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Outline: RULE 2 - Cause of Action CIVIL PROCEDURE

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CIVIL PROCEDURE

Lesson for August 2, 2014, Saturday
Judge Mike Asuncion

- Felipe Sr. v. Hon. Leuterio, G.R. No. L-4606, May 30, 1952
Cause of Action - the act or omission by which a party violates a right of another - Sec. 2, Rule 2
- Du v. Jayoma, G.R. No. 175042, April 23, 2012
Elements:
- Ma-ao Sugar Central Co. v. Barrios, G.R. No. L-1539, December 3, 1947
Right of Action vs. Cause of Action
- Marquez v. Varela, G.R. No. L-4845, December 24, 1952
Failure to state a cause of action
- Remitere v. Montinola Vda. De Yulo,. G.R. No. L-19751, February 28, 1966
Test of the sufficiency of a cause of action
- Misamis Occidental II Cooperative, Inc. v. David, G.R. No. 129928, August 25, 2005
Splitting a single cause of action
- Quadra v. CA, G.R. No. 147593, July 31, 2006
- Bachrach Motor v. Icarangal, G.R. No. L-45350, May 29, 1939
- City of Bacolod v. San Miguel Brewery, G.R. No. L-25134, October 30, 1969
Joinder and mis-joinder of causes of action
- Ada v. Baylon, G.R. No. 182435, August 13, 2012
- Sps. Perez v. Hermano, G.R. No. 147417, July 8, 2005

Case Digest: RULE 2 Cause of Action CIVIL PROCEDURE


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FELIPE, SR. vs LEUTERIO
G.R. No. L-4606, 30 May 1952

Facts:
A benefit inter-collegiate oratorical contest was held in
Naga City. The contestants were eight, among them Nestor Nosce,
Emma Imperial, and Luis General, Jr.
There were five judges of the competition, the petitioner
Ramon B. Felipe, Sr. being the Chairman.
After the orators had delivered their respective pieces, and
after the judges had expressed their votes, the Chairman publicly
announced their decision awarding first price to Nestor Nosce,
second price to Emma Imperial, third price to Menandro Benavides
and fourth place to Luis General, Jr.
Imperial addressed a letter to the Board of Judges
protesting the verdict and alleging that one of the Judges had
committed a mathematical mistake, resulting in her second place
only instead of the first.
Upon refusal of the Board to amend their award, she filed
a complaint in the court of first instance.
At the contest the five judges were each furnished a blank
form wherein he gave the participants grades according to his
estimate of their abilities, giving number 1 to the best, number 2 to
the second best etc., down to number 8. Then the grades were
added, and the contestant receiving the lowest number got first
prize, the next second prize, etc.
The sums for the first four winners were: Nosce 10;
Imperial 10; Benevides 17, General 17.
It appearing that Nosce and Imperial had tied for the first
place, the Chairman, apparently with the consent of the board,
broke the tie awarding first honors to Nosce and second honors to
Imperial.
It was discovered later that the form filed by Delfin
Rodriguez, one of the Judges, gave Imperial a total score of 94 (4
th

place) and General a total score of 95 (3
rd
place).
Imperial asserts that her total should be 95 instead of 94
and therefore should rank 3rd place in Rodriguez' vote. And if she
got 3 from Rodriguez, her total vote should have been 9 instead of
ten, with the result that she copped first place in the speaking joust.
Rodriguez testified that he made a mistake in adding up
Imperial's ratings; that she should have been given a total of 95, or
placed no. 3, the same as General; that he was not disposed to
break the tie between her and General and insisted that he wanted
to give rank 3 to Imperial and rank 3 also to General.
The situation then is this: Days after a contest has been
conducted and the winners announced, one of the judges confesses
he made a mistake, that the ratings he gave the second place winner
should have been such as would entitle her to first place. The other
judges refuse to alter their verdict.

Issue:
May the matter be brought to the court to obtain a new
award, reversing the decision of the board of judges? No.

Held:
For more than thirty years oratorical tilts have been held
periodically by schools and colleges in these islands. Inter-collegiate
oratorical competitions are of more recent origin. Members of this
court have taken part in them either as contestants in their school
days, or as members of the board of judges afterwards. They know
some (few) verdicts did not reflect the audience's preference and
that errors have sometimes been ascribed to the award of the
judges. Yet no party ever presumed to invoke judicial intervention;
for it is unwritten law in such contests that the board's decision is
final and unappealable.
Incidentally, these school activities have been imported
from the United States. We found in American jurisprudence no
litigation questioning the determination of the board of judges.
SC observes that in assuming jurisdiction over the matter,
the respondent judge reasoned out that where there is a wrong
there is a remedy and that courts of first instance are courts of
general jurisdiction.
The flaw in his reasoning lies in the assumption that
Imperial suffered some wrong at the hands of the board of judges. If
at all, there was error on the part of one judge, at most. Error and
wrong do not mean the same thing. "Wrong" as used in the
aforesaid legal principle is the deprivation or violation of a right. As
stated before, a contestant has no right to the prize unless and until
he or she is declared winner by the board of referees or judges.
Granting that Imperial suffered some loss or injury, yet in
law there are instances of "damnum absque injuria". This is one of
them. If fraud or malice had been proven, it would be a different
proposition. But then her action should be directed against the
individual judge or judges who fraudulently or maliciously injured
her. Not against the other judges.
The judiciary has no power to reverse the award of the
board of judges of an oratorical contest. For that matter it would not
interfere in literary contests, beauty contests and similar
competitions.





Cause of Action - the act or omission by which a party violates a right
of another - Sec. 2, Rule 2
DU vs. JAYOMA
G.R. No. 175042, 23 April 2012

Facts:
The Sangguniang Bayan of the Municipality of Mabini,
Bohol, enacted Municipal Ordinance No. 1, series of 1988, requiring
the conduct of a public bidding for the operation of a cockpit in the
said municipality every four years.
For the period January 1, 1989 to December 31, 1992, the
winning bidder was Engr. Edgardo Carabuena. Due to his failure to
comply with the legal requirements for operating a cockpit, the
Sangguniang Bayan adopted Resolution authorizing petitioner Danilo
Du to continue his cockpit operation until the winning bidder
complies with the legal requirements.
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Upon discovering that petitioner has been operating his
cockpit in violation of Municipal Ordinance, the Sangguniang Bayan
passed Municipal Resolution suspending petitioners cockpit
operation.
Pursuant to Municipal Resolution, respondent Venancio R.
Jayoma, then Mayor of Mabini, in a letter, ordered petitioner to
desist from holding any cockfighting activity.
Petitioner filed with the Regional Trial Court (RTC) of
Bohol, a Petition for Prohibition (Special Civil Action) against
respondent mayor and nine members of the Sangguniang Bayan of
Mabini. Petitioner prayed that a preliminary injunction and/or a
temporary restraining order be issued to prevent respondents from
suspending his cockpit operation. Petitioner claimed that he has a
business permit to operate until December 31, 1997; and that the
Municipal Resolution was unlawfully issued as it deprived him of due
process.
Respondents interposed that under the Local Government
Code (LGC) of 1991, the power to authorize and license the
establishment, operation and maintenance of a cockpit is lodged in
the Sangguniang Bayan; that respondent mayor, in ordering the
suspension of petitioners cockpit operation, was merely exercising
his executive power to regulate the establishment of cockpits in the
municipality, pursuant to the ordinances and resolutions enacted by
the Sangguniang Bayan; and that Municipal Resolution does not
need to be approved by the Sangguniang Panlalawigan because it is
not an ordinance but an expression of sentiments of the
Sangguniang Bayan of Mabini.
A Temporary Restraining Order was issued by the RTC
enjoining respondents from suspending the cockpit operation of
petitioner until further orders from the court.
The Petition for Prohibition was later amended to include
damages, which the RTC admitted in an Order.
The CA reversed the Decision of the RTC. According to the
CA, petitioner did not acquire a vested right to operate a cockpit in
the municipality as he was only granted a temporary privilege by the
Sangguniang Bayan. CA denied petitioners reconsideration.

Issue:
Whether the CA erred in finding that petitioner is not
entitled to damages. No. There was no cause of action.

Held:
The petition lacks merit. A cause of action is defined as
"the act or omission by which a party violates a right of another."
Corollarily, the essential elements of a cause of action are:
(1) a right in favor of the plaintiff; (2) an obligation on the part of the
defendant to respect such right; and (3) an act or omission on the
part of the defendant in violation of the plaintiffs right with a
resulting injury or damage to the plaintiff for which the latter may
file an action for the recovery of damages or other appropriate
relief. Petitioner has no legal right to operate a cockpit.
In this case, we find that petitioner has no cause of action
against the respondents as he has no legal right to operate a cockpit
in the municipality. Under Resolution, the Sangguniang Bayan
allowed him to continue to operate his cockpit only because the
winning bidder for the period January 1, 1989 to December 31, 1992
failed to comply with the legal requirements for operating a cockpit.
Clearly, under the said resolution, petitioners authority to operate
the cockpit would end on December 31, 1992 or upon compliance by
the winning bidder with the legal requirements for operating a
cockpit, whichever comes first. As we see it, the only reason he was
able to continue operating until July 1997 was because the
Sangguniang Bayan of Mabini failed to monitor the status of the
cockpit in their municipality.
And even if he was able to get a business permit from
respondent mayor for the period January 1, 1997 to December 31,
1997, this did not give him a license to operate a cockpit. Under
Section 447(a)(3)(v) of the LGC, it is the Sangguniang Bayan which is
empowered to "authorize and license the establishment, operation
and maintenance of cockpits, and regulate cockfighting and
commercial breeding of gamecocks." Considering that no public
bidding was conducted for the operation of a cockpit from January
1, 1993 to December 31, 1997, petitioner cannot claim that he was
duly authorized by the Sangguniang Bayan to operate his cockpit in
the municipality for the period January 1, 1997 to December 31,
1997. Respondent members of the Sangguniang Bayan, therefore,
had every reason to suspend the operation of petitioners cockpit by
enacting Municipal Resolution. As the chief executive of the
municipal government, respondent mayor was duty-bound to
enforce the suspension of the operation of petitioners cockpit
pursuant to the said Resolution. License to operate a cockpit is a
mere privilege.
In addition, it is well enshrined in our jurisprudence that "a
license authorizing the operation and exploitation of a cockpit is not
property of which the holder may not be deprived without due
process of law, but a mere privilege that may be revoked when
public interests so require." Having said that, petitioners allegation
that he was deprived of due process has no leg to stand on.






Cause of Action - the act or omission by which a party violates a right
of another - Sec. 2, Rule 2
Elements:
MA-AO SUGAR CENTRAL CO. vs. BARRIOS
G.R. No. L-1539, 03 December 1947

Facts:
This is a petition for certiorari to set aside the order of the
respondent judge denying the motion to dismiss the complaint of
the other respondents which seek to recover amounts of money due
then from the petitioner before the outbreak of the war, on the
ground that the respondent judge acted without or in excess of the
court's jurisdiction in rendering said order; and for prohibition to
forbid the respondent judge from taking cognizance of the case on
the ground that the respondent judge had no jurisdiction to try and
decide it.
The ground for the motion to dismiss filed by the
petitioner is that the complaint of the respondents does not state
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facts sufficient to constitute a cause of action, because the plaintiffs
have no right to demand the payment of the defendants' alleged
debts until after the termination or legal cessation of the
moratorium provided No. 32, the pertinent part of which reads as
follows:

III. DEBT MORATORIUM
1. Enforcement of payment of all debts and other
monetary obligations payable within the Philippines,
except debts and other monetary obligations, entered into
in any area after declaration by Presidential Proclamation,
that such area has been freed from enemy occupation and
control, is temporarily suspended pending action by the
Commonwealth Government.

Issue:
Whether or not the complaint of the plaintiffs-
respondents states no cause of action and the petition for certiorari
and prohibition filed in the present case do not entitle the petitioner
to said reliefs. Yes!


Held:
It is plain and Supreme Court (SC) is of the opinion that the
complaint filed by the plaintiff respondent in the court below does
not state facts sufficient to constitute a cause of action. A cause of
action is an act or omission of one party in violation of the legal right
or rights of the other; and its essential elements are legal right of the
plaintiff, correlative obligation of the defendant, and act or omission
of the defendant in violation of said legal right. In the present case
the complaint alleges the legal right of the plaintiffs to be paid the
amount due them from the defendant, as well as the correlative
obligation of the defendant to pay said debts to the plaintiffs when
it becomes due and payable; but not the omission on the part of the
defendant to pay in violation of the legal rights of the plaintiffs to be
paid, because according to the above quoted provision of Executive
Order No. 32, said debts are not yet payable or their payment can
not be enforced until the legal cessation of the moratorium, which is
still in force. As the defendant herein petitioner is not yet in default,
plaintiffs have no cause of action against him.
While the debt moratorium is in force the defendant-
petitioner has no obligation yet to pay the plaintiffs, and the latter
can not file a suit against him in the courts of justice requiring him to
recognize his debts to the plaintiffs and to pay them (after the
moratorium) not only the amount of the indebtedness, but the legal
interest thereon from the filling of the complaint, the attorney's fees
of ten per centum of the amounts due, and the costs of the suits.
There is no such action to compel a defendant to acknowledge or
recognize his debt which is not yet payable, distinct and different
from the action for recovery or payment of a debt already due and
payable, against the debtor who refuses to pay it. To allow the
plaintiffs' action and grant the relief demanded in the complaint,
would be to compel the defendant to pay legal interest of the
amount claimed from filing of the said complaint, as well as the
attorney's fees of 10 per cent of the sum due thereon as stipulated,
and the costs of the suit, as if the defendants' obligations to the
plaintiffs were already payable and he had failed or refused to pay
them. Why should the defendant be required to bear the expenses
incidental to a suit before he has violated the plaintiffs' right? How
could plaintiffs assume that the defendant will not pay his debts
when they become payable, and for that reason they have filed this
action against defendant? Why should not the contrary be
presumed, that is, that the debtor will pay his obligation at the
proper time, in order to prevent a suit, preserve its credit, and avoid
the expenses incident to a suit, and the payment of legal interest on
the amount due and attorney's fees?

After stating SCs opinion that the complaint of the plaintiffs
respondents states no cause of action, SC has to hold that the facts
stated in the petition for certiorari and prohibition filed in the
present case do not entitle the petitioner to said reliefs. It requires
no argument to show that the respondent judge had jurisdiction and
did not exceed it or act with grave abuse of discretion in denying the
petitioner's motion to dismiss, and therefore we have to dismiss the
present petition. This Court, in special civil actions of certiorari and
prohibition, can only determine the question whether or not the
court acted without or in excess of its jurisdiction or with grave
abuse of its discretion in doing the act complained of. SC can not
correct errors committed by the lower courts in their judgments,
decrees or orders rendered in the exercise of their jurisdiction.






Right of Action vs. Cause of Action
MARQUEZ vs. VARELA
G.R. No. L-4845, December 24, 1952

Facts:
This is an appeal against an order of the Court of First
Instance of manila dismissing the complaint as to plaintiff L.G.
Marquez.
The pertinent allegations of the complaint are as follows :
that plaintiff Gutierrez Lora was authorized by defendants to
negotiate the sale of their share or interest in a parcel of land on
Plaza Goiti, Manila, and having meet his co-plaintiff L. G. Marquez, a
real estate broker, both of them agreed to work together for the
sale of defendant's property; that they found a ready, willing, and
able buyer, which accepted defendants' price and terms, but that
thereafter defendants, without any justifiable reason, refused to
carry out the sale and execute the necessary deed therefor; and that
as a consequence plaintiffs failed to receive the commission which
they were entitled to receive.
The defendants presented a motion to dismiss the
complaint as to L. G . Marquez on the ground that he has no cause
of action against defendants , and this motion having been granted,
plaintiff L. G. Marquez has prosecuted this appeal.
The complaint was dismissed on the alleged ground that it
states no cause of action against the defendants.

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Issue:
Whether or not the objection to the complaint justified./
Whether or not the complaint of Marquez is properly dismissed. No
Whether or not there is a cause of action in favor of
Marquez against the defendants. Yes.

Held:
The term "cause of action" has been held to be
synonymous with "right of action" , but in the law of pleading
(Code Pleading) one is distinguished from the other in that a right
of action is a remedial right belonging to some person, while a
cause of action is a formal statement of the operative facts that
give rise to such remedial right. The one is a matter of right and
depends on the substantive law, while the other is a matter of
statement and is governed by the law of procedure. (Phillips, Code
Pleading, section 189, page 170.)
It is not denied that Lora, if he rendered the service
alleged in the complaint, would have a right to be paid
compensation for the service he rendered jointly with Marquez. He
acted as a broker, and a broker is entitled to a commission for his
services. (Article 277, Code of Commerce: Henry vs. Velasco, 34 Phil.
587; Perez de Tagle vs. Luzon Surety Co, 38 Off. Gaz. 1213).
There is no prohibition in law against the employment of a
companion to look for a buyer; neither is it against public policy.
Neither was there even any implied understanding between Lora
and the defendants that no part of the compensation to which Lora
would be entitled to receive could be paid to any companion or
helper of Lora. Marquez's right to compensation can not, therefore,
be disputed under the operative facts set forth in the complaint.

There is a primary right in favor of Marquez (to be paid
for his services even through Lora only) and a corresponding duty
devolving upon the defendants (to pay for said services). Since (as
alleged) defendants refuse to comply with their duty, Marquez
now is entitled to enforce his legal right by an action in court. The
complaint in the case at bar, therefore, contains both the primary
right and duty and the delict or wrong combined which constitute
the cause of action in the legal sense as used in Code Pleading
(Pomeroy, Code Remedies, section 347), and the cause of action is
full and complete.
Objection to the complaint, however, is not that Marquez
has no right to share in the compensation to be paid Lora, whom
defendants had directly engaged, but that Marquez can not join in
this action and enforce therein his rights directly against the
defendants, evidently because defendants never dealt with
Marquez, directly or indirectly, or, in other words, that both
Marquez and his services were not known to dismiss show that
such in fact was the objection:
This paragraph clearly shows that the authority
to sell was only given to plaintiff Z. Gutierrez Lora and not
to the other plaintiff L. G. Marquez. Attention is
respectfully called to the word "plaintiff" used in said
paragraph III and expressed in singular form to the
exclusion of the other plaintiff L. G. Marquez. If the
plaintiff L. G. Marquez had worked at all for the sale of the
property at the instance of an invitation of his co- plaintiff
Z. Gutierrez Lora, we maintain that his action if there is
any is against his co-plaintiff and not against the
defendants herein.
As far as the defendant are concerned in this
case, plaintiff L. G. Marquez is not only a stranger in this
case but also unknown to the defendants; and if he had
worked at all for the sale of the defendants' share and
participation in the parcels of lands referred to in the
complaint, the same was made not only at his own look-
out, risk and responsibility but also with no authority
whatsoever. (Record on Appeal, pages 16, 17)

The principle underlying defendants' objection is one of
substantive law, recognized under common law, where no one could
sue for a breach of a contract who was not a party thereto, and the
action allowed to be brought only in the name of the one holding
the legal title. The requirement was based upon the doctrine of
privity of contract.
Sec. 234. Plaintiffs in Action ex Contractu.
When an action of contract concerns only the original
parties to the instrument, it is not difficult to determine
who should be the plaintiff. Obviously the one seeking to
enforce it is the real party in interest. At common law no
one could sue for the breach of contract who was not a
party thereto. Hence an action on contract, whether
express or implied, was required to be brought in the
name of the one who held the legal interest. This
requirement was based upon the doctrine of privity of
contract. . . . (Phillips, Code Pleading, page 226.)
Sec. 235. Privity of Contract. When necessary.
It was a rule of the common law that before one may
complain of another for breach of contract, there must be
some direct contractual relation, or privity, between them;
and this, with only a few exceptions, is a requirement of
the law today. . . . (Phillips, code Pleading, page 227.)

