
this instance is a matter of right that is not subject to the trial court’s discretion. In O.B. Jovenir Construction and Development Corporation v. Macamir
Realty and Development Corporation:76

[T]he trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter of right to
the plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, the trial court has no choice but to consider the complaint as dismissed,
since the plaintiff may opt for such dismissal as a matter of right, regardless of ground. 77 (Emphasis supplied)

For this reason, the trial court issued its order dated November 22, 2002 dismissing the case, without prejudice. The order states:

When this Motion was called for hearing, all the plaintiffs namely, Joseph Cheng, Jaime Cheng, Mercedes Igne and Lucina Santos appeared without their
counsels. That they verbally affirmed the execution of the Motion to Dismiss, as shown by their signatures over their respective names reflected thereat.
Similarly, none of the defendants appeared, except the counsel for defendant, Ramon Chang [sic], who manifested that they have not yet filed their Answer
as there was a defect in the address of Ramon Cheng [sic] and the latter has not yet been served with summons.

Under the circumstances, and further considering that the defendants herein have not yet filed their Answers nor any pleading, the plaintiffs has [sic] the right
to out rightly [sic] cause the dismissal of the Complaint pursuant to Section 2, Rule 17 of the 1997 Rules of Civil Procedure without prejudice. Thereby, and
as prayed for, this case is hereby ordered DISMISSED without prejudice.

SO ORDERED.78 (Emphasis supplied)

When respondents filed the third case on substantially the same claim, there was already one prior dismissal at the instance of the plaintiffs and one prior
dismissal at the instance of the defendants. While it is true that there were two previous dismissals on the same claim, it does not necessarily follow that the
re-filing of the claim was barred by Rule 17, Section 1 of the Rules of Civil Procedure. The circumstances surrounding each dismissal must first be examined
to determine before the rule may apply, as in this case.

Even assuming for the sake of argument that the failure of Atty. Mirardo Arroyo Obias to file the appropriate pleading in the first case came under the
purview of Rule 17, Section 3 of the Rules of Civil Procedure, the dismissal in the second case is still considered as one without prejudice. In Gomez v.
Alcantara:79

The dismissal of a case for failure to prosecute has the effect of adjudication on the merits, and is necessarily understood to be with prejudice to the filing of
another action, unless otherwise provided in the order of dismissal. Stated differently, the general rule is that dismissal of a case for failure to prosecute is to
be regarded as an adjudication on the merits and with prejudice to the filing of another action, and the only exception is when the order of dismissal expressly
contains a qualification that the dismissal is without prejudice.80 (Emphasis supplied)

In granting the dismissal of the second case, the trial court specifically orders the dismissal to be without prejudice. It is only when the trial court’s order
either is silent on the matter, or states otherwise, that the dismissal will be considered an adjudication on the merits.

However, while the dismissal of the second case was without prejudice, respondents’ act of filing the third case while petitioners’ motion for reconsideration
was still pending constituted forum shopping.

The rule against forum shopping and the "twin-dismissal rule"

In Yap v. Chua:81

Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or
successively, on the supposition that one or the other court would make a favorable disposition. Forum shopping may be resorted to by any party against
whom an adverse judgment or order has been issued in one forum, in an attempt to seek a favorable opinion in another, other than by appeal or a special civil
action for certiorari. Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice and congest court dockets. What
iscritical is the vexation brought upon the courts and the litigants by a party who asks different courts to rule on the same or related causes and grant the same
or substantially the same reliefs and in the process creates the possibility of conflicting decisions being renderedby the different fora upon the same issues.
Willful and deliberate violation of the rule against forum shopping is a ground for summary dismissal of the case; it may also constitute direct contempt.

To determine whether a party violated the rule against forum shopping, the most important factor toask is whether the elements of litis pendentiaare present,
or whether a final judgment in one case will amount to res judicatain another; otherwise stated, the test for determining forum shopping is whether in the two
(or more) cases pending, there is identity of parties, rights or causes of action, and reliefs sought. 82 (Emphasis supplied)

When respondents filed the third case, petitioners’ motion for reconsideration of the dismissal of the second case was still pending. Clearly, the order of
dismissal was not yet final since it could still be overturned upon reconsideration, or even on appeal to a higher court.

Moreover, petitioners were not prohibited from filing the motion for reconsideration. This court has already stated in Narciso v. Garcia 83 that a defendant has
the right to file a motion for reconsideration of a trial court’s order denying the motion to dismiss since "[n]o rule prohibits the filing of such a motion for
reconsideration."84 The second case, therefore, was still pending when the third case was filed.

The prudent thing that respondents could have done was to wait until the final disposition of the second case before filing the third case. As it stands, the
dismissal of the second case was without prejudice to the re-filing of the same claim, in accordance with the Rules of Civil Procedure. In their haste to file
the third case, however, they unfortunately transgressed certain procedural safeguards, among which are the rules on litis pendentiaand res judicata.

In Yap:

Litis pendentiaas a ground for the dismissal of a civil action refers to that situation wherein another action is pending between the same parties for the same
cause of action, such that the second action becomes unnecessary and vexatious. The underlying principle of litis pendentia is the theory that a party is not
allowed to vex another more than once regarding the same subject matter and for the same cause of action. This theory is founded on the public policy that
the same subject matter should not be the subject of controversy incourts more than once, in order that possible conflicting judgments may be avoided for the
sake of the stability of the rights and status of persons.

The requisites of litis pendentiaare: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the identity of rights
asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that judgment in one, regardless ofwhich
party is successful, would amount to res judicatain the other. 85 (Emphasis supplied)

There is no question that there was an identity of parties, rights, and reliefs in the second and third cases. While it may be true that the trial court already
dismissed the second case when the third case was filed, it failed to take into account that a motion for reconsideration was filed in the second case and, thus,
was still pending. Considering that the dismissal of the second case was the subject of the first certiorari case and this present petition for review, it can be
reasonably concluded that the second case, to this day, remains pending.

Hence, when respondents filed the third case, they engaged in forum shopping. Any judgment by this court on the propriety of the dismissal of the second
case will inevitably affect the disposition of the third case.

This, in fact, is the reason why there were two different petitions for certiorari before the appellate court. The omnibus order dated July 30, 2004 denied two
pending motions by petitioners: (1) the motion for reconsideration in the second case and (2) the motion to dismiss in the third case. Since petitioners are
barred from filing a second motion for reconsideration of the second case, the first certiorari case was filed before the appellate court and is now the subject
of this review. The denial of petitioners’ motion for reconsideration in the third case, however, could still be the subject of a separate petition for certiorari.
That petition would be based now on the third case, and not on the second case.

This multiplicity of suits is the veryevil sought to be avoided by the rule on forum shopping. In Dy v. Mandy Commodities Co., Inc.,86 the rule is that:

Once there is a finding of forum shopping, the penalty is summary dismissal not only of the petition pending before this Court, but also of the other case that
is pending in a lower court. This is so because twin dismissal is a punitive measure to those who trifle with the orderly administration of justice.87 (Emphasis
supplied)

The rule originated from the 1986 case of Buan v. Lopez, Jr.88 In Buan, petitioners filed a petition for prohibition with this court while another petition for
prohibition with preliminary injunction was pending before the Regional Trial Court of Manila involving the same parties and based on the same set of facts.
This court, in dismissing both actions, stated:

Indeed, the petitioners in both actions . . . have incurred not only the sanction of dismissal oftheir case before this Court in accordance with Rule 16 of the
Rules of Court, but also the punitive measure of dismissal of both their actions, that in this Court and that in the Regional Trial Court as well. Quite recently,
upon substantially identical factual premises, the Court en banchad occasion to condemn and penalize the act of litigants of filing the same suit in different
courts, aptly described as "forum shopping[.]"89

The rule essentially penalizes the forum shopper by dismissing all pending actions on the same claim filed in any court. Accordingly, the grant of this petition
would inevitably result in the summary dismissal of the third case. Any action, therefore, which originates from the third case pending with any court would
be barred by res judicata.

Because of the severity of the penalty of the rule, an examination must first be made on the purpose of the rule.1âwphi1Parties resort to forum shopping
when they file several actions of the same claim in different forums in the hope of obtaining a favorable result. It is prohibited by the courts as it "trifle[s]
with the orderly administration of justice."90

In this case, however, the dismissal of the first case became final and executory upon the failure of respondents’counsel to file the appropriate pleading. They
filed the correct pleading the second time around but eventually sought its dismissal as they"[suspected] that their counsel is not amply protecting their
interests as the case is not moving for almost three (3) years."91 The filing of the third case, therefore, was not precisely for the purpose of obtaining a
favorable result butonly to get the case moving, in an attempt to protect their rights.

It appears that the resolution on the merits of the original controversy between the parties has long beenmired in numerous procedural entanglements. While
it might be more judicially expedient to apply the "twin-dismissal rule" and disallow the proceedings in the third case to continue, it would not serve the ends
of substantial justice. Courts of justice must always endeavor to resolve cases on their merits, rather than summarily dismiss these on technicalities: [C]ases
should be determined on the merits, after all parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or
procedural imperfections. In that way, the ends of justice would be served better. Rules of procedure are mere tools designed to expedite the decision or
resolution of cases and other matters pending in court. A strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than
promote substantial justice, must be avoided.In fact, Section 6 of Rule 1 states that the Rules [on Civil Procedure] shall be liberally construed in order to
promote their objective of ensuring the just, speedy and inexpensive disposition of every action and proceeding. 92 (Emphasis supplied)

The rule on forum shopping will not strictly apply when it can be shown that (1) the original case has been dismissed upon request of the plaintiff for valid
procedural reasons; (2) the only pending matter is a motion for reconsideration; and (3) there are valid procedural reasons that serve the goal of substantial
justice for the fresh new· case to proceed.

The motion for reconsideration filed in the second case has since been dismissed and is now the subject of a petition for certiorari. The third case filed
apparently contains the better cause of action for the plaintiffs and is now being prosecuted by a counsel they are more comfortable with. Substantial justice
will be better served if respondents do not fall victim to the labyrinth in the procedures that their travails led them. It is for this reason that we deny the
petition. WHEREFORE, the petition is DENIED. The Regional Trial Court of Manila, Branch 6 is ordered to proceed with Civil Case No. 02-105251 with
due and deliberate dispatch.

SO ORDERED.
 G.R. No. 130974 August 16, 2006

MA. IMELDA M. MANOTOC, Petitioner,

vs.
HONORABLE COURT OF APPEALS and AGAPITA TRAJANO on behalf of the Estate of ARCHIMEDES TRAJANO, Respondents.

DECISION

VELASCO, JR., J.:

The court’s jurisdiction over a defendant is founded on a valid service of summons. Without a valid service, the court cannot acquire jurisdiction over the
defendant, unless the defendant voluntarily submits to it. The defendant must be properly apprised of a pending action against him and assured of the
opportunity to present his defenses to the suit. Proper service of summons is used to protect one’s right to due process.

The Case

This Petition for Review on Certiorari 1 under Rule 45 presents the core issue whether there was a valid substituted service of summons on petitioner for the
trial court to acquire jurisdiction. Petitioner Manotoc claims the court a quo should have annulled the proceedings in the trial court for want of jurisdiction
due to irregular and ineffective service of summons.

The Facts

Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on behalf of the Estate of Archimedes Trajano v. Imelda ‘Imee’ R.
Marcos-Manotoc 2 for Filing, Recognition and/or Enforcement of Foreign Judgment. Respondent Trajano seeks the enforcement of a foreign court’s
judgment rendered on May 1, 1991 by the United States District Court of Honolulu, Hawaii, United States of America, in a case entitled Agapita Trajano, et
al. v. Imee Marcos-Manotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for wrongful death of deceased Archimedes Trajano committed by military
intelligence officials of the Philippines allegedly under the command, direction, authority, supervision, tolerance, sufferance and/or influence of defendant
Manotoc, pursuant to the provisions of Rule 39 of the then Revised Rules of Court.

Based on paragraph two of the Complaint, the trial court issued a Summons 3 on July 6, 1993 addressed to petitioner at Alexandra Condominium Corporation
or Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.

On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker of petitioner at the
condominium unit mentioned earlier. 4 When petitioner failed to file her Answer, the trial court declared her in default through an Order 5 dated October 13,
1993.

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss 6 on the ground of lack of jurisdiction of the trial court over her
person due to an invalid substituted service of summons. The grounds to support the motion were: (1) the address of defendant indicated in the Complaint
(Alexandra Homes) was not her dwelling, residence, or regular place of business as provided in Section 8, Rule 14 of the Rules of Court; (2) the party (de la
Cruz), who was found in the unit, was neither a representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on personal
and substituted service of summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be
ineffective and futile.

During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales, who testified that he saw defendant Manotoc as a visitor in
Alexandra Homes only two times. He also identified the Certification of Renato A. de Leon, which stated that Unit E-2104 was owned by Queens Park
Realty, Inc.; and at the time the Certification was issued, the unit was not being leased by anyone. Petitioner also presented her Philippine passport and the
Disembarkation/Embarkation Card 7 issued by the Immigration Service of Singapore to show that she was a resident of Singapore. She claimed that the
person referred to in plaintiff’s Exhibits "A" to "EEEE" as "Mrs. Manotoc" may not even be her, but the mother of Tommy Manotoc, and granting that she
was the one referred to in said exhibits, only 27 out of 109 entries referred to Mrs. Manotoc. Hence, the infrequent number of times she allegedly entered
Alexandra Homes did not at all establish plaintiff’s position that she was a resident of said place.

On the other hand, Agapita Trajano, for plaintiffs’ estate, presented Robert Swift, lead counsel for plaintiffs in the Estate of Ferdinand Marcos Human Rights
Litigation, who testified that he participated in the deposition taking of Ferdinand R. Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified that
petitioner’s residence was at the Alexandra Apartment, Greenhills. 8 In addition, the entries 9 in the logbook of Alexandra Homes from August 4, 1992 to
August 2, 1993, listing the name of petitioner Manotoc and the Sheriff’s Return, 10 were adduced in evidence.

On October 11, 1994, the trial court rejected Manotoc’s Motion to Dismiss on the strength of its findings that her residence, for purposes of the Complaint,
was Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue, Pasig, Metro Manila, based on the documentary evidence of respondent Trajano. The trial
court relied on the presumption that the sheriff’s substituted service was made in the regular performance of official duty, and such presumption stood in the
absence of proof to the contrary. 11

On December 21, 1994, the trial court discarded Manotoc’s plea for reconsideration for lack of merit. 12

Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the Court of Appeals (CA) on January 20, 1995, docketed as CA-G.R. SP No.
36214 seeking the annulment of the October 11, 1994 and December 21, 1994 Orders of Judge Aurelio C. Trampe.

Ruling of the Court of Appeals

On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the Petition for Certiorari and Prohibition. The court a quo adopted the findings of
the trial court that petitioner’s residence was at Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig, Metro Manila, which was also the
residence of her husband, as shown by the testimony of Atty. Robert Swift and the Returns of the registered mails sent to petitioner. It ruled that the
Disembarkation/Embarkation Card and the Certification dated September 17, 1993 issued by Renato A. De Leon, Assistant Property Administrator of
Alexandra Homes, were hearsay, and that said Certification did not refer to July 1993—the month when the substituted service was effected.

In the same Decision, the CA also rejected petitioner’s Philippine passport as proof of her residency in Singapore as it merely showed the dates of her
departure from and arrival in the Philippines without presenting the boilerplate’s last two (2) inside pages where petitioner’s residence was indicated. The CA
considered the withholding of those pages as suppression of evidence. Thus, according to the CA, the trial court had acquired jurisdiction over petitioner as
there was a valid substituted service pursuant to Section 8, Rule 14 of the old Revised Rules of Court.

On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied by the CA in its Resolution 16dated October 8, 1997.

Hence, petitioner has come before the Court for review on certiorari.
The Issues

Petitioner raises the following assignment of errors for the Court’s consideration:

I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE DECISION AND RESOLUTION IN QUESTION
(ANNEXES A AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE IN RULING THAT THE TRIAL COURT ACQUIRED JURISDICTION
OVER THE PERSON OF THE PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN ACCORDANCE WITH SECTION 8, RULE
14 OF THE REVISED RULES OF COURT.

II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT THERE WAS A VALID SERVICE OF
SUMMONS ON AN ALLEGED CARETAKER OF PETITIONER’S RESIDENCE IN COMPLETE DEFIANCE OF THE RULING IN CASTILLO VS.
CFI OF BULACAN, BR. IV, G.R. NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE PROPRIETY OF SUCH SERVICE
UPON MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY RESIDES.

III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT THE RESIDENCE OF THE HUSBAND IS
ALSO THE RESIDENCE OF HIS WIFE CONTRARY TO THE RULING IN THE BANK OF THE PHILIPPINE ISLANDS VS. DE COSTER, G.R. NO.
23181, MARCH 16, 1925, 47 PHIL. 594.

IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY THE RULE ON EXTRA-TERRITORIAL
SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES OF COURT. 17

The assigned errors bring to the fore the crux of the disagreement—the validity of the substituted service of summons for the trial court to acquire jurisdiction
over petitioner.

The Court’s Ruling

We GRANT the petition.

Acquisition of Jurisdiction

Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary appearance in court. When the defendant
does not voluntarily submit to the court’s jurisdiction or when there is no valid service of summons, "any judgment of the court which has no jurisdiction
over the person of the defendant is null and void." 18 In an action strictly in personam, personal service on the defendant is the preferred mode of service, that
is, by handing a copy of the summons to the defendant in person. If defendant, for excusable reasons, cannot be served with the summons within a reasonable
period, then substituted service can be resorted to. While substituted service of summons is permitted, "it is extraordinary in character and in derogation of
the usual method of service." 19 Hence, it must faithfully and strictly comply with the prescribed requirements and circumstances authorized by the rules.
Indeed, "compliance with the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction." 20

Requirements for Substituted Service

Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:

SEC. 8. 21 Substituted service. – If the defendant cannot be served within a reasonable time as provided in the preceding section [personal service on
defendant], service may be effected (a) by leaving copies of the summons at the defendant’s residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant’s office or regular place of business with some competent person in charge thereof.

We can break down this section into the following requirements to effect a valid substituted service:

(1) Impossibility of Prompt Personal Service

The party relying on substituted service or the sheriff must show that defendant cannot be served promptly or there is impossibility of prompt
service. 22 Section 8, Rule 14 provides that the plaintiff or the sheriff is given a "reasonable time" to serve the summons to the defendant in person, but no
specific time frame is mentioned. "Reasonable time" is defined as "so much time as is necessary under the circumstances for a reasonably prudent and
diligent man to do, conveniently, what the contract or duty requires that should be done, having a regard for the rights and possibility of loss, if any[,] to the
other party." 23 Under the Rules, the service of summons has no set period. However, when the court, clerk of court, or the plaintiff asks the sheriff to make
the return of the summons and the latter submits the return of summons, then the validity of the summons lapses. The plaintiff may then ask for an alias
summons if the service of summons has failed. 24 What then is a reasonable time for the sheriff to effect a personal service in order to demonstrate
impossibility of prompt service? To the plaintiff, "reasonable time" means no more than seven (7) days since an expeditious processing of a complaint is
what a plaintiff wants. To the sheriff, "reasonable time" means 15 to 30 days because at the end of the month, it is a practice for the branch clerk of court to
require the sheriff to submit a return of the summons assigned to the sheriff for service. The Sheriff’s Return provides data to the Clerk of Court, which the
clerk uses in the Monthly Report of Cases to be submitted to the Office of the Court Administrator within the first ten (10) days of the succeeding month.
Thus, one month from the issuance of summons can be considered "reasonable time" with regard to personal service on the defendant.

Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and reasonable promptness and speed so as not to
prejudice the expeditious dispensation of justice. Thus, they are enjoined to try their best efforts to accomplish personal service on defendant. On the other
hand, since the defendant is expected to try to avoid and evade service of summons, the sheriff must be resourceful, persevering, canny, and diligent in
serving the process on the defendant. For substituted service of summons to be available, there must be several attempts by the sheriff to personally serve the
summons within a reasonable period [of one month] which eventually resulted in failure to prove impossibility of prompt service. "Several attempts" means
at least three (3) tries, preferably on at least two different dates. In addition, the sheriff must cite why such efforts were unsuccessful. It is only then that
impossibility of service can be confirmed or accepted.

(2) Specific Details in the Return

The sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted personal service. 25 The efforts made to find the
defendant and the reasons behind the failure must be clearly narrated in detail in the Return. The date and time of the attempts on personal service, the
inquiries made to locate the defendant, the name/s of the occupants of the alleged residence or house of defendant and all other acts done, though futile, to
serve the summons on defendant must be specified in the Return to justify substituted service. The form on Sheriff’s Return of Summons on Substituted
Service prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy requires a narration of the efforts made to find the defendant
personally and the fact of failure. 26 Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service
should be shown by stating the efforts made to find the defendant personally and the failure of such efforts," which should be made in the proof of service.

(3) A Person of Suitable Age and Discretion

If the substituted service will be effected at defendant’s house or residence, it should be left with a person of "suitable age and discretion then residing
therein." 27 A person of suitable age and discretion is one who has attained the age of full legal capacity (18 years old) and is considered to have enough
discernment to understand the importance of a summons. "Discretion" is defined as "the ability to make decisions which represent a responsible choice and
for which an understanding of what is lawful, right or wise may be presupposed". 28 Thus, to be of sufficient discretion, such person must know how to read
and understand English to comprehend the import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the
earliest possible time for the person to take appropriate action. Thus, the person must have the "relation of confidence" to the defendant, ensuring that the
latter would receive or at least be notified of the receipt of the summons. The sheriff must therefore determine if the person found in the alleged dwelling or
residence of defendant is of legal age, what the recipient’s relationship with the defendant is, and whether said person comprehends the significance of the
receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must
be clearly and specifically described in the Return of Summons.

(4) A Competent Person in Charge

If the substituted service will be done at defendant’s office or regular place of business, then it should be served on a competent person in charge of the place.
Thus, the person on whom the substituted service will be made must be the one managing the office or business of defendant, such as the president or
manager; and such individual must have sufficient knowledge to understand the obligation of the defendant in the summons, its importance, and the
prejudicial effects arising from inaction on the summons. Again, these details must be contained in the Return.

Invalid Substituted Service in the Case at Bar

Let us examine the full text of the Sheriff’s Return, which reads:

THIS IS TO CERTIFY that on many occasions several attempts were made to serve the summons with complaint and annexes issued by this Honorable
Court in the above entitled case, personally upon the defendant IMELDA ‘IMEE’ MARCOS-MANOTOC located at Alexandra Condominium Corpration
[sic] or Alexandra Homes E-2 Room 104 No. 29 Merlaco [sic] Ave., Pasig, Metro-Manila at reasonable hours of the day but to no avail for the reason that
said defendant is usually out of her place and/or residence or premises. That on the 15th day of July, 1993, substituted service of summons was resorted to in
accordance with the Rules of Court in the Philippines leaving copy of said summons with complaint and annexes thru [sic] (Mr) Macky de la Cruz, caretaker
of the said defendant, according to (Ms) Lyn Jacinto, Receptionist and Telephone Operator of the said building, a person of suitable age and discretion, living
with the said defendant at the given address who acknowledged the receipt thereof of said processes but he refused to sign (emphases supplied).

WHEREFORE, said summons is hereby returned to this Honorable Court of origin, duly served for its record and information.

Pasig, Metro-Manila July 15, 1993. 29

A meticulous scrutiny of the aforementioned Return readily reveals the absence of material data on the serious efforts to serve the Summons on petitioner
Manotoc in person. There is no clear valid reason cited in the Return why those efforts proved inadequate, to reach the conclusion that personal service has
become impossible or unattainable outside the generally couched phrases of "on many occasions several attempts were made to serve the summons x x x
personally," "at reasonable hours during the day," and "to no avail for the reason that the said defendant is usually out of her place and/or residence or
premises." Wanting in detailed information, the Return deviates from the ruling—in Domagas v. Jensen 30 and other related cases 31—that the pertinent facts
and circumstances on the efforts exerted to serve the summons personally must be narrated in the Return. It cannot be determined how many times, on what
specific dates, and at what hours of the day the attempts were made. Given the fact that the substituted service of summons may be assailed, as in the present
case, by a Motion to Dismiss, it is imperative that the pertinent facts and circumstances surrounding the service of summons be described with more
particularity in the Return or Certificate of Service.

Besides, apart from the allegation of petitioner’s address in the Complaint, it has not been shown that respondent Trajano or Sheriff Cañelas, who served such
summons, exerted extraordinary efforts to locate petitioner. Certainly, the second paragraph of the Complaint only states that respondents were "informed,
and so [they] allege" about the address and whereabouts of petitioner. Before resorting to substituted service, a plaintiff must demonstrate an effort in good
faith to locate the defendant through more direct means. 32 More so, in the case in hand, when the alleged petitioner’s residence or house is doubtful or has
not been clearly ascertained, it would have been better for personal service to have been pursued persistently.

In the case Umandap v. Sabio, Jr., 33 it may be true that the Court held that a Sheriff’s Return, which states that "despite efforts exerted to serve said process
personally upon the defendant on several occasions the same proved futile," conforms to the requirements of valid substituted service. However, in view of
the numerous claims of irregularities in substituted service which have spawned the filing of a great number of unnecessary special civil actions of certiorari
and appeals to higher courts, resulting in prolonged litigation and wasteful legal expenses, the Court rules in the case at bar that the narration of the efforts
made to find the defendant and the fact of failure written in broad and imprecise words will not suffice. The facts and circumstances should be stated with
more particularity and detail on the number of attempts made at personal service, dates and times of the attempts, inquiries to locate defendant, names of
occupants of the alleged residence, and the reasons for failure should be included in the Return to satisfactorily show the efforts undertaken. That such efforts
were made to personally serve summons on defendant, and those resulted in failure, would prove impossibility of prompt personal service.

Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would encourage routine performance of their precise duties relating to
substituted service—for it would be quite easy to shroud or conceal carelessness or laxity in such broad terms. Lastly, considering that monies and properties
worth millions may be lost by a defendant because of an irregular or void substituted service, it is but only fair that the Sheriff’s Return should clearly and
convincingly show the impracticability or hopelessness of personal service.

Granting that such a general description be considered adequate, there is still a serious nonconformity from the requirement that the summons must be left
with a "person of suitable age and discretion" residing in defendant’s house or residence. Thus, there are two (2) requirements under the Rules: (1) recipient
must be a person of suitable age and discretion; and (2) recipient must reside in the house or residence of defendant. Both requirements were not met. In this
case, the Sheriff’s Return lacks information as to residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriff’s general assertion that de la
Cruz is the "resident caretaker" of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged receptionist and telephone operator of Alexandra Homes. It
is doubtful if Mr. de la Cruz is residing with petitioner Manotoc in the condominium unit considering that a married woman of her stature in society would
unlikely hire a male caretaker to reside in her dwelling. With the petitioner’s allegation that Macky de la Cruz is not her employee, servant, or representative,
it is necessary to have additional information in the Return of Summons. Besides, Mr. Macky de la Cruz’s refusal to sign the Receipt for the summons is a
strong indication that he did not have the necessary "relation of confidence" with petitioner. To protect petitioner’s right to due process by being accorded
proper notice of a case against her, the substituted service of summons must be shown to clearly comply with the rules.

It has been stated and restated that substituted service of summons must faithfully and strictly comply with the prescribed requirements and in the
circumstances authorized by the rules. 34

Even American case law likewise stresses the principle of strict compliance with statute or rule on substituted service, thus:

The procedure prescribed by a statute or rule for substituted or constructive service must be strictly pursued. 35There must be strict compliance with the
requirements of statutes authorizing substituted or constructive service. 36
Where, by the local law, substituted or constructive service is in certain situations authorized in the place of personal service when the latter is inconvenient
or impossible, a strict and literal compliance with the provisions of the law must be shown in order to support the judgment based on such substituted or
constructive service. 37 Jurisdiction is not to be assumed and exercised on the general ground that the subject matter of the suit is within the power of the
court. The inquiry must be as to whether the requisites of the statute have been complied with, and such compliance must appear on the record. 38 The fact
that the defendant had actual knowledge of attempted service does not render the service effectual if in fact the process was not served in accordance with the
requirements of the statute.39

Based on the above principles, respondent Trajano failed to demonstrate that there was strict compliance with the requirements of the then Section 8, Rule 14
(now Section 7, Rule 14 of the 1997 Rules of Civil Procedure).

Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the trial court perforce must be annulled.

The court a quo heavily relied on the presumption of regularity in the performance of official duty. It reasons out that "[t]he certificate of service by the
proper officer is prima facie evidence of the facts set out herein, and to overcome the presumption arising from said certificate, the evidence must be clear
and convincing." 40

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the Sheriff’s Return must show that serious efforts or
attempts were exerted to personally serve the summons and that said efforts failed. These facts must be specifically narrated in the Return. To reiterate, it
must clearly show that the substituted service must be made on a person of suitable age and discretion living in the dwelling or residence of defendant.
Otherwise, the Return is flawed and the presumption cannot be availed of. As previously explained, the Return of Sheriff Cañelas did not comply with the
stringent requirements of Rule 14, Section 8 on substituted service.

In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the presumption of regularity in the performance of official functions by the sheriff is
not applicable in this case where it is patent that the sheriff’s return is defective (emphasis supplied)." While the Sheriff’s Return in the Venturanza case had
no statement on the effort or attempt to personally serve the summons, the Return of Sheriff Cañelas in the case at bar merely described the efforts or
attempts in general terms lacking in details as required by the ruling in the case of Domagas v. Jensen and other cases. It is as if Cañelas’ Return did not
mention any effort to accomplish personal service. Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig City, our findings that the
substituted service is void has rendered the matter moot and academic. Even assuming that Alexandra Homes Room 104 is her actual residence, such fact
would not make an irregular and void substituted service valid and effective.

IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed March 17, 1997 Decision and October 8, 1997 Resolution
of the Court of Appeals and the October 11, 1994 and December 21, 1994 Orders of the Regional Trial Court, National Capital Judicial Region, Pasig City,
Branch 163 are hereby REVERSEDand SET ASIDE.No costs.

SO ORDERED.
G.R. No. 193420, October 14, 2015

7107 ISLANDS PUBLISHING, INC., Petitioner, v. THE HOUSE PRINTERS CORPORATION, Respondent.

DECISION

BRION, J.:*

This petition for review on certiorari seeks to reverse the 10 November 20091 and 17 August 20102resolutions of the Court of Appeals (CA) in CA-G.R.
UDK-SP No. 6325. The CA dismissed the petitioner's petition for certiorari challenging the 30 January 2009 and 29 June 2009 orders of the Regional Trial
Court of Quezon City (RTC), Branch 221, in Civil Case No. Q-06-58473.3 This RTC ruling, in turn, denied its motion to dismiss.

ANTECEDENTS

On 25 July 2006, respondent The House Printers Corporation (House Printers) filed a complaint for a sum of money and damages against the 7107 Islands
Publishing, Inc. (7107 Publishing) before the RTC. House Printers alleged that 7107 Publishing refused to pay for PHP 1,178,700.00 worth of magazines it
purchased in 2005. The complaint was docketed as Civil Case No. Q-06-58473.

On 1 August 2006, Manuel S. Paguyo, Sheriff IV, served the summons and a copy of the complaint on 7107 Publishing through its Chief Accountant Laarni
Milan. Sheriff Paguyo explained on his return that the President and the in-house counsel were not at the office when he arrived so he served the summons on
the highest ranking officer.

On 16 August 2006, 7107 Publishing filed a motion to dismiss on the ground that the RTC failed to acquire jurisdiction over its person. 7107 Publishing
argued that if the defendant was a corporation, service of summons could only be made on the president, managing partner, general manager, corporate
secretary, treasurer, or in-house counsel pursuant to Rule 14, Section 11 of the Rules of Court. Petitioner further argued that this was an exclusive list,
citing E.B. Villarosa & Partner Co., Ltd v. Benito4 and Delta Motor Sales Corporation v. Mangosing5

On 4 September 2006, House Printers filed its opposition to petitioner's motion to dismiss. House Printers argued that there was substantial compliance with
the requirement of service, citing G&G Trading Corporation v. Court of Appeals6 and Millenium Industrial Commercial Corporation v. Tan.7

On 30 January 2009, the RTC denied the motion to dismiss for lack of merit. The RTC held that there was substantial compliance with the rule on service of
summons and directed the petitioner to file its answer within five days from receipt of the denial.

On 16 March 2009, 7107 Publishing moved for the reconsideration of the denial. It reiterated that Rule 14, Section 11 is an exclusive list that requires strict
compliance.

On 29 June 2009, the RTC denied the motion for reconsideration. It held that although a Chief Accountant was not included in the enumeration under Rule
14, Section 11, Chief Accountant Milan was able to turn over the summons and the complaint to the defendants; therefore, the purpose of Rule 14 was
attained. The petitioner received a copy of the order on 4 August 2009.

On 2 October 2009, 7107 Publishing filed a petition for certiorari before the CA against the 30 January 2009 and 29 June 2009 orders of the RTC. The
petition was filed by registered mail.

On 7 October 2009, 7107 Publishing manifested before the CA that it had filed a petition for certiorari on 2 October 2009.

On 10 November 2009, the CA dismissed the petition outright because the petitioner failed to pay the docket and the other legal fees.

On 18 December 2009, 7107 Publishing moved for the reconsideration of the dismissal. It explained that: (1) it was constrained to file the petition by
registered mail on 2 October 2009, prior to the last day of the reglementary period; (2) on 7 October 2009, petitioner's counsel went to the RTC to give an
advance copy of the petition and pay the docket and other lawful fees; (3) however, the court personnel at the receiving section refused to accept payment;
(4) instead, the court personnel instructed the petitioner to file a manifestation that the petition was filed by registered mail then wait until the CA receives
and dockets the petition, to avoid double docketing and double payment; (5) the petitioner complied and was instructed by the Civil Cases Section to wait for
a notice from the CA to pay the docket fees; (6) petitioner relied in good faith on the court personnel's advice, but the notice to pay never arrived; (7) instead,
the petitioner received the 10 November 2009 order of dismissal on 14 December 2009. The petitioner prayed for the CA to allow him to pay the required
fees and to give due course to the petition.

On 17 August 2010, the CA denied reconsideration. It held that even if the court personnel refused to accept the petitioner's tender of payment, it could have
simply paid the required fees by postal, money order.

On 8 October 2010, 7107 Publishing filed the present petition for review on certiorari .

THE PETITION

The petitioner argues: (1) that the RTC committed grave abuse of discretion when it denied its motion to dismiss because the RTC did not acquire
jurisdiction over its person; and (2) that the CA was not justified in dismissing its petition for certiorari for nonpayment of the required fees because of the
court personnel's refusal to accept its tender of payment on four separate occasions. The petitioner begs this Court to brush aside any procedural barriers and
give due course to its petition.

In its Comment dated 16 May 2011, the respondent maintains: (1) that the petitioner did not suffer any undue prejudice from the service of summons on its
accountant; and (2) that the petitioner failed to substantiate its allegations that court personnel refused his tender of payment four times.

OUR RULING

We deny the petition for lack of merit. Rule 14 of the Rules of Court provides:

SEC. 11. Service upon domestic private juridical entity. - When the defendant is a corporation, partnership or association organized under the laws of the
Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or
in-house counsel. (emphasis supplied)ChanRoblesVirtualawlibrary
We have long established that this enumeration is an exclusive list under the principle of expresso unius est exclusio alterius.8 Under the present Rules of
Court, the rule of substantial compliance invoked by the respondent is no longer applicable. To quote our decision in Sps. Mason v. Court of Appeals:

The question of whether the substantial compliance rule is still applicable under Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been settled
in Villarosa which applies squarely to the instant case. In the said case, petitioner E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with principal office
address at 102 Juan Luna St., Davao City, and with branches at 2492 Bay View Drive, Tambo, Paranaque, Metro Manila, and Kolambog, Lapasan, Cagayan
de Oro City, entered into a sale with development agreement with private respondent Imperial Development Corporation. As Villarosa failed to comply with
its contractual obligation, private respondent initiated a suit for breach of contract and damages at the Regional Trial Court of Makati. Summons, together
with the complaint, was served upon Villarosa through its branch manager at Kolambog, Lapasan, Cagayan de Oro City. Villarosa filed a Special
Appearance with Motion to Dismiss on the ground of improper service of summons and lack of jurisdiction. The trial court denied the motion and ruled that
there was substantial compliance with the rule, thus, it acquired jurisdiction over Villarosa. The latter questioned the denial before us in its petition
for certiorari . We decided in Villarosa's favor and declared the trial court without jurisdiction to take cognizance of the case. We held that there was no valid
service of summons on Villarosa as service was made through a person not included in the enumeration in Section 11, Rule 14 of the 1997 Rules of Civil
Procedure, which revised the Section 13, Rule 14 of the 1964 Rules of Court. We discarded the trial court's basis for denying the motion to dismiss, namely,
private respondents' substantial compliance with the rule on service of summons, and fully agreed with petitioners' assertions that the enumeration under the
new rule is restricted, limited and exclusive, following the rule in statutory construction that expressio unios est exclusio alterius. Had the Rules of Court
Revision Committee intended to liberalize the rule on service of summons, we said, it could have easily done so by clear and concise language. Absent a
manifest intent to liberalize the rule, we stressed strict compliance with Section 11, Rule 14 of the 1997 Rules of Civil Procedure.

Neither can herein petitioners invoke our ruling in Millenium to support their position for said case is not on all fours with the instant case. We must stress
that Millenium was decided when the 1964 Rules of Court were still in force and effect, unlike the instant case which falls under the new rule.
Hence, the cases cited by petitioners where we upheld the doctrine of substantial compliance must be deemed overturned by Villarosa, which is the
later case.9 (emphasis supplied)

Therefore, the petitioner's argument is meritorious; service of summons on an officer other than those enumerated in Section 11 is invalid.10

However, although the petition before the CA was meritorious, the petitioner failed to pay the required docket fees and other legal fees. The payment of
docket fees within the prescribed period is mandatory for the filing of a petition for certiorari .11 The court acquires jurisdiction over the case only upon the
payment of the prescribed docket fees. The payment of the full amount of the docket fee is a condition sine qua non for jurisdiction to rest.

We agree with the respondent that the petitioner failed to substantiate his allegations that the Court of Appeals personnel refused his offer of payment four
times. Moreover, these are factual allegations that we cannot entertain because we are not a trier of facts. Nevertheless, the petitioner pleads that
technicalities be set aside in order to dispense substantial justice.

The payment of docket fees, like the rule of strict compliance in the service of summons, is not a mere technicality of procedure but is an essential
requirement of due process. Procedural rules are not to be set aside simply because their strict application would prejudice a party's substantive rights. Like
all rules, they must be observed. They can only be relaxed for the most persuasive of reasons where a litigant's degree of noncompliance with the rules is
severely disproportionate to the injustice he is bound to suffer as a consequence.12

In the present case, the petitioner appeals to our sense of equity and justice to relax the procedural rules in his favor because his petition for certiorari is
meritorious. However, we cannot overlook the inequity of relaxing the procedural rules for the petitioner in CA-G.R. UDK-SP No. 6325 in order to dismiss
the respondent's complaint in Civil Case No. Q-06-58473 for the Sheriffs noncompliance with the rule on the service of summons. If we will be equitable to
the petitioner, then fairness demands that we must also be equitable to the respondent.

In rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat
against substantive rights, and not the other way around.13 As the petitioner itself said, the ends of justice would be best served if we do away with the
technicalities as we dispense substantial justice. We thus believe that the best course of action under the circumstances is to allow the RTC to decide the case
on the merits.

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The Regional Trial Court of Quezon City, Branch 221
is DIRECTED to proceed with Civil Case No. Q-06-58473 and the petitioner is ORDERED to file its answer within five (5) days from receipt of this
decision. No costs.

SO ORDERED.chanroblesvirtuallawlibrary
 G.R. No. 136325. July 29, 2005

MANUEL M. SERRANO, Petitioners,

vs.
EUGENIO C. DELICA, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

At bar is a petition for review on certiorari1 assailing the Decision2 dated September 30, 1998 and Resolution dated November 13, 1998 of the Court of
Appeals in CA-G.R. SP No. 46632, entitled "Manuel M. Serrano, petitioner, vs. Hon. Alberto L. Lerma, Presiding Judge, Regional Trial Court, Branch 256,
Muntinlupa City, and Eugenio C. Delica, respondents.

The petition stemmed from the following facts:

On June 30, 1997, Eugenio C. Delica, respondent, filed with the Regional Trial Court, Branch 256, Muntinlupa City, presided by Judge Alberto L. Lerma, a
complaint for cancellation of Deeds of Sale, Transfer Certificates of Title, Joint Venture Agreement, and damages, with prayer for the issuance of a writ of
preliminary injunction and temporary restraining order, docketed as Civil Case No. 97-120. Impleaded as defendants were Manuel M. Serrano, now
petitioner, Manuel P. Blanco, MBJ Land, Inc., and MARILAQUE Land, Inc.

The complaint alleges inter alia that respondent is the registered owner of ten parcels of land situated in Bagbagan, Muntinlupa City, with a total area of
2,062,475 square meters, more or less, covered by ten Transfer Certificates of Title (TCT) Nos. S-12619 to S-12628 of the Registry of Deeds, same city. On
August 10, 1995, after having been "promised with financial bonanza" by petitioner and Manuel Blanco, respondent executed in favor of the latter a special
power of attorney. Blanco then sold to MBJ Land, Inc. respondent’s three parcels of land covered by TCT Nos. S-12625, S-12626 and S-12628. Thus, these
titles were cancelled and in lieu thereof, TCT Nos. 207282, 207283 and 207284 were issued in the name of MBJ Land, Inc.

On December 4, 1996, MBJ Land, Inc. entered into a Joint Venture Agreement with MARILAQUE Land, Inc. involving the three parcels of land.

On December 23, 1996, petitioner Serrano again "unduly influenced, coerced and intimidated" respondent into executing an affidavit wherein he confirmed
that he sold his remaining seven parcels of land, covered by TCT Nos. S-12619 to S-126124 and S-12627, to petitioners. Later, respondent found that these
seven titles were cancelled and new titles (TCT Nos. 209636 to 209642) were issued in petitioner’s name based on a spurious Deed of Absolute Sale.

Respondent thus prayed in his complaint that the special power of attorney, affidavit, the new titles issued in the names of petitioner and MBJ Land, Inc., and
contracts of sale be cancelled; and that petitioner and his co-defendants be ordered to pay respondent, jointly and severally, actual, moral and exemplary
damages in the amount of ₱200,000.00, as well as attorney’s fee of ₱200,000.00 and costs of litigation. Respondent likewise prayed that, pending trial on the
merits, a temporary restraining order and a writ of preliminary injunction be issued ordering the defendants to immediately restore him to his possession of
the parcels of land in question; and that after trial, the writ of injunction be made permanent.

Petitioner then filed his answer with compulsory counterclaim, denying the material allegations of the complaint.

Respondent later amended his complaint.

On August 5, 1997, the trial court issued a temporary restraining order and on September 8, 1997, a preliminary injunction directing petitioner and his co-
defendants to immediately restore respondent to his possession.

Petitioner then filed consolidated motions for reconsideration praying that the complaint be dismissed for respondent’s failure to pay the required docket fee;
and that Judge Lerma be directed to inhibit himself from hearing the case.

The trial court, in its Order dated January 7, 1998, denied petitioner’s consolidated motions.

Petitioner seasonably filed with the Court of Appeals a petition for certiorari and prohibition with application for a preliminary injunction and temporary
restraining order assailing the trial court’s twin Orders dated September 8, 1997 ordering the issuance of a writ of preliminary injunction; and denying his
consolidated motions dated January 7, 1998. Petitioner raised three issues: (a) whether respondent paid the correct docket fee; (b) whether the trial court’s
issuance of the writ of preliminary injunction is in order; and (c) whether Judge Lerma should inhibit himself from hearing the case.

On September 30, 1998, the Court of Appeals rendered a Decision partially granting the petition by: (1) affirmingthe trial court’s ruling that the docket fee
was correctly paid; (2) setting aside the trial court’s Order directing the issuance of a writ of preliminary injunction; and (3) leaving the matter of
inhibition to the discretion of Judge Lerma.

Petitioner then filed a motion for partial reconsideration of the Court of Appeals’ ruling that respondent correctly paid the docket fee and that the motion
for inhibition should be addressed to Judge Lerma’s sound discretion.

In a Resolution dated November 13, 1998, the Appellate Court denied the motion.

Hence the instant petition for review on certiorari.

The core issues for our resolution are:

1. Whether respondent paid the correct docket fee when he filed his complaint in Civil Case No. 97-120; and

2. Whether the matter of inhibition should be addressed to Judge Lerma’s discretion.

On the first issue, we cannot overemphasized the importance of paying the correct docket fees. Such fees are intended to take care of court expenses in the
handling of cases in terms of cost of supplies, use of equipment, salaries and fringe benefits of personnel, etc., computed as to man-hours used in the handling
of each case. The payment of said fees, therefore, cannot be made dependent on the result of the action taken, without entailing tremendous losses to the
government and to the judiciary in particular.3

Thus, the rule is that "upon the filing of the pleading or other application which initiates an action or proceeding, the fees prescribed therefor shall be paid in
full."4 However, a litigant who is a pauper is exempt from the payment of the docket fees. But the fees shall be a lien on the judgment rendered in favor of
said pauper litigant, unless the court otherwise provides.5
It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fees that vests a trial court with
jurisdiction over the subject matter or nature of the action.6

In the case at bar, petitioner impugns the Court of Appeals’ ruling that respondent’s complaint in Civil Case No. 97-120 is not capable of pecuniary
estimation and that, therefore, the docket fee is fixed at ₱600.00 pursuant to Section 7(b)(1), Rule 141 of the Revised Rules of Court.

We agree with petitioner that the Court of Appeals erred in issuing such ruling. It should have considered the allegations of the complaint and the character
of the reliefs sought, the criteria in determining the nature of an action.7

A careful examination of respondent’s complaint is that it is a real action. In Paderanga vs. Buissan,8 we held that "in a real action, the plaintiff seeks
the recovery of real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of Court, 9 a real action is one ‘affecting title to real property or
for the recovery of possession of, or for partition or condemnation of, or foreclosure of a mortgage on a real property.’"

Obviously, respondent’s complaint is a real action involving not only the recovery of real properties, but likewise the cancellation of the titles thereto.

Considering that respondent’s complaint is a real action, the Rule requires that "the assessed value of the property, or if there is none, the estimated
value thereof shall be alleged by the claimant and shall be the basis in computing the fees."10

We note, however, that neither the "assessed value" nor the "estimated value" of the questioned parcels of land were alleged by respondent in both his
original and amended complaint. What he stated in his amended complaint is that the disputed realties have a "BIR zonal valuation" of ₱1,200.00 per square
meter. However, the alleged "BIR zonal valuation" is not the kind of valuation required by the Rule. It is the assessed value of the realty.11 Having utterly
failed to comply with the requirement of the Rule that he shall allege in his complaint the assessed value of his real properties in controversy, the correct
docket fee cannot be computed. As such, his complaint should not have been accepted by the trial court. We thus rule that it has not acquired jurisdiction
over the present case for failure of herein respondent to pay the required docket fee. On this ground alone, respondent’s complaint is vulnerable to dismissal.

Since the complaint is dismissible, the second issue on whether Judge Lerma should inhibit himself from hearing the case has become moot and academic.

WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 46632 are hereby
REVERSED. The complaint in Civil Case No. 97-120 is ordered DISMISSED without prejudice.

SO ORDERED.
 G.R. No. 181676 June 11, 2014

ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,

vs.
SANNAEDLE CO., LTD., Respondent.

DECISION

PERALTA, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision1 and Resolution,2 dated April
25, 2006 and February 6, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 71916.

The facts follow.

This case stemmed from a Complaint3 for Sum of Money filed by respondent against petitioner. The complaint alleged that petitioner and respondent
executed a Memorandum of Agreement wherein respondent was engaged to supply and erect insulated panel systems at various pavilions at the Philippine
Centennial Exposition Theme Park, specifically for the Phase I Project, for an agreed amount of US$3,745,287.94.

Pursuant to the Memorandum of Agreement, petitioner made various payments amounting to US$3,129,667.32 leaving a balance of US$615,620.33.
Respondent claims that it made several written demands for petitioner to pay the said balance, but the latter continuously refused to heed its plea.

Thereafter, petitioner filed its Answer with Counterclaim.4

Respondent then moved for judgment on the pleadings on the ground that the Answer admitted all material allegations of the Complaint and, therefore, failed
to tender an issue. Thus, respondent deems that petitioner’s Answer, in effect, admitted the existence of the Memorandum of Agreement and its failure to pay
the balance despite repeated demands.

In a Judgment5 dated October 6, 2000, the Regional Trial Court (RTC) of Makati City rendered judgment in favor of respondent. Pertinent portions of said
decision read:

In claiming that the Answer of the [petitioner] failed to tender an issue, [respondent] argued that the present action is for collection of the amount of
US$615,620.33 with interest at the rate of 12% per annum, which amount represents the balance of the payment under the Memorandum of Agreement,
Annex B of the Complaint entered into between [respondent] and [petitioner] which was not denied in the Answer. [Respondent] further claimed that in a
letter dated February 2, 2000, Annex C of the Complaint, it demanded payment of the said amount of US$615,620.33 and in reply thereto, [petitioner] stated
in part –

"We refer to your letter dated February 2, 2000 regarding the US$2,635,333.00 balance unpaid claim of SANNAEDLE.

xxx xxx xxx

2. Phase I Contract

While we recognize being obligated to this amount, we do not have at the moment the capability to pay it. This is because our financial position has been
severely affected by the freezing of the government of all our collectibles on EXPO projects including the ₱80M (approx. US$2.0M) from DPWH intended
to pay the cost increment of reverting back the use of Sannaedle in Phase I.

xxx xxx xxx

The partial amount of about US$1.4M paid by ASIAKONSTRUKT to Sannaedle in excess of its allocated budget of US$1.745M actually came from its own
source and initiatives. This effort made by ASIAKONSTRUKT significantly reduced the balance due Sannaedle to only US$615,620.33.

xxx xxx xxx

The Court notes that in the Answer with Counterclaim of the [petitioner], the execution of the Memorandum of Agreement, Annex B of the Complaint was
admitted (paragraph 13, Answer). Further, it did not deny specifically the claim of the [respondent] of being entitled to collect the said amount of
US$615,620.33.6

xxxx

WHEREFORE, judgment is rendered in favor [of] the [respondent] and [petitioner] is ordered to pay [respondent] the amount of US $615,620.33 with
interest thereon at the rate of 12% per annum from February 2, 2000 until fully paid.

No pronouncement as to costs.

SO ORDERED.7

Petitioner filed a motion for reconsideration against said decision. However, the same was denied in an Order 8dated December 13, 2000.

Thus, petitioner filed an appeal before the CA.

On April 25, 2006, the CA rendered its assailed Decision which disposed as follows:

WHEREFORE, the instant appeal is DISMISSED. The judgment of the Regional Trial Court of Makati City, Branch 138, dated October 6, 2000, is hereby
AFFIRMED.

Costs against the [petitioner].

SO ORDERED.9
Petitioner filed a motion for reconsideration, but the CA denied it in a Resolution dated February 6, 2008.

Hence, the present petition wherein petitioner raises this sole issue for our resolution: whether or not judgment on the pleadings is proper.

Petitioner contends that the judgment on the pleadings is not proper, because it raised special and affirmative defenses in its Answer. It asserts that with this
specific denial, a genuine issue of fact had been joined to the extent that a judgment on the pleadings could not be made.

For its part, respondent counters that petitioner’s Answer admitted the material allegations of its complaint regarding the cause of action, which is collection
of sum of money. Respondent emphasizes that assuming petitioner’s defense of respondent’s lack of capacity to sue has a leg to stand on, still, the same
cannot prevent respondent from seeking the collection of petitioner’s unpaid balance.

The Court finds the petition bereft of merit.

Judgment on the pleadings is governed by Section 1, Rule 34 of the 1997 Rules of Civil Procedure which reads:

Sec. 1. Judgment on the pleadings. – Where an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading,
the court may, on motion of that party, direct judgment on such pleading. However, in actions for declaration of nullity or annulment of marriage or for legal
separation, the material facts alleged in the complaint shall always be proved. 10

Judgment on the pleadings is proper when an answer fails to tender an issue, or otherwise admits the material allegations of the adverse party’s pleading. An
answer fails to tender an issue if it does not comply with the requirements of a specific denial as set out in Sections 8 11 and 10,12 Rule 8 of the 1997 Rules of
Civil Procedure, resulting in the admission of the material allegations of the adverse party’s pleadings. 13

This rule is supported by the Court’s ruling in Mongao v. Pryce Properties Corporation 14 wherein it was held that "judgment on the pleadings is governed by
Section 1,Rule 34 of the 1997 Rules of Civil Procedure, essentially a restatement of Section 1, Rule 19 of the 1964 Rules of Court then applicable to the
proceedings before the trial court. Section 1, Rule 19 of the Rules of Court provides that where an answer fails to tender an issue, or otherwise admits the
material allegations of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. The answer would fail to
tender an issue, of course, if it does not comply with the requirements for a specific denial set out in Section 10 (or Section 8) of Rule 8; and it would admit
the material allegations of the adverse party’s pleadings not only where it expressly confesses the truthfulness thereof but also if it omits to deal with them at
all."15

Further, in First Leverage and Services Group, Inc. v. Solid Builders, Inc., 16 this Court held that where a motion for judgment on the pleadings is filed, the
essential question is whether there are issues generated by the pleadings. In a proper case for judgment on the pleadings, there is no ostensible issue at all
because of the failure of the defending party’s answer to raise an issue. The answer would fail to tender an issue, of course, if it does not deny the material
allegations in the complaint or admits said material allegations of the adverse party’s pleadings by confessing the truthfulness thereof and/or omitting to deal
with them at all.17

Here, it is irrefutable that petitioner acknowledged having entered into a Memorandum of Agreement with respondent and that it still has an unpaid balance
of US$615,620.33.

We note that respondent’s complaint for a sum of money is based mainly on the alleged failure of petitioner to pay the balance of US$615,620.33 under the
Memorandum of Agreement. Quoting petitioner’s Answer, it is obvious that it admitted the foregoing material allegations in paragraphs 3, 4 and 5 of the
complaint, which states as follows:

3. The [Petitioner] ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION ("ASIAKONSTRUKT" for brevity), is a corporation
duly incorporated under the laws of the Philippines, with capacity to sue and be sued, and with business address at the Second Floor, Union
Ajinomoto Building, Sen. Gil Puyat Avenue, Makati City, and within the jurisdiction of this Honorable Court; and where it may be served with
summons and other court processes of this Honorable Court,

4. That the [respondent] and the [petitioner] entered into a Memorandum of Agreement in Makati City, within the jurisdiction of this Honorable
Court, dated February 17, 1998, wherein the [Petitioner] corporation agreed with and ordered the herein [Respondent], as Contractor, to design and
install INSUPANEL SYSTEMS at various pavilions, etc. at expo projects site; and specifically for the Phase I project at an agreed amount of
US$3,745,287.94(Par. 2.1). A xerox copy of this Memorandum of Agreement dated February 17, 1998 between [Respondent] and [Petitioner]
consisting of six (6) pages, is attached hereto as Annex B and made an integral part hereof.

5. That pursuant to this Memorandum of Agreement (Exhibit B)and contract price of US$3,745,287.94, various payments have been made by
[Petitioner] Corporation on this Phase I project totaling US$3,129,667.32, thus leaving a balance of US$615,620.33.18

While petitioner allegedly raised affirmative defenses, i.e., defect in the certification of non-forum shopping, no legal capacity to sue and fortuitous event, the
same cannot still bar respondent from seeking the collection of the unpaid balance. Other than these affirmative defenses, petitioner’s denial neither made a
specific denial that a Memorandum of Agreement was perfected nor did it contest the genuineness and due execution of said agreement.

We, therefore, sustain the CA and quote with approval the well-reasoned findings and conclusions of the appellate court contained in its Decision, to wit:

The [respondent’s] cause of action for collection of Sum of Money is founded mainly on the Memorandum of Agreement validly executed by both parties.

First, the allegations in the [petitioner’s] Answer do not make out a specific denial that a Memorandum of Agreement was perfected between the parties.
Second, the [respondent] does not contest the due execution and/or genuineness of said Memorandum of Agreement. In fact, paragraph 13 of the Answer
categorically admits paragraphs 4 and 5 of the Complaint.

In its Answer, the [petitioner] offered the following defenses, to wit:

19. The complaint should be dismissed on the ground that [respondent's J certification of non-forum shopping is defective.1âwphi1 Rule 7, Section
5 of the 1997 Revised Rules of Civil Procedure ... xxx xxx xxx

22. [Respondent] has no legal capacity to sue, as it is a foreign corporation doing business in the Philippines without a valid license. xxx xxx xxx

27. The unexpected default of FCCC on its obligations to [petitioner} on account of the Senate Blue Ribbon Committee investigation was a
fortuitous event which suspended, if not extinguished [petitioner's} obligation to FCCC.

In essence, the [petitioner] justifies its refusal to tender payment of the balance of US$615,620.33 to the [respondent], to the failure of the First Centennial
Clark Corporation (FCCC) to comply with its obligations to ASIAKONSTRUKT which [it] characterizes as a fortuitous event.
The defenses raised by [petitioner] cannot prevent the [respondent] from seeking the collection of the amount of US$615,620.33. The express terms of the
Memorandum of Agreement, the genuineness and due execution of which are not denied by the [petitioner]. It cannot assert the said defenses in order to
resist the [respondent's] claim for the aforesaid sum of money, especially where it has been sufficiently shown by the allegations of the Complaint and the
Answer that the [petitioner] is clearly liable for the payment thereof.19

WHEREFORE, the instant petition is DENIED. The Decision dated April 25, 2006 and Resolution dated February 6, 2008 of the Court of Appeals are
hereby AFFIRMED.

SO ORDERED.