Ramon Ching and Po Wing Properties vs. Hon.

Rodriguez
Facts: Respondents Cheng et al. filed a Complaint against the petitioners and Stronghold
Insurance Company and all persons claiming rights or titles from Ramon Ching (Ramon) and his
successors-in-interest.
In the Complaint, the respondents alleged the different cause of actions. They prayed that the
Court must declare RAMON CHING who murdered his father ANTONIO CHING disqualified as
heir and from inheriting to (sic) the estate of his father; declare the nullity of the defendant
RAMON CHING transfer the parcel of lands; declare the nullity of the transfer of the shares of
stocks from the name of Antonio Ching to Ramon Ching due to falsification of their signatures 
during the transfer; declare the nullity and to have no force and effect the AFFIDAVIT OF
SETTLEMENT OF ESTATE executed by Ramon Ching for being contrary to law and existing
jurisprudence; and declare the nullity of deed of sales or having illegally procured the
ownership and titles of the properties.
Petitiner Ching filed with the RTC a Motion to Dismiss alleging forum shopping, litis
pendentia, res judicata and the respondents as not being the real parties in interest. But the
RTC issued an Omnibus Order denying the petitioners' Motion to Dismiss.
The respondents filed an Amended Complaint dated April 7, 2005 impleading Metrobank as the
successor-in-interest of co-defendant Global Bank. The Amended Complaint also added a new
cause of action relative to the existence of a Certificate of Premium Plus Acquisition (CPPA) in
the amount of ₱4,000,000.00 originally issued by PhilBank to Antonio. The respondents prayed
that they be declared as the rightful owners of the CPPA and that it be immediately released to
them.
The RTC issued a pre- trial order. But the petitioners filed a Motion to Dismiss the respondents'
Amended Complaint on the alleged ground of the RTC's lack of jurisdiction over the subject
matter of the Complaint. The petitioners argued that since the Amended Complaint sought the
release of the CPPA to the respondents, the latter's declaration as heirs of Antonio, and the
propriety of Ramon's disinheritance, the suit partakes of the nature of a special proceeding and
not an ordinary action for declaration of nullity. Hence, jurisdiction pertains to a probate or
intestate court and not to the RTC acting as an ordinary court.
Issue: WON the nature of the proceeding is special proceeding and not an ordinary action
hence
Held: No.
An action for reconveyance and annulment of title with damages is a civil action, whereas
matters relating to settlement of the estate of a deceased person such as advancement of
property made by the decedent, partake of the nature of a special proceeding, which
concomitantly requires the application of specific rules as provided for in the Rules of Court. A
special proceeding is a remedy by which a party seeks to establish a status, a right, or a
particular fact. It is distinguished from an ordinary civil action where a party sues another for
the enforcement or protection of a right, or the prevention or redress of a wrong  To initiate a
special proceeding, a petition and not a complaint should be filed.
Under Article 916 of the NCC, disinheritance can be effected only through a will wherein the
legal cause therefor shall be specified. This Court agrees with the RTC and the CA that while the
respondents in their Complaint and Amended Complaint sought the disinheritance of Ramon,
no will or any instrument supposedly effecting the disposition of Antonio's estate was ever
mentioned. Hence, despite the prayer for Ramon's disinheritance, Civil Case No. 02-105251
does not partake of the nature of a special proceeding and does not call for the probate court's
exercise of its limited jurisdiction.

In Marjorie Cadimas v. Marites Carrion and Gemma Hugo  the Court declared:

It is an elementary rule of procedural law that jurisdiction of the court over the subject matter
is determined by the allegations of the complaint irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein. As a necessary
consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up
in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would
almost entirely depend upon the defendant. What determines the jurisdiction of the court is
the nature of the action pleaded as appearing from the allegations in the complaint. The
averments in the complaint and the character of the relief sought are the matters to be
consulted.1âwphi1

In sum, this Court agrees with the CA that the nullification of the documents subject of Civil
Case No. 02-105251 could be achieved in an ordinary civil action, which in this specific case was
instituted to protect the respondents from the supposedly fraudulent acts of Ramon.

Paglaum Management & Development Corp. vs. Union Bank of the Philippines, et al.
Facts: Petitioner Paglaum Management and Development Corporation (PAGLAUM) is the
registered owner of three parcels of land located in the Province of Cebu. While Respondent
Union Bank extended HealthTech a credit line in the amount of ₱ 10,000,000. To secure this
obligation, PAGLAUM executed three Real Estate Mortgages on behalf of HealthTech and in
favor of Union Bank. But it was stated in the REM that The venue of all suits and actions arising
out of or in connection with this Mortgage shall be in Makati, Metro Manila or in the place
where any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the
parties hereto waiving any other venue.
However, under the two Real Estate Mortgages dated 11 February 1994, The venue of all suits
and actions arising out of or in connection with this Mortgage shall be in Cebu City Metro
Manila or in the place where any of the Mortgaged Properties is located, at the absolute option
of the Mortgagee, the any other venue. This same provision was also contained in the Real
Estate Mortgage dated 22 April 1998.
Unfortunately, due to financial crisis, both parties entered into a Restructuring
Agreement, which states that any action or proceeding arising out of or in connection therewith
shall be commenced in Makati City, with both parties waiving any other venue. Despite the
Restructuring Agreement, HealthTech failed to pay its obligation, prompting Union Bank to
send a demand letter, stating that the latter would be constrained to institute foreclosure
proceedings, unless HealthTech settled its account in full. Since HealthTech defaulted on its
payment, Union Bank extra-judicially foreclosed the mortgaged properties.
Consequently, HealthTech filed a Complaint for Annulment of Sale and Titles with Damages and
Application for Temporary Restraining Order and Writ of Injunction. The case was raffled to the
Regional Trial Court, National Capital Judicial Region, Makati City. But ion Bank filed a Motion to
Dismiss on the following grounds: (a) lack of jurisdiction over the issuance of the injunctive
relief; (b) improper venue; and (c) lack of authority of the person who signed the Complaint.
The RTC granted the motion resulting to the dismissal of the case, as well as the dissolution of
the Writ of Preliminary Injunction. The CA affirmed the decision.

In the instant Petition, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement
governs the choice of venue between the parties, and (b) the agreement on the choice of venue
must be interpreted with the convenience of the parties in mind and the view that any
obscurity therein was caused by Union Bank.

On the other hand, Union Bank contends that: (a) the Restructuring Agreement is applicable
only to the contract of loan, and not to the Real Estate Mortgage, and (b) the mortgage
contracts explicitly state that the choice of venue exclusively belongs to it

Issue:  WON Makati City is the proper venue to assail the foreclosure of the subject real estate
mortgage.
Held: No.
The case, being an action for Annulment of Sale and Titles resulting from the extrajudicial
foreclosure by Union Bank of the mortgaged real properties, is classified as a real action. An
action to annul a real estate mortgage foreclosure sale is no different from an action to annul a
private sale of real property.
Being a real action it is governed by Rule 4 of the Rules of Cour, which states that, 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. However this rule shall not apply Where the parties
have validly agreed in writing before the filing of the action on the exclusive venue thereof (sec.
3, rule 4).
At the outset, we must make clear that under Section 4 (b) of Rule 4 of the 1997 Rules of Civil
Procedure, the general rules on venue of actions shall not apply where the parties, before the
filing of the action, have validly agreed in writing on an exclusive venue. The mere stipulation
on the venue of an action, however, 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.

In the case at bar, These quoted provisions of the Real Estate Mortgages and the later
Restructuring Agreement clearly reveal the intention of the parties to implement a restrictive
venue stipulation, which applies not only to the principal obligation, but also to the mortgages.
The phrase "waiving any other venue" plainly shows that the choice of Makati City as the venue
for actions arising out of or in connection with the Restructuring Agreement and the Collateral,
with the Real Estate Mortgages being explicitly defined as such, is exclusive.

Even if this Court were to consider the venue stipulations under the Real Estate Mortgages, it
must be underscored that those provisions did not contain words showing exclusivity or
restrictiveness. In fact, in the Real Estate Mortgages dated 11 February 1994, the phrase
"parties hereto waiving" – from the entire phrase "the parties hereto waiving any other venue"
– was stricken from the final executed contract. Following the ruling in Sps. Lantin as earlier
quoted, in the absence of qualifying or restrictive words, the venue stipulation should only be
deemed as an agreement on an additional forum, and not as a restriction on a specified
place.1âwphi1

United Alloy Philippines Corporation, et al. vs. United Coconut Planters Bank
Facts: United Alloy Philippines Corporation (UNIALLOY) applied for and was granted a credit
accommodation by herein respondent United Coconut Planters Bank (UCPB) in the amount of
PhP50,000,000.00, as evidenced by a Credit Agreement. Part of UNIALLOY's obligation under
the Credit Agreement was secured by a Surety Agreement, dated December 18, 2000, executed
by UNIALLOY Chairman, Jakob Van Der Sluis (Van Der Sluis), UNIALLOY President, David Chua
and his spouse, Luten Chua (Spouses Chua), and one Yang Kim Eng (Yang). Six (6) Promissory
Notes, were later executed by UNIALLOY in UCPB's favor.

In addition, as part of the consideration for the credit accommodation, UNIALLOY and UCPB
also entered into a "lease-purchase" contract wherein the former assured the latter that it will
purchase several real properties which UCPB co-owns with the Development Bank of the
Philippines.
Subsequently, UNIALLOY failed to pay its loan obligations. The collection case was filed with the
Regional Trial Court of Makati City (RTC of Makati) and UCPB also unilaterally rescinded its
leasepurchase contract with UNIALLOY.

On the other hand, on even date, UNIALLOY filed against UCPB, Claiming that it holds office and
conducts its business operations in Tagoloan, Misamis Oriental, UNIALLOY filed the case with
the Regional Trial Court of Cagayan De Oro City (RTC of CDO. UNIALLOY contended that Van Der
Sluis, in cahoots with UCPB Vice-President Robert Chua, committed fraud, manipulation and
misrepresentation to obtain the subject loan for their own benefit. UNIALLOY prayed, among
others, that three (3) of the six (6) Promissory Notes it executed be annulled or reformed or
that it be released from liability thereon.

CPB and its co-defendants also filed a Motion to Dismiss UNIALLOY's complaint for annulment
of contract on the grounds of improper venue and the RTC of CDO issued an Orde dismissing
UNIALLOY's complaint for annulment of contract.

UNIALLOY then filed a petition for certiorari and mandamus with the CA and also prayed for the
issuance of a writ of preliminary injunction. The CA granted UNIALLOY’s prayer for the issuance
of a writ of preliminary injunction. UCPB filed a petition for certiorari with the SC which
restrained the CA from enforcing its Resolution granting the issuance of the writ of preliminary
injunction. Eventually, the SC rendered its Decision denying UCPB’s petition for certiorari and
affirming the CA Resolution granting the writ of preliminary injunction

Thereafter, the CA dismissed UNIALLOY's certiorari petition and affirmed the RTC of CDO.
UNIALLOY then filed a petition for review on certiorari, which the SC denied. Meanwhile,
UNIALLOY filed with the RTC of Makati an omnibus motion praying for the suspension of the
proceedings of the collection case in the said court on the ground of pendency of the certiorari
petition it filed with the SC. However, the RTC denied UNIALLOY’s motion. Subsequently, the
RTC of Makati rendered Judgment in the collection case in favor of UCPB. The CA affirmed.

Issue: WON UNIALLOY’s complaint for annulment of contract should be dismissed on the
ground of improper venue.

Held: Yes

The RTC was correct in dismissing UNIALLOY’s Complaint on the ground of improper venue. In
the case at bench, paragraph 18 of the LPA expressly provides that “[a]ny legal action arising
out of or in connection with this Agreement shall be brought exclusively in the proper courts of
Makati City, Metro Manila.” Hence, UNIALLOY should have filed its complaint before the RTC of
Makati City, and not with the RTC of Cagayan de Oro City. But to justify its choice of venue,
UNIALLOY insists that the subject matter of its Complaint in Civil Case No. 2001-219 is not the
LPA, but the fictitious loans that purportedly matured on April 17, 2001. UNIALLOY’s insistence
lacks merit. Its Complaint unequivocally sought to declare “as null and void the unilateral
rescission made by defendant UCPB of its subsisting Lease Purchase Agreement with
[UNIALLOY].” What UCPB unilaterally rescinded is the LPA and without it there can be no
unilateral rescission to speak of. Hence, the LPA is the subject matter or at least one of the
subject matters of the Complaint. Moreover, and to paraphrase the aforecited paragraph 18 of
the LPA, as long as the controversy arises out of or is connected therewith, any legal action
should be filed exclusively before the proper courts of Makati City. Thus, even assuming that
the LPA is not the main subject matter, considering that what is being sought to be annulled is
an act connected and inseparably related thereto, the Complaint should have been filed before
the proper courts in Makati City
Belen vs Chavez
Facts: Spouses Pacleb (private respondents) filed an action for the enforcement of aforeign judgment
against spouses Belen (petitioners). The complaint alleged that thePacleb secured a judgment
by default rendered by Judge John W. Green of theSuperior Court of the State of California, which
ordered the spouses Belen to pay$56,204.69 representing loan repayment and share in the profits
plus interest and costsof suit. The summons was served on the Belen’s address in Laguna, as was
alleged in the complaint, and received by Marcelo M. Belen.
Spouses Belen filed an answer alleging that they were actually residents ofCalifornia and that
their liability had already been extinguished via a releaseabstract judgment issued in the
collection case abroad. For failure to attend the pre-trial conference, the RTC ordered the ex
partepresentation of evidence for Pacleb.
 Belen subsequently filed a Motion to Dismiss citing the judgment of dismissalissued by the
Superior Court of California; however the MTD was dismissed forfailure to submit a copy of the judgment
of dismissal. Spouses Pacleb, for their part, filed for the amendment of the complaint,
statingthat they withdrew the complaint (in California) because of the prohibitive costof
litigation.
 
For failure of spouses Belen to appear in the rescheduled pre-trial conference,RTC declared
Belen in default and allowed the presentation of ex parteevidence. In the meantime, the
counsel (Alcantara) of petitioners died withoutthe RTC being informed of such fact. The RTC ruled
against Belen and orderedthem to pay Pacleb.

A copy of the decision was sent to Atty. Alcantara but was returned with the notation “addressee
deceased.” A copy of th e same was then sent to the lastknown address of spouses Belen in Laguna.
Atty. Culvera, the new counsel ofspouses Belen, filed a motion to quash the Writ of Execution as well
as a notice ofappeal. The RTC denied the same.
 
Petitioners filed a petition for review on certiorari (Rule 65) alleging that CAcommitted grave
abuse of discretion in denying petitioners’ motion to quash the writ of execution and notice of
appeal despite sufficient legal bases in supportthereof.
Issue: WON the RTC acquired jurisdiction over the persons of petitioners through eitherthe proper service of
summons or the appearance of Atty. Alcantara on behalf ofpetitioners

Held: Yes.

Courts acquire jurisdiction over the plaintiffs upon the filing of thecomplaint. On the other hand,
jurisdiction over the defendants in a civil case isacquired either through the service of summons
upon them or through their voluntaryappearance in court and their submission to its authority.
As a rule, if defendants havenot been summoned, the court acquires no jurisdiction over their
person, and a judgment rendered against them is null and void. To be bound by a decision,
a party
should first be subject to the court’s jurisdiction.
 

The action filed against petitioners, prior to the amendment of the complaint, is for the
enforcement of a foreign judgment in a complaint for breach of contract whereby petitioners
were ordered to pay private respondents the monetary award. It is in the nature of an action in
personam because private respondents are suing to enforce their personal rights under said
judgment.

 in an action in personam wherein the defendant is a non-resident who does not voluntarily
submit himself to the authority of the court, personal service of summons within the state is
essential to the acquisition of jurisdiction over her person. This method of service is possible if
such defendant is physically present in the country. If he is

not found therein, the court cannot acquire jurisdiction over his person and therefore cannot
validly try and decide the case against him. An exception was laid down in Gemperle v.
Schenker wherein a non-resident was served with summons through his wife, who was a
resident of the Philippines and who was his representative and attorney-in-fact in a prior civil
case filed by him; moreover, the second case was a mere offshoot of the first case.

Applying the foregoing rules on the service of summons to the instant case, in an action  in
personam, jurisdiction over the person of the defendant who does not voluntarily submit
himself to the authority of the court is necessary for the court to validly try and decide the case
through personal service or, if this is not possible and he cannot be personally served,
substituted service as provided in Rule 14, Sections 6-7.

However, the records of the case reveal that herein petitioners have been permanent residents
of California, U.S.A. since the filing of the action up to the present. That being the case, the
service of summons on petitioners’ purported address in San Gregorio, Alaminos, Laguna was
defective and did not serve to vest in court jurisdiction over their persons.

Nevertheless, the Court of Appeals correctly concluded that the appearance of Atty. Alcantara
and his filing of numerous pleadings were sufficient to vest jurisdiction over the persons of
petitioners. Through certain acts, Atty. Alcantara was impliedly authorized by petitioners to
appear on their behalf. For instance, in support of the motion to dismiss the complaint, Atty.
Alcantara attached thereto a duly authenticated copy of the judgment of dismissal and a
photocopy of the identification page of petitioner Domingo Belen’s U.S. passport. These
documents could have been supplied only by petitioners, indicating that they have consented
to the appearance of Atty. Alcantara on their behalf. In sum, petitioners voluntarily submitted
themselves through Atty. Alcantara to the jurisdiction of the RTC.

Planters Development Bank vs Julie Chandumal

Facts: PDB filed an action for judicial confirmation of notarial rescission and delivery of
possession against Chandumal. Summons was issued and served by deputy sheriff. According to
his return, the Sheriff attempted to personally serve the summons upon Chandumal on three
separate instances but it was unavailing as she was always out of the house on said dates.
Hence, the sheriff caused substituted service of summons by serving the same through
Chandumal’s mother who acknowledged receipt thereof.

For her failure to file an answer within the prescribed period, Chandumal was declared in
default. Chandumal then filed an Urgent Motion to Set Aside Order of Default and to Admit
Attached Answer. The RTC denied Motion and rendered a Judgment against Chandumal. On
appeal, Chandumal claimed, among others, that the RTC failed to acquire jurisdiction over her
person.

Issue: (1) WON there was a valid substituted service of summons.

(2) WON Chandumal voluntarily submitted to the jurisdiction of the trial court.

Held:
(1) No.
Where the action is in personam and the defendant is in the Philippines, service of summons
may be made through personal service, that is, summons shall be served by handing to the
defendant in person a copy thereof, or if he refuses to receive and sign for it, by tendering it to
him. If the defendant cannot be personally served with summons within a reasonable time, it is
then that substituted service may be made. Personal service of summons should and always be
the first option, and it is only when the said summons cannot be served within a reasonable
time can the process server resort to substituted service.
In this case, the sheriff’s return failed to justify a resort to substituted service of summons. The
Return of Summons does not specifically show or indicate in detail the actual exertion of efforts
or any positive step taken by the officer or process server in attempting to serve the summons
personally to the defendant. The return merely states the alleged whereabouts of the
defendant without indicating that such information was verified from a person who had
knowledge thereof. Indeed, the sheriff’s return shows a mere perfunctory attempt to cause
personal service of the summons on Chandumal. There was no indication if he even asked
Chandumal’s mother as to her specific whereabouts except that she was "out of the house",
where she can be reached or whether he even tried to await her return. The "efforts" exerted
by the sheriff clearly do not suffice to justify substituted service and his failure to comply with
the requisites renders such service ineffective.

(2) Yes
Despite that there was no valid substituted service of summons, the Court, nevertheless, finds
that Chandumal voluntarily submitted to the jurisdiction of the trial court. When Chandumal
filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer, she
effectively submitted her person to the jurisdiction of the trial court as the filing of a pleading
where one seeks an affirmative relief is equivalent to service of summons and vests the trial
court with jurisdiction over the defendant’s person.
Biaco vs. Philippine Countryside Rural Bank
Facts: Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves Biaco. While employed in
the Philippine Countryside Rural Bank (PCRB) as branch manager, Ernesto obtained several
loans from the respondent bank.
As security for the payment of the said loans, Ernesto executed a real estate mortgage in favor
of the bank covering the parcel of land which the real estate mortgages bore the signatures of
the spouses Biaco. When Ernesto failed to settle the above-mentioned loans on its due date,
respondent bank through counsel sent him a written demand,however, proved futile.
Respondent bank filed a complaint for foreclosure of mortgage against the spouses Ernesto and
Teresa Biaco before the RTC of Misamis Oriental. Summons was served to the spouses Biaco
through Ernesto at his office (Export and Industry Bank). The RTC ruled against them; a writ of
execution was served on the spouses.
Petitioner sought the annulment of the Regional Trial Court decision contending, among others,
that the trial court failed to acquire jurisdiction because summons were served on her through
her husband without any explanation as to why personal service could not be made. The CA
affirmed RTC decision invoking that judicial foreclosure proceedings are actions quasi in rem. As
such, jurisdiction over the person of the defendant is not essential as long as the court acquires
jurisdiction over the res.
Issue: WON the trial court has jurisdiction in ordering the petitioner to pay the remaining
balance of the loan.
Held: No
In an action in personam, jurisdiction over the person of the defendant is necessary for the
court to validly try and decide the case. In a proceeding in rem or quasi in rem, jurisdiction over
the person of the defendant is not a prerequisite to confer jurisdiction on the court provided
that the court acquires jurisdiction over the res. Jurisdiction over the res is acquired either (1)
by the seizure of the property under legal process, whereby it is brought into actual custody of
the law; or (2) as a result of the institution of legal proceedings, in which the power of the court
is recognized and made effective.

In this case, the judicial foreclosure proceeding instituted by respondent PCRB undoubtedly
vested the trial court with jurisdiction over the res. A judicial foreclosure proceeding is an
action quasi in rem. As such, jurisdiction over the person of petitioner is not required, it being
sufficient that the trial court is vested with jurisdiction over the subject matter. There is a
dimension to this case though that needs to be delved into. Petitioner avers that she was not
personally served summons. Instead, summons was served to her through her husband at his
office without any explanation as to why the particular surrogate service was resorted to.
Without ruling on petitioner’s allegation that her husband and the sheriff connived to prevent
summons from being served upon her personally, we can see that petitioner was denied due
process and was not able to participate in the judicial foreclosure proceedings as a
consequence. The violation of petitioner’s constitutional right to due process arising from want
of valid service of summons on her warrants the annulment of the judgment of the trial court.
Yu vs. Pacleb
Facts: Respondent Baltazar Pacleb are registered owners of a parcel of land located in Barrio
Langcaa,Dasmarinas, Cavite .The subject property is covered by 3 documents; a deed of sale
from B. Pacleb to Del Rosario, deed of absolute sale from Del Rosario to Javier and a contract to
sell from Javier to Sps Yu. The sales were notr egistered.Yu filed a complaint for Specific
performance & damages against Javier since the subject property wastenanted by Ramon
Pacleb. They demanded the cancellation. Since Javier was declared on default due to not
appearance the cancellation became final.
After the cancellation petitioner and R. Pacleb executed an agreement in exchange for Ramon’s
tenancy rights were paid 500, 000 pesos. Respondents filed a complaint stating that the deed of
sale was executed through fraud.
Issue: WON over the Langcaan Property was properly vested in petitioner spouses by virtue of
the Decision in Civil Case No. 741-93

Held: No.
Civil Case No. 741-93 is an action for specific performance and damages filed by petitioner
spouses against Javier to compel performance of the latter’s undertakings under their Contract
to Sell. As correctly held by the Court of Appeals, its object is to compel Javier to accept the full
payment of the purchase price, and to execute a deed of absolute sale over the Langcaan
Property in their favor. The obligations of Javier under the contract to sell attach to him alone,
and do not burden the Langcaan Property.
We have held in an unbroken string of cases that an action for specific performance is an action
in personam.37 In Cabutihan v. Landcenter Construction and Development Corporation,38 we
ruled that an action for specific performance praying for the execution of a deed of sale in
connection with an undertaking in a contract, such as the contract to sell, in this instance, is an
action in personam.
Being a judgment in personam, Civil Case No. 741-93 is binding only upon the parties properly
impleaded therein and duly heard or given an opportunity to be heard. Therefore, it cannot
bind respondent since he was not a party therein. Neither can respondent be considered as
privy thereto since his signature and that of his late first wife, Angelita Chan, were forged in the
deed of sale.
Manchester Development vs. CA
Facts: Manchester Development Corporation, et al., is filed an action against City Land
Development Corporations, et al. for torts and damages and specific performance.
Manchetser prayed for the issuance of a writ of preliminary prohibitory injunction during the
pendency of the action against City Land’s announced forfeiture of the sum of P3 Million paid
by Manchester for the property in question. That the said property sufficient to satisfy any
judgment that maybe rendered, and after hearing, to order City Land to execute a contract of
purchase and sale of the subject property and annul the latter’s illegal forfeiture of the money
of Manchester Development. 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 Manchester Development.
Later, Manchester Development hrough 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. he 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. Still no amount of damages were specified in the prayer. Said amended
complaint was admitted.
Issue: WON the the filing fee should be levied by considering the amount of damages sought in
the Amended complaint.
Held: No.
Because 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.
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. 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.
Sun Insurance Office, Ltd. vs. Asuncion
Facts: Sun Insurance Office, Ltd. (SIOL) filed a complaint with the Regional Trial Court of Makati,
Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer
for the judicial declaration of its nullity against Manuel Uy Po Tiong.
On the other hand, Tiong  filed a complaint in the Regional Trial Court of Quezon City for the
refund of premiums and the issuance of a writ of preliminary attachment  against SIOL, E.B.
Philiipps and D.J. Warby. The complaint sought the payment of damages, although the prayer in
the complaint did not quantify the amount of damages sought said amount may be inferred
from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).
Later Judge Asuncion ordered Tiong to indicate the exact amount sought to be recovered. On
January 23, 1986, Tiong filed a "Compliance" and a "Re-Amended Complaint" stating therein a
claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the
body of the said second amended complaint however, Tiong alleges actual and compensatory
damages and attorney's fees in the total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended
complaint and stating therein that the same constituted proper compliance with the Resolution
of this Court and that a copy thereof should be furnished the Clerk of Court for the
reassessment of the docket fees. The reassessment by the Clerk of Court based on Tiong’s claim
of "not less than P10,000,000.00 as actual and compensatory damages" amounted to
P39,786.00 as docket fee. This was subsequently paid by Tiong.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional
claim of P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On
October 16, 1986, or some seven months after filing the supplemental complaint, the private
respondent paid the additional docket fee of P80,396.00.
Issue: WON a court acquires jurisdiction over a case when the correct and proper docket fee
has not been paid.
Held: No.
It was held that it is not simply the filing of the complaint or appropriate initiatory pleading, but
the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the
subject matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee within a
reasonable time but in no case beyond the applicable prescriptive or reglamentary period.
Same rule goes for permissive counterclaims, third party claims and similar pleadings.

In herein case, obviously, there was the intent on the part of PR to defraud the government of
the docket fee due not only in the filing of the original complaint but also in the filing of the
second amended complaint. However, a more liberal interpretation of the rules is called for
considering that, unlike in Manchester, the private respondent demonstrated his willingness to
abide by the rules by paying the additional docket fees as required.

Where a trial court acquires jurisdiction in like manner, but subsequently, the judgment awards
a claim not specified in the pleading, or if specified the same has been left for determination by
the court, the additional filing fee shall constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess
and collect the additional fee.
Ballatan vs. CA

Facts: The parties herein are owners of adjacent lots located at Block No. 3, Poinsettia Street,
Araneta University Village, Malabon, Metro Manila. Lot No. 24, is registered in the name of
petitioners Eden Ballatan and spouses Betty Martinez and Chong Chy Ling.  Lots Nos. 25 and 26,
are registered in the name of respondent Gonzalo Go, Sr.  On Lot No. 25, respondent Winston
Go, son of Gonzalo Go, Sr., constructed his house. Adjacent to Lot No. 26 is Lot No. 27, and is
registered in the name of respondent Li Ching Yao.

In 1985, petitioner Ballatan constructed her house on Lot No. 24. During the construction, she
noticed that the concrete fence and side pathway of the adjoining house of respondent
Winston Go encroached on the entire length of the eastern side of her property. Ballatan called
the attention of the AIA to the discrepancy of the land area in her title and the actual land area
received from them. The AIA authorized another survey of the land by Engineer Jose N.
Quedding.
On June 2, 1985, Engineer Quedding found that Lot No. 24, lost approximately 25 square
meters on its eastern boundary. While Lot No. 25, although found to have encroached on Lot
No. 24, did not lose nor gain any area; that Lot No. 26 lost some three (3) square meters which,
however, were gained by Lot No. 27 on its western boundary.  In short, Lots Nos. 25, 26 and 27
moved westward to the eastern boundary of Lot No. 24.

Based on this survey, Ballatan made a written demand on respondents Go to remove and
dismantle their improvements on Lot No. 24., but Go refused. The parties including Li Ching
Yao, however, met several times to reach an agreement one matter.

On April 1, 1986, petitioner Ballatan instituted against respondents Go a Civil Case for recovery
of possession before the RTC, Malabon. The Go's filed their "Answer with Third-Party
Complaint" impleading as third-party defendants respondents Li Ching Yao, the AIA and
Engineer Quedding.

On August 23, 1990, RTC decided in favor of petitioners. Respondents Go appealed. On March
25, 1996, the CA modified the decision of the trial court. It affirmed the dismissal of the third-
party complaint against the AIA but reinstated the complaint against Li Ching Yao and Jose
Quedding. Hence, this petition for review on certiorari.

Petitioners question the admission by respondent CA of the third-party complaint by

respondents Go against the AIA, Jose Quedding and Li Ching Yao. Petitioners claim that the
third-party complaint should not have been considered by the Court of Appeals for lack of
jurisdiction due to third-party plaintiffs' failure to pay the docket and filing fees before the trial
court.

Issue: WON CA erred in admitting the third-party complaint despite the failure of respondents
GO’s to pay the docket and filing fees before the trial court.

RULING: No.

The third-party complaint in the instant case arose from the complaint of petitioners against
respondents Go. The complaint filed was for accion publiciana, i.e., the recovery of possession
of real property which is a real action. The rule in this jurisdiction is that when an action is filed
in court, the complaint must be accompanied the payment of the requisite docket and filing
fees.  In real actions, the docket and filing fees are based on the value of the property and the
amount of damages claimed, if any  If the complaint is filed but the fees are not paid at the time
of filing, the court acquires jurisdiction upon full payment of the fees within a reasonable time
as the court may grant, barring prescription.  

Where the fees prescribed for the real action have been paid but the fees of certain related
damages are not, the court, although having jurisdiction over the real action, may not have
acquired jurisdiction over the accompanying claim for damages.  Accordingly, the court may
expunge those claims for damages, or allow, on motion, a reasonable time for amendment of
the complaint to allege the precise amount of damages and accept payment of the requisite
legal fee. If there are unspecified claims, the determination of which may arise after the filing of
the complaint or similar pleading, the additional filing fee thereon shall constitute a lien on the
judgment award.  The same rule also applies to third-party claims and other similar pleadings. 

In the case at bar, the third-party complaint filed by respondents Go was incorporated in their
answer to the complaint. The third-party complaint sought the same remedy as the principal
complaint but added a prayer for attorney's fees and costs without specifying their amounts.
The Court of Appeal did not err in awarding damages despite the Go's failure to specify the
amount prayed for and pay the corresponding additional filing fees thereon. The claim for
attorney's fees refers to damages arising after the filing of the complaint against the Go's. The
additional filing fee on this claim is deemed to constitute a lien on the judgment award. 

Heirs of Reinoso, Sr. vs. CA

Facts:
A passenger jeep and truck collided along E. Rodriguez Avenue that resulted in the death of
Ruben Reinoso Sr. The heirs of Reinoso filed a complaint for damages against Tapales and
Guballa, owners of the jeep and truck, respectively. The RTC rendered a decision in favor of the
heirs and Tapales then on appeal, the CA set aside and reversed the decision and dismissed the
complaint due to non-payment of docket fees as laid down in Manchester v. CA. In addition, the
CA ruled that since prescription had already set in, petitioners could no longer pay the required
docket fees.
Issue: WON the court had jurisdiction notwithstanding the failure to pay the proper docket fees
within the prescribed period.
Held: YES.
The rule is that payment in full of the docket fees within the prescribed period is mandatory, as
enunciated in the Manchester case. However two years later, the same rule was relaxed in the
Sun Insurance Office case wherein the SC decreed that were the initiatory pleading is not
accompanied by the payment of the docket fee, the court may allow payment of the fee within
a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary
period.
In this case, it cannot be denied that the case was litigated before the RTC and said trial court
had already rendered a decision. While it was at that level, the matter of non-payment of
docket fees was never an issue. It was only the CA which motu propio dismissed the case for
said reason.
The heirs are liable for the difference between the actual fees paid and correct payable docket
fees to be assessed by the Clerk which shall constitute a lien on the judgment pursuant to Sec.
2, Rule 141.
In the Matter of Exemption From payment of All Court and Sheriff’s Fees of Cooperatives Duly
Registered in Accordance with RA NO. 9520, [A.M. No. 12-2-03-0, March 13, 2012]
Facts: In a Petition dated 24 October 2011, Perpetual Help Community Cooperative (PHCCI),
through counsel, requests for the issuance of a court order to clarify and implement the
exemption of cooperatives from the payment of court and sheriff’s fees pursuant to Republic
Act No. 6938, as amended by Republic Act No. 9520, otherwise known as the Philippine
Cooperative Act of 2008.
PHCCI contends that as a cooperative it enjoys the exemption provided for under Section 6,
Article 61 of Republic Act No. 9520, which states: (6) Cooperatives shall be exempt from the
payment of all court and sheriff’s fees payable to the Philippine Government for and in
connection with all actions brought under this Code, or where such actions is brought by the
Authority before the court, to enforce the payment of obligations contracted in favor of the
cooperative. It avers that despite the exemptions granted by the aforesaid laws and issuances,
PHCCI had been continuously assessed and required to pay legal and other fees whenever it
files cases in court.
Issue: WON cooperatives are exempt from the payment of court and sheriff’s fees.
Held: No.
The term “all court fees” under Section 6, Article 61 of Republic Act No. 9520 refers to the
totality of “legal fees” imposed under Rule 141 of the Rules of Court as an incident of instituting
an action in court. These fees include filing or docket fees, appeal fees, fees for issuance of
provisional remedies, mediation fees, sheriff’s fees, stenographer’s fees and commissioner’s
fees. With regard to the term “sheriff’s fees,” this Court, in an extended minute Resolution
dated 1 September 2009, held that the exemptions granted to cooperatives under Section 2,
paragraph 6 of Republic Act No. 6938; Section 6, Article 61 of Republic Act No. 9520; and OCA
Circular No. 44-2007 clearly do not cover the amount required “to defray the actual travel
expenses of the sheriff, process server or other court-authorized person in the service of
summons, subpoena and other court processes issued relative to the trial of the case, which are
neither considered as court and sheriff’s fees nor are amounts payable to the Philippine
Government. In fine, the 1 September 2009 Resolution exempted the cooperatives from court
fees but not from sheriff’s fees/ expenses.
Ricardo Rizal, et al. vs. Leoncia Naredo
Facts: Petitioners herein commenced a civil case against respondents involving the accretion of
two (2) hectares of land in Calamba. The Court of First Instance ruled in favor of the petitioners
and ordered the respondents to vacate the land and pay P500.00 a year from 1943 as
reasonable rent for their occupancy. This ruling was upheld by both the appellate court and
Supreme Court. To satisfy the money judgment, the provincial sheriff levied lots no. 252 and
269 together with a house erected on Lot 252, which is owned by the legal heirs of Gervacia
Cantillano to which several third party claims were filed, including herein respondent.
Petitioners acquired the lot and the respondent now questions the execution for they believe
that it must be exempt from execution. Although the CFI ordered that the petitioners be placed
in possession of the subject land, it did not evict Leoncia Naredo. The parties then entered into
a compromise agreement whereby 3/5 belongs to the petitioners and 2/5 to the defendants.
Ten years after, they assailed the validity of the compromise agreement claiming that forgery
took place. The Regional Trial Court dismissed the case on the ground of prescription.
Issue: Whether or not the petition should be dismissed on the ground of prescription and
failure to pay docket fees
Held: Yes.
Failure to observe the requirements under Section 13(a), Rule 44 of the 1997 Rules of Court and
to pay the correct docket fees is fatal to the appeal. Likewise, the action is dismissible for res
judicata and lack of cause of action. The partition of Lot No. 252 was the result of the approved
Compromise Agreement in Civil Case No. 36-C, which was immediately final and executory.
Absent any showing that said Compromise Agreement was vitiated by fraud, mistake or duress,
the court cannot set aside a judgment based on compromise. It is axiomatic that a compromise
agreement once approved by the court settles the rights of the parties and has the force of res
judicata. It cannot be disturbed except on the ground of vice of consent or forgery. We thus
sustain the respondents' affirmative defenses of res judicata and lack of cause of action, and
uphold the appellate and trial courts' rejection of the petitioners' ostensible attempt to revive
the already stale judgment in Civil Case No. 36-C through an entirely new action for partition.
Manuel Ubas, Sr. vs. Wilson Chan
Facts: This case stemmed from a Complaint for Sum of Money with Application for Writ of
Attachment3 (Complaint) filed by petitioner against respondent Wilson Chan (respondent)
before the Regional Trial Court of Catarman, Northern Samar, Branch 19 (RTC), docketed as
Civil Case No. C-1071. In his Complaint, petitioner alleged that respondent, “doing business
under the name and style of UNIMASTER,” was indebted to him in the amount of
P1,500,000.00, representing the price of boulders, sand, gravel, and other construction
materials allegedly purchased by respondent from him for the construction of the Macagtas
Dam in Barangay Macagtas, Catarman, Northern Samar (Macagtas Dam project). He claimed
that the said obligation has long become due and demandable and yet, respondent unjustly
refused to pay the same despite repeated demands.4 Further, he averred that respondent had
issued three (3) bank checks, payable to “CASH” in the amount of P500,000.00 each, on January
31, 1998, March 13, 1998, and April 3, 1998, respectively (subject checks),5 but when petitioner
presented the subject checks for encashment on June 29, 1998, the same were dishonored due
to a stop payment order. As such, respondent was guilty of fraud in incurring the obligation.
Respondent filed an Answer with Motion to Dismiss,7 seeking the dismissal of the case on the
following grounds: (a) the complaint states no cause of action, considering that the checks do
not belong to him but to Unimasters Conglomeration, Inc. (Unimasters); (b) there is no contract
that ever existed between him and petitioner; and (c) if petitioner even had a right of action at
all, the complaint should not have been filed against him but against Unimasters, a duly
registered construction company which has a separate juridical personality from him. The RTC
ruled that petitioner had a cause of action against respondent. However, on appeal, the CA the
CA reversed and set aside the RTC’s ruling, dismissing petitioner’s complaint on the ground of
lack of cause of action.
Issue: WON Ubas complaint should be dismissed for lack of cause of action.
Held: No.
Cause of action is defined as the act or omission by which a party violates a right of another. It
is well-settled that the existence of a cause of action is determined by the allegations in the
complaint. In this case, petitioner’s cause of action is anchored on his claim that respondent
personally entered into a contract with him for the delivery of construction materials
amounting to P1,500,000.00, which was, however, left unpaid. He also avers that respondent is
guilty of fraud in the performance of said obligation because the subject checks issued to him
by respondent were dishonored on the ground of stop payment. As proof, petitioner offered in
evidence, among others, the demand letter he sent to respondent detailing the serial numbers
of the checks that were issued by the latter, including the dates and amounts thereof. He also
offered the dishonored checks which were in his possession. Respondent neither disputes the
fact that he had indeed signed the subject checks nor denies the demand letter sent to him by
petitioner. Nevertheless, he claims that the checks were not issued to petitioner but to the
project engineer of Unimasters who, however, lost the same. He also disclaims any personal
transaction with petitioner, stating that the subject checks were in fact, issued by Unimasters
and not him. Besides, petitioner failed to present any documentary proof that he or his firm
delivered construction materials for the Macagtas Dam project. Hence, the Court finds for
petitioner.
Goodland Company, Inc. vs. Asia United Bank
Facts: Goodland Company mortgaged its two parcels of land situated in Sta. Rosa, Laguna
through a Third Party Real Estate Mortgage (REM) with Smartnet to secure the loans extended
by Asia United Bank (AUB). Petitioner also executed another REM for its Makati properties.
Both the REMs were signed by its President Gilbert Guy. AUB registered the mortgages with the
Registry of Deed at the concerned properties. Afterwards, Goodland repudiated the REMs.
Hence, Goodland filed a complaint for annulment of mortgage before the RTC of Binan, Laguna
on the ground that the REM was falsified and against the agreement that the blank mortgage
would only serve as a comfort document and not to be registered by AUB. Smartnet defaulted
on its loan obligation which prompted AUB to extra-judicially foreclose the REM and then was
issued a Certificate of Sale registered with the Registry of Deeds. Goodland filed another case
seeking for the annulment of the foreclosure sale and enjoin consolidation of the title in favor
of AUB. AUB moved to dismiss both the cases filed by Goodland on the ground of forum
shopping and litis pendentia. It was granted. On appeal, the decision of the RTC were reversed.
As to the Makati properties, the same case was filed by Goodland including the President of
AUB and the notarizing lawyer whose signature was falsified. The same was contradicted by
AUB but this time, the motion to dismiss on the ground of forum shopping, non-payment of
proper docket fees, and litis pendentia were denied. AUB argued that there was no service of
summons, thus the court never acquired jurisdiction over the persons of the respondents. On
appeal, the CA held Goodland guilty of forum shopping for failing to inform AUB of the other
case filed while the case on the REM is pending. I
Issue: WON the causes of action in the first and second cases are identical hence Goodland
Company committed forum shopping.
Ruling: Yes.
A cause of action is defined in Section 2, Rule 2 of the Rules of Court as the act or omission by
which a party violates the right of another. This Court has laid down the test in determining
whether or not the causes of action in the first and second cases are identical, to wit: would the
same evidence support and establish both the present and former cause of action? If so, the
former recovery is a bar; if otherwise, it does not stand in the way of the former action.
The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its
allegedly falsified or spurious nature) which is allegedly violative of Goodland’s right to the
mortgaged property. It serves as the basis for the prayer for the nullification of the REM. The
Injunction Case involves the same cause of action, inasmuch as it also invokes the nullity of the
REM as the basis for the prayer for the nullification of the extrajudicial foreclosure and for
injunction against consolidation of title. While the main relief sought in the Annulment Case
(nullification of the REM) is ostensibly different from the main relief sought in the Injunction
Case (nullification of the extrajudicial foreclosure and injunction against consolidation of title),
the cause of action which serves as the basis for the said reliefs remains the same — the alleged
nullity of the REM. Thus, what is involved here is the third way of committing forum shopping,
i.e., filing multiple cases based on the same cause of action, but with different prayers. As
previously held by the Court, there is still forum shopping even if the reliefs prayed for in the
two cases are different, so long as both cases raise substantially the same issues.
Relucio vs. Lopez
Facts: Angelina Mejia Lopez filed a petition for "APPOINTMENT AS SOLE ADMINISTRATIX OF
CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC.," against Alberto Lopez and Imelda
Relucio, in the Regional Trial Court of Makati. Angelina alleged that sometime in 1968,
defendant Lopez, who is legally married to her, abandoned the latter and their four legitimate
children; that he arrogated unto himself full and exclusive control and administration of the
conjugal properties, spending and using the same for his sole gain and benefit to the total
exclusion of the family. Lopez, after abandoning his family, maintained an illicit relationship and
cohabited with Imelda since 1976.
It was further alleged that Lopez and Imelda, uring their period of cohabitation since 1976, have
amassed a fortune consisting mainly of stockholdings in Lopez-owned or controlled
corporations, residential, agricultural, commercial lots, houses, apartments and buildings, cars
and other motor vehicles, bank accounts and jewelry. These properties, which are in the names
of Lopez and Angelina singly or jointly or their dummies and proxies, have been acquired
principally if not solely through the actual contribution of money, property and industry of
Lopez with minimal, if not nil, actual contribution from Angelina.
Later a Motion to Dismiss the Petition was filed by Imelda on the ground that Angelina has no
cause of action against her. But the RTC denied the Motion to Dismiss on the ground that she is
impleaded as a necessary or indispensable party because some of the subject properties are
registered in her name and defendant Lopez, or solely in her name. The CA affirmed the
decision of the RTC.
Issue: WON Angelina’s petition for appointment as sole administratrix of the conjugal property,
accounting, etc. against her husband Alberto J. Lopez established a cause of action against
Imelda.
Held: No.
"A cause of action is an act or omission of one party the defendant in violation of the legal right
of the other."

The elements of a cause of action are:

(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;

(2) an obligation on the part of the named defendant to respect or not to violate such right; and

(3) an act or omission on the part of such defendant in violation of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages. 11

A cause of action is sufficient if a valid judgment may be rendered thereon if the alleged facts
were admitted or proved. In order to sustain a motion to dismiss for lack of cause of action, the
complaint must show that the claim for relief does not exist, rather than that a claim has been
merely defectively stated or is ambiguous, indefinite or uncertain.

The complaint is by an aggrieved wife against her husband.

Nowhere in the allegations does it appear that relief is sought against petitioner. Respondent's
causes of action were all against her husband.

The first cause of action is for judicial appointment of respondent as administratrix of the

conjugal partnership or absolute community property arising from her marriage to Alberto J.
Lopez. Petitioner is a complete stranger to this cause of action. Article 128 of the Family Code
refers only to spouses, to wit:

"If a spouse without just cause abandons the other or fails to comply with his or her obligations
to the family, the aggrieved spouse may petition the court for receivership, for judicial
separation of property, or for authority to be the sole administrator of the conjugal partnership
property xxx"

The administration of the property of the marriage is entirely between them, to the exclusion
of all other persons. Angelina alleges that Alberto J. Lopez is her husband. Therefore, her first
cause of action is against Alberto J. Lopez. There is no right-duty relation between Imelda and
Angelina that can possibly support a cause of action. In fact, none of the three elements of a
cause of action exists.

The second cause of action is for an accounting "by respondent husband." The accounting of
conjugal partnership arises from or is an incident of marriage. Imelda has nothing to do with
the marriage between Angelina and Alberto J. Lopez. Hence, no cause of action can exist
against petitioner on this ground.

Angelina’s alternative cause of action is for forfeiture of Alberto J. Lopez' share in the co-owned
property "acquired during his illicit relationship and cohabitation with [petitioner]" and for the
"dissolution of the conjugal partnership of gains between him [Alberto J. Lopez] and the
[respondent]."

The third cause of action is essentially for forfeiture of Alberto J. Lopez' share in property co-
owned by him and Imelda. It does not involve the issue of validity of the co-ownership between
Alberto J. Lopez and Imelda. The issue is whether there is basis in law to forfeit Alberto J. Lopez'
share, if any there be, in property co-owned by him with Imelda. Angelina’s asserted right to
forfeit extends to Alberto J. Lopez' share alone. Failure of Alberto J. Lopez to surrender such
share, assuming the trial court finds in respondent's favor, results in a breach of an obligation to
respondent and gives rise to a cause of action. Such cause of action, however, pertains to
Alberto J. Lopez, not petitioner.Lastly, Angelina also sought support. Support cannot be
compelled from a stranger. Finally, as to the moral damages, respondent's claim for moral
damages is against Alberto J. Lopez, not to Imelda.

Juana Complex I Homeowners Association, Inc. et al. vs. Fil- estate Land, Inc.
Facts: On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together
with individual residents of Juana Complex I and other neighboring subdivisions (collectively
referred as JCHA, et al.), instituted a complaint5 for damages, in its own behalf and as a class
suit representing the regular commuters and motorists of Juana Complex I and neighboring
subdivisions who were deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-
Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing & Development Corporation
(La Paz), and Warbird Security Agency and their respective officers (collectively referred as Fil-
Estate, et al.). The complaint alleged that JCHA, et al. were regular commuters and motorists
who constantly travelled towards the direction of Manila and Calamba; that they used the entry
and exit toll gates of South Luzon Expressway (SLEX) by passing through right-of-way public
road known as La Paz Road; that they had been using La Paz Road for more than ten (10) years;
that in August 1998, Filestate excavated, broke and deliberately ruined La Paz Road that led to
SLEX so JCHA, et al. would not be able to pass through the said road; that La Paz Road was
restored by the residents to make it passable but Fil-estate excavated the road again; that JCHA
reported the matter to the Municipal Government and the Office of the Municipal Engineer but
the latter failed to repair the road to make it passable and safe to motorists and pedestrians;
that the act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience,
annoyance, and loss of precious hours to them, to the commuters and motorists because traffic
was re-routed to narrow streets that caused terrible traffic congestion and hazard; and that its
permanent closure would not only prejudice their right to free and unhampered use of the
property but would also cause great damage and irreparable injury. Accordingly, JCHA, et al.
also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of
preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in
their use of La Paz Road. On February 10, 1999, a TRO was issued ordering Fil- Estate, et al., for
a period of twenty (20) days, to stop preventing, coercing, intimidating or harassing the
commuters and motorists from using the La Paz Road. Subsequently, the RTC conducted several
hearings to determine the propriety of the issuance of a WPI. On February 26, 1999, Fil-Estate,
et al. filed a motion to dismiss7 arguing that the complaint failed to state a cause of action and
that it was improperly filed as a class suit. On On March 3, 1999, the RTC issued an Order
granting the WPI and required JCHA, et al. to post a bond. On March 19, 1999, Fil-Estate, et al.
filed a motion for reconsideration arguing, among others, that JCHA, et al. failed to satisfy the
requirements for the issuance of a WPI. The RTC then issued its June 16, 2000 Omnibus Order,
denying both the motion to dismiss and the motion for reconsideration filed by Fil-Estate, et al.
On appeal, the CA ruled that the complaint sufficiently stated a cause of action when JCHA, et
al. alleged in their complaint that they had been using La Paz Road for more than ten (10) years
and that their right was violated when Fil-Estate closed and excavated the road. Hence, this
appeal.
Issue: Whether the complaint sufficiently states a cause of action.
Held: Yes.
Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a
party violates the right of another. A complaint states a cause of action when it contains three
(3) essential elements of a cause of action, namely:
(1) the legal right of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act
or omission of the defendant in violation of said legal right.
The question of whether the complaint states a cause of action is determined by its averments
regarding the acts committed by the defendant.19 Thus, it must contain a concise statement of
the ultimate or essential facts constituting the plaintiff’s cause of action.20 To be taken into
account are only the material allegations in the complaint; extraneous facts and circumstances
or other matters aliunde are not considered.
The test of sufficiency of facts alleged in the complaint as constituting a cause of action is
whether or not admitting the facts alleged, the court could render a valid verdict in accordance
with the prayer of said complaint. Stated differently, if the allegations in the complaint furnish
sufficient basis by which the complaint can be maintained, the same should not be dismissed
regardless of the defense that may be asserted by the defendant.
In the present case, the Court finds the allegations in the complaint sufficient to establish a
cause of action. First, JCHA, et al.’s averments in the complaint show a demandable right over
La Paz Road. These are: (1) their right to use the road on the basis of their allegation that they
had been using the road for more than 10 years; and (2) an easement of a right of way has been
constituted over the said roads. There is no other road as wide as La Paz Road existing in the
vicinity and it is the shortest, convenient and safe route towards SLEX Halang that the
commuters and motorists may use. Second, there is an alleged violation of such right
committed by Fil-Estate, et al. when they excavated the road and prevented the commuters
and motorists from using the same. Third, JCHA, et al. consequently suffered injury and that a
valid judgment could have been rendered in accordance with the relief sought therein.
Asia Brewery Inc. and Charlie Go vs. Equitable PCI Bank
Facts: Petitioners filed a complaint for payment, reimbursement or restitution against
respondents. Petitioners alleged that 10 to 16 crossed checks were issued in the name of
Charlie Go. However, none of the checks were received by Go. Instead a certain Raymond Keh
was able to receive the said checks and deposited the same to Respondent bank pretending to
be Go. In demanding payment from respondent, petitioners relied on Associated Bank v. CA, in
which this Court held "the possession of check on a forged or unauthorized indorsement is
wrongful, and when the money is collected on the check, the bank can be held for moneys had
and received." The RTC, however, dismissed the complaint for lack of cause of action.
Issue: Whether or not the CA correctly dismissed the case
Held: No.
A reading of the Order dated 30 January 2008 reveals that the RTC dismissed the Complaint for
lack of cause of action prior to trial. At that time, this Court, in the 2003 case Bank of America
NT&SA v. CA, had already emphasized that lack or absence of cause of action is not a ground for
the dismissal of a complaint; and that the issue may only be raised after questions of fact have
been resolved on the basis of stipulations, admissions or evidence presented. Failure to state a
cause of action is not the same as lack of cause of action; the terms are not interchangeable. It
may be observed that lack of cause of action is not among the grounds that may be raised in a
motion to dismiss under Rule 16 of the Rules of Court.
The dismissal of a Complaint for lack of cause of action is based on Section 1 of Rule 33. We said
that ''dismissal due to lack of cause of action may be raised any time after the questions of fact
have been resolved on the basis of stipulations, admissions, or evidence presented by the
plaintiff." In the case at bar, the action has not even reached the pre-trial stage. Even assuming
that the trial court merely used the wrong terminology, that it intended to dismiss the
Complaint on the ground of failure to state a cause of action, the Complaint would still have to
be reinstated.

Butuan Development Corporation (BDC) v. Court of Appeals (Mindanao Station), et.al.

Facts: While BDC was still in the process of incorporation, a certain Max Arriola armed with a
notarized Resolution of BDC board of directors, mortgaged a property owned and bought for
BDC to De Oro Resources Inc. (DORI) After incorporation, BDC filed a complaint for declaration
of nullity of the real estate mortgage (REM) against Arriola and DORI alleging that the Arriola’s
misrepresented themselves as the owners and directors of the BDC. DORI claims that the case
should be dismissed for failure to state a cause of action, because at the time the REM was
constituted, BDC had not yet existed as a corporation. The RTC ruled in favour of BDC but was
reversed by the CA.
Issue: Whether or not BDC has a cause of action.
Held: Yes.
The elements of a cause of action are:
(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;
(2) an obligation on the part of the named defendant to respect or not to violate such right;
and
(3) act or omission on the part of such defendant in violation of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages or other appropriate relief.
 Based on the foregoing allegations, BDC's complaint sufficiently stated a cause of action for
declaration of nullity of the REM. Basically, BDC alleged in its complaint that it is the owner of
the subject property as evidenced by TCT No. RT-4724, which was issued in its name after it
purchased the subject property, through Satorre, from the Spouses Sering on March 31, 1966.
It bears stressing that a certificate of title issued is an absolute and indefeasible evidence of
ownership of the property in favor of the person whose name appears therein. BDC further
alleged that the subject property was mortgaged to DORI and Libarios without their knowledge
or consent and that the Arriolas were not in any way connected with BDC.
The respondents' affirmative defense that BDC, at the time of the execution of the REM, had no
right to hold the subject property in its name being merely an unincorporated association, if at
all, amounts to an allegation that BDC has no cause of action against the respondents.
However, failure to state a cause of action is different from lack of cause of action. Failure to
state a cause of action refers to the insufficiency of the pleading, and is a ground for dismissal
under Rule 16 of the Rules of Court. On the other hand, lack of cause action refers to a situation
where the evidence does not prove the cause of action alleged in the pleading. The remedy in
the first is to move for the dismissal of the pleading, while the remedy in the second is to demur
to the evidence.

Miguel "Lucky" Guillermo and AV Manila Creative Production Co. v. Philippine Information
Agency and Department of Public Works and Highways
Facts: In the last few months of Former President Gloria Macapagal-Arroyo’s administration
(Arroyo Administration), then Acting Secretary of the Department of Public Works and
Highways (DPWH) Victor Domingo (Acting Secretary Domingo) consulted and discussed with
Miguel "Lucky" Guillermo (Guillermo) and AV Manila Creative Production, Co. (AV Manila)
allegedly for the urgent need for an advocacy campaign (Campaign) to counteract the public's
negative perception of the performance of the outgoing Arroyo Administration. Guillermo and
AV Manila formally submitted in a letter-proposal dated February 26, 2010 the concept of
"Joyride," a documentary film showcasing milestones of the Arroyo Administration. Acting
Secretary Domingo signed a marginal note on the letter-proposal, which read, "OK, proceed!"
Petitioners alleged that under the foregoing exchanges, they committed to the following
deliverables: reproduction and distribution of (a) a revised, expanded, and more
comprehensive "Joyride" documentary; (b) "Joyride" coffee table book; (c) "Joyride" comics; (d)
"Joyride" infomercial entitled "Sa Totoo Lang!"; and (e) "Joyride" infomercial entitled "Sa Totoo
Lang-GFX", which was a representation of improved government services. On April 20, 2010,
Guillermo and AV Manila submitted samples and storyboards of the foregoing to DPWH. They
further alleged that Acting Secretary Domingo informed them that the total consideration of
₱25,000,000.00 for their services and deliverable items was acceptable and approved. A
Memorandum addressed to Former President Gloria Macapagal-Arroyo pertaining to the
"Joyride" materials was issued by Acting Secretary Domingo.
Thereafter, Joan Marzan, Philippine Information Agency's (PIA) representative, advised that, in
light of the foregoing agreement, a separate written contract was no longer necessary. Thus,
the Philippine Information Agency instructed Guillermo to send billings directly to the Philippine
Information Agency. Guillermo and AV Manila averred to have delivered copies of the "Joyride"
documentary, and thereafter, the "Joyride" comics. No funds were released by the Philippine
Information Agency.
Guillermo and AV Manila alleged that because of lack of funds, petitioner Guillermo had to
secure financial assistance to deliver the subsequent deliverable items to DPWH and PIA. Thus,
Guillermo and AV Manila delivered copies of the "Joyride" coffee table book with DVD inserts,
and comics, to the DPWH. After all the deliverables had been delivered, petitioners followed up
on the payment from the PIA. Despite several demands, no payments were made. Guillermo
and AV Manila said that they made demands through letters dated August 19, September 20,
and October 12, 2010, to various officials of the PIA, under the Administration of Former
President Benigno Aquino III. However, it refused and failed to pay the amount of
₱25,000,000.00.On December 10, 2010, Guillermo and AV Manila filed a Complaint for a sum of
money and damages before the Regional Trial Court of Marikina. The Office of the Solicitor
General moved to dismiss the Complaint for failure to state a cause of action and for failure to
exhaust administrative remedies.
On August 14, 2012, the RTC granted the OSG's Motion to Dismiss, finding that, although a
contract existed, this contract was not binding because of absence of legal requirements for
entering into a contract with the government. Guillermo and AV Manila moved for
reconsideration but were denied. They appealed to the Court of Appeals, but it affirmed the
RTC’s Order of dismissal holding that the Complaint sought to enforce a legal right based on a
contract, however, Guillermo and AV Manila failed to prove the existence of a contract,
considering that the elements of a contract were absent. The C A also found the doctrine of
quantum meruit inapplicable because of absence of any contract or legal right in favor of
petitioners. The Motion for Reconsideration was denied.
Issue: Whether or not the Complaint was properly dismissed for failure to state a cause of
action.
Held: Yes.
A complaint states a cause of action if it sufficiently avers the existence of the three (3)
essential elements of a cause of action, namely: (a) a right in favor of the plaintiff by whatever
means and under whatever law it arises or is created; (b) an obligation on the part of the
named defendant to respect or not to violate such right; and (c) an act or omission, on the part
of the named defendant, violative of the right of the plaintiff or constituting a breach of the
obligation of defendant to the plaintiff for which the latter may maintain an action for recovery
of damages. If the allegations of the complaint do not state the concurrence of these elements,
the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a
cause of action.
It is well to point out that the plaintiff's cause of action should not merely be "stated" but,
importantly, the statement thereof should be "sufficient." This is why the elementary test in a
motion to dismiss on such ground is whether or not the complaint alleges facts which if true
would justify the relief demanded. As a corollary, it has been held that only ultimate facts and
not legal conclusions or evidentiary facts are considered for purposes of applying the test. This
is consistent with Section 1, Rule 8 of the Rules of Court which states that the complaint need
only allege the ultimate facts or the essential facts constituting the plaintiffs cause of action. A
fact is essential if they cannot be stricken out without leaving the statement of the cause of
action inadequate. Since the inquiry is into the sufficiency, not the veracity, of the material
allegations, it follows that the analysis should be confined to the four comers of the complaint,
and no other. Thus, to determine the sufficiency of a cause of action in a motion to dismiss,
only the facts alleged in the complaint should be considered, in relation to whether its prayer
may be granted.
Sections 46, 47, and 48 of Book V, Title I, Subtitle B, Chapter 8 of the Administrative Code
expressly declares void a contract that fails to comply with the two requirements, namely, an
appropriation law funding the contract and a certification of appropriation and fund availability.
The clear purpose of these requirements is to insure that government contracts are never
signed unless supported by the corresponding appropriation law and fund availability. The
Complaint, however, completely ignored the foregoing requisites for the validity of contracts
involving expenditure of public funds. The RTC could not order the enforcement of the alleged
contract on the basis of the Complaint, and the same was properly dismissed for failure to state
a cause of action.
Finally, the invocation of the principle of quantum meruit could not save the Complaint from
dismissal. A careful reading reveals that the Complaint does not mention the principle of
quantum meruit, or any facts showing that the public has derived any benefit from the
"Joyride" project. Even assuming that basis exists to reimburse petitioners under the principle
of quantum meruit, no factual basis for its application was laid down in the Complaint. Its
belated invocation does not retroactively make the Complaint sufficient. However, petitioners
are not without recourse. Under the Administrative Code, officers who enter into contracts
contrary to the Administrative Code are liable to the government or to the other contracting
party for damages. Thus, assuming petitioners are able to prove a contract was entered into,
they may go after the officers who entered into said contract and hold them personally liable.
Jose Diaz, Jr. and Adelina McMullen vs Salvador Valenciano, Jr.
Facts: Petitioners Diaz and McMullen filed a case for unlawful detainer against Salvador, Sr.,
father of respondent Salvador, Jr. Petitioners in that complaint allege that they are the owner
of the subject property. On the other hand, respondent Salvador Jr. countered that his father
and the rest of his family have been in open, peaceful, and continuous possession of the subject
property from when Diaz mortgaged it to his father. The parties in this case entered in to a
compromise agreement where they agreed to amicably settle the case provided that Salvador,
Sr. will vacate the and surrender the property to petitioner Diaz within a period of 1 and ½
years, and that Diaz shall pay to Salvador, Sr. the sum of P1,600.00.
Salvador, Sr. failed to vacate the subject property. As such, Diaz field an ex parte Motion for
Execution which the MTCC granted. A writ of execution was then issued to cause Salvador, Sr.
to surrender possession of the subject property to Diaz. However, petitioners by sheer
tolerance chose not to implement the writ and allowed Salvador, Sr. and his family to stay,
subject to the condition that they will cavate when petitioners need it. Salvador, Sr. eventually
passed away.
15 years after, petitioners sent a demand letter to Salvador, Jr., who refused to vacate. This led
petitioners to filed a new case for unlawful detainer. In his Answer, Salvador, Jr. contended that
the complaint was barred by res judicata in view of the compromise agreement. He also
claimed that he and his predecessor in interest have been occupying the subject property in the
concept of an owner for more than 45 years already.
The MTCC held that the present complaint is already barred by res judicata because the same
evidence in the first action would support and establish the cause of action in the second one.
The RTC held that res judicata does not apply because the compromise agreement was not a
judgment on the merits. The CA reinstated the MTCC decision.
Issue: Whether or not there is an identity of cause of action?.
Held: No.
Be that as it may, petitioners are partly correct that there is no identity of cause of action
between the first and second unlawful detainer cases, but not for the reason that Salvador Jr.'s
occupation is akin to forcible entry made through stealth and strategy — an allegation that is
nowhere to be found in the Complaints. The Rules of Court defines cause of action as an act or
omission by which a party violates a right of another. One of the tests to determine the identity
of causes of action so as to warrant application of res judicata is the "same evidence rule."
In Bachrach Corporation v. CA, to ascertain the identity of causes of action, the test is to look
into whether or not the same evidence fully supports and establishes both the present and the
former causes of action. In an unlawful detainer case, the evidence needed to establish the
cause of action would be the lease contract and the violation of that lease. However, in this
case where a person occupies the land of another at the latter’s tolerance or permission,
without any contract between them, what must be· proven is that such possession is by mere
tolerance, and that there was a breach of implied promise to vacate the land upon demand.
The refusal to comply with the earlier demand letter sent to Salvador, Sr. creates a different
cause of action different from the one created by the refusal to comply with the second
demand letter by Salvador, Sr. The first deals with possession by mere tolerance while the
second refers to possession by tolerance which only arose when they neglected to execute the
earlier judgment.
The CA thus committed reversible error when it overlooked that fact that the cause of action in
the first unlawful detainer case is Salvador Sr.'s breach of the implied promise to vacate the
property being occupied by his family by mere tolerance of petitioners, whereas the cause of
action in the second case is another breach of implied promise to vacate the same property by
Salvador Jr., the son and successor-in-interest of Salvador Sr., despite the judicially-approved
Compromise Agreement which petitioners neglected to enforce even after the issuance of a
writ of execution.