Sindico vs Diaz Tolentino vs Leviste Manila Railroad vs Atty General Abbain vs Chua SEAFDEC vs NLRC Soliven vs Fastforms Siena

vs Gal-lang Souhern Food vs Salas People vs Sola Urbano vs Chavez Josefa vs Zhandong St Martin vs NLRC CB vs CA HGC vs R-2 Builders Ascue vs CA Baito vs Sarmiento Matling vs Coros Lim Kieh Tong vs CA BF Citiland vs Otake Russell vs Vestil Tomawis vs Balindong Republic vs Asuncion LBP vs Villegas STRADEC vs SIDC Phil. Overseas vs Africa City of Baguio vs Masweng Manufacturer's Distributors vs Yu Siu Liung Cruz vs Tan Lapitan vs Scandia Good Shepherd vs Tutaan Optoma Hertz vs Realty Rodriguez vs Alikpala Banco Espanol vs Palanca De Midgely vs Ferandos Gonzaga vs CA Hernandez vs Rural Bank of Lucena De Midgeley vs Ferandos CB vs CA Phil. 1st Insurance vs Pyramid Logistics Perez vs Metrobank Go vs Tong Felipe vs Leuterio

Santiago vs Bautista Sagrada Orden vs NACOCO Ma-ao Sugar Central vs Barrios Danfoss vs Continental Cement Bayan Muna vs Romulo Secretary of Defense vs Manalo Juasing Hardware vs Mendoza Carillo vs Dabon Joya vs PCGG Minoza vs Lopez Ablaza vs Republic Oposa vs Factoran Wee vs De Castro Arcelona vs CA Cerezo vs Tuazon Quiombing vs CA Orbeta vs Sendiong Chua vs Beltran Limos vs Odones Robles Transport vs Manalo Newsweek vs IAC MIAA vs Rivera Village Heirs of Dona Paz Filipinas Port vs Go Reyes vs RTC Chua vs Beltran Gojo vs Goyala Heirs of Medrano vs De Vera Del Castillo vs Jaymalin Carabeo vs Sps. Dingco

Namarco vs Federacion WON the counterclaim was compulsory? No. 1. It did not meet the logical relationship test because there was no connection between the claim and counterclaim. 2. Assuming it met the logical relationship test, the counterclaim was after-acquired. An after-acquired counterclaim is not barred if not set up. An after-acquired counterclaim, even if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim, need not be pleaded supplementally; the after-acquired claim is not considered a compulsory counterclaim under Rule 13(a) and a failure to interpose it will not bar its assertion in a later suit.

Young vs Sy What is the purpose of a supplemental pleading? 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. Why was the supplemental complaint proper? The relief prayed for in the Supplemental Complaint, which is the exercise of the right of legal redemption accorded to co-owners of property, is germane to and intertwined with the cause of action in the Complaint for the nullification of the "Second Supplemental to the Extrajudicial Partition" on the ground that it lacked the approval of a guardianship court. The petitioner's right to redeem the property is dependent on the nullification of the partition, which is the subject of the original complaint. Unless the partition is nullified or declared without any force or effect, the petitioner will not be considered a co-owner of the property and, consequently, she will be unable to exercise any right of legal redemption under Article 1620 of the Civil Code granted to co-owners of property. The right of legal redemption as co-owner is conferred by law and is merely a natural consequence of co-ownership. Hence, the petitioner's cause of action for legal redemption as embodied in her Supplemental Complaint stems directly from and is an extension of her rights as co-owner of the property subject of the Complaint. Is it improper for a supplemental pleading to contain a new cause of action? A broad definition of causes of action should be applied: 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 factor to be considered by the court in the exercise of its discretion; and of course, a broad definition of "cause of action" should be applied here as elsewhere.

Republic vs Central Surety What is the purpose of a third-party complaint? The third-party complaint is but a continuation of the main action, its purpose being merely to seek "contribution, indemnity, subrogation or any other relief, in respect of his opponent's claim." (Rule 6, Sec. 12.) The aim is to avoid the actions which should be tried together to save the time and cost of a reduplication of evidence, to obtain consistent results from identical or similar evidence, and to do away with the serious handicap to a defendant of a time difference between a judgment against him and a judgment in his favor against the third party defendant. Can the court decide on the third-party complaint even if, taken independently, it might not have jurisdiction over the third-party complaint? Thus it has been held that "where a court has jurisdiction of a claim and the parties in the principal action, it generally has jurisdiction also of a suit or proceeding which is a continuation of or incidental and ancillary to the principal action, even though it might not have jurisdiction of the ancillary proceeding if it were an independent and original action or proceeding. The jurisdiction of the ancillary suit or proceeding is referrable to or dependent upon the jurisdiction of the court over the principal suit or proceeding." Distinguish a third-party complaint from a counterclaim and cross-claim: Petitioners urge that a rule similar to the rule on counterclaim be adopted. But a third-party complaint cannot be likened to a counterclaim which must be within the jurisdiction of the court trying the main case, because unlike a third-party complaint, a counterclaim "need not diminish or defeat the recovery sought by the opposing party, but may claim itself exceeding in amount or different in kind from that sought in the opposing party's claim" (Rule 6, Sec. 6). A third-party complaint may likewise be likened to a cross claim under Rule 9, section 5. ... The principle is at once apparent, namely, that where an action is ancillary to a main action over which a court has jurisdiction, no independent jurisdiction is needed to enable the court to take cognizance of the ancillary action.

Asian Construction vs CA What is the purpose of a third-party complaint? The purpose of Section 11, Rule 6 of the Rules of Court is to permit a defendant to assert an independent claim against a third-party which he, otherwise, would assert in another action, thus preventing multiplicity of suits. All the rights of the parties concerned would then be adjudicated in one proceeding. This is a rule of procedure and does not create a substantial right. Neither does it abridge, enlarge, or nullify the substantial rights of any litigant. This right to file a third-party complaint against a third-party rests in the discretion of the trial court. The third-party complaint is actually independent of, separate and distinct from the plaintiffs complaint, such that were it not for the rule, it would have to be filed separately from the original complaint. What are the types of third-party complaint according to the relief? (Atlantic vs. US Fidelity) The defendant may implead another as third-party defendant: (a) on an allegation of liability of the latter to the defendant for contribution, indemnity, subrogation or any other relief; (b) on the ground of direct liability of the third-party defendant to the plaintiff; or (c) the liability of the third-party defendant to both the plaintiff and the defendant. What are the requisites of a third-party complaint? (a) Some substantive basis for a third-party claim be found to exist, whether the basis be one of indemnity, subrogation, contribution or other substantive right. (b) There must be a causal connection between the claim of the plaintiff in his complaint and a claim for contribution, indemnity or other relief of the defendant against the thirdparty defendant. What is the test of a third-party complaints validity? (Capayas v. Court of First Instance) (1) whether it arises out of the same transaction on which the plaintiffs claim is based; or whether the third-party claim, although arising out of another or different contract or transaction, is connected with the plaintiffs claim; (2) whether the third-party defendant would be liable to the plaintiff or to the defendant for all or part of the plaintiffs claim against the original defendant, although the third-party defendants liability arises out of another transaction; and (3) whether the third-party defendant may assert any defenses which the third-party plaintiff has or may have to the plaintiffs claim. What is CONTRIBUTION?

Common liability is the very essence for contribution: Contribution is a payment made by each, or by any of several having a common liability of his share in the damage suffered or in the money necessarily paid by one of the parties in behalf of the other or others. Why was the third-party complaint improper? The contract of lease and sale between ACDC and MEC is different and separate from the contract for construction services between Becthel and ACDC. What was the danger of filing an improper third-party complaint in this case? Considering that the third-party defendant admitted its liability for the principal claim of the original plaintiff in its Answer with Third-Party Complaint, the trial court did not err in rendering judgment on the pleadings against it.

Pentacapital vs Mahinay What is the purpose of a supplemental pleading? As a general rule, leave will be granted to a party who desires to file a supplemental pleading that alleges any material fact which happened or came within the partys knowledge after the original pleading was filed, such being the office of a supplemental pleading. The application of the rule would ensure that the entire controversy might be settled in one action, avoid unnecessary repetition of effort and unwarranted expense of litigants, broaden the scope of the issues in an action owing to the light thrown on it by facts, events and occurrences which have accrued after the filing of the original pleading, and bring into record the facts enlarging or charging the kind of relief to which plaintiff is entitled. It is the policy of the law to grant relief as far as possible for wrongs complained of, growing out of the same transaction and thus put an end to litigation. Why was the supplemental compulsory counterclaim improper? Given these premises, it is obvious that the alleged obligation of petitioner already existed and was known to respondent at the time of the filing of his Answer with Counterclaim. He should have demanded payment of his commission and share in the proceeds of the sale in that Answer with Compulsory Counterclaim, but he did not. He is, therefore, proscribed from incorporating the same and making such demand via a supplemental pleading. The supplemental pleading must be based on matters arising subsequent to the filing of the original pleading related to the claim or defense presented therein, and founded on the same cause of action. Supplemental pleadings must state transactions, occurrences or events which took place since the time the pleading sought to be supplemented was filed. Why was the action for preliminary mandatory injunction dismissed? Non-payment of the correct filing fee considering that the complaint was actually a collection of sum of money although denominated as Preliminary Mandatory Injunction The court treated the complaint as a collection suit because respondent was seeking the payment of his unpaid commission or share in the proceeds of the sale of the Molino Properties. Why was the action for a sum of money dismissed on the ground of lack of cause of action? The RTC found that respondent had no cause of action against Pentacapital Realty, there being no privity of contract between them. Why is the action for a sum of money still barred by res judicata EVEN IF the plaintiff is a different party from the 1st case? Respondents supplemental counterclaim against petitioner is anchored on the doctrine of piercing the veil of corporate fiction. Obviously, after the dismissal of his complaint before the RTC-Cebu, he now proceeds against petitioner, through a counterclaim, on the basis of the same cause of action. Thus, if we follow respondents contention that petitioner and Pentacapital Realty are one and the same entity, the latter being a subsidiary of the former, respondent is barred from instituting the present case based on the principle of bar by prior

judgment. The RTC-Cebu already made a definitive conclusion that Pentacapital Realty is not a privy to the contract between respondent and CRDI. It also categorically stated that it was CRDI which agreed to pay respondents commission equivalent to 20% of the proceeds of the sale. With these findings, and considering that petitioners alleged liability stems from its supposed relation with Pentacapital Realty, logic dictates that the findings of the RTC-Cebu, which had become final and executory, should bind petitioner. It is well-settled that when material facts or questions in issue in a former action were conclusively settled by a judgment rendered therein, such facts or questions constitute res judicata and may not again be litigated in a subsequent action between the same parties or their privies regardless of the form of the latter. Absolute identity of parties is not required, and where a shared identity of interest is shown by the identity of the relief sought by one person in a prior case and the second person in a subsequent case, such was deemed sufficient. There is identity of parties not only when the parties in the cases are the same, but also between those in privity with them. What are the three (3) modes of forum shopping? (a) by filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis pendentia); (b) by filing multiple cases based on the same cause of action and with the same prayer, the previous case having been finally resolved (where the ground for dismissal is res judicata); and (c) by filing multiple cases based on the same cause of action but with different prayers (splitting of causes of action, where the ground for dismissal is also either litis pendentia or res judicata). What are the elements of forum shopping? (a) identity of parties or at least such parties that represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the relief being founded on the same facts; (c) identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.

Metrobank vs Absolute Management Why was the 4th party complaint improper? Why should the 4th party complaint be filed instead as a claim in the settlement proceeding? Metrobanks fourth-party complaint, as a contingent claim, falls within the claims that should be filed under Section 5, Rule 86 of the Rules of Court. This is not a case of a death of a party pending action, because Metrobank filed the action against the estate, not when the deceased was alive. Example of a claim that need not be filed in the settlement proceeding, but filed as an ordinary civil action against the estate: Maclan v. Garcia: Gabriel Maclan filed a civil case to recover from Ruben Garcia the necessary expenses he spent as possessor of a piece of land. Garcia acquired the land as an heir of its previous owner. He set up the defense that this claim should have been filed in the special proceedings to settle the estate of his predecessor. Maclan, on the other hand, contended that his claim arises from law and not from contract, express or implied. Thus, it need not be filed in the settlement of the estate of Garcias predecessor, as mandated by Section 5, Rule 87 of the Rules of Court (now Section 5, Rule 86).

3A Apparel vs Metrobank Example of application of Rule 17.3: For the dismissal of a case for failure to prosecute is addressed to the sound discretion of the trial court and where, as here, the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude in the prosecution of its case, and absent grave abuse on the part of the trial court, the dismissal must be upheld.

Meliton vs CA Why is the counterclaim compulsory? Both the claims therein of petitioners and private respondent arose from the same contract of lease. The rights and obligations of the parties, as well as their potential liability for damages, emanated from the same contractual relation. Petitioners' right to claim damages for the unlawful demolition of the improvements they introduced on the land was based on their right of possession under the contract of lease which is precisely the very same contract sought to be rescinded by private respondent in her complaint. The two actions are but the consequences of the reciprocal obligations imposed by law upon and assumed by the parties under their aforesaid lease contract. That contract of lease pleaded by private respondent constitutes the foundation and basis relied on by both parties for recovery of their respective claims. An action for damages specifically applicable in a lessor-lessee relationship is authorized in Article 1659 of the Civil Code which provides that: Art. 1659. If the lessor or the lessee should not comply with the obligations set forth in articles 1654 and 1657, the aggrieved party may ask for the rescission of the contract and indemnification for damages, or only the latter, allowing the contract to remain in force. Paragraph 3 of Article 1654 of the same Code requires that the lessor must "maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract." 21 The aggrieved party has the alternative remedies, in case of contractual breach, of rescission with damages, or for damages only, "allowing the contract to remain in force." The act of private respondent in demolishing the structures introduced by petitioners on the property leased and the improvements therein during the existence of the lease contract is a clear violation by her, as lessor, of her obligation mandated by paragraph 3, Article 1654 of the Civil Code. The said violation gave rise to a cause of action for damages in favor of herein petitioners. Why is the dismissed compulsory counterclaim not barred, when the defendant failed to file MR or appeal on the order of dismissal of the compulsory counterclaim? Petitioners' claims were duly set up as counterclaims in the prior case but the same were dismissed by reason of non-payment of docket fees. Compulsory counterclaim was DISMISSED, but not on the merits. in the same order of dismissal of the complaint, the counterclaims of herein petitioners were dismissed by reason of the fact the court a quo had not acquired jurisdiction over the same for non-payment of the docket fees. On that score, the said dismissal was also without prejudice, since a dismissal on the ground of lack of jurisdiction does not constitute res judicata, there having been no consideration and adjudication of the case on the merits. The discontinuance of a case not on the merits does not bar another action on the same subject matter.

BY ANALOGY: On a parity of rationale, Rule 17.2 should apply to a counterclaim duly interposed therein and which is likewise dismissed but not on the merits thereof.

Example of a compulsory counterclaim: Berses vs. Villanueva: As we have ruled, in actions for ejectment or for recovery of possession of real property, it is well settled that the defendant's claims for the value of the improvements on the property or necessary expenses for its preservation are required to be interposed in the same action as compulsory couterclaims. In such cases, it is the refusal of the defendant to vacate or surrender possession of the premises that serves as the vital link in the chain of facts and events, and which constitutes the transaction upon which the plaintiff bases his cause of action. It is likewise an "important part of the transaction constituting the subject matter of the counterclaim" of defendant for the value of the improvements or the necessary expenses incurred for the preservation of the property. They are offshoots of the same basic controversy between the parties, that is, the right of either to the possession of the property.

Gojo vs Goyala

GSIS vs Caballero Why is the counterclaim permissive? The issue in the main action, i.e., the nullity or validity of the bid award, deed of absolute sale and TCT in favor of CMTC, is entirely different from the issue in the counterclaim, i.e., whether petitioner is entitled to receive the CMTC's rent payments over the subject property when GSIS became the owner of the subject property by virtue of the consolidation of ownership of the property in its favor. What is the rule on permissive counterclaims in relation to docket fees? The rule in permissive counterclaims is that for the trial court to acquire jurisdiction, the counterclaimant is bound to pay the prescribed docket fees. Since petitioner failed to pay the docket fees, the RTC did not acquire jurisdiction over its permissive counterclaim. The judgment rendered by the RTC, insofar as it ordered Fernando to pay petitioner the rentals which he collected from CMTC, is considered null and void. Any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court.

Calo vs Ajax Why is the counterclaim not compulsory? However, plaintiff's claim is not a compulsory counterclaim in Civil Case No. IV-93062 for the simple reason that the amount thereof exceeds the jurisdiction of the municipal court. The rule that a compulsory counterclaim not set up is barred, when applied to the municipal court, presupposes that the amount involved is within the said court's jurisdiction. Otherwise, as this Court had already noted in Yu Lay v. Galmes, we would come to the absurd situation where a claim must be filed with the municipal court which it is prohibited from taking cognizance of, being beyond its jurisdiction. Besides, the reason underlying the rule, which is to settle all related controversies in one sitting only, does not obtain. For, even if the counterclaim in excess of the amount cognizable by the inferior court is set up, the defendant cannot obtain positive relief. The Rules allow this only for the defendant to prevent plaintiff from recovering from him. This means that should the court find both plaintiff's complaint and defendant's counterclaim (for an amount exceeding said court's jurisdiction) meritorious, it will simply dismiss the complaint on the ground that defendant has a bigger credit. Since defendant still has to institute a separate action for the remaining balance of his counterclaim, the previous litigation did not really settle all related controversies.

Chavez vs. Sandiganbayan Why is the counterclaim not compulsory? As earlier stated, we do not suggest that a lawyer enjoys a special immunity from damage suits. However, when he acts in the name of a client, he should not be sued on a counterclaim in the very same case he has filed only as counsel and not as a party. Any claim for alleged damages or other causes of action should be filed in an entirely separate and distinct civil action. A lawyer cannot properly attend to his duties towards his client if, in the same case, he is kept busy defending himself.

Cojuangco vs Villegas Why is the counterclaim barred? Villegas should have set forth, simultaneously with the assertion that she was entitled to the parcel of land by right of inheritance, the alternative claim that assuming she was not legally entitled to the disputed lot, at least as a builder in good faith, she has the right to the value of the buildings and improvements which she and her parents had introduced on the land. And while it may be argued that the defense of being a builder in good faith would have been inconsistent with her claim of ownership, in the case of Castle Bros., Wolf and Sons v. Go-Juno the Court held that a party may set forth as many defenses and counterclaims as he may have, whatever be their nature. These may even be inconsistent with each other because what is sufficient is that each is consistent with itself. Since Villegas failed to set up such alternative defense (i.e. a builder in good faith is entitled to recover the value of improvements) and instead relied on the sole defense that she inherited the land from her parents, the rejection thereof was a complete resolution of the controversy between the parties which bars a later case based upon the unpleaded defense. The adjudication of the issue joined by the parties in the earlier case constitutes res judicata, the theory being that what is barred by prior judgment are not only the matters actually raised and litigated upon, but also such other matters as could have been raised but were not.

Chan vs CA Why is the counterclaim compulsory? Chan's counterclaim for ejectment is a compulsory counterclaim because it is necessarily connected with the transaction or occurrence which is the subject matter of Cu's complaint, viz., the lease contract between them. The case of Ching Pue vs. Gonzales is not applicable because in Ching Pue the consignation cases were filed with the Court of First Instance of Manila which did not have jurisdiction to pass upon the unlawful detainer cases that were properly cognizable by the Municipal Court. In the instant case, the consignation case was filed with the MTC which also has jurisdiction over the counterclaim for ejectment. Involving ejectment and consignation, why is the counterclaim permissive in Ching Pue vs. Gonzales? Ching Pue vs. Gonzales: Consignation in court under article 1176 of the Civil Code, is not the proper proceedings to determine the relation between landlord and tenant, the period or life of the lease or tenancy, the reasonableness of the rental, the right of the tenant to keep the premises against the will of landlord, etc. These questions should be decided in a case of ejectment or detainer like those two cases brought by Gonzales against two of the petitioners under the provisions of Rule 72 of the Rules of Court. In a case of ejectment, the landlord claims either that the lease has ended or been terminated or that the lessee has forfeited his right as such because of his failure to pay the rents as agreed upon or because he failed or refused to pay the new rentals fixed and demanded by the lessor. The lessee in his turn may put up the defense that according to law, the rental demanded of him is unreasonable, exorbitant and illegal, or that the period of the lease has not yet expired, or that if the rental law is applicable, and that the premises are destined solely for dwelling, he may not be ousted therefrom because the owner does not need them for his own use, etc. We repeat that all these questions should be submitted and decided in a case of ejectment and cannot be decided in a case of consignation.

Sps. Javier vs Ardiente Example of a barred cross-claim: At the outset, the Court noticed that COWD and Gonzalez, who were petitioner's co-defendants before the RTC and her co-appellants in the CA, were impleaded as respondents in the instant petition. This cannot be done. Being her co-parties before the RTC and the CA, petitioner cannot, in the instant petition for review on certiorari, make COWD and Gonzalez, adversary parties. It is a grave mistake on the part of petitioner's counsel to treat COWD and Gonzalez as respondents. There is no basis to do so, considering that, in the first place, there is no showing that petitioner filed a cross-claim against COWD and Gonzalez. Under Section 2, Rule 9 of the Rules of Court, a cross-claim which is not set up shall be barred. Thus, for failing to set up a cross-claim against COWD and Gonzalez before the RTC, petitioner is already barred from doing so in the present petition.

Gojo vs Goyala May a plaintiff be declared in default with respect to a compulsory counterclaim? No. The appellant contends that there is no occasion for the TC to declare him in default in respect of appellees counterclaim as said counterclaim falls within the category of compulsory counterclaim which does not call for an independent answer as the complaint already denies its material allegations. It is now settled that a plaintiff who fails or chooses not to answer a compulsory counterclaim may not be declared in default, principally because the issues raised in the counterclaim are deemed automatically joined by the allegations of the complaint.

Tec Bi vs Chartered Bank of India What is deemed admitted under Rule 8.11 if not specifically denied? A general admission of the truth of the allegations set forth in a pleading is not an admission of: 1. the truth of an impossible conclusion of fact drawn from other facts set out in the pleading 2. nor of a wrong conclusion of law based on the allegations of fact well pleaded 3. nor of the truth of a general averment of facts contradicted by more specific averments. Thus, if a pleader alleges that two pesos were borrowed on one day and two more borrowed on another making five Pin all, a stipulation of the truth of the allegations in the pleading does not amount to an admission by the opposing party that twice two make five. Again if a pleader alleges that one hundred pesos were loaned without interest for one year and had not been paid, and that the borrower is indebted to the lender in the sum of one hundred and ten pesos, that being the amount of the capital together with interest for the year for which the money was loaned, a stipulation as to the truth of the allegation set forth in the pleadings is not an admission of the truth of the conclusion of law as to the interest due by the borrower. What was the extent of the admission insofar as the document attached (i.e. a contract of pledge) is concerned? The plaintiff in this action does not question the truth of the bank's allegations that the pledge contract was executed on the day on which it purports on its face to have been signed and delivered. There is no suggestion of bad faith or sharp practice on the part of either the pledgor or pledgee in the execution of the pledge. Under the circumstances plaintiff had no reason to object to the introduction of evidence, which tended direct to establish his claim that although the pledge had been executed as alleged by the defendant bank, it could not affect his rights on the premises. On the contrary he must have welcomed the introduction of this evidence, which conclusively established the very point upon which his whole case necessarily turns. Plaintiff stands strictly on the rule of substantive law laid down in this article of the code which declared that this rights, as a "third person," cannot be adversely affected by a pledge the date of which is not evidenced in a public document.

Phil. Advertising vs Revilla Why is there failure of specific denial by disavowal of knowledge? Whether or not the said averments in the complaint were true, could not conceivably be unknown to private respondent. As a matter of fact it has never been denied by private respondent that it was indebted to petitioner, much less it been asserted that the letters attached as Annexes "A" and "B" to the complaint which were sent to petitioner by the counsel of private respondent were not authorized by the latter. There was thus a failure on private respondent's part to deny the material averments of the complaint. Consequently, the same, including the contents of Annexes "A" and "B", which formed part of the complaint, and in which the existence and validity of petitioners claim were unequivocally conceded, must deemed to have been admitted. What are the requisites of disavowal of knowledge? Although sanctioned by the rules, the form of denial adopted by private respondent must be availed of in good faith and with sincerity and not resorted to merely for the purpose of delay or to confuse the party as to what averments in the complaint are actually put in issue. What are instances when disavowal of knowledge is an INEFFECTIVE denial? 1. AVERMENT OF IGNORANCE IS PALPABLY UNTRUE. Capitol Motors Corporation v. Yabut: In said case the defendant's answer was as follows: "Paragraphs 2, 3, 4, 5, 6 and 7 of the complaint are specifically denied for lack of knowledge sufficient to form a belief as to the truth thereof." We there held that the rule authorizing an answer to the effect that the defendant has no knowledge or information sufficient to form a belief as to the truth of an averment and giving such answer the effect of a denial, does not apply where the fact as to which want of knowledge is asserted is so plainly and necessarily within the defendant's knowledge that his averment of ignorance must be palpably untrue. In the said case a copy of the promisory note sued upon was attached to the complaint. 2. MEANS OF INFORMATION ARE WITHIN CONTROL OF PLEADER. Dahlstrom v. Gemunder: this Court said "an unexplained denial of information and belief of a matter of records, the means of information concerning which are within the control of the pleader, or are readily accessible to him, is evasive and is insufficient to constitute an effective denial." 3. FACT BEING DISAVOWED COULD NOT CONCEIVABLY BE UNKNOWN TO PLEADER. Sy-Quia, et al. v. Marsman, et al.: We said that so lacking in sincerity and good faith was the defendants' answer that went to the extent of denying knowledge or information as to whether they were in the premises of Marsman on January 4, 1961, as averred in the complaint, although, whether such a fact was or was not true, could not be unknown to the defendants.

Liam Law vs Olympic Sawmill What is the effect of not denying under oath the allegation of usury in the Answer? If the contract is usurious, the party liable for the usurious interest may sue the party to whom the usurious interest is to be paid. The party sued for usurious interest shall file Answer under oath. Failure to Answer under oath shall constitute admission of fact that the interest is usurious. If Liam Law did not Answer under oath, it admitted the usurious interest. If the usurious interest is deemed admitted, the trial court is wrong to enforce the payment of the usurious interest.

The foregoing provision envisages a complaint filed against an entity which has committed usury, for the recovery of the usurious interest paid. In that case, if the entity sued shall not file its answer under oath denying the allegation of usury, the defendant shall be deemed to have admitted the usury. The provision does not apply to a case, as in the present, where it is the defendant, not the plaintiff, who is alleging usury. Moreover, for sometime now, usury has been legally non-existent. Interest can now be charged as lender and borrower may agree upon. The Rules of Court in regards to allegations of usury, procedural in nature, should be considered repealed with retroactive effect.

Phil. Banking Corp. vs. CA

Course of discussion: The Complaint must prove the elements of the contract of loan. One element of a contract is consideration. The Complaint only attached as evidence the signed promissory notes and disclosure statement, as well as the entries in the bank statement crediting the proceeds of the loan to Sarmientos account. The Answer attached as evidence entries in the bank statement showing that the same loan amount was again debited or withdrawn by the bank. Hence, the due execution of said documents, even though admitted by the defendant, does not solve the issue of whether the contract had a consideration.

Ratio: It is undisputed that respondent Sarmiento signed the promissory note and the accompanying disclosure statement on loan/credit transaction. But said pieces of evidence proved only the existence of such documents. There was even no question as to that because respondent Sarmiento himself admitted the due execution thereof. The important issue was whether or not respondent Sarmiento actually received the proceeds of the subject loan so as to make him liable therefor, a matter which should have been ventilated before the trial court. The trial court did in fact make a finding that the documentary evidence of petitioner failed to prove anything showing that respondent indeed received the proceeds of the loan. The Court of Appeals affirmed the conclusions of the trial court and declared: A pre-existing obligation, it may be conceded, constitutes value and may, of and by itself, serve as valuable and sufficient consideration for a contract such as the loan sued upon. As an essential element of a contract, however, the same should have been satisfactorily proved by the appellant particularly when, as in the instant case, the absence of consideration was precisely put in issue by the pleadings and was buttressed by both oral and documentary evidence. Having failed in this material respect, the appellants withdrawal of the amount supposedly credited to the appellees account was understandably interpreted by the court a quo as a termination/cancellation of the loan the latter applied for. Considering further that contracts without consideration do not exist in contemplation of law and produce no effect whatsoever (Article 1352, Civil Code of the Philippines), the trial, likewise, correctly dismissed the appellants case.[5] (emphasis supplied) A statement in a written instrument regarding the payment of consideration is merely in the nature of a receipt and may be contradicted.[6] Respondent Sarmiento denied having received the proceeds of the loan and in fact presented evidence showing that on the day petitioner claimed to have credited the subject amount, it was again debited or withdrawn by petitioner, admittedly upon the instruction of the officials from petitioners head office . Petitioner attempted to controvert this fact by claiming that the proceeds of the loan were applied to respondents previous obligations to the bank. But we find nothing in the records showing that respondent had other obligations to which the proceeds of the loan could or should have been applied. Moreover, petitioner failed to explain just exactly what said obligations were or to what extent the purported proceeds were applied in satisfaction thereof. What appeared clearly was that the proceeds of the loan were deposited then withdrawn the same day by petitioner itself, thus negating its claim that respondent actually received it. Petitioner therefore failed to establish its case against respondent Sarmiento.

Katon vs. Palanca Why was the action dismissed motu priopio by the CA? 1. Petitioners action was brought 24 years after the issuance of Palancas homestead patent. Under the Public Land Act, such action should have been taken within ten years from the issuance of the homestead certificate of title. 2. No cause of action: a mere homestead applicant, not being the real party in interest, has no cause of action in a suit for reconveyance of a land in public domain. Nowhere in the Complaint did petitioner allege that he had previously held title to the land in question. Basis of CAs motu propio dismissal of the action under Rule 9.1: Sec. 2, Rule 1: "[t]hese rules shall apply in all courts, except as otherwise provided by the Supreme Court." Enumeration of remedies to dismiss on the ground of prescription: Gicano v. Gegato: "x x x [T]rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles, Feb. 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v. Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97 Phil. 821); or where a defendant has been declared in default (PNB v. Perez, 16 SCRA 270). What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period be otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's complaint, or otherwise established by the evidence."

Valientes vs Ramas Are there other grounds for motu propio dismissal not enumerated in Rule 9.1? While not included in the above enumeration under Section 1, Rule 9 of the Rules of Court, we have ruled in previous cases that laches need not be specifically pleaded and may be considered by the court on its own initiative in determining the rights of the parties. What is so special about QUIETING OF TITLE? Heirs of Olviga vs. CA: imprescriptibility of action for reconveyance if it is in the concept of quieting of title, i.e. when the actual possessor is still in possession of the property. With regard to the issue of prescription, this Court has ruled a number of times before that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property (Vda. de Portugal vs. IAC, 159 SCRA 178). But this rule applies only when the plaintiff is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. SC: However, the Court made a clear distinction in Olviga: when the plaintiff in such action is not in possession of the subject property, the action prescribes in ten years from the date of registration of the deed or the date of the issuance of the certificate of title over the property. When the plaintiff is in possession of the subject property, the action, being in effect that of quieting of title to the property, does not prescribe.

Rumarate vs Hernandez Requisites for quieting of title: In an action for quieting of title, the court is tasked to determine the respective rights of the parties so that the complainant and those claiming under him may be forever free from any danger of hostile claim. For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. Imprescriptibility of quieting of title: On the issue of prescription, the settled rule is that an action for quieting of title is imprescriptible, as in the instant case, where the person seeking relief is in possession of the disputed property. A person in actual possession of a piece of land under claim of ownership may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, and that his undisturbed possession gives him the continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his title.

Laches: The failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier constitutes laches. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has either abandoned it or declined to assert it. While it is by express provision of law that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession, it is likewise an enshrined rule that even a registered owner may be barred from recovering possession of property by virtue of laches. In applying the doctrine of laches, we have ruled that where a party allows the following number of years to lapse from the emergence of his cause of action without enforcing his claim, laches sets in: 36 years; 12 years; 50 years; 34 years; 37 years; 32 years; 20 years; 47 years; 11 years; 25 years; 40 years; 19 years; 27 years; 7 years; 44 years; 4 years; and 67 years. Elements of laches: The elements of laches are: (1) conduct of a party on the basis of which the other party seeks a remedy; (2) delay in asserting ones rights, despite having had knowledge or notice of the other partys conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of a

party that the person against whom laches is imputed would assert the right; and (4) injury or prejudice to the party asserting laches in the event the suit is allowed to prosper.

Baguioro vs Barrios Morales vs CA Cruz-agana vs Lagman Wee vs Galvez Hasegawa vs Kitamura AUB vs Goodland Midland Pasig vs Tablante BPI vs CA Vallacar vs Catubig UE vs Pepanio Perpetual Savings vs Fajardo Cerezo vs Tuazon Sps. Delos Santos vs CA Juasing Hardware vs Mendoza Dauden-Hernaez vs Delos Angeles Phil. Infrastructure vs. Phil. Export Surigao Mining vs Harris Bormaheco vs Malayan Bautista vs Maya-Maya GCP-Manny vs Principe Marinduque Mining vs CA Camper vs Pajo-reyes GSIS vs NLRC Luz vs National Amnesty Toyota Cubao vs CA Gentle Supreme vs Consulta VHF vs Quelnan Robinson vs Miralles Palma vs Galvez Arlo vs Afdal Dialcorp vs Soriano Maximo vs Montalban Sahagun vs CA De Midgely vs Ferandos Romualdez-Licaros vs Licaros Paluwagan vs King Maximo vs Montalban Palma vs Galvez DOLE vs Quilala Facilities Management vs Dela Osa Baltazar vs CA Rodriguez vs Alikpala City of Dumaguete vs PPA Barcelonia vs CA PNR vs Rustia

Gochan vs. Gochan although the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the RTC was denominated as one for specific performance and damages, the relief sought was the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional memorandum of agreement. Under these circumstances, the case before the RTC was actually a real action, affecting as it did title to or possession of real property. Consequently, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged in the complaint. But since Mercedes Gochan failed to allege in their complaint the value of the real properties, the Court found that the RTC did not acquire jurisdiction over the same for non-payment of the correct docket fees.