But we did not import into this jurisdiction the common
law procedure. Our original code of civil Procedure (Act 190) was
taken mainly from the code of Civil Procedure of California, and this
in turn was based upon the Code of Civil procedure of New York
adopted in that stated in 1948. Our system of pleading is Code
Pleading that system used in the states of the Union that had
adopted codes of procedure. The code system of pleading adopted
in substance the rules of equity practice as to parties, under which
"all persons having an interest in the subject of the action, and in
obtaining the relief demanded, may be joined as plaintiffs". (Phillips,
Code Pleading, section 251, page 247.) In New York and California
interest in the subject matter, or in any relief growing out of the
same transaction or series of transactions is sufficient to allow
joinder
Under the former Code of civil procedure "every action
must be prosecuted in the name of the real party in interest," and
"all persons having an interest in the subject of the action and in
obtaining the relief demanded shall be joined as plaintiffs, " and " if
any person having an interest and in obtaining the relief demanded
refuses to join as plaintiff, he may be made a defendant and the fact
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of his interest and refusal to join to be stated in the complaint." (
Section 114, Act 190)
The principle underlying the rule is that all persons having
a material interest under the substantive law should be made
parties, as distinguished from that of the common law which
allowed only a two-sided controversy, each party to be opposed to
the other. Phillips, Code Pleading, 2d ed. section 228, page 216.)
The above principles have not been changed by the
reforms in the rules in 1940 and 1941. The action is still to be
prosecuted in the name of the real party in interest. Under section 6
of Rule 3, "All persons in whom . . . any right to relief in respect to or
arising out of the same transaction . . . is alleged to exist, whether
jointly, severally, or in the alternative, may, . . . join as plaintiffs . . .
where any question of law or fact common to all such plaintiffs . . .
may arise in the action;
Plaintiff Marquez, in the case at bar, clearly falls under the
above rule. He is entitled to be paid his commission out of the very
contract of agency between Lora and the defendants; Lora and he
acted jointly in rendering services to defendants under Lora's
contract, and the same questions of law and fact govern their
claims. The rules do not require the existence of privity of contract
between Marquez and the defendants as required under the
common law; all that they demand is that Marquez has a material
interest in the subject of the action, the right to share in the broker's
commission to be paid Lora under the latter's contract, which right
Lora does not deny. This is sufficient to justify the joinder of
Marquez as a party plaintiff, even in the absence of privity of
contract between him and the defendants.






Failure to state a cause of action
REMITERE vs MONTINOLA VDA. DE YULO
G.R. No. L-19751, February 28, 1966

Facts:
Remitere filed a complaint against the defendants-
appellees, Montinola and the Register of Deeds of Negros
Occidental. A parcel of land was registered in the name of Remedios
Montinola Vda. de Yulo, the defendant herein.
Prior to the transfer, the public sale mentioned in this
complaint, however, was and still is absolutely a void sale, and
certainly did not pass titles and ownership of said lots, starting from
its primitive owner, now being represented by the plaintiffs herein,
as surviving heirs thereto, until it reaches the possession by the
defendant. That by reason of its invalidity, all and every benefits that
the transferees, including the defendant herein, had acquired from
the parcels of land in question, should be indemnified to the
plaintiffs.
The complaint prayed that the defendants be ordered to
reconvey the two lots in question to the plaintiffs; that the
defendant Register of Deeds be ordered to cancel the certificates of
title in the name of the defendant Remedios Montinola Viuda de
Yulo and to issue new ones in the names of the plaintiffs; and that
the defendants pay the costs.
The defendants-appellees filed a motion to dismiss the
complaint on the grounds (1) that the complaint does not state a
cause of action, and (2) that even assuming that a cause of action
exists, the same has already prescribed.
The lower court dismissed the complaint precisely on the
grounds relied upon by the defendants-appellees. Hence this appeal.
In this appeal, the plaintiffs-appellants contend that the
trial court erred: (1) in declaring that the complaint contains no
narration of facts; (2) in holding that complaint states no cause of
action; and (3) in holding that the plaintiffs' cause of action, if any,
has already prescribed.

Issue:
Whether or not the complaint states no cause of action.

Held:
Yes. The lower court had correctly ruled that the complaint
in the present case does not narrate facts that constitute a cause of
action.
The lack of a cause of action as a ground for dismissal must
appear on the face of the complaint, and to determine whether the
complaint states a cause of action only the facts alleged therein, and
no other, should be considered. A reading of the complaint in this
case will readily impress one that no ultimate facts which may
constitute the basis of plaintiffs-appellants rights which had been
violated are alleged. Neither are there allegations of ultimate facts
showing acts or omissions on the part of the defendants-appellees
which constitute a violation of the rights of plaintiffs-appellants.
Apparently, the plaintiffs-appellants rely on the allegations of
paragraphs 3 and 5 of the complaint for their cause of action.
Paragraph 3 states:
3. Upon the demise of Gregorio Remitere on January 1,
1914 the Court of First Instance of Negros Occidental, in
Civil Case No. 1661, Re-Application for Letters of
Administration, appointed his wife as administratrix of his
estate, among which the two lots in question.
During this period, the provincial sheriff of Negros
Occidental, conducted a public auction sale over the said
parcels of land, and on the same day, September 23, 1918,
he issued thereof a deed of sale in favor of Mariano Yulo
of Binalbagan, Negros Occidental, for the total
consideration of P20,000.00. . . . .

The allegations embodied in the above quoted paragraph
are mere averments or recitals of facts that do not establish any
right or claim on the part of the plaintiffs. The allegations do not
state any connection that the plaintiffs have with the deceased
Gregorio Remitere, nor do they state what connection or claim the
plaintiffs have on the properties left by the deceased Gregorio
Remitere. The allegation about the sale at public auction does not
state in what way the rights or interests of the plaintiffs had been
affected, nay prejudiced, by that sale. Again, paragraph 5 of the
complaint states:
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5. The public sale mentioned in paragraph 3 of this
complaint, however, was and still is absolutely a void sale,
and certainly did not pass titles and ownership of said lots,
starting from its primitive owner, now being represented
by the plaintiffs herein, as surviving heirs thereto, until it
reaches the possession by the defendants.
That by reason of its invalidity, all and every benefits that
the transferees, including the defendant herein, had
acquired from the parcels of land in question, should be
indemnified to the plaintiffs.

It is not stated anywhere in the complaint why the sale at
public auction was absolutely void, nor were there stated any
particular facts or circumstances upon which the alleged nullity of
the sale or transaction is predicated. The averment that "the public
sale . . . was and still is absolutely a void sale, and certainly did not
pass titles and ownerships of said lots, starting from its primitive
owner, now being represented by the plaintiffs herein, as surviving
heirs thereto, until it reaches the possession by the defendants. . ."
is a conclusion of law or an inference from facts not stated in the
pleading. A pleading should state the ultimate facts essential to the
rights of action or defense asserted, as distinguished from mere
conclusion of fact, or conclusion of law. An allegation that a
contract is valid, or void, as in the instant case, is a mere conclusion
of law.
General allegations that a contract is valid or legal, or is
just, fair and reasonable, are mere conclusion of law.
Likewise, allegations that a contract is void, voidable,
invalid, illegal, ultra vires, or against public policy, without
stating facts showing its invalidity, are mere conclusions of
law; as are allegations that a contract is in conformity
with, or in violation of a constitutional or statutory
provision. . . . . (71 C.J.S. pp. 44-45.) (Emphasis supplied.)

Not being statements of ultimate facts which constitute
the basis of a right of the plaintiffs-appellants, nor are they
statements of ultimate facts which constitute the wrongful acts or
omissions of the defendants-appellees that violated the right of
the plaintiffs-appellants the allegations of the complaint in the
present case have not fulfilled the requirements of Section 3, Rule
6 of the Revised Rules of Court (Sec. 1, Rule 6 of the former Rules
of Court) that the complaint should contain a "concise statement
of the ultimate facts constituting the plaintiff's cause or causes of
action."

This Court has defined the term "cause of action" as
follows:
A cause of action has been defined by the
Supreme Court as an act or omission of one party in
violation of the legal right or rights of the other; and its
essential elements are legal right of the plaintiff,
correlative obligations of the defendant, and act or
omission of the defendant in violation of said legal right.
(Ma-ao Sugar Central Co., Inc. vs. Barrios, et al., L-1539,
Dec. 30, 1947)

The term "ultimate facts" has been defined or explained as follows:
Ultimate facts defined.The term "ultimate
facts" as used in Sec. 3, Rule 3 of the Rules of Court, means
the essential facts constituting the plaintiff's cause of
action. A fact is essential if it cannot be stricken out
without leaving the statement of the cause of action
insufficient. . . . . (Moran, Rules of Court, Vol. I, 1963 ed., p.
213)
Ultimate facts are important and substantial
facts which either directly form the basis of the primary
right and duty, or which directly make up the wrongful
acts or omissions of the defendant. The term does not
refer to the details of probative matter or particulars of
evidence by which these material elements are to be
established. It refers to principal determinate, constitutive
facts, upon the existence of which, the entire cause of
action rests. (Montemayor vs. Raborar, et al., 53 O.G. No.
19, p. 6596, citing Pomeroy, Code Remedies, 5th Ed., sec.
420).







Test of the sufficiency of a cause of action
MISAMIS OCCIDENTAL II COOPERATIVE, INC. vs DAVID
G.R. No. 129928, August 25, 2005

Facts:
Private respondent David, a supplier of electrical
hardware, filed a case for specific performance and damages against
MOELCI II, a rural electric cooperative in Misamis Occidental. The
said case, which was essentially a collection suit, pending before
Judge Felixberto Olalia (hereinafter, Judge Olalia) of the RTC Manila,
was predicated on a document and that according to David is the
contract pursuant to which he sold to MOELCI II one (1) unit of 10
MVA Transformer.
MOELCI II filed its Answer to Amended Complaint which
pleaded, among others, affirmative defenses which also constitute
grounds for dismissal of the complaint. These grounds were lack of
cause of action, there being allegedly no enforceable contract
between David and MOELCI II under the Statute of Frauds pursuant
to Section 1 (g) and (i), Rule 16 of the Rules of Court, and improper
venue.
MOELCI II filed with the trial court a Motion (For
Preliminary Hearing of Affirmative Defenses and Deferment of Pre-
Trial Conference)

(hereinafter referred to as Motion) arguing that the
document attached as Annex "A" to the Amended Complaint was
only a quotation letter and not a contract as alleged by David. Thus,
it contends that Davids Amended Complaint is dismissible for failure
to state a cause of action.
David contended in the main that because a motion to
dismiss on the ground of failure to state a cause of action is required
to be based only on the allegations of the complaint, the "quotation
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letter," being merely an attachment to the complaint and not part of
its allegations, cannot be inquired into.
MOELCI II filed a rejoinder to the opposition in which it
asserted that a complaint cannot be separated from its annexes;
hence, the trial court in resolving a motion to dismiss on the ground
of failure to state a cause of action must consider the complaints
annexes.

Judge Olalia issued an order denying MOELCI IIs motion
for preliminary hearing of affirmative defenses. MOELCI IIs motion
for reconsideration of the said order was likewise denied in another
order.
MOELCI II elevated this incident to the Court of Appeals by
way of a special civil action for certiorari, alleging grave abuse of
discretion on the part of Judge Olalia in the issuance of the two
aforesaid orders.
Court of Appeals dismissed MOELCI IIs petition holding
that the allegations in Davids complaint constitute a cause of action.
With regard to MOELCI IIs contention that Davids Amended
Complaint is dismissible as the document, attached thereto as Annex
"A," upon which Davids claim is based is not a contract of sale but
rather a quotation letter, the Court of Appeals ruled that the
interpretation of the document requires evidence aliunde which is
not allowed in determining whether or not the complaint states a
cause of action. The appellate court further declared that when the
trial court is confronted with a motion to dismiss on the ground of
lack of cause of action, it is mandated to confine its examination for
the resolution thereof to the allegations of the complaint and is
specifically enjoined from receiving evidence for that purpose.
With the denial of its Motion for Reconsideration,
petitioner is now before this Court seeking a review of the appellate
courts pronouncements. MOELCI II asserts that the Court of Appeals
committed serious error in: (1) ruling that the resolution of its
motion to dismiss on the ground of lack of cause of action
necessitated hearings by the trial court with the end in view of
determining whether or not the document attached as Annex "A" to
the Amended Complaint is a contract as alleged in the body of said
pleading; and (2) not ordering the trial court to dismiss the Amended
Complaint on the ground of lack of cause of action.

Anent the first
ground, MOELCI II further claims that with the denial of its Petition,
the appellate court in effect exhorted the trial court to defer the
resolution of its motion to dismiss until after the hearing of the case
on the merits contrary to Rule 16

of the Rules of Court and well-
settled jurisprudence.

Issue:
Whether or not the Court of Appeals erred in dismissing
the petition for certiorari and in holding that the trial court did not
commit grave abuse of discretion in denying petitioners Motion.

Held:
No.
To determine the existence of a cause of action, only the
statements in the complaint may be properly considered. It is error
for the court to take cognizance of external facts or hold
preliminary hearings to determine their existence. If the
allegations in a complaint furnish sufficient basis by which the
complaint can be maintained, the same should not be dismissed
regardless of the defenses that may be averred by the defendants.
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.
It has been hypothetically admitted that the parties had
entered into a contract sale David bound himself to supply MOELCI II
(1) unit 10 MVA Power transformer with accessories for a total price
of P5,200,000.00 plus 69 KV Line Accessories for a total price of
P2,169,500.00; that despite written and verbal demands, MOELCI II
has failed to pay the price thereof plus the custom duties and
incidental expenses of P272,722.27; and that apart from the
previously stated contract of sale, David regularly delivered various
electrical hardware to MOELCI II which, despite demands, has an
outstanding balance of P281,939.76.
The court believed all the foregoing sufficiently lay out a
cause of action. Even extending our scrutiny to Annex "A," which is
after all deemed a part of the Amended Complaint, will not result to
a change in our conclusion. The interpretation of a document
requires introduction of evidence which is precisely disallowed in
determining whether or not a complaint states a cause of action.
The Court of Appeals therefore correctly dismissed MOELCI IIs
petition and upheld the trial courts ruling.






Splitting a single cause of action
QUADRA vs CA
G.R. No. 147593, July 31, 2006

Facts:
Petitioner Quadra was the Chief Legal Officer of
respondent Philippine Charity Sweepstakes Office (PCSO) when he
organized and actively participated in the activities of Philippine
Charity Sweepstakes Employees Association (CUGCO), an
organization composed of the rank and file employees of PCSO, and
then later, the Association of Sweepstakes Staff Personnel and
Supervisors (CUGCO) (ASSPS [CUGCO]).
He was administratively charged before the Civil Service
Commission with violation of Civil Service Law and Rules for neglect
of duty and misconduct and/or conduct prejudicial to the interest of
the service. Civil Service Commission rendered a decision finding
petitioner guilty of the charges and recommending the penalty of
dismissal. General Manager of PCSO, Ignacio Santos Diaz, sent
petitioner a letter of dismissal, in accordance with the decision of
the Civil Service Commission.
Petitioner filed a motion for reconsideration of the
decision of the Civil Service Commission. At the same time,
petitioner, together with ASSPS (CUGCO), filed with the Court of
Industrial Relations (CIR) a complaint for unfair labor practice against
respondent PCSO and its officers.
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CIR issued its decision finding respondent PCSO guilty of
unfair labor practice for having committed discrimination against the
union and for having dismissed petitioner due to his union activities.
It ordered the reinstatement of petitioner to his former position
with full backwages and with all the rights and privileges pertaining
to said position.
Respondent PCSO complied with the decision of the CIR.
But while it reinstated petitioner to his former position and paid his
backwages, it also filed with the Supreme Court a petition for review
on certiorari entitled "Philippine Charity Sweepstakes Office, et al. v.
The Association of Sweepstakes Staff Personnel, et al." assailing the
decision of the CIR in Case No. 4312-ULP.
During the pendency of the case in the Supreme Court,
petitioner filed with the CIR a "Petition for Damages." He prayed for
moral and exemplary damages in connection with Case No. 4312-
ULP.
Respondent PCSO moved to dismiss the petition for
damages on the following grounds: (1) the CIR has no jurisdiction to
award moral and exemplary damages; (2) the cause of action is
barred by prior judgment, it appearing that two complaints are
brought for different parts of a single cause of action; and (3) the
petition states no valid cause of action.
Petitioner resigned from PCSO . The petition for damages
and the motion to dismiss, however, remained pending with the CIR
until it was abolished and the NLRC was created. Labor Arbiter
rendered a decision awarding moral and exemplary damages to
petitioner . The NLRC affirmed the decision of the Labor Arbiter,

prompting respondent PCSO to file a petition for certiorari with the
Court of Appeals.
The Court of Appeals reversed the decision of the NLRC. It
held that there was no basis for the grant of moral and exemplary
damages to petitioner as his dismissal was not tainted with bad
faith. It was the Civil Service Commission that recommended
petitioner's dismissal after conducting an investigation. It also held
that the petition claiming moral and exemplary damages filed by
petitioner after respondent PCSO had complied with the CIR
decision of reinstatement and backwages amounted to splitting of
cause of action.
Petitioner filed a motion for reconsideration of the
decision of the Court of Appeals, but the same was denied for lack
for merit.
Petitioner now seeks the Court to review the ruling of the
Court of Appeals. He argued that:
First: The ruling of the Court of Appeals that the PCSO did
not act in bad faith when it dismissed the petitioner is contrary to
the already final and executory decision of the CIR finding the PCSO
guilty of bad faith and unfair labor practice in dismissing the
petitioner. The decision of the CIR was affirmed by the High Court in
the case of PCSO. The Court of Appeals has no jurisdiction to amend
the final and executory decision of the CIR which was affirmed by
the High Court. Once a decision has become final [and] executory, it
could no longer be amended or altered.
Second: The ruling of the Court of Appeals that the claims
for moral and exemplary damages of the petitioner is allegedly
"tantamount to splitting of cause of action under Sec. 4, Rule 2 of
the 1997 Rules of Civil Procedure" is contrary to law. When
petitioner filed with the CIR his complaint for illegal dismissal and
unfair labor practice, the prevailing law and jurisprudence was that
the CIR did not have jurisdiction to grant moral and exemplary
damages. Petitioner's claim for moral damages was filed with the
CIR in the same case by virtue of the ruling of the High Court in
Rheem v. Ferrer, 19 SCRA 130 holding that the CIR has jurisdiction to
award moral and exemplary damages arising out of illegal dismissal
and unfair labor practice.

Issue:
Whether or not petitioners contention is correct. (2
nd

contention)

Held:
Yes. The court ruled that the filing of a petition for
damages before the CIR did not constitute splitting of cause of
action under the Revised Rules of Court. The Revised Rules of Court
prohibits parties from instituting more than one suit for a single
cause of action. Splitting a cause of action is the act of dividing a
single cause of action, claim or demand into two or more parts,
and bringing suit for one of such parts only, intending to reserve
the rest for another separate action. The purpose of the rule is to
avoid harassment and vexation to the defendant and avoid
multiplicity of suits.
The prevailing rule at the time that the action for unfair
labor practice and illegal dismissal was filed and tried before the CIR
was that said court had no jurisdiction over claims for damages.
Hence, petitioner, at that time, could not raise the issue of damages
in the proceedings. However, on January 27, 1967, the Supreme
Court rendered its ruling in Rheem of the Philippines, Inc., et al. v.
Ferrer, et al. upholding the jurisdiction of the CIR over claims for
damages incidental to an employee's illegal dismissal. Petitioner
properly filed his claim for damages after the declaration by the
Court and before the ruling on their case became final. Such filing
could not be considered as splitting of cause of action.





Splitting a single cause of action
BACHRACH MOTOR vs ICARANGAL
G.R. No. L-45350, May 29, 1939

Facts:
Icarangal with Figueroa executed a promissory note in
favor of appellant Bachrach in the amount of P1,614. As a security
for its payment, Icarangal executed a real estate mortgage on a
parcel of land which was duly registered in the RD in 1931. When
the promissors defaulted in the payment of the agreed monthly
installments, Bachrach instituted in the CFI an action for collection
of the amount due on the note. Judgement was rendered in favor of
Bachrach, thereafter, a writ of execution was issued and the
properties of Icarangal was subsequently levied by the sheriff
including the mortgaged property.

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Oriental Commercial Co., Inc. (Oriental), the other defendant,
interposed a third-party claim, alleging that the mortgaged property
had already been acquired by it thru public auction in 1933. By said
reason, the sheriff desisted from the sale of the property, and as a
consequence, the judgement rendered in favor of Bachrach
remained unsatisfied. Bachrach instituted an action to foreclose the
mortgage. The trial court dismissed the complaint, hence, the filing
of the present appeal.

Issue:
Whether or not Bachrach is barred from foreclosing the
real estate mortgage after obtaining a personal judgment against
Icarangal on the promissory note.

Held:
YES. The rule against splitting a single cause of action is
intended "to prevent repeated litigation between the same parties
in regard to the same subject of controversy; to protect defendant
from unnecessary vexation; and to avoid the costs and expenses
incident to numerous suits." It comes from that old maxim nemo
bedet bis vexare pro una et eadem cause (no man shall be twice
vexed for one and the same cause). And it developed, certainly not
as an original legal right of the defendant, but as an interposition of
courts upon principles of public policy to prevent inconvenience and
hardship incident to repeated and unnecessary litigations.

For non-payment of a note secured by mortgage, the creditor has a
single cause of action against the debtor. This single cause of action
consists in the recovery of the credit with execution of the security.
In other words, the creditor in his action may make two demands,
the payment of the debt and the foreclosure of his mortgage. But
both demands arise from the same cause, the non-payment of the
debt, and, for that reason, they constitute a single cause of action.
Though the debt and the mortgage constitute separate agreements,
the latter is subsidiary to the former, and both refer to one and the
same obligation. Consequently, there exists only one cause of action
for a single breach of that obligation.
Plaintiff, then, by applying the rule above stated, cannot
split up his single cause of action by filing a complaint for payment
of the debt, and thereafter another complaint for foreclosure of the
mortgage. If he does so, the filing of the first complaint will bar the
subsequent complaint. By allowing the creditor to file two separate
complaints simultaneously or successively, one to recover his credit
and another to foreclose his mortgage, we will, in effect, be
authorizing him plural redress for a single breach of contract at so
much cost to the courts and with so much vexation and oppression
to the debtor.
We hold, therefore, that, in the absence of express
statutory provisions, a mortgage creditor may institute against the
mortgage debtor either a personal action for debt or real action to
foreclose the mortgage. In other words, he may pursue either of the
two remedies, but not both. By such election, his cause of action can
by no means be impaired, for each of the two remedies is complete
in itself. Thus, an election to bring personal action will leave open to
him all the properties of the debtor for attachment and execution,
even including the mortgaged property itself. And, if he waives such
personal action and pursues his remedy against the mortgaged
property, an unsatisfied judgment thereon would still give him the
right to sue for a deficiency judgment, in which case, all the
properties of the defendant, other than the mortgaged property, are
again open to him for the satisfaction of the deficiency. In either
case, his remedy is complete, his cause of action undiminished, and
any advantages attendant to the pursuit of one or the other remedy
are purely accidental and are all under his right of election. On the
other hand, a rule that would authorize the plaintiff to bring a
personal action against the debtor and simultaneously or
successively another action against the mortgaged property, would
result not only in multiplicity of suits so offensive to justice
(Soriano vs. Enriquez, 24 Phil., 584) and obnoxious to law and equity
(Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting the
defendant to the vexation of being sued in the place of his residence
of the plaintiff, and then again in the place where the property lies.
In arriving at the foregoing conclusion, we are not
unaware of the rule prevailing in certain States of the American
Union, to the effect that, in cases like the one at bar, the creditor
can pursue his remedies against the note and against the security
concurrently or successively. The reason given for the rule seems to
be that the causes of action in the two instances are not the same,
one being personal and the other, real. But, as we have heretofore
stated, the creditor's cause of action is not only single but indivisible,
although the agreements of the parties, evidenced by the note and
the deed of mortgage, may give rise to different remedies.
(Frost vs. Witter, 132 Cal., 421.) The cause of action should not be
confused with the remedy created for its enforcement. And
considering, as we have shown, that one of the two remedies
available to the creditor is as complete as the other, he cannot be
allowed to pursue both in violation of those principles of procedure
intended to secure simple, speedy and unexpensive administration
of justice.
Judgment is affirmed, with costs against the appellant.




Splitting a single cause of action
CITY OF BACOLOD vs SAN MIGUEL BREWERY
G.R. No. L-25134, October 30, 1969

Facts:
In 1949, the City Council of Bacolod passed Ordinance No.
66, series of 1949, imposing upon any person or corporation
engaged in the manufacturing of bottling products such as softdrinks
within the jurisdiction of the City of Bacolod, a fee of 1/24 of a
centavo for every bottle thereof, plus surcharge of 2% every month,
but in no case to exceed 24% for one whole year for the delinquent
manufacturer.
In 1959, the ordinance was amended by Ordinance No.
150, series of 1959, by increasing the fee to 1/8 of a centavo for
every bottle thereof, or an increased from P0.01 to P0.03 per case of
softdrinks. San Miguel Brewery, Inc. (San Miguel) refused to pay the
additional fee and challenged the validity of the whole ordinance.

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In 1960, the City Council sued San Miguel before the CFI for the
payment of the unpaid bottling taxes due with legal interests and
for the payment of P0.03 per case bottling tax. San Miguel filed its
answer. The trial court rendered judgement in favor of the appellee.
Appellant appealed the said decision to SC where it
pressed the question of the invalidity of the above mentioned taxing
ordinances. The SC affirmed the CFI decision and upheld the
constitutionality of the taxing ordinances. After the finality of the SC
decision, the appellee (City Council) moved for the reconsideration
thereof, praying that the same be amended so as to include the
penalties and surcharges provided for in the ordinances. The said
motion was denied, for the reason the the decision is already final
and may not be amended. During the execution before the CFI, the
appellee again sought the inclusion of the surcharges referred to,
the said motion was denied.
Appellee filed before the CFI a second action/complaint to
collect the said surcharges. Appellant move for the dismissal of the
complaint anchored on two grounds: (1) the cause of action is
barred by prior judgment, and (2) a party may not institute more
than one suit for a single cause of action. This motion was denied by
the trial court, and so the appellant filed its answer. The trial court
rendered judgment in favor of the appellee. Appellants moved for a
reconsideration but it was denied, hence, the instant appeal.

Issue:
Whether or not the actions of the appellee splits up a
single cause of action.

Held:
YES. It cannot be denied that appellant's failure to pay the
bottling charges or taxes and the surcharges for delinquency in the
payment thereof constitutes but one single cause of action which
under the above rule can be the subject of only one complaint,
under pain of either of them being barred if not included in the
same complaint with the other. The error of appellee springs from a
misconception or a vague comprehension of the elements of a cause
of action.
The classical definition of a cause of action is that it is "a
delict or wrong by which the rights of the plaintiff are violated by the
defendant." Its elements may be generally stated to be (1) a right
existing in favor of the plaintiff; (2) a corresponding obligation on
the part of the defendant to respect such right; and (3) an act or
omission of the plaintiff which constitutes a violation of the
plaintiff's right which defendant had the duty to respect. For
purposes, however, of the rule against splitting up of a cause of
action, a clearer understanding can be achieved, if together with
these elements, the right to relief is considered.
In the last analysis, a cause of action is basically an act or
an omission or several acts or omissions. A single act or omission can
be violative of various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct
legal obligations. In other words, for a single cause of action or
violation of a right, the plaintiff may be entitled to several reliefs. It
is the filing of separate complaints for these several reliefs that
constitutes splitting up of the cause of action. This is what is
prohibited by the rule.
In the case at bar, when appellant failed and refused to
pay the difference in bottling charges from July 1, 1959, such act of
appellant in violation of the right of appellee to be paid said charges
in full under the Ordinance, was one single cause of action, but
under the Ordinance, appellee became entitled, as a result of such
non-payment, to two reliefs, namely: (1) the recovery of the balance
of the basic charges; and (2) the payment of the corresponding
surcharges, the latter being merely a consequence of the failure to
pay the former. Stated differently, the obligation of appellant to pay
the surcharges arose from the violation by said appellant of the
same right of appellee from which the obligation to pay the basic
charges also arose. Upon these facts, it is obvious that appellee has
filed separate complaints for each of two reliefs related to the same
single cause of action, thereby splitting up the said cause of action.
The trial court held that inasmuch as there was no demand
in the complaint in the first case for the payment of the surcharges,
unlike in the case of Collector of Internal Revenue vs. Blas Gutierrez,
et al., G.R. No. L-13819. May 25, 1960, wherein there was such a
demand, there is no bar by prior judgment as to said surcharges, the
same not having been "raised as an issue or cause of action in Civil
Case No. 5693." This holding is erroneous.
Section 4 of Rule 2, above-quoted, is unmistakably clear as
to the effect of the splitting up of a cause of action. It says, "if
separate complaints are brought for different parts (reliefs) of a
single cause of action, the filing of the first (complaint) may be
pleaded in abatement of the others, and a judgment upon the
merits in either is available as a bar in the others." In other words,
whenever a plaintiff has filed more than one complaint for the
same violation of a right, the filing of the first complaint on any of
the reliefs born of the said violation constitutes a bar to any action
on any of the other possible reliefs arising from the same violation,
whether the first action is still pending, in which event, the defense
to the subsequent complaint would be litis pendentia, or it has
already been finally terminated, in which case, the defense would
be res adjudicata. Indeed, litis pendentia and res adjudicata, on the
one hand, and splitting up a cause of action on the other, are not
separate and distinct defenses, since either of the former is by law
only the result or effect of the latter, or, better said, the sanction for
or behind it.
It thus results that the judgment of the lower court must
be, as it is hereby, reversed and the complaint of appellee is
dismissed. No costs.



Joinder and mis-joinder of causes of action
ADA vs BAYLON
G.R. No. 182435, August 13, 2012

Background of the case:
Spouses Florentino and Maximina Baylon died in 1961 and 1974
respectively. Children: Rita, Victoria, Dolores, Panfila, Ramon and
Lilia, herein petitioner. Dolores died intestate and without issue in
1976. Victoria died in 1981 and was survived by daughter, Luz,
herein petitioner. Ramon died intestate in 1989, and was survived
by herein respondent Florante, his child from his first marriage, and
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Flora his second wife, and their legitimate children, the other herein
petitioners.
Facts:
Petitioners filed with the RTC a complaint for partition,
accounting and damages against Florante, Rita and Panfila, alleging
therein that Spouses Baylon, during their lifetime, owned 43 parcels
of land all situated in Negros Oriental. After the death of Spouses
Baylon, they claimed that Rita took possession of the said parcels of
land and appropriated for herself the income from the same. Using
the income produced by the said parcels of land, Rita allegedly
purchased two parcels of land. The petitioners averred that Rita
refused to effect a partition of the said parcels of land.
In their Answer, Florante, Rita and Panfila asserted that
they and the petitioners co-owned 22

out of the 43 parcels of land
mentioned in the latters complaint, whereas Rita actually
owned

parcels of land, 10 out of the 43 parcels which the
petitioners sought to partition, while the remaining

parcels of land
are separately owned by Petra Cafino Adanza, Florante, Meliton
Adalia, Consorcia Adanza, Lilia & Santiago Mendez. Further, they
claimed that the 2 parcels of land, claimed to be brought from the
income produced from the estate of the late spouses, were acquired
by Rita using her own money. They denied that Rita appropriated
solely for herself the income of the estate of Spouses Baylon, and
expressed no objection to the partition of the estate of Spouses
Baylon, but only with respect to the co-owned parcels of land.
During the pendency of the case, Rita, through a Deed of
Donation, conveyed the 2 above mentioned parcels of land to
Florante. On July 16, 2000, Rita died intestate and without any issue.
Thereafter, learning of the said donation inter vivos in favor of
Florante, the petitioners filed a Supplemental Pleading,

praying
that the said donation in favor of the respondent be rescinded in
accordance with Article 1381(4) of the Civil Code. They further
alleged that Rita was already sick and very weak when the said Deed
of Donation was supposedly executed and, thus, could not have
validly given her consent thereto.
Florante and Panfila opposed the rescission of the said
donation, asserting that Article 1381(4) of the Civil Code applies only
when there is already a prior judicial decree on who between the
contending parties actually owned the properties under litigation.


RTC Decision:
The RTC held that the death of Rita during the pendency of
the case, having died intestate and without any issue, had rendered
the issue of ownership insofar as parcels of land which she claims as
her own moot since the parties below are the heirs to her estate.
Thus, the RTC regarded Rita as the owner of the said 10 parcels of
land and, accordingly, directed that the same be partitioned among
her heirs. Nevertheless, the RTC rescinded the donation inter
vivos in favor of Florante, holding that the donation inter vivos was
executed to prejudice the plaintiffs right to succeed to the estate of
Rita in case of death considering that it refers to the parcels of land
in litigation.

Florante sought reconsideration insofar as to the rescission of the
donation. The trial court denied the motion.

CA Decision:
On appeal, the CA rendered a decision reversing the RTC
decision. The CA remanded the case to RTC for the determination of
ownership of the said 2 parcels of land. The CA held that before the
petitioners may file a rescission, they must first obtain a favorable
judicial ruling that the subject 2 parcels of land belonged to the
estate of Spouses Baylon and not to Rita. Until then, an action for
rescission is premature.

The petitioners moved for the reconsideration, but it was
denied, hence, the instant petition.

Issue:
Whether or not an action for partition and rescission may
be joined in a single cause of action.

Held:
NO. There was a misjoinder of causes of action. The action
for partition filed by the petitioners could not be joined with the
action for the rescission of the said donation inter vivos in favor of
Florante. Lest it be overlooked, an action for partition is a special
civil action governed by Rule 69 of the Rules of Court while an action
for rescission is an ordinary civil action governed by the ordinary
rules of civil procedure. The variance in the procedure in the special
civil action of partition and in the ordinary civil action of rescission
precludes their joinder in one complaint or their being tried in a
single proceeding to avoid confusion in determining what rules shall
govern the conduct of the proceedings as well as in the
determination of the presence of requisite elements of each
particular cause of action.
By a joinder of actions, or more properly, a joinder of
causes of action is meant the uniting of two or more demands or
rights of action in one action, the statement of more than one cause
of action in a declaration. It is the union of two or more civil causes
of action, each of which could be made the basis of a separate suit,
in the same complaint, declaration or petition. A plaintiff may under
certain circumstances join several distinct demands, controversies or
rights of action in one declaration, complaint or petition.
[29]

The objectives of the rule or provision are to avoid a
multiplicity of suits where the same parties and subject matter are
to be dealt with by effecting in one action a complete determination
of all matters in controversy and litigation between the parties
involving one subject matter, and to expedite the disposition of
litigation at minimum cost. The provision should be construed so as
to avoid such multiplicity, where possible, without prejudice to the
rights of the litigants.
Nevertheless, while parties to an action may assert in one
pleading, in the alternative or otherwise, as many causes of action as
they may have against an opposing party, such joinder of causes of
action is subject to the condition, inter alia, that the joinder shall not
include special civil actions governed by special rules.
Disposition: WHEREFORE, in consideration of the
foregoing disquisitions, the petition is PARTIALLY GRANTED. The
Decision dated October 26, 2007 issued by the Court of Appeals in
CA-G.R. CV No. 01746 is MODIFIED in that the Decision dated
October 20, 2005 issued by the Regional Trial Court, Tanjay City,
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Negros Oriental, Branch 43 in Civil Case No. 11657, insofar as it
decreed the rescission of the Deed of Donation dated July 6, 1997 is
hereby REINSTATED. The case is REMANDED to the trial court for
the determination of the ownership of Lot No. 4709 and half of Lot
No. 4706 in accordance with this Decision.

NOTES:
A misjoined cause of action, if not severed upon motion of a
party or by the court sua sponte, may be adjudicated by the
court together with the other causes of action; not a ground for
dismissal
A supplemental pleading may raise a new cause of action as long
as it has some relation to the original cause of action set forth in
the original complaint

The purpose of 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.




Joinder and mis-joinder of causes of action
SPS. PEREZ vs HERMANO
G.R. No. 147417, July 8, 2005

Facts:
The civil case filed by the petitioners before the trial court
against the respondents for Enforcement of Contract and Damages
with Prayer for TRO (Branch 224) presented three (3) causes of
action: first, enforcement of contract to sell entered into between
petitioners and Zescon Land, Inc.; second, for the annulment or
rescission of two contracts of mortgage entered into between
petitioners and respondent Hermano; and third, for damages
against all defendants.
First cause of action: Sometime in 1997, petitioners
entered into a Contract of Sell with Zescon through Sales-Contreras,
for the purchase of 5 parcels of land in the total amount of
P19,104,000.00. as part of their agreement, a portion of the
purchase price would be paid to them as downpayment, another
portion to be given to them as cash advance upon the execution of
the contract and another portion to be used by the buyer, Zescon, to
pay for loans earlier contracted by petitioners which loans were
secured by mortgages.
Second cause of action: In a tricky machination and
simultaneous with the execution of the aforesaid Contract of Sell,
they were made to sign other documents, two of which were
Mortgage deeds over the same 5 properties in favor of respondent
Hermano, whom they had never met. It was allegedly explained to
them by Sales-Contreras that the mortgage contracts would merely
serve to facilitate the payment of the price as agreed upon in their
Contract to Sell. They claim that it was never their intention to
mortgage their property to Hermano, more so that they have never
received a single centavo from the latter.
As to third cause of action, they prayed for damages
against all defendants.
In his Answer with Compulsory Counterclaim, respondent
Hermano denied petitioners allegations. He then filed a civil case
for Judicial Foreclosure of Real Estate Mortgage (Branch 216)
against petitioner Aviso. He also filed a Motion with Leave to
Dismiss the Complaint Against Him or Ordered Severed for
Separate Trial before Branch 224, arguing that there was a mis-
joinder of causes of action under Rule 2, Section 6 of the Rules of
Court.
The trial court (Branch 224) granted the said motion over
the opposition of the petitioners, holding that respondent Hermano
should be dropped as one of the defendants in this case and
whatever claims petitioner may have against Hermano, they can set
it up by way of an answer to said judicial foreclosure. Petitioners
motion for reconsideration was also dismissed.
They filed a petition for certiorari to the CA under Rule 65,
however it was dismissed on mere technicality, the petition having
been filed out of time. Hence, this petition after the denial of their
motion for reconsideration.

Issue:
Whether or not there was mis-joinder of causes of action.

Held:
NONE. The statutory intent behind the provisions on
joinder of causes of action is to encourage joinder of actions which
could reasonably be said to involve kindred rights and wrongs,
although the courts have not succeeded in giving a standard
definition of the terms used or in developing a rule of universal
application. The dominant idea is to permit joinder of causes of
action, legal or equitable, where there is some substantial unity
between them. While the rule allows a plaintiff to join as many
separate claims as he may have, there should nevertheless be some
unity in the problem presented and a common question of law and
fact involved, subject always to the restriction thereon regarding
jurisdiction, venue and joinder of parties. Unlimited joinder is not
authorized.
Our rule on permissive joinder of causes of action, with
the proviso subjecting it to the correlative rules on jurisdiction,
venue and joinder of parties and requiring a conceptual unity in the
problems presented, effectively disallows unlimited joinder.
In herein case, petitioners have adequately alleged in their
complaint that after they had already agreed to enter into a contract
to sell with Zescon Land, Inc., through Sales-Contreras, the latter
also gave them other documents to sign, to wit: A Deed of Absolute
Sale over the same properties but for a lower consideration, two
mortgage deeds over the same properties in favor of respondent
Hermano with accompanying notes and acknowledgment receipts
for Ten Million pesos (P10,000,000) each. Petitioners claim that
Zescon Land, Inc., through Sales-Contreras, misled them to
mortgage their properties which they had already agreed to sell to
the latter.
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From the above averments in the complaint, it becomes
reasonably apparent that there are questions of fact and law
common to both Zescon Land, Inc., and respondent Hermano arising
from a series of transaction over the same properties. There is the
question of fact, for example, of whether or not Zescon Land, Inc.,
indeed misled petitioners to sign the mortgage deeds in favor of
respondent Hermano. There is also the question of which of the four
contracts were validly entered into by the parties. Note that under
Article 2085 of the Civil Code, for a mortgage to be valid, it is
imperative that the mortgagor be the absolute owner of the thing
mortgaged. Thus, respondent Hermano will definitely be affected if
it is subsequently declared that what was entered into by petitioners
and Zescon Land, Inc., was a Contract of Sale (as evidenced by the
Deed of Absolute Sale signed by them) because this would mean
that the contracts of mortgage were void as petitioners were no
longer the absolute owners of the properties mortgaged. Finally,
there is also the question of whether or not Zescon Land, Inc., as
represented by Sales-Contreras, and respondent Hermano
committed fraud against petitioners as to make them liable for
damages.
Prescinding from the foregoing, and bearing in mind that
the joinder of causes of action should be liberally construed as to
effect in one action a complete determination of all matters in
controversy involving one subject matter, we hold that the trial
court committed grave abuse of discretion in severing from the
complaint petitioners cause of action against respondent Hermano.
WHEREFORE, premises considered, the Resolution of the
Court of Appeals dated 19 October 2000 dismissing petitioners
petition for certiorari and its Resolution dated 02 March 2001
denying petitioners motion for reconsideration are REVERSED and
SET ASIDE. The petition for certiorari is hereby GRANTED. The Orders
of the Regional Trial Court of Quezon City, Branch 224, dated 28
February 2000 and 25 May 2000 are ANNULLED and SET ASIDE. The
RTC is further ordered to reinstate respondent Antonio Hermano as
one of the defendants in Civil Case No. Q-98-34211. No costs.

NOTES:
Requisites for Joinder of Causes of Action
(a) It will not violate the rules on jurisdiction, venue and joinder of
parties; and
(b) The causes of action arise out of the same contract, transaction
or relation between parties, or are for demands for money or
are of the same nature and character

Objectives of the rule or provision
(a) To avoid multiplicity of suits where the same parties and
subject matter are to be dealt with by effecting in one action a
complete determination of all matters in controversy and
litigation between the parties involving one subject matter; and
(b) To expedite the disposition of litigation at minimum cost

Should be construed so as to avoid such multiplicity, where
possible, without prejudice to the rights of the litigants

Sec. 6. Misjoinder of causes of action. - Misjoinder of causes of
action is not a ground for dismissal of an action. A misjoined
cause of action may, on motion of a party or on the initiative of
the court, be severed and proceeded with separately.

Sec. 5. Joinder of causes of action. - A party may in one pleading
assert, in the alternative or otherwise, as many causes of action
as he may have against an opposing party, subject to the
following conditions:

(a) The party joining the causes of action shall comply with the
rules on joinder of parties;
(b) The joinder shall not include special civil actions or actions
governed by special rules;
(c) Where the causes of action are between the same parties
but pertain to different venues or jurisdictions, the joinder
may be allowed in the Regional Trial Court provided one of
the causes of action falls within the jurisdiction of said court
and the venue lies therein; and
(d) Where the claims in all the causes of action are principally
for recovery of money, the aggregate amount claimed shall
be the test of jurisdiction.


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G.R. No. L-4606 May 30, 1952
RAMON B. FELIPE, SR., as Chairman, Board of Judges, petitioner,
vs.
HON. JOSE N. LEUTERIO, Judge, Court of First Instance of
Camarines Sur, EMMA IMPERIAL, represented by her guardian-ad-
litem JUSTO V. IMPERIAL, and SOUTHERN LUZON COLLEGE,
respondents.
Ramon Felipe, Jr., and L. B. Karingal for petitioner.
Ezequiel S. Grageda and Victoriano Yamson for respondents Judge
Leuterio and Emma Imperial.
Padilla and San Juan for respondent Southern Luzon College.
BENGZON, J.:
Statement of the case. The issue in the litigation is whether the
courts have the authority to reverse the award of the board of
judges of an oratorical competition.
In an oratorical contest held in Naga, Camarines Sur, first honor was
given by the board of five judges to Nestor Nosce, and second honor
to Emma Imperial. Six days later, Emma asked the court of the first
instance of that province to reversed that award, alleging that one
of the judges had fallen to error in grading her performance. After a
hearing, and over the objection of the other four judges of the
contest, the court declared Emma Imperial winner of the first place.
Hence this special civil action challenging the court's power to
modify the board's verdict.
The facts. There is no dispute about the facts:
1. On March 12, 1950 a benefit inter-collegiate oratorical contest
was held in Naga City. The contestants were eight, among them
Nestor Nosce, Emma Imperial, and Luis General, Jr.
2. There were five judges of the competition, the petitioner Ramon
B. Felipe, Sr. being the Chairman.
3. After the orators had delivered their respective pieces, and after
the judges had expressed their votes, the Chairman publicly
announced their decision awarding first price to Nestor Nosce,
second price to Emma Imperial, third price to Menandro Benavides
and fourth place to Luis General, Jr.
4. Four days afterwards, Emma Imperial addressed a letter to the
Board of Judges protesting the verdict, and alleging that one of the
Judges had committed a mathematical mistake, resulting in her
second place only, instead of the first, which she therefore claimed.
5. Upon refusal of the Board to amend their award, she filed a
complaint in the court of first instance.
6. At the contest the five judges were each furnished a blank form
wherein he give the participants grades according to his estimate of
their abilities, giving number 1 to the best, number 2 to the second
best etc., down to number 8. Then the grades were added, and the
contestant receiving the lowest number got first prize, the next
second prize, etc.
7. The sums for the first four winners were: Nosce 10; Imperial 10;
Benevides 17, General 17, the Board of judges having voted as
follows:
Judge Nosce Imperial Buenavides General
Felipe Sr. ......... 3 1 2 4
Obias .............. 1 2 4 3
Rodriguez .......... 1 4 5 3
Prado .............. 3 2 1 3
Moll ............... 2 1 5 4
10 10 17 17
8. It appearing that Nestor Nosce and Emma Imperial had tied for
the first place, the Chairman, apparently with the consent of the
board, broke the tie awarding first honors to Nosce and second
honors to Imperial.
9. For the convenience of the judges the typewritten forms
contained blank spaces in which, after the names of the rival orators
and their respective orations, the judge could not jot down the
grades he thought the contestants deserved according to
"Originality", "Timeliness", "English", "Stage Personality",
"Pronunciation and Enunciation" and "Voice". From such data he
made up his vote.
10. It was discovered later that the form filed by Delfin Rodriguez,
one of the Judges, gave Imperial and General the following ratings
under the above headings; Imperial 19-15-15-18-14-14 Total 94-
Place 4th General 19-15-15 or 14-19-14-14 Total 95-Place 3rd.
11. Imperial asserts that her total should be 95 instead of 94 and
therefore should rank 3rd place in Rodriguez' vote. And if she got 3
from Rodriguez, her total vote should have been 9 instead of ten,
with the result that she copped first place in the speaking joust.
12. Rodriguez testified that he made a mistake in adding up
Imperial's ratings; that she should have been given a total of 95, or
placed No. 3, the same as General; that he was not disposed to
break the tie between her and General and insisted that he wanted
to give rank 3 to Imperial and rank 3 also to General.
Discussion. Although it would seem anomalous for one judge to give
the same rank to two contestants, we will concede for the moment
that Delfin Rodriguez could have given 3 to Imperial to General.
However if deductions are to be made from his recorded vote
(Exhibit 3) one may infer that after the contest and before
submitting his vote he decided to give General an edge over
Imperial. How? Under the caption "English" General was given by
himself at first "14", later increased to "15". Evidently because after
he had added the ratings of Imperial and (erroneously) reached the
sum of 94, he added the ratings of General (which were the same as
Imperial with 14 under "English") and (mistakenly) reached 94 also.
So what did he also? He raised the 14 to 15 and thus gave general 95
to place him over Imperial's 94. (Mistakingly again, because with 15
General got 96 instead of 95).
But to us the important thing is Rodriguez' vote during and
immediately after the affair. His vote in Exhibit 3 definitely gave
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General place No. 3 and Imperial place No. 4. His calculations
recorded on Exhibit 3 were not material. In fact the Chairman did
not bother to fill out the blank spaces in his own form, and merely
set down his conclusions giving one to Imperial, 2 to Benavides etc.
without specifying the ratings for "Voice", "English", "Stage
Personality" etc. In other words what counted was the vote.
Probably for the above reasons the board refused to "correct" the
alleged error.
The situation then is this: Days after a contest has been conducted
and the winners announced, one of the judges confesses he made a
mistake, that the ratings he gave the second place winner should
have been such as would entitle her to first place. The other judges
refuse to alter their verdict. May the matter be brought to the court
to obtain a new award, reversing the decision of the board of
judges?
For more than thirty years oratorical tilts have been held periodically
by schools and colleges in these islands. Inter-collegiate oratorical
competitions are of more recent origin. Members of this court have
taken part in them either as contestants in their school days
1
, or as
members of the board of judges afterwards. They know some (few)
verdicts did not reflect the audience's preference and that errors
have sometimes been ascribed to the award of the judges. Yet no
party ever presumed to invoke judicial intervention; for it is
unwritten law in such contests that the board's decision is final and
unappealable.
Like the ancient tournaments of the Sword, these tournaments of
the Word apply the highest tenets of sportmanship: finally of the
referee's verdict. No alibis, no murmurs of protest. The participants
are supposed to join the competition to contribute to its success by
striving their utmost: the prizes are secondary.
No rights to the prizes may be asserted by the contestants, because
their's was merely the privilege to compete for the prize, and that
privilege did not ripen into a demandable right unless and until they
were proclaimed winners of the competition by the appointed
arbiters or referees or judges.
Incidentally, these school activities have been imported from the
United States. We found in American jurisprudence no litigation
questioning the determination of the board of judges.
Now, the fact that a particular action has had no precedent during a
long period affords some reason for doubting the existence of the
right sought to be enforced, especially where occasion for its
assertion must have often arisen; and courts are cautious before
allowing it, being loath to establish a new legal principle not in
harmony with the generally accepted views thereon. (See C.J.S. Vol.
1, p. 1012).
We observe that in assuming jurisdiction over the matter, the
respondent judge reasoned out that where there is a wrong there is
a remedy and that courts of first instance are courts of general
jurisdiction.
The flaw in his reasoning lies in the assumption that Imperial
suffered some wrong at the hands of the board of judges. If at all,
there was error on the part of one judge, at most. Error and wrong
do not mean the same thing. "Wrong" as used in the aforesaid legal
principle is the deprivation or violation of a right. As stated before, a
contestant has no right to the prize unless and until he or she is
declared winner by the board of referees or judges.
Granting that Imperial suffered some loss or injury, yet in law there
are instances of "damnum absque injuria". This is one of them. If
fraud or malice had been proven, it would be a different
proposition. But then her action should be directed against the
individual judge or judges who fraudulently or maliciously injured
her. Not against the other judges.
By the way what is here in stated must not be understood as
applying to those activities which the government has chosen to
regulate with the creation of the Games and Amusements Board in
Executive Order No. 392, Series 1950.
Judgment. In view of all the foregoing, we are of the opinion and so
declare, that the judiciary has no power to reverse the award of the
board of judges of an oratorical contest. For that matter it would not
interfere in literary contests, beauty contests and similar
competitions.
Wherefore the order in controversy is hereby set aside. No costs.


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G.R. No. 175042 April 23, 2012
DANILO A. DU, Petitioner,
vs.
VENANCIO R. JAYOMA, then Municipal Mayor of Mabini, Bohol,
VICENTE GULLE, JR., JOVENIANO MIANO, WILFREDO MENDEZ,
AGAPITO VALLESPIN, RENE BUCIO, JESUS TUTOR, CRESCENCIO
BERNALES, EDGARDO YBANEZ, and REY PAGALAN, then members
of the Sangguniang Bayan (SB) of Mabini, Bohol, Respondents.
D E C I S I O N
DEL CASTILLO, J.:
In the absence of a legal right in favor of the plaintiff, there can be
no cause of action.
This Petition for Review on Certiorari
1
under Rule 45 of the Rules of
Court assails the Decision
2
dated July 11, 2006 and the Resolution
3

dated October 4, 2006 of the Court of Appeals (CA) in CA-G.R. SP No.
00492.
Factual Antecedents
On July 7, 1988, the Sangguniang Bayan of the Municipality of
Mabini, Bohol, enacted Municipal Ordinance No. 1, series of 1988,
4

requiring the conduct of a public bidding for the operation of a
cockpit in the said municipality every four years.
For the period January 1, 1989 to December 31, 1992, the winning
bidder was Engr. Edgardo Carabuena.
5
However, due to his failure to
comply with the legal requirements for operating a cockpit, the
Sangguniang Bayan on December 1, 1988 adopted Resolution No.
127, series of 1988,
6
authorizing petitioner Danilo Du to continue his
cockpit operation until the winning bidder complies with the legal
requirements.
7

On July 9, 1997, upon discovering that petitioner has been operating
his cockpit in violation of Municipal Ordinance No. 1, series of 1988,
the Sangguniang Bayan passed Municipal Resolution No. 065, series
of 1997,
8
suspending petitioners cockpit operation effective upon
approval.
9

On July 11, 1997, pursuant to Municipal Resolution No. 065, series of
1997, respondent Venancio R. Jayoma, then Mayor of Mabini, in a
letter,
10
ordered petitioner to desist from holding any cockfighting
activity effective immediately.
11

Feeling aggrieved, petitioner filed with Branch 51 of the Regional
Trial Court (RTC) of Bohol, a Petition for Prohibition,
12
docketed as
Special Civil Action No. 4, against respondent mayor and nine
members of the Sangguniang Bayan of Mabini, namely: Vicente
Gulle, Jr., Joveniano Miano, Wilfredo Mendez, Agapito Vallespin,
Rene Bucio, Jesus Tutor, Crescencio Bernales, Edgardo Ybanez and
Rey Pagalan. Petitioner prayed that a preliminary injunction and/or
a temporary restraining order be issued to prevent respondents
from suspending his cockpit operation.
13
Petitioner claimed that he
has a business permit to operate until December 31, 1997;
14
and
that the Municipal Resolution No. 065, series of 1997, was
unlawfully issued as it deprived him of due process.
15

In their Answer,
16
respondents interposed that under the Local
Government Code (LGC) of 1991, the power to authorize and license
the establishment, operation and maintenance of a cockpit is lodged
in the Sangguniang Bayan;
17
that respondent mayor, in ordering the
suspension of petitioners cockpit operation, was merely exercising
his executive power to regulate the establishment of cockpits in the
municipality, pursuant to the ordinances and resolutions enacted by
the Sangguniang Bayan;
18
and that Municipal Resolution No. 065,
series of 1997, does not need to be approved by the Sangguniang
Panlalawigan because it is not an ordinance but an expression of
sentiments of the Sangguniang Bayan of Mabini.
19

On October 22, 1997, a Temporary Restraining Order
20
was issued
by the RTC enjoining respondents from suspending the cockpit
operation of petitioner until further orders from the court.
21

The Petition for Prohibition was later amended
22
to include
damages, which
the RTC admitted in an Order
23
dated January 21, 1998.
Ruling of the Regional Trial Court
On October 5, 2004, the RTC rendered a Decision
24
in favor of
petitioner, to wit:
WHEREFORE, and on the ground that petitioner was able to prove
his case with preponderance of evidence, judgment is hereby
rendered in favor of the petitioner and against the respondents,
ordering the respondents jointly and severally to pay the petitioner:
1. The amount of Twenty Thousand Pesos (P20,000.00) in
the concept of moral damages;
2. The amount of Sixty Thousand Pesos (P60,000.00) in the
concept of unearned income considering the unrebutted
testimony of the petitioner [that] he lost Four Thousand
Pesos (P4,000.00) for each of the fifteen (15) Sundays that
his cockpit was closed as its operation was ordered
suspended by the respondent. By mathematical
computation P4,000.00 x 15 amounts to P60,000.00;
3. The amount of Ten Thousand Pesos (P10,000.00) as
exemplary damages to deter other public officials from
committing similar acts;
4. The amount of Twenty Thousand Pesos (P20,000.00) as
attorneys fees, and to pay the cost.
SO ORDERED.
25

Ruling of the Court of Appeals
On appeal, the CA reversed the Decision of the RTC. According to the
CA, petitioner did not acquire a vested right to operate a cockpit in
the municipality as he was only granted a temporary privilege by the
Sangguniang Bayan.
26
Hence, there being no right in esse, petitioner
is not entitled to damages.
27
Thus, the dispositive portion reads:
WHEREFORE, premises considered, the instant appeal is hereby
DENIED. The assailed decision granting petitioner the award of
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damages is SET ASIDE and the petition filed by petitioner against
respondents is DISMISSED.
SO ORDERED.
28

Petitioner moved for reconsideration which was denied by the CA in
a Resolution
29
dated October 4, 2006.
Issue
Hence, the instant petition raising the core issue of whether the CA
erred in finding that petitioner is not entitled to damages.
30

Petitioners Arguments
Petitioner contends that Municipal Resolution No. 065, series of
1997, is ultra vires as it was maliciously, hastily, and unlawfully
enforced by respondent mayor two days after its passage without
the review or approval of the Sangguniang Panlalawigan of Bohol.
31

He alleges that respondents suspended the operation of his cockpit
without due process and that the suspension was politically
motivated.
32
In addition, he claims that as a result of the incident, he
is entitled to actual, moral and exemplary damages as well as
attorneys fees.
33

Respondents Arguments
Echoing the ruling of the CA, respondents insist that petitioner is not
entitled to damages because he did not acquire a vested right to
operate a cockpit in the municipality.
34
They also maintain that the
suspension of petitioners cockpit operation was pursuant to law
and prevailing ordinance.
35

Our Ruling
The petition lacks merit.
A cause of action is defined as "the act or omission by which a party
violates a right of another."
36

Corollarily, the essential elements of a cause of action are: (1) a right
in favor of the plaintiff; (2) an obligation on the part of the
defendant to respect such right; and (3) an act or omission on the
part of the defendant in violation of the plaintiffs right with a
resulting injury or damage to the plaintiff for which the latter may
file an action for the recovery of damages or other appropriate
relief.
37

Petitioner has no legal right to operate a cockpit.
In this case, we find that petitioner has no cause of action against
the respondents as he has no legal right to operate a cockpit in the
municipality. Under Resolution No. 127, series of 1988, the
Sangguniang Bayan allowed him to continue to operate his cockpit
only because the winning bidder for the period January 1, 1989 to
December 31, 1992 failed to comply with the legal requirements for
operating a cockpit. Clearly, under the said resolution, petitioners
authority to operate the cockpit would end on December 31, 1992
or upon compliance by the winning bidder with the legal
requirements for operating a cockpit, whichever comes first. As we
see it, the only reason he was able to continue operating until July
1997 was because the Sangguniang Bayan of Mabini failed to
monitor the status of the cockpit in their municipality.
And even if he was able to get a business permit from respondent
mayor for the period January 1, 1997 to December 31, 1997, this did
not give him a license to operate a cockpit. Under Section
447(a)(3)(v) of the LGC, it is the Sangguniang Bayan which is
empowered to "authorize and license the establishment, operation
and maintenance of cockpits, and regulate cockfighting and
commercial breeding of gamecocks." Considering that no public
bidding was conducted for the operation of a cockpit from January
1, 1993 to December 31, 1997, petitioner cannot claim that he was
duly authorized by the Sangguniang Bayan to operate his cockpit in
the municipality for the period January 1, 1997 to December 31,
1997. Respondent members of the Sangguniang Bayan, therefore,
had every reason to suspend the operation of petitioners cockpit by
enacting Municipal Resolution No. 065, series of 1997. As the chief
executive of the municipal government, respondent mayor was
duty-bound to enforce the suspension of the operation of
petitioners cockpit pursuant to the said Resolution.
It bears stressing that no evidence was presented to show that upon
review by the Sangguniang Panlalawigan of Bohol, the resolution
was declared invalid or that the resolution was issued beyond the
powers of the Sangguniang Bayan or mayor. Jurisprudence
consistently holds that an ordinance, or in this case a resolution, is
"presumed valid in the absence of evidence showing that it is not in
accordance with the law."
38
Hence, we find no reason to invalidate
Municipal Resolution No. 065, series of 1997.
License to operate a cockpit is a mere privilege.
In addition, it is well enshrined in our jurisprudence that "a license
authorizing the operation and exploitation of a cockpit is not
property of which the holder may not be deprived without due
process of law, but a mere privilege that may be revoked when
public interests so require."
39
Having said that, petitioners
allegation that he was deprived of due process has no leg to stand
on.
Petitioner not entitled to damages
Without any legal right to operate a cockpit in the municipality,
petitioner is not entitled to damages. Injury alone does not give
petitioner the right to recover damages; he must also have a right of
action for the legal wrong inflicted by the respondents.
40
We need
not belabor that "in order that the law will give redress for an act
causing damage, there must be damnum et injuria that act must
be not only hurtful, but wrongful."
41
1wphi1
All told, we find no error on the part of the CA in dismissing
petitioners case.
WHEREFORE, the petition is hereby DENIED. The assailed Decision
dated July 11, 2006 and the Resolution dated October 4, 2006 of the
Court of Appeals in CA-G.R. SP No. 00492 are hereby AFFIRMED.
SO ORDERED.

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G.R. No. L-1539 December 3, 1947
MA-AO SUGAR CENTRAL CO., petitioner,
vs.
CONRADO BARRIOS, ET AL., respondents.
Hilado Brothers for petitioner.
Gibbs, Gibbs, Chuidian and Quasha for respondents.

FERIA, J.:
This is a petition for certiorari to set aside the order of the
respondent judge denying the motion to dismiss the complaint of
the other respondents which seek to recover amounts of money due
then from the petitioner before the outbreak of the war, on the
ground that the respondent judge acted without or in excess of the
court's jurisdiction in rendering said order; and for prohibition to
forbid the respondent judge from taking cognizance of the case on
the ground that the respondent judge had no jurisdiction to try and
decide it.
The ground for the motion to dismiss filed by the petitioner is that
the complaint of the respondents does not state facts sufficient to
constitute a cause of action, because the plaintiffs have no right to
demand the payment of the defendants' alleged debts until after the
termination or legal cessation of the moratorium provided No. 32,
the pertinent part of which reads as follows:lawphil.net
III. DEBT MORATORIUM
1. Enforcement of payment of all debts and other
monetary obligations payable within the Philippines,
except debts and other monetary obligations, entered into
in any area after declaration by Presidential Proclamation,
that such area has been freed from enemy occupation and
control., is temporarily suspended pending action by the
Commonwealth Government. (41 Off. Gaz., No. 1 p. 56.)
It is plain and were are of the opinion that the complaint filed by the
plaintiff respondent in the court below does not state facts sufficient
to constitute a cause of action. A cause of action is an act or
omission of one party in violation of the legal right or rights of the
other; and its essential elements are legal right of the plaintiff,
correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right. In the present case the
complaint alleges the legal right of the plaintiffs to be paid the
amount due them from the defendant, as well as the correlative
obligation of the defendant to pay said debts to the plaintiffs when
it becomes due and payable; but not the omission on the part of the
defendant to pay in violation of the legal rights of the plaintiffs to be
paid, because according to the above quoted provision of Executive
Order No. 32, said debts are not yet payable or their payment can
not be enforced until the legal cessation of the moratorium, which is
still in force. As the defendant herein petitioner is not yet in default,
plaintiffs have no cause of action against him.
While the debt moratorium is in force the defendant-petitioner has
no obligation yet to pay the plaintiffs, and the latter can not file a
suit against him in the courts of justice requiring him to recognize his
debts to the plaintiffs and to pay them (after the moratorium) not
only the amount of the indebtedness, but the legal interest thereon
from the filling of the complaint, the attorney's fees of ten per
centum of the amounts due, and the costs of the suits. There is no
such action to compel a defendant to acknowledge or recognize his
debt which is not yet payable, distinct and different from the action
for recovery or payment of a debt already due and payable, against
the debtor who refuses to pay it. To allow the plaintiffs' action and
grant the relief demanded in the complaint, would be to compel the
defendant to pay legal interest of the amount claimed from filing of
the said complaint, as well as the attorney's fees of 10 per cent of
the sum due thereon as stipulated, and the costs of the suit, as if the
defendants' obligations to the plaintiffs were already payable and he
had failed or refused to pay them. Why should the defendant be
required to bear the expenses incidental to a suit before he has
violated the plaintiffs' right? How could plaintiffs assume that the
defendant will not pay his debts when they become payable, and for
that reason they have filed this action against defendant? Why
should not the contrary be presumed, that is, that the debtor will
pay his obligation at the proper time, in order to prevent a suit,
preserve its credit, and avoid the expenses incident to a suit, and the
payment of legal interest on the amount due and attorney's fees?
In the case of Henares vs. Cordova (G.R. No. L-1536), a petition for
prohibition was filed by the petitioner alleging that the lower court
had no jurisdiction over the subject matter, which is the collection of
an alleged indebtedness unenforceable under the debt moratorium,
and this Court denied the petition on the ground that Executive
Order No. 25, as amended by Executive Order No. 32, did not have
the effect of divesting the lower court of its jurisdiction to try and
hear the case. We did not deem it necessary then to express our
opinion on the sufficiency of the complaint, but now we do for the
guidance of the courts and legal practitioners, and state that said
Executive Order No. 25, as amended by Executive Order No. 32 not
only suspends the execution of the judgment that the court may
render so far as it orders the payment of debts and other monetary
obligations, as stated in the resolution in said case but also suspends
the filing of suit in the courts of justice for the enforcement of the
payment of debts and other monetary obligations therein referred
to, if timely objection is set up by the defendant debtor. It is to be
borne in mind that the debt moratorium is a right granted by law to
the debtors, and as such right it may be waived because its waiver
does not effect the public interest or the rights of third parties.
After stating our opinion that the complaint of the plaintiffs
respondents states no cause of action, we have to hold that the
facts stated in the petition for certiorari and prohibition filed in the
present case do not entitle the petitioner to said reliefs. It requires
no argument to show that the respondent judge had jurisdiction and
did not exceed it or act with grave abuse of discretion in denying the
petitioner's motion to dismiss, and therefore we have to dismiss the
present petition. This Court, in special civil actions of certiorari and
prohibition, can only determine the question whether or not the
court acted without or in excess of its jurisdiction or with grave
abuse of its discretion in doing the act complained of. We can not
correct errors committed by the lower courts in their judgments,
decrees or orders rendered in the exercise of their jurisdiction.
In view of the foregoing, the petition is denied.


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G.R. No. L-4845 December 24, 1952
L. G. MARQUEZ and Z. GUTIERREZ LORA, plaintiffs.
L. G. Marquez, plaintiff-appellant,
vs.
FRANCISCO VARELA and CARMEN VARELA, defendants-appellees.
Amelito R. Mutuc for appellant
Jorge V. Jazmines for appellees.

LABRADOR, J.:
This is an appeal against an order of the Court of First Instance of
manila dismissing the complaint as to plaintiff L.G. Marquez. The
pertinent allegations of the complaint are as follows : that plaintiff
Gutierrez Lora was authorized by defendants to negotiate the sale of
their share or interest in a parcel of land on Plaza Goiti, Manila, and
having meet his co-plaintiff L. G. Marquez, a real estate broker, both
of them agreed to work together for the sale of defendant's
property; that they found a ready, willing, and able buyer, which
accepted defendants' price and terms, but that thereafter
defendants, without any justifiable reason, refused to carry out the
sale and execute the necessary deed therefor; and that as a
consequence plaintiffs failed to receive the commission which they
were entitled to receive. The defendants presented a motion to
dismiss the complaint as to L. G . Marquez on the ground that he has
no cause of action against defendants , and this motion having been
granted, plaintiff L. G. Marquez has prosecuted this appeal.
The complaint was dismissed on the alleged ground that it states no
cause of action against the defendants. Is this objection to the
complaint justified? The term "cause of action" has been held to be
synonymous with "right of action" (37 Words and Phrases, 642), but
in the law of pleading (Code Pleading) one is distinguished from the
other in that a right of action is a remedial right belonging to some
person, while a cause of action is a formal statement of the
operative facts that give rise to such remedial right. The one is a
matter of right and depends on the substantive law, while the other
is a matter of statement and is governed by the law of procedure.
(Phillips, Code Pleading, section 189, page 170.)
It is not denied that Lora, if he rendered the service alleged in the
complaint, would have a right to be paid compensation for the
service he rendered jointly with Marquez. He acted as a broker, and
a broker is entitled to a commission for his services. (Article 277,
Code of Commerce: Henry vs. Velasco, 34 Phil. 587; Perez de Tagle
vs. Luzon Surety Co, 38 Off. Gaz. 1213). There is no prohibition in law
against the employment of a companion to look for a buyer; neither
is it against public policy. Neither was there even any implied
understanding between Lora and the defendants that no part of the
compensation to which Lora would be entitled to receive could be
paid to any companion or helper of Lora. Marquez's right to
compensation can not, therefore, be disputed under the operative
facts set forth in the complaint.
The next issue is, is there a cause of action in favor of Marquez
against the defendants? From the facts alleged in the complaint, it is
clear that there is a primary right in favor of Marquez (to be paid for
his services even through Lora only) and a corresponding duty
devolving upon the defendants (to pay for said services). Since (as
alleged) defendants refuse to comply with their duty, Marquez now
is entitled to enforce his legal right by an action in court. The
complaint in the case at bar, therefore, contains both the primary
right and duty and the delict or wrong combined which constitute
the cause of action in the legal sense as used in Code Pleading
(Pomeroy, Code Remedies, section 347), and the cause of action is
full and complete.
Objection to the complaint, however, is not that Marquez has no
right to share in the compensation to be paid Lora, whom
defendants had directly engaged, but that Marquez can not join in
this action and enforce therein his rights directly against the
defendants, evidently because defendants never dealt with
Marquez, directly or indirectly, or, in other words, that both
Marquez and his services were not known to dismiss show that such
in fact was the objection:
This paragraph clearly shows that the authority to sell was
only given to plaintiff Z. Gutierrez Lora and not to the
other plaintiff L. G. Marquez. Attention is respectfully
called to the word "plaintiff" used in said paragraph III and
expressed in singular form to the exclusion of the other
plaintiff L. G. Marquez. If the plaintiff L. G. Marquez had
worked at all for the sale of the property at the instance of
an invitation of his co- plaintiff Z. Gutierrez Lora, we
maintain that his action if there is any is against his co-
plaintiff and not against the defendants herein.
As far as the defendant are concerned in this case, plaintiff
L. G. Marquez is not only a stranger in this case but also
unknown to the defendants; and if he had worked at all for
the sale of the defendants' share and participation in the
parcels of lands referred to in the complaint, the same was
made not only at his own look-out, risk and responsibility
but also with no authority whatsoever. (Record on Appeal,
pages 16, 17)
The principle underlying defendants' objection is one of substantive
law, recognized under common law, where no one could sue for a
breach of a contract who was not a party thereto, and the action
allowed to be brought only in the name of the one holding the legal
title. The requirement was based upon the doctrine of privity of
contract.
Sec. 234. Plaintiffs in Action ex Contractu. When an
action of contract concerns only the original parties to the
instrument, it is not difficult to determine who should be
the plaintiff. Obviously the one seeking to enforce it is the
real party in interest. At common law no one could sue for
the breach of contract who was not a party thereto. Hence
an action on contract, whether express or implied, was
required to be brought in the name of the one who held
the legal interest. This requirement was based upon the
doctrine of privity of contract. . . . (Phillips, Code Pleading,
page 226.)
Sec. 235. Privity of Contract. When necessary. It was
a rule of the common law that before one may complain
of another for breach of contract, there must be some
direct contractual relation, or privity, between them; and
this, with only a few exceptions, is a requirement of the
law today. . . . (Phillips, code Pleading, page 227.)
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At common law, in order that two or more persons may
join in an action upon a contract, there must be
community of interest between them; that is, they must
be parties to the contract and jointly interested in therein.
(47 . C. J. 54)lawphil.net
Persons subsequently admitted to the benefit of a
contract, without the privity or assent of the promisor, can
not join in a suit on the contract. (47 C.J., 55)
But we did not import into this jurisdiction the common law
procedure. Our original code of civil Procedure (Act 190) was taken
mainly from the code of Civil Procedure of California, and this in turn
was based upon the Code of Civil procedure of New York adopted in
that stated in 1948. Our system of pleading is Code Pleading that
system used in the states of the Union that had adopted codes of
procedure. The code system of pleading adopted in substance the
rules of equity practice as to parties, under which "all persons having
an interest in the subject of the action, and in obtaining the relief
demanded, may be joined as plaintiffs". (Phillips, Code Pleading,
section 251, page 247.) In New York and California interest in the
subject matter, or in any relief growing out of the same transaction
or series of transactions is sufficient to allow joinder. (Ibid, footnote
10a. page 247.)
Under the former Code of civil procedure "every action must be
prosecuted in the name of the real party in interest," and "all
persons having an interest in the subject of the action and in
obtaining the relief demanded shall be joined as plaintiffs, " and " if
any person having an interest and in obtaining the relief demanded
refuses to join as plaintiff, he may be made a defendant and the fact
of his interest and refusal to join to be stated in the complaint." (
Section 114, Act 190) The principle underlying the rule is that all
persons having a material interest under the substantive law should
be made parties, as distinguished from that of the common law
which allowed only a two-sided controversy, each party to be
opposed to the other. Phillips, Code Pleading, 2d ed. section 228,
page 216.)
The above principles have not been changed by the reforms in the
rules in 1940 and 1941. The action is still to be prosecuted in the
name of the real party in interest. Under section 6 of Rule 3, "All
persons in whom . . . any right to relief in respect to or arising out of
the same transaction . . . is alleged to exist, whether jointly,
severally, or in the alternative, may, . . . join as plaintiffs . . . where
any question of law or fact common to all such plaintiffs . . . may
arise in the action; Plaintiff Marquez, in the case at bar, clearly falls
under the above rule. He is entitled to be paid his commission out of
the very contract of agency between Lora and the defendants; Lora
and he acted jointly in rendering services to defendants under Lora's
contract, and the same questions of law and fact govern their
claims. The rules do not require the existence of privity of contract
between Marquez and the defendants as required under the
common law; all that they demand is that Marquez has a material
interest in the subject of the action, the right to share in the broker's
commission to be paid Lora under the latter's contract, which right
Lora does not deny. This is sufficient to justify the joinder of
Marquez as a party plaintiff, even in the absence of privity of
contract between him and the defendants.
We find, therefore, that the complaint of Marquez was improperly
dismissed. The order of dismissal is hereby reversed, with costs
against defendants.


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G.R. No. L-19751 February 28, 1966
ALFREDO REMITERE, ET AL., plaintiff-appellants,
vs.
REMEDIOS MONTINOLA VDA. DE YULO, ET AL., defendants-
appellees.
E.M. Almario for the plaintiffs-appellants.
Eduardo Arboleda for the defendants-appellees.
ZALDIVAR, J.:
This is an appeal from the order of the Court of First Instance of
Negros Occidental dismissing the complaint in its Civil Case No.
6377.
On December 6, 1961 the plaintiffs-appellants, Alfredo Remitere, et
al., filed a complaint against the defendants-appellees, Remedies
Montinola Viuda de Yulo and the Register of Deeds of Negros
Occidental, the pertinent allegations of which complaint, for the
purposes of this decision, are as follows:
2. In Cadastral Decrees Nos. 69518 and 69515 issued by
the Court of First Instance of Negros Occidental on August
21, 1918, copies of which are herewith attached as
Annexes "A" and "B" and made an integral part of this
complaint, Gregorio Remitere was declared and registered
owner of Lots Nos. 35 and 52 of the Cadastral Survey of
Isabela, with areas of 4.4731 and 29.7398 hectares,
respectively. These lots were issued the corresponding
Original Certificates of Title under the Land Registration
Act, being 10894 and 10898.
3. Upon the demise of Gregorio Remitere on January 1,
1914, the Court of First Instance of Negros Occidental, in
Civil Case No. 1661, Re-Application for Letters of
Administration, appointed his wife as administratrix of his
estate, among which are the two lots in question.
During this period, the provincial sheriff of Negros
Occidental conducted a public auction sale over the said
parcels of land, and on the same day, September 23, 1918,
he issued thereof a deed of sale in favor of Mariano Yulo
of Binalbagan, Negros Occidental, for the total
consideration of P20,000.00. Copy of the deed of sale is
herewith attached as Annex "C" and formed part of this
complaint.
4. As a result, series of cancellations to the Original
Certificates of Title mentioned in paragraph 2 hereof had
followed.
First, they were cancelled by Transfer Certificates of Title Nos. 2819
and 2820, registered in the name of Mariano C. Yulo by virtue of the
Certificates of Sale issued by the provincial sheriff of Negros
Occidental. They were in turn cancelled by R-T 602 and R-T 4706, by
virtue of reconstitution of titles. Then these were cancelled by T-532
and T-2979, by virtue of deeds of sales registered in the name of
Remedios Montinola Vda. de Yulo, the defendant herein..
5. The public sale mentioned in Article 3 of this complaint,
however, was and still is absolutely a void sale, and
certainly did not pass titles and ownership of said lots,
starting from its primitive owner, now being represented
by the plaintiffs herein, as surviving heirs thereto, until it
reaches the possession by the defendant.
That by reason of its invalidity, all and every benefits that
the transferees, including the defendant herein, had
acquired from the parcels of land in question, should be
indemnified to the plaintiffs.
And that, in order to justify their rights and interests
pursuant to the mandates prescribed by law over said lots
and discontinue the irreparable losses and damages that
they are still sustaining, on account of the perversed
transfer of September 23, 1918, the same should be
reverted to their immediate possessions and titles.
The complaint prayed that the defendants be ordered to reconvey
the two lots in question to the plaintiffs; that the defendant Register
of Deeds be ordered to cancel the certificates of title in the name of
the defendant Remedios Montinola Viuda de Yulo and to issue new
ones in the names of the plaintiffs; and that the defendants pay the
costs.
The defendants-appellees filed a motion to dismiss the complaint on
the grounds (1) that the complaint does not state a cause of action,
and (2) that even assuming that a cause of action exists, the same
has already prescribed.
The lower court dismissed the complaint precisely on the grounds
relied upon by the defendants-appellees. Hence this appeal.
In this appeal, the plaintiffs-appellants contend that the trial court
erred: (1) in declaring that the complaint contains no narration of
facts; (2) in holding that complaint states no cause of action; and (3)
in holding that the plaintiffs' cause of action, if any, has already
prescribed.
We find that the lower court had correctly dismissed the
complaint.1wph1.t
The lack of a cause of action as a ground for dismissal must appear
on the face of the complaint, and to determine whether the
complaint states a cause of action only the facts alleged therein, and
no other, should be considered. A reading of the complaint in this
case will readily impress one that no ultimate facts which may
constitute the basis of plaintiffs-appellants rights which had been
violated are alleged. Neither are there allegations of ultimate facts
showing acts or omissions on the part of the defendants-appellees
which constitute a violation of the rights of plaintiffs-appellants.
Apparently, the plaintiffs-appellants rely on the allegations of
paragraphs 3 and 5 of the complaint for their cause of action.
Paragraph 3 states:
3. Upon the demise of Gregorio Remitere on January 1,
1914 the Court of First Instance of Negros Occidental, in
Civil Case No. 1661, Re-Application for Letters of
Administration, appointed his wife as administratrix of his
estate, among which the two lots in question.
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During this period, the provincial sheriff of Negros
Occidental, conducted a public auction sale over the said
parcels of land, and on the same day, September 23, 1918,
he issued thereof a deed of sale in favor of Mariano Yulo
of Binalbagan, Negros Occidental, for the total
consideration of P20,000.00. . . . .
The allegations embodied in the above quoted paragraph are mere
averments or recitals of facts that do not establish any right or claim
on the part of the plaintiffs. The allegations do not state any
connection that the plaintiffs have with the deceased Gregorio
Remitere, nor do they state what connection or claim the plaintiffs
have on the properties left by the deceased Gregorio Remitere. The
allegation about the sale at public auction does not state in what
way the rights or interests of the plaintiffs had been affected, nay
prejudiced, by that sale. Again, paragraph 5 of the complaint states:
5. The public sale mentioned in paragraph 3 of this
complaint, however, was and still is absolutely a void sale,
and certainly did not pass titles and ownership of said lots,
starting from its primitive owner, now being represented
by the plaintiffs herein, as surviving heirs thereto, until it
reaches the possession by the defendants.
That by reason of its invalidity, all and every benefits that
the transferees, including the defendant herein, had
acquired from the parcels of land in question, should be
indemnified to the plaintiffs.
It is not stated anywhere in the complaint why the sale at public
auction was absolutely void, nor were there stated any particular
facts or circumstances upon which the alleged nullity of the sale or
transaction is predicated. The averment that "the public sale . . . was
and still is absolutely a void sale, and certainly did not pass titles and
ownerships of said lots, starting from its primitive owner, now being
represented by the plaintiffs herein, as surviving heirs thereto, until
it reaches the possession by the defendants. . ." is a conclusion of
law or an inference from facts not stated in the pleading. A pleading
should state the ultimate facts essential to the rights of action or
defense asserted, as distinguished from mere conclusion of fact, or
conclusion of law. An allegation that a contract is valid, or void, as in
the instant case, is a mere conclusion of law.
General allegations that a contract is valid or legal, or is
just, fair and reasonable, are mere conclusion of law.
Likewise, allegations that a contract is void, voidable,
invalid, illegal, ultra vires, or against public policy, without
stating facts showing its invalidity, are mere conclusions of
law; as are allegations that a contract is in conformity
with, or in violation of a constitutional or statutory
provision. . . . . (71 C.J.S. pp. 44-45.) (Emphasis supplied.)
Not being statements of ultimate facts which constitute the basis of
a right of the plaintiffs-appellants, nor are they statements of
ultimate facts which constitute the wrongful acts or omissions of the
defendants-appellees that violated the right of the plaintiffs-
appellants the allegations of the complaint in the present case have
not fulfilled the requirements of Section 3, Rule 6 of the Revised
Rules of Court (Sec. 1, Rule 6 of the former Rules of Court) that the
complaint should contain a "concise statement of the ultimate facts
constituting the plaintiff's cause or causes of action."
This Court has defined the term "cause of action" as follows:
A cause of action has been defined by the Supreme Court
as an act or omission of one party in violation of the legal
right or rights of the other; and its essential elements are
legal right of the plaintiff, correlative obligations of the
defendant, and act or omission of the defendant in
violation of said legal right. (Ma-ao Sugar Central Co., Inc.
vs. Barrios, et al., L-1539, Dec. 30, 1947)
The term "ultimate facts" has been defined or explained as follows:
Ultimate facts defined.The term "ultimate facts" as used
in Sec. 3, Rule 3 of the Rules of Court, means the essential
facts constituting the plaintiff's cause of action. A fact is
essential if it cannot be stricken out without leaving the
statement of the cause of action insufficient. . . . . (Moran,
Rules of Court, Vol. I, 1963 ed., p. 213)
Ultimate facts are important and substantial facts which
either directly form the basis of the primary right and duty,
or which directly make up the wrongful acts or omissions
of the defendant. The term does not refer to the details of
probative matter or particulars of evidence by which these
material elements are to be established. It refers to
principal determinate, constitutive facts, upon the
existence of which, the entire cause of action rests.
(Montemayor vs. Raborar, et al., 53 O.G. No. 19, p. 6596,
citing Pomeroy, Code Remedies, 5th Ed., sec. 420).
We, therefore, hold that the lower court had correctly ruled that the
complaint in the present case does not narrate facts that constitute
a cause of action.
Having arrived at the foregoing conclusion, We deem it not
necessary to discuss whether the lower court had correctly ruled
that the plaintiffs' cause of action, if any, had prescribed or not.
Wherefore, the order of dismissal appealed from is affirmed, with
costs against the plaintiffs-appellants.


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G.R. No. 129928 August 25, 2005
MISAMIS OCCIDENTAL II COOPERATIVE, INC., Petitioners,
vs.
VIRGILIO S. DAVID, Respondent.
D E C I S I O N
Tinga, J.:
In this Petition for Review
1
under Rule 45 of the 1997 Rules of Civil
Procedure, petitioner Misamis Occidental II Electric Cooperative, Inc.
(hereinafter, MOELCI II) seeks the reversal of the Decision
2
of the
Court of Appeals, Former Ninth Division in C.A. G.R. SP No. 41626
and its Resolution
3
denying MOELCI IIs motion for reconsideration.
The questioned Decision dismissed MOELCI IIs petition for certiorari
under Rule 65 and effectively affirmed the trial courts orders dated
16 November 1995
4
and 13 March 1996
5
which respectively denied
petitioners Motion (For Preliminary Hearing of Affirmative Defenses
and Deferment of Pre-Trial Conference)
6
and Motion for
Reconsideration.
7

The antecedents are as follows:
Private respondent Virgilio S. David (hereinafter, David), a supplier
of electrical hardware,
8
filed a case for specific performance and
damages against MOELCI II, a rural electric cooperative in Misamis
Occidental, docketed as Civil Case No. 94-69402 entitled "Virgilio
David v. Misamis Occidental II Electric Cooperative, Inc. (MOELCI II)."
The said case, which was essentially a collection suit, pending before
Judge Felixberto Olalia (hereinafter, Judge Olalia) of the Regional
Trial Court of Manila, Branch 8 (the trial court), was predicated on a
document attached as Annex "A" to the Amended Complaint
9
that
according to David is the contract pursuant to which he sold to
MOELCI II one (1) unit of 10 MVA Transformer.
10

MOELCI II filed its Answer to Amended Complaint
11
which pleaded,
among others, affirmative defenses which also constitute grounds
for dismissal of the complaint. These grounds were lack of cause of
action, there being allegedly no enforceable contract between David
and MOELCI II under the Statute of Frauds pursuant to Section 1 (g)
and (i), Rule 16 of the Rules of Court, and improper venue.
12

In accordance with Section 5, Rule 16 of the Rules of Court,
13
(now
Section 6, Rule 16 of the 1997 Rules of Civil Procedure) MOELCI II
filed with the trial court a Motion (For Preliminary Hearing of
Affirmative Defenses and Deferment of Pre-Trial Conference)
14

(hereinafter referred to as Motion). In said Motion, MOELCI II in
essence argued that the document attached as Annex "A" to the
Amended Complaint was only a quotation letter and not a contract
as alleged by David. Thus, it contends that Davids Amended
Complaint is dismissible for failure to state a cause of action.
15

In his opposition to MOELCI IIs Motion, David contended in the
main that because a motion to dismiss on the ground of failure to
state a cause of action is required to be based only on the
allegations of the complaint, the "quotation letter," being merely an
attachment to the complaint and not part of its allegations, cannot
be inquired into.
16

MOELCI II filed a rejoinder to the opposition in which it asserted,
citing extensively the ruling of the Court in World Wide Insurance &
Surety Co., Inc. v. Macrohon,
17
that a complaint cannot be separated
from its annexes; hence, the trial court in resolving a motion to
dismiss on the ground of failure to state a cause of action must
consider the complaints annexes.
18

After the parties filed their respective memoranda, Judge Olalia
issued an order dated 16 November 1995 denying MOELCI IIs
motion for preliminary hearing of affirmative defenses. MOELCI IIs
motion for reconsideration of the said order was likewise denied in
another order issued by Judge Olalia on 13 March 1996.
19

MOELCI II elevated this incident to the Court of Appeals by way of a
special civil action for certiorari, alleging grave abuse of discretion
on the part of Judge Olalia in the issuance of the two aforesaid
orders.
On 14 March 1997, the Court of Appeals dismissed MOELCI IIs
petition holding that the allegations in Davids complaint constitute
a cause of action. With regard to MOELCI IIs contention that Davids
Amended Complaint is dismissible as the document, attached
thereto as Annex "A," upon which Davids claim is based is not a
contract of sale but rather a quotation letter, the Court of Appeals
ruled that the interpretation of the document requires evidence
aliunde which is not allowed in determining whether or not the
complaint states a cause of action. The appellate court further
declared that when the trial court is confronted with a motion to
dismiss on the ground of lack of cause of action, it is mandated to
confine its examination for the resolution thereof to the allegations
of the complaint and is specifically enjoined from receiving evidence
for that purpose.
20

With the denial of its Motion for Reconsideration, petitioner is now
before this Court seeking a review of the appellate courts
pronouncements. MOELCI II asserts that the Court of Appeals
committed serious error in: (1) ruling that the resolution of its
motion to dismiss on the ground of lack of cause of action
necessitated hearings by the trial court with the end in view of
determining whether or not the document attached as Annex "A" to
the Amended Complaint is a contract as alleged in the body of said
pleading; and (2) not ordering the trial court to dismiss the Amended
Complaint on the ground of lack of cause of action.
21
Anent the first
ground, MOELCI II further claims that with the denial of its Petition,
the appellate court in effect exhorted the trial court to defer the
resolution of its motion to dismiss until after the hearing of the case
on the merits contrary to Rule 16
22
of the Rules of Court and well-
settled jurisprudence.
23

In his comment,
24
David counters that a sufficient cause of action
exists. He also points out that he and MOELCI II differ in the
interpretation of the construction of the document attached as
Annex "A" of the Amended Complaint; hence, there is a need to
conduct hearings thereon. He likewise contends that the trial court
did not defer the resolution of petitioners motion to dismiss. On the
contrary, the trial court denied squarely the motion "to abbreviate
the proceedings and for the parties to proceed to trial and avoid
piece meal resolution of issues."
25

In its Reply,
26
MOELCI II reiterates its position that the document
attached as Annex "A" of the Amended Complaint clearly is a
quotation letter and not a perfected contract of sale as alleged by
David. The absence of doubt or ambiguity of the contents and
import of the document leaves no room for its interpretation.
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At issue is whether the Court of Appeals erred in dismissing the
petition for certiorari and in holding that the trial court did not
commit grave abuse of discretion in denying petitioners Motion.
We find no error in the ruling of the Court of Appeals.
In Municipality of Bian, Laguna v. Court of Appeals,
27
decided under
the old Rules of Court, we held that a preliminary hearing permitted
under Section 5, Rule 16, is not mandatory even when the same is
prayed for. It rests largely on the sound discretion of the court, thus:
SEC. 5. Pleading grounds as affirmative defenses.- Any of the
grounds for dismissal provided for in this rule, except improper
venue, may be pleaded as an affirmative defense, and a preliminary
hearing may be had thereon as if a motion to dismiss had been filed.
The use of the word "may" in the aforequoted provision shows that
such a hearing is not mandatory but discretionary. It is an auxiliary
verb indicating liberty, opportunity, permission and possibility.
28

Such interpretation is now specifically expressed in the 1997 Rules
of Civil Procedure. Section 6, Rule 16 provides that a grant of
preliminary hearing rests on the sound discretion of the court, to
wit-
SEC. 6. Pleading grounds as affirmative defenses.- If no motion to
dismiss has been filed, any of the grounds for dismissal provided for
in this Rule may be pleaded as an affirmative defense in the answer
and, in the discretion of the court, a preliminary hearing may be had
thereon as if a motion to dismiss had been filed.
Based on the foregoing, a preliminary hearing undeniably is subject
to the discretion of the trial court. Absent any showing that the trial
court had acted without jurisdiction or in excess thereof or with
such grave abuse of discretion as would amount to lack of
jurisdiction, as in the present case, the trial courts order granting or
dispensing with the need for a preliminary hearing may not be
corrected by certiorari.
29

Moreover, consistent with our ruling in The Heirs of Juliana Clavano
v. Genato,
30
as MOELCI IIs Motion is anchored on the ground that
the Complaint allegedly stated no cause of action, a preliminary
hearing thereon is more than unnecessary as it constitutes an
erroneous and improvident move. No error therefore could be
ascribed to the trial court in the denial of such Motion. The Court
ruled in the cited case, thus:
. . . . respondent Judge committed an error in conducting a
preliminary hearing on the private respondents affirmative
defenses. It is a well-settled rule that in a motion to dismiss based
on the ground that the complaint fails to state a cause of action, the
question submitted to the court for determination is the sufficiency
of the allegations in the complaint itself. Whether those allegations
are true or not is beside the point, for their truth is hypothetically
admitted by the motion. The issue rather is: admitting them to be
true, may the court render a valid judgment in accordance with the
prayer of the complaint? Stated otherwise, the sufficiency of the
cause of action must appear on the face of the complaint in order to
sustain a dismissal on this ground. No extraneous matter may be
considered nor facts not alleged, which would require evidence and
therefore must be raised as defenses and await the trial. In other
words, to determine the sufficiency of the cause of action, only the
facts alleged in the complaint, and no other should be considered.
The respondent Judge departed from this rule in conducting a
hearing and in receiving evidence in support of the private
respondents affirmative defense, that is, lack of cause of action.
31

To determine the existence of a cause of action, only the statements
in the complaint may be properly considered. It is error for the court
to take cognizance of external facts or hold preliminary hearings to
determine their existence. If the allegations in a complaint furnish
sufficient basis by which the complaint can be maintained, the same
should not be dismissed regardless of the defenses that may be
averred by the defendants.
32

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.
33

In the case at bar, the Amended Complaint states in paragraphs 3, 4,
5, and 6, thus:
FIRST CAUSE OF ACTION
3. On June 8 1992 the parties entered into a contract for the sale by
the plaintiff to the defendant of one (1) unit 10 MVA Power
transformer with accessories for a total price of P5,200,000.00 plus
69 KV Line Accessories for a total price of P2,169,500.00 under the
following relevant terms and conditions:
1. Fifty percent (50%) downpayment upon signing of contract.
Fifty percent (50%) upon delivery
2. Delivery- Ninety (90) working days upon receipt of your Purchase
Order and Downpayment
Copy of the contract is hereto attached as Annex "A."
4. Because of the standing relationship between the parties and the
urgent need on the part of the defendant for the power transformer
to remedy the electric supply deficiency in its area of coverage the
plaintiff waived the 50% downpayment and delivered soon
thereafter the 10 MVA transformer with accessories evidence (sic)
by a copy of the sales invoice hereto attached as Annex "B".
5. Despite demands however, verbal and written, since December
1992, the defendant has failed to pay the price thereof of
P5,200,000.00 plus the custom duties and incidental expenses of
P272,722.27.
SECOND CAUSE OF ACTION
6. Apart from the above transaction, the plaintiff has been, on a
regular basis, delivering various electrical hardware to the defendant
which, as of 31 January 1994, despite demands, has an outstanding
balance of P281,939.76.
34

And David prayed as follows:
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WHEREFORE, it is respectfully prayed that judgment render ordering
the defendant to pay the plaintiff:
ON THE FIRST CAUSE OF ACTION
1. The total sum of P5,472,722.27 plus the stipulated interest at 24%
per annum from December 1992 until fully paid.
ON THE SECOND CAUSE OF ACTION
2. The balance of P281,939.76 plus the stipulated interest at 24% per
annum from due dates until fully paid.
COMMON PROPER (sic)
3. Attorneys fee at 25% of the foregoing amounts plus expenses of
litigation and not less than P100,000.00 with costs.
4. Other reliefs as may be just and equitable in the premises.
35

It has been hypothetically admitted that the parties had entered into
a contract sale David bound himself to supply MOELCI II (1) unit 10
MVA Power transformer with accessories for a total price of
P5,200,000.00 plus 69 KV Line Accessories for a total price of
P2,169,500.00; that despite written and verbal demands, MOELCI II
has failed to pay the price thereof plus the custom duties and
incidental expenses of P272,722.27; and that apart from the
previously stated contract of sale, David regularly delivered various
electrical hardware to MOELCI II which, despite demands, has an
outstanding balance of P281,939.76.
We believe all the foregoing sufficiently lay out a cause of action.
Even extending our scrutiny to Annex "A," which is after all deemed
a part of the Amended Complaint, will not result to a change in our
conclusion.
Contrary to MOELCI IIs assertion, Annex "A" is not an "undisguised
quotation letter."
36
While Annex "A" is captioned as such, the
presence of the signatures of both the General Manager and the
Chairman of the Committee of Management immediately below the
word "CONFORME" appearing on the documents last page
37
lends
credulity to Davids contention that there was, or might have been, a
meeting of minds on the terms embodied therein. Thus, the
appendage of Annex "A" does not entirely serve to snuff out Davids
claims.
In fact, the ambiguity of the import and nature of Annex "A" which
necessitates a resort to its proper interpretation, fortifies the
propriety of the trial courts
denial of MOELCI IIs Motion. The interpretation of a document
requires introduction of evidence which is precisely disallowed in
determining whether or not a complaint states a cause of action.
The Court of Appeals therefore correctly dismissed MOELCI IIs
petition and upheld the trial courts ruling.
Now, whether in truth Annex "A" is, as entitled, a mere quotation
letter is a matter that could best be proven during a full-blown
hearing rather than through a preliminary hearing as this may
involve extensive proof. Verily, where a preliminary hearing will not
suffice, it is incumbent upon the trial court to deny a motion for
preliminary hearing and go on to trial. The veracity of the assertions
of the parties can be ascertained at the trial of the case on the
merits.
38

Finally, we do not agree with MOELCI IIs contention that the Court
of Appeals sanctioned the trial courts deferment of the resolution
of MOELCI IIs Motion. The trial court squarely denied the Motion
and not merely deferred its resolution.
39
Thus, there is no deferment
to speak of that should be enjoined.
WHEREFORE, the instant petition is DENIED. The Decision of the
Court of Appeals dated 14 March 1997 and its Resolution dated 14
July 1997 are AFFIRMED. Costs against petitioner.
SO ORDERED.


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G.R. No. 147593 July 31, 2006
GERONIMO Q. QUADRA, petitioner,
vs.
THE COURT OF APPEALS and the PHILIPPINE CHARITY
SWEEPSTAKES OFFICE, respondents.
D E C I S I O N
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals in
CA-G.R. SP No. 55634 dated December 29, 2000 and its resolution
dated March 26, 2001. The Court of Appeals reversed and set aside
the decision of the National Labor Relations Commission (NLRC) in
NLRC NCR Case No. 4312-ULP which affirmed the decision of the
Labor Arbiter granting moral and exemplary damages to petitioner
Geronimo Q. Quadra in connection with his dismissal from the
service.
Petitioner Geronimo Q. Quadra was the Chief Legal Officer of
respondent Philippine Charity Sweepstakes Office (PCSO) when he
organized and actively participated in the activities of Philippine
Charity Sweepstakes Employees Association (CUGCO), an
organization composed of the rank and file employees of PCSO, and
then later, the Association of Sweepstakes Staff Personnel and
Supervisors (CUGCO) (ASSPS [CUGCO]). In April 1964, he was
administratively charged before the Civil Service Commission with
violation of Civil Service Law and Rules for neglect of duty and
misconduct and/or conduct prejudicial to the interest of the service.
On July 14, 1965, the Civil Service Commission rendered a decision
finding petitioner guilty of the charges and recommending the
penalty of dismissal. The following day, on July 15, 1965, the General
Manager of PCSO, Ignacio Santos Diaz, sent petitioner a letter of
dismissal, in accordance with the decision of the Civil Service
Commission. Petitioner filed a motion for reconsideration of the
decision of the Civil Service Commission on August 10, 1965. At the
same time, petitioner, together with ASSPS (CUGCO), filed with the
Court of Industrial Relations (CIR) a complaint for unfair labor
practice against respondent PCSO and its officers. The case was
docketed as Case No. 4312-ULP.
On November 19, 1966, the CIR issued its decision finding
respondent PCSO guilty of unfair labor practice for having
committed discrimination against the union and for having
dismissed petitioner due to his union activities. It ordered the
reinstatement of petitioner to his former position with full
backwages and with all the rights and privileges pertaining to said
position.
1

Respondent PCSO complied with the decision of the CIR. But while it
reinstated petitioner to his former position and paid his backwages,
it also filed with the Supreme Court a petition for review on
certiorari entitled "Philippine Charity Sweepstakes Office, et al. v.
The Association of Sweepstakes Staff Personnel, et al." assailing the
decision of the CIR in Case No. 4312-ULP. The petition was docketed
as G.R. No. L-27546.
2

On March 16, 1967, during the pendency of the case in the Supreme
Court, petitioner filed with the CIR a "Petition for Damages." He
prayed for moral and exemplary damages in connection with Case
No. 4312-ULP. He cited the decision of the Supreme Court in Rheem
of the Philippines, Inc., et al. v. Ferrer, et al.
3
where it upheld the
jurisdiction of the CIR over claims for damages incidental to an
employee's dismissal.
Respondent PCSO moved to dismiss the petition for damages on the
following grounds: (1) the CIR has no jurisdiction to award moral and
exemplary damages; (2) the cause of action is barred by prior
judgment, it appearing that two complaints are brought for different
parts of a single cause of action; and (3) the petition states no valid
cause of action.
Petitioner resigned from PCSO on August 18, 1967.
The petition for damages and the motion to dismiss, however,
remained pending with the CIR until it was abolished and the NLRC
was created. On April 25, 1980, the Labor Arbiter rendered a
decision awarding moral and exemplary damages to petitioner in the
amount of P1.6 million. The dispositive portion of the decision
stated:
WHEREFORE, in view of all the foregoing considerations,
judgment is hereby rendered awarding to complainant
Geronimo Q. Quadra moral damages consisting of the
following sum: Three Hundred Fifty Thousand Pesos
(P350,000.00) for besmirched reputation; Three Hundred
Fifty Thousand Pesos (P350,000.00) for social humiliation;
One Hundred Thousand Pesos (P100,000.00) for mental
anguish; One Hundred Thousand Pesos (P100,000.00) for
serious anxiety; One Hundred Thousand Pesos
(P100,000.00) for wounded feelings; One Hundred
Thousand Pesos (P100,000.00) for moral shock; and the
further sum of P500,000.00 as exemplary damages, on
account of the arbitrary and unlawful dismissal effected by
respondents. Consequently, respondents are therefore
ordered to pay complainant Quadra the total sum of One
Million Six Hundred Thousand Pesos (P1,600,000.00)
within ten (10) days after this Decision becomes final.
SO ORDERED.
4

The NLRC affirmed the decision of the Labor Arbiter,
5
prompting
respondent PCSO to file a petition for certiorari with the Court of
Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that
there was no basis for the grant of moral and exemplary damages to
petitioner as his dismissal was not tainted with bad faith. It was the
Civil Service Commission that recommended petitioner's dismissal
after conducting an investigation. It also held that the petition
claiming moral and exemplary damages filed by petitioner after
respondent PCSO had complied with the CIR decision of
reinstatement and backwages amounted to splitting of cause of
action.
6

Petitioner filed a motion for reconsideration of the decision of the
Court of Appeals, but the same was denied for lack for merit.
7

Petitioner now seeks the Court to review the ruling of the Court of
Appeals. He basically argues:
First: The ruling of the Court of Appeals that the PCSO did
not act in bad faith when it dismissed the petitioner is
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contrary to the already final and executory decision of the
CIR dated November 1[9], 1966 finding the PCSO guilty of
bad faith and unfair labor practice in dismissing the
petitioner. The decision of the CIR was affirmed by the
High Court in the case of PCSO, et al. v. Geronimo Q.
Quadra, et al., 115 SCRA 34. The Court of Appeals has no
jurisdiction to amend the final and executory decision of
November 1[9], 1966 of the CIR which was affirmed by the
High Court. Once a decision has become final [and]
executory, it could no longer be amended or altered.
Second: The ruling of the Court of Appeals that the claims
for moral and exemplary damages of the petitioner is
allegedly "tantamount to splitting of cause of action under
Sec. 4, Rule 2 of the 1997 Rules of Civil Procedure" is
contrary to law. When petitioner filed with the CIR his
complaint for illegal dismissal and unfair labor practice,
the prevailing law and jurisprudence was that the CIR did
not have jurisdiction to grant moral and exemplary
damages. Petitioner's claim for moral damages was filed
with the CIR in the same case by virtue of the ruling of the
High Court in Rheem v. Ferrer, 19 SCRA 130 holding that
the CIR has jurisdiction to award moral and exemplary
damages arising out of illegal dismissal and unfair labor
practice.
8

The petition is impressed with merit.
A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act
oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages may be awarded
if the dismissal is effected in a wanton, oppressive or malevolent
manner.
9
It appears from the facts that petitioner was deliberately
dismissed from the service by reason of his active involvement in the
activities of the union groups of both the rank and file and the
supervisory employees of PCSO, which unions he himself organized
and headed. Respondent PCSO first charged petitioner before the
Civil Service Commission for alleged neglect of duty and conduct
prejudicial to the service because of his union activities. The Civil
Service Commission recommended the dismissal of petitioner.
Respondent PCSO immediately served on petitioner a letter of
dismissal even before the latter could move for a reconsideration of
the decision of the Civil Service Commission. Respondent PCSO may
not impute to the Civil Service Commission the responsibility for
petitioner's illegal dismissal as it was respondent PCSO that first filed
the administrative charge against him. As found by the CIR,
petitioner's dismissal constituted unfair labor practice. It was done
to interfere with, restrain or coerce employees in the exercise of
their right to self-organization. It stated:
Upon the entire evidence as a whole (sic), the [c]ourt feels
and believes that complainant Quadra was discriminatorily
dismissed by reason of his militant union activities, not
only as President of PCSEA, but also as President of the
ASSPS.
10

In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, et al. v. NLRC, et al.,
11
we found it proper to award
moral and exemplary damages to illegally dismissed employees as
their dismissal was tainted with unfair labor practice. The Court said:
Unfair labor practices violate the constitutional rights of
workers and employees to self-organization, are inimical
to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and
mutual respect; and disrupt industrial peace and hinder
the promotion of healthy and stable labor-management
relations. As the conscience of the government, it is the
Court's sworn duty to ensure that none trifles with labor
rights.
For this reason, we find it proper in this case to impose
moral and exemplary damages on private respondent. x x
x
On the second issue, we agree with petitioner that the filing of a
petition for damages before the CIR did not constitute splitting of
cause of action under the Revised Rules of Court. The Revised Rules
of Court prohibits parties from instituting more than one suit for a
single cause of action. Splitting a cause of action is the act of dividing
a single cause of action, claim or demand into two or more parts,
and bringing suit for one of such parts only, intending to reserve the
rest for another separate action. The purpose of the rule is to avoid
harassment and vexation to the defendant and avoid multiplicity of
suits.
12

The prevailing rule at the time that the action for unfair labor
practice and illegal dismissal was filed and tried before the CIR was
that said court had no jurisdiction over claims for damages. Hence,
petitioner, at that time, could not raise the issue of damages in the
proceedings. However, on January 27, 1967, the Supreme Court
rendered its ruling in Rheem of the Philippines, Inc., et al. v. Ferrer,
et al.
13
upholding the jurisdiction of the CIR over claims for damages
incidental to an employee's illegal dismissal. Petitioner properly filed
his claim for damages after the declaration by the Court and before
the ruling on their case became final. Such filing could not be
considered as splitting of cause of action.
IN VIEW WHEREOF, the assailed decision and resolution of the Court
of Appeals are REVERSED and SET ASIDE. The decision of the NLRC
in NLRC NCR Case No. 4312-ULP is REINSTATED.
SO ORDERED.


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G.R. No. 147593 July 31, 2006
GERONIMO Q. QUADRA, petitioner,
vs.
THE COURT OF APPEALS and the PHILIPPINE CHARITY
SWEEPSTAKES OFFICE, respondents.
D E C I S I O N
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals in
CA-G.R. SP No. 55634 dated December 29, 2000 and its resolution
dated March 26, 2001. The Court of Appeals reversed and set aside
the decision of the National Labor Relations Commission (NLRC) in
NLRC NCR Case No. 4312-ULP which affirmed the decision of the
Labor Arbiter granting moral and exemplary damages to petitioner
Geronimo Q. Quadra in connection with his dismissal from the
service.
Petitioner Geronimo Q. Quadra was the Chief Legal Officer of
respondent Philippine Charity Sweepstakes Office (PCSO) when he
organized and actively participated in the activities of Philippine
Charity Sweepstakes Employees Association (CUGCO), an
organization composed of the rank and file employees of PCSO, and
then later, the Association of Sweepstakes Staff Personnel and
Supervisors (CUGCO) (ASSPS [CUGCO]). In April 1964, he was
administratively charged before the Civil Service Commission with
violation of Civil Service Law and Rules for neglect of duty and
misconduct and/or conduct prejudicial to the interest of the service.
On July 14, 1965, the Civil Service Commission rendered a decision
finding petitioner guilty of the charges and recommending the
penalty of dismissal. The following day, on July 15, 1965, the General
Manager of PCSO, Ignacio Santos Diaz, sent petitioner a letter of
dismissal, in accordance with the decision of the Civil Service
Commission. Petitioner filed a motion for reconsideration of the
decision of the Civil Service Commission on August 10, 1965. At the
same time, petitioner, together with ASSPS (CUGCO), filed with the
Court of Industrial Relations (CIR) a complaint for unfair labor
practice against respondent PCSO and its officers. The case was
docketed as Case No. 4312-ULP.
On November 19, 1966, the CIR issued its decision finding
respondent PCSO guilty of unfair labor practice for having
committed discrimination against the union and for having
dismissed petitioner due to his union activities. It ordered the
reinstatement of petitioner to his former position with full
backwages and with all the rights and privileges pertaining to said
position.
1

Respondent PCSO complied with the decision of the CIR. But while it
reinstated petitioner to his former position and paid his backwages,
it also filed with the Supreme Court a petition for review on
certiorari entitled "Philippine Charity Sweepstakes Office, et al. v.
The Association of Sweepstakes Staff Personnel, et al." assailing the
decision of the CIR in Case No. 4312-ULP. The petition was docketed
as G.R. No. L-27546.
2

On March 16, 1967, during the pendency of the case in the Supreme
Court, petitioner filed with the CIR a "Petition for Damages." He
prayed for moral and exemplary damages in connection with Case
No. 4312-ULP. He cited the decision of the Supreme Court in Rheem
of the Philippines, Inc., et al. v. Ferrer, et al.
3
where it upheld the
jurisdiction of the CIR over claims for damages incidental to an
employee's dismissal.
Respondent PCSO moved to dismiss the petition for damages on the
following grounds: (1) the CIR has no jurisdiction to award moral and
exemplary damages; (2) the cause of action is barred by prior
judgment, it appearing that two complaints are brought for different
parts of a single cause of action; and (3) the petition states no valid
cause of action.
Petitioner resigned from PCSO on August 18, 1967.
The petition for damages and the motion to dismiss, however,
remained pending with the CIR until it was abolished and the NLRC
was created. On April 25, 1980, the Labor Arbiter rendered a
decision awarding moral and exemplary damages to petitioner in the
amount of P1.6 million. The dispositive portion of the decision
stated:
WHEREFORE, in view of all the foregoing considerations,
judgment is hereby rendered awarding to complainant
Geronimo Q. Quadra moral damages consisting of the
following sum: Three Hundred Fifty Thousand Pesos
(P350,000.00) for besmirched reputation; Three Hundred
Fifty Thousand Pesos (P350,000.00) for social humiliation;
One Hundred Thousand Pesos (P100,000.00) for mental
anguish; One Hundred Thousand Pesos (P100,000.00) for
serious anxiety; One Hundred Thousand Pesos
(P100,000.00) for wounded feelings; One Hundred
Thousand Pesos (P100,000.00) for moral shock; and the
further sum of P500,000.00 as exemplary damages, on
account of the arbitrary and unlawful dismissal effected by
respondents. Consequently, respondents are therefore
ordered to pay complainant Quadra the total sum of One
Million Six Hundred Thousand Pesos (P1,600,000.00)
within ten (10) days after this Decision becomes final.
SO ORDERED.
4

The NLRC affirmed the decision of the Labor Arbiter,
5
prompting
respondent PCSO to file a petition for certiorari with the Court of
Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that
there was no basis for the grant of moral and exemplary damages to
petitioner as his dismissal was not tainted with bad faith. It was the
Civil Service Commission that recommended petitioner's dismissal
after conducting an investigation. It also held that the petition
claiming moral and exemplary damages filed by petitioner after
respondent PCSO had complied with the CIR decision of
reinstatement and backwages amounted to splitting of cause of
action.
6

Petitioner filed a motion for reconsideration of the decision of the
Court of Appeals, but the same was denied for lack for merit.
7

Petitioner now seeks the Court to review the ruling of the Court of
Appeals. He basically argues:
First: The ruling of the Court of Appeals that the PCSO did
not act in bad faith when it dismissed the petitioner is
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contrary to the already final and executory decision of the
CIR dated November 1[9], 1966 finding the PCSO guilty of
bad faith and unfair labor practice in dismissing the
petitioner. The decision of the CIR was affirmed by the
High Court in the case of PCSO, et al. v. Geronimo Q.
Quadra, et al., 115 SCRA 34. The Court of Appeals has no
jurisdiction to amend the final and executory decision of
November 1[9], 1966 of the CIR which was affirmed by the
High Court. Once a decision has become final [and]
executory, it could no longer be amended or altered.
Second: The ruling of the Court of Appeals that the claims
for moral and exemplary damages of the petitioner is
allegedly "tantamount to splitting of cause of action under
Sec. 4, Rule 2 of the 1997 Rules of Civil Procedure" is
contrary to law. When petitioner filed with the CIR his
complaint for illegal dismissal and unfair labor practice,
the prevailing law and jurisprudence was that the CIR did
not have jurisdiction to grant moral and exemplary
damages. Petitioner's claim for moral damages was filed
with the CIR in the same case by virtue of the ruling of the
High Court in Rheem v. Ferrer, 19 SCRA 130 holding that
the CIR has jurisdiction to award moral and exemplary
damages arising out of illegal dismissal and unfair labor
practice.
8

The petition is impressed with merit.
A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act
oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages may be awarded
if the dismissal is effected in a wanton, oppressive or malevolent
manner.
9
It appears from the facts that petitioner was deliberately
dismissed from the service by reason of his active involvement in the
activities of the union groups of both the rank and file and the
supervisory employees of PCSO, which unions he himself organized
and headed. Respondent PCSO first charged petitioner before the
Civil Service Commission for alleged neglect of duty and conduct
prejudicial to the service because of his union activities. The Civil
Service Commission recommended the dismissal of petitioner.
Respondent PCSO immediately served on petitioner a letter of
dismissal even before the latter could move for a reconsideration of
the decision of the Civil Service Commission. Respondent PCSO may
not impute to the Civil Service Commission the responsibility for
petitioner's illegal dismissal as it was respondent PCSO that first filed
the administrative charge against him. As found by the CIR,
petitioner's dismissal constituted unfair labor practice. It was done
to interfere with, restrain or coerce employees in the exercise of
their right to self-organization. It stated:
Upon the entire evidence as a whole (sic), the [c]ourt feels
and believes that complainant Quadra was discriminatorily
dismissed by reason of his militant union activities, not
only as President of PCSEA, but also as President of the
ASSPS.
10

In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, et al. v. NLRC, et al.,
11
we found it proper to award
moral and exemplary damages to illegally dismissed employees as
their dismissal was tainted with unfair labor practice. The Court said:
Unfair labor practices violate the constitutional rights of
workers and employees to self-organization, are inimical
to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and
mutual respect; and disrupt industrial peace and hinder
the promotion of healthy and stable labor-management
relations. As the conscience of the government, it is the
Court's sworn duty to ensure that none trifles with labor
rights.
For this reason, we find it proper in this case to impose
moral and exemplary damages on private respondent. x x
x
On the second issue, we agree with petitioner that the filing of a
petition for damages before the CIR did not constitute splitting of
cause of action under the Revised Rules of Court. The Revised Rules
of Court prohibits parties from instituting more than one suit for a
single cause of action. Splitting a cause of action is the act of dividing
a single cause of action, claim or demand into two or more parts,
and bringing suit for one of such parts only, intending to reserve the
rest for another separate action. The purpose of the rule is to avoid
harassment and vexation to the defendant and avoid multiplicity of
suits.
12

The prevailing rule at the time that the action for unfair labor
practice and illegal dismissal was filed and tried before the CIR was
that said court had no jurisdiction over claims for damages. Hence,
petitioner, at that time, could not raise the issue of damages in the
proceedings. However, on January 27, 1967, the Supreme Court
rendered its ruling in Rheem of the Philippines, Inc., et al. v. Ferrer,
et al.
13
upholding the jurisdiction of the CIR over claims for damages
incidental to an employee's illegal dismissal. Petitioner properly filed
his claim for damages after the declaration by the Court and before
the ruling on their case became final. Such filing could not be
considered as splitting of cause of action.
IN VIEW WHEREOF, the assailed decision and resolution of the Court
of Appeals are REVERSED and SET ASIDE. The decision of the NLRC
in NLRC NCR Case No. 4312-ULP is REINSTATED.
SO ORDERED.


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G.R. No. L-25134 October 30, 1969
THE CITY OF BACOLOD, plaintiff-appellee,
vs.
SAN MIGUEL BREWERY, INC., defendant-appellant.
First Assistant City Fiscal Raymundo O. Rallos for plaintiff-appellee.
Picazo and Agcaoili for defendant-appellant.
BARREDO, J.:
An appeal from the decision of the Court of First Instance of Negros
Occidental in its Civil Case No. 7355, ordering the San Miguel
Brewery, Inc. to pay to the City of Bacolod the sum of P36,519.10,
representing surcharges on certain fees which, under existing
ordinances of the City of Bacolod, the San Miguel Brewery should
have paid quarterly to the treasurer of the said city for and/or
during the period from July, 1959 to December, 1962, but which
were paid only on April 23, 1963.
On February 17, 1949, the City Council of Bacolod passed Ordinance
No. 66, series of 1949 imposing upon "any person, firm or
corporation engaged in the manufacturer bottling of coca-cola,
pepsi cola, tru orange, lemonade, and other soft drinks within the
jurisdiction of the City of Bacolod, ... a fee of ONE TWENTY-FOURTH
(1/24) of a centavo for every bottle thereof," plus "a surcharge of 2%
every month, but in no case to exceed 24% for one whole year,"
upon "such local manufacturers or bottler above-mentioned who
will be delinquent on any amount of fees due" under the ordinance.
In 1959, this ordinance was amended by Ordinance No. 150, series
of 1959, by increasing the fee to "one-eighth (1/8) of a centavo for
every bottle thereof." In other words, the fee was increased from
P0.01 to P0.03 per case of soft drinks. Appellant refused to pay the
additional fee and challenged the validity of the whole ordinance.
Under date of March 23, 1960, appellee sued appellant in Civil Case
No. 5693 of the Court of First Instance of Negros Occidental, with
the corresponding Complaint alleging, inter alia:
3. That the defendant, Manager of the San Miguel
Brewery, Bacolod Coca Cola Plant, Bacolod Branch since
the approval of Ordinance No. 66, Series of 1949 as
amended by Ordinance No. 150, Series of 1959, which
took effect on July 1, 1959, only paid to the plaintiff herein
the P0.01 bottling tax per case of soft drinks thereby
refusing to pay the P0.03 bottling tax per case of soft
drinks which amounted to P26,306.54 at P0.02 per case of
soft drinks such as coca cola and tru orange manufactured
or bottled by said company as per statement submitted by
the Assistant City Treasurer of Bacolod City herewith
attached as Annex "C" of this complaint;
and praying
... that judgment be rendered for the plaintiff:
"(a) Ordering the defendant to pay the plaintiff
the bottling taxes of P0.03 per case of soft drinks
as provided for in Section 1, Ordinance No. 66,
Series of 1949, as amended by Ordinance No.
150, Series of 1959, as well as the sum of
P26,306.54 representing unpaid bottling taxes
due with legal rate of interest thereon from the
date of the filing of this complaint until complete
payment thereof; ... costs, etc."'
In due time, appellant filed its answer. This was followed by a
stipulation of facts between the parties, whereupon, the court
rendered judgment on November 12, 1960; with the following
dispositive portion:
WHEREFORE, San Miguel Brewery Inc. is ordered to pay to
the plaintiff the sum of P26,306.54 and the tax at the rate
of three centavos per case levied in Ordinance No. 66 and
150 from March, 1960, and thereafter. Costs against the
defendant.
Appellant appealed from the said decision to this Court where it
pressed the question of the invalidity of the abovementioned taxing
ordinances. In that appeal (G.R. No. L-18290), however, this Court
affirmed the decision appealed from and upheld the
constitutionality of the questioned ordinances and the authority of
the appellee to enact the same. For reasons not extant in the record,
it was already after this decision had become final when appellee
moved for the reconsideration thereof, praying that the same be
amended so as to include the penalties and surcharges provided for
in the ordinances. Naturally, the said motion was denied, for the
reason that "the decision is already final and may not be amended."
When execution was had before the lower court, the appellee again
sought the inclusion of the surcharges referred to; and once again
the move was frustrated by the Court of First Instance of Negros
Occidental which denied the motion, as follows:
Acting upon the motion dated October 24, 1963, filed by
the Assistant City Fiscal, Raymundo Rallos, counsel for the
plaintiff, and the opposition thereto filed by attorneys for
the defendants dated November 9, 1963, as well as the
reply to the opposition of counsel for the defendants
dated December 5, 1963, taking into consideration that
the decision of this Court as affirmed by the Supreme
Court does not specifically mention the alleged surcharges
claimed by the plaintiff-appellee, the Court hereby
resolves to deny, as it hereby denies, the aforesaid
motion, for not being meritorious.
Failing thus in its attempt to collect the surcharge provided for in the
ordinances in question, appellee filed a second action (Civil Case No.
7355) to collect the said surcharges. Under date of July 10, 1964, it
filed the corresponding complaint before the same Court of First
Instance of Negros Occidental alleging, inter alia, that:
6. That soon after the decision of the Honorable Supreme
Court affirming the decision of the Hon. Court, the
defendant herein on April 23, 1963 paid to the City of
Bacolod, the amount of ONE HUNDRED FIFTY SIX
THOUSAND NINE HUNDRED TWENTY FOUR PESOS and
TWENTY CENTAVOS (P156,924.20) as taxes from July, 1959
to December, 1962 in compliance with the provision of
Section 1, Ordinance No. 66, Series of 1949, as amended by
Ordinance No. 150, Series of 1959, which corresponds to
the taxes due under said section in the amount of P0.03
per case of soft soft drinks manufactured by the defendant,
but refused and still continued refusing to pay the
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surcharge as provided for under Section 4 of Ordinance No.
66, Series of 1949, as amended by Ordinance No. 150,
Series of 1959, which reads as follows:
"SEC. 4 A surcharge of 2% every month, but in
no case to exceed 24% for one whole year, shall
be imposed on such local manufacturer or
bottlers above mentioned who will be
delinquent on any amount of fees under the
ordinance."
which up to now amounted to THIRTY SIX THOUSAND FIVE
HUNDRED NINETEEN PESOS AND TEN CENTAVOS
(P36,519.10), as shown by the certified statement of the
office of the City Treasurer of Bacolod City herewith
attached as Annex "E" and made an integral part of this
complaint;
7. That the said interest and/or penalties to the said
bottling taxes which defendant refused to pay have long
been overdue;
and again praying
... that judgment be rendered for the plaintiff:
(a) Ordering the defendant to pay the penalty
and/or interest therein Section 4 of Ordinance
No. 66, Series of 1949, as amended by Ordinance
No. 150, Series of 1959 the total amount of
THIRTY SIX THOUSAND FIVE HUNDRED
NINETEEN PESOS and TEN CENTAVOS
(P36,519.10), representing the surcharges from
August, 1959 to December, 1962, inclusive, and
the 24% penalty computed as of June 30, 1964,
from the amount of P152,162.90, with legal rate
of interest thereon from the date of the filing of
this complaint until complete payment thereof;"
plus costs, etc.
On July 24, 1964, appellant filed a motion to dismiss the case on the
grounds that: (1) the cause of action is barred by a prior judgment,
and (2) a party may not institute more than one suit for a single
cause of action. This motion was denied by the court a quo in its
order dated August 22, 1964; so appellant filed its answer wherein it
substantially reiterated, as affirmative defenses, the above-
mentioned grounds of its motion to dismiss. Thereafter, the parties
submitted the case for judgment on the pleadings, whereupon, the
court rendered judgment on March 11, 1965 with the following
dispositive portion: .
IN VIEW THEREOF, judgment is hereby rendered ordering
the defendant San Miguel Brewery, Inc. to pay to the
plaintiff the sum of P36,519.10 representing the
surcharges as provided in section 4 of Ordinance 66, series
of 1949 of the City of Bacolod. No costs.
Appellants moved for reconsideration but its motion was denied,
hence, the instant appeal.
Appellant has only one assignment of error, to wit:
THE LOWER COURT ERRED IN FINDING THE APPELLANT
LIABLE TO THE APPELLEE FOR THE SUM OF P36,519.10
REPRESENTING SURCHARGES AS PROVIDED IN TAX
ORDINANCE NO. 66, SERIES OF 1949, AS AMENDED, OF
THE CITY OF BACOLOD.
Under this, it argues that the action of appellee cannot be
maintained because (1) a party may not institute more than one suit
for a single cause of action; and (2) appellee's action for recovery of
the surcharges in question is barred by prior judgment.
We find appellant's position essentially correct. There is no question
that appellee split up its cause of action when it filed the first
complaint on March 23, 1960, seeking the recovery of only the
bottling taxes or charges plus legal interest, without mentioning in
any manner the surcharges.
The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the
Rules of Court of 1940 which were still in force then provided:
SEC. 3. Splitting a cause of action, forbidden. A single
cause of action cannot be split up into two or more parts
so as to be made the subject of different complaints. .
SEC. 4. Effect of splitting. If separate complaints were
brought for different parts of a single cause of action, the
filing of the first may be pleaded in abatement of the
others, and a judgment upon the merits in either is
available as a bar in the others.
Indeed, this rule against the splitting up of a cause of action is an old
one. In fact, it preceded the Rules of Court or any statutory
provision. In Bachrach Motor Co., Inc. vs. Icarangal et al.,
1
this Court
already explained its meaning, origin and purpose, thus:
But, even if we have no such section 708 of our Code of
Civil Procedure, or section 59 of the Insolvency Law, we
have still the rule against splitting a single cause of action.
This rule, though not contained in any statutory provision,
has been applied by this court in all appropriate cases.
Thus, in Santos vs. Moir (36 Phil. 350, 359), we said: "It is
well recognized that a party cannot split a single cause of
action into parts and sue on each part separately. A
complaint for the recovery of personal property with
damages for detention states a single cause of action
which cannot be divided into an action for possession and
one for damages; and if suit is brought for possession only
a subsequent action cannot be maintained to recover the
damages resulting from the unlawful detention." In Rubio
de Larena vs. Villanueva (53 Phil. 923, 927), we reiterated
the rule by stating that "... a party will not be permitted to
split up a single cause of action and make it the basis for
several suits" and that when a lease provides for the
payment of the rent in separate installments, each
installment constitutes an independent cause of action,
but when, at the time the complaint is filed, there are
several installments due, all of them constitute a single
cause of action and should be included in a single
complaint, and if some of them are not so included, they
are barred. The same doctrine is stated in Lavarro vs.
Labitoria (54 Phil. 788), wherein we said that "a party will
not be permitted to split up a single cause of action and
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make it a basis for several suits" and that a claim for
partition of real property as well as for improvements
constitutes a single cause of action, and a complaint for
partition alone bars a subsequent complaint for the
improvements. And in Blossom & Co. vs. Manila Gas
Corporation (55 Phil. 226-240), we held that "as a general
rule a contract to do several things at several times is
divisible in its nature, so as to authorize successive actions;
and a judgment recovered for a single breach of a
continuing contract or covenant is no bar to suit for a
subsequent breach thereof. But where the covenant or
contract is entire, and the breach total, there can be only
one action, and plaintiff must therein recover all his
damages.
The rule against splitting a single cause of action is
intended "to prevent repeated litigation between the
same parties in regard to the same subject of controversy;
to protect defendant from unnecessary vexation; and to
avoid the costs and expenses incident to numerous suits."
(1 C.J. 1107) It comes from that old maxim nemo debet bis
vexare pro una et eadem causa (no man shall be twice
vexed for one and the same cause). (Ex parte Lange, 18
Wall 163, 168; 21 Law Ed. 872; also U.S. vs. Throckmorton,
98 U.S. 61; 25 Law Ed. 93). And it developed, certainly not
as an original legal right of the defendant, but as an
interposition of courts upon principles of public policy to
prevent inconvenience and hardship incident to repeated
and unnecessary litigations. (1 C. J. 1107).
In the light of these precedents, it cannot be denied that appellant's
failure to pay the bottling charges or taxes and the surcharges for
delinquency in the payment thereof constitutes but one single cause
of action which under the above rule can be the subject of only one
complaint, under pain of either of them being barred if not included
in the same complaint with the other. The error of appellee springs
from a misconception or a vague comprehension of the elements of
a cause of action. The classical definition of a cause of action is that
it is "a delict or wrong by which the rights of the plaintiff are violated
by the defendant." Its elements may be generally stated to be (1) a
right existing in favor of the plaintiff; (2) a corresponding obligation
on the part of the defendant to respect such right; and (3) an act or
omission of the plaintiff which constitutes a violation of the
plaintiff's right which defendant had the duty to respect. For
purposes, however, of the rule against splitting up of a cause of
action, a clearer understanding can be achieved, if together with
these elements, the right to relief is considered.
In the last analysis, a cause of action is basically an act or an
omission or several acts or omissions. A single act or omission can be
violative of various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct
legal obligations. This happens, for example, when a passenger of a
common carrier, such as a taxi, is injured in a collision thereof with
another vehicle due to the negligence of the respective drivers of
both vehicles. In such a case, several rights of the passenger are
violated, inter alia, (1) the right to be safe from the negligent acts of
either or both the drivers under the law on culpa-acquiliana or
quasi-delict; (2) the right to be safe from criminal negligence of the
said drivers under the penal laws; and (3) the right to be safely
conducted to his destination under the contract of carriage and the
law covering the same, not counting anymore the provisions of
Article 33 of the Civil Code. The violation of each of these rights is a
cause of action in itself. Hence, such a passenger has at least three
causes of action arising from the same act. On the other hand, it can
happen also that several acts or omissions may violate only one
right, in which case, there would be only one cause of action. Again
the violation of a single right may give rise to more than one relief.
In other words, for a single cause of action or violation of a right, the
plaintiff may be entitled to several reliefs. It is the filing of separate
complaints for these several reliefs that constitutes splitting up of
the cause of action. This is what is prohibited by the rule.
In the case at bar, when appellant failed and refused to pay the
difference in bottling charges from July 1, 1959, such act of
appellant in violation of the right of appellee to be paid said charges
in full under the Ordinance, was one single cause of action, but
under the Ordinance, appellee became entitled, as a result of such
non-payment, to two reliefs, namely: (1) the recovery of the balance
of the basic charges; and (2) the payment of the corresponding
surcharges, the latter being merely a consequence of the failure to
pay the former. Stated differently, the obligation of appellant to pay
the surcharges arose from the violation by said appellant of the
same right of appellee from which the obligation to pay the basic
charges also arose. Upon these facts, it is obvious that appellee has
filed separate complaints for each of two reliefs related to the same
single cause of action, thereby splitting up the said cause of action.
The trial court held that inasmuch as there was no demand in the
complaint in the first case for the payment of the surcharges, unlike
in the case of Collector of Internal Revenue vs. Blas Gutierrez, et al.,
G.R. No. L-13819. May 25, 1960, wherein there was such a demand,
there is no bar by prior judgment as to said surcharges, the same not
having been "raised as an issue or cause of action in Civil Case No.
5693." This holding is erroneous.
Section 4 of Rule 2, above-quoted, is unmistakably clear as to the
effect of the splitting up of a cause of action. It says, "if separate
complaints are brought for different parts (reliefs) of a single cause
of action, the filing of the first (complaint) may be pleaded in
abatement of the others, and a judgment upon the merits in either
is available as a bar in the others." In other words, whenever a
plaintiff has filed more than one complaint for the same violation of
a right, the filing of the first complaint on any of the reliefs born of
the said violation constitutes a bar to any action on any of the other
possible reliefs arising from the same violation, whether the first
action is still pending, in which event, the defense to the subsequent
complaint would be litis pendentia, or it has already been finally
terminated, in which case, the defense would be res adjudicata.
2

Indeed, litis pendentia and res adjudicata, on the one hand, and
splitting up a cause of action on the other, are not separate and
distinct defenses, since either of the former is by law only the result
or effect of the latter, or, better said, the sanction for or behind it.
It thus results that the judgment of the lower court must be, as it is
hereby, reversed and the complaint of appellee is dismissed. No
costs.


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G.R. No. 182435 August 13, 2012
LILIA B. ADA, LUZ B. ADANZA, FLORA C. BA YLON, REMO BA YLON,
JOSE BA YLON, ERIC BA YLON, FLORENTINO BA YLON, and MA.
RUBY BA YLON, Petitioners,
vs.
FLORANTE BA YLON, Respondent.
VILLARAMA, JR.,
*

D E C I S I O N
REYES, J.:
Before this Court is a petition for review on certiorari under Rule 45
of the Rules of Court seeking to annul and set aside the Decision
1

dated October 26, 2007 rendered by the Court of Appeals (CA) in
CA-G.R. CV No. 01746. The assailed decision partially reversed and
set aside the Decision
2
dated October 20, 2005 issued ~y the
Regional Trial Court (RTC), Tan jay City, Negros Oriental, Branch 43 in
Civil Case No. 11657.
The Antecedent Facts
This case involves the estate of spouses Florentino Baylon and
Maximina Elnas Baylon (Spouses Baylon) who died on November 7,
1961 and May 5, 1974, respectively.
3
At the time of their death,
Spouses Baylon were survived by their legitimate children, namely,
Rita Baylon (Rita), Victoria Baylon (Victoria), Dolores Baylon
(Dolores), Panfila Gomez (Panfila), Ramon Baylon (Ramon) and
herein petitioner Lilia B. Ada (Lilia).
Dolores died intestate and without issue on August 4, 1976. Victoria
died on November 11, 1981 and was survived by her daughter,
herein petitioner Luz B. Adanza. Ramon died intestate on July 8,
1989 and was survived by herein respondent Florante Baylon
(Florante), his child from his first marriage, as well as by petitioner
Flora Baylon, his second wife, and their legitimate children, namely,
Ramon, Jr. and herein petitioners Remo, Jose, Eric, Florentino and
Ma. Ruby, all surnamed Baylon.
On July 3, 1996, the petitioners filed with the RTC a Complaint
4
for
partition, accounting and damages against Florante, Rita and Panfila.
They alleged therein that Spouses Baylon, during their lifetime,
owned 43 parcels of land
5
all situated in Negros Oriental. After the
death of Spouses Baylon, they claimed that Rita took possession of
the said parcels of land and appropriated for herself the income
from the same. Using the income produced by the said parcels of
land, Rita allegedly purchased two parcels of land, Lot No. 4709
6
and
half of Lot No. 4706,
7
situated in Canda-uay, Dumaguete City. The
petitioners averred that Rita refused to effect a partition of the said
parcels of land.
In their Answer,
8
Florante, Rita and Panfila asserted that they and
the petitioners co-owned 22
9
out of the 43 parcels of land
mentioned in the latters complaint, whereas Rita actually owned 10
parcels of land
10
out of the 43 parcels which the petitioners sought
to partition, while the remaining 11 parcels of land are separately
owned by Petra Cafino Adanza,
11
Florante,
12
Meliton Adalia,
13

Consorcia Adanza,
14
Lilia
15
and Santiago Mendez.
16
Further, they
claimed that Lot No. 4709 and half of Lot No. 4706 were acquired by
Rita using her own money. They denied that Rita appropriated solely
for herself the income of the estate of Spouses Baylon, and
expressed no objection to the partition of the estate of Spouses
Baylon, but only with respect to the co-owned parcels of land.
During the pendency of the case, Rita, through a Deed of Donation
dated July 6, 1997, conveyed Lot No. 4709 and half of Lot No. 4706
to Florante. On July 16, 2000, Rita died intestate and without any
issue. Thereafter, learning of the said donation inter vivos in favor of
Florante, the petitioners filed a Supplemental Pleading
17
dated
February 6, 2002, praying that the said donation in favor of the
respondent be rescinded in accordance with Article 1381(4) of the
Civil Code. They further alleged that Rita was already sick and very
weak when the said Deed of Donation was supposedly executed
and, thus, could not have validly given her consent thereto.
Florante and Panfila opposed the rescission of the said donation,
asserting that Article 1381(4) of the Civil Code applies only when
there is already a prior judicial decree on who between the
contending parties actually owned the properties under litigation.
18

The RTC Decision
On October 20, 2005, the RTC rendered a Decision,
19
the decretal
portion of which reads:
Wherefore judgment is hereby rendered:
(1) declaring the existence of co-ownership over parcels
nos. 1, 2, 3, 5, 7, 10, 13, 14, 16, 17, 18, 26, 29, 30, 33, 34,
35, 36, 40 and 41 described in the complaint;
(2) directing that the above mentioned parcels of land be
partitioned among the heirs of Florentino Baylon and
Maximina Baylon;
(3) declaring a co-ownership on the properties of Rita
Baylon namely parcels no[s]. 6, 11, 12, 20, 24, 27, 31, 32,
39 and 42 and directing that it shall be partitioned among
her heirs who are the plaintiffs and defendant in this case;
(4) declaring the donation inter vivos rescinded without
prejudice to the share of Florante Baylon to the estate of
Rita Baylon and directing that parcels nos. 1 and 2
paragraph V of the complaint be included in the division of
the property as of Rita Baylon among her heirs, the parties
in this case;
(5) excluding from the co-ownership parcels nos. 20, 21,
22, 9, 43, 4, 8, 19 and 37.
Considering that the parties failed to settle this case amicably and
could not agree on the partition, the parties are directed to
nominate a representative to act as commissioner to make the
partition. He shall immediately take [his] oath of office upon [his]
appointment. The commissioner shall make a report of all the
proceedings as to the partition within fifteen (15) days from the
completion of this partition. The parties are given ten (10) days
within which to object to the report after which the Court shall act
on the commissioner report.
SO ORDERED.
20
(Emphasis ours)
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The RTC held that the death of Rita during the pendency of the case,
having died intestate and without any issue, had rendered the issue
of ownership insofar as parcels of land which she claims as her own
moot since the parties below are the heirs to her estate. Thus, the
RTC regarded Rita as the owner of the said 10 parcels of land and,
accordingly, directed that the same be partitioned among her heirs.
Nevertheless, the RTC rescinded the donation inter vivos of Lot No.
4709 and half of Lot No. 4706 in favor of Florante. In rescinding the
said donation inter vivos, the RTC explained that:
However, with respect to lot nos. 4709 and 4706 which [Rita] had
conveyed to Florante Baylon by way of donation inter vivos, the
plaintiffs in their supplemental pleadings (sic) assailed the same to
be rescissible on the ground that it was entered into by the
defendant Rita Baylon without the knowledge and approval of the
litigants [or] of competent judicial authority. The subject parcels of
lands are involved in the case for which plaintiffs have asked the
Court to partition the same among the heirs of Florentino Baylon
and Maximina Elnas.
Clearly, the donation inter vivos in favor of Florante Baylon was
executed to prejudice the plaintiffs right to succeed to the estate of
Rita Baylon in case of death considering that as testified by Florante
Baylon, Rita Baylon was very weak and he tried to give her vitamins
x x x. The donation inter vivos executed by Rita Baylon in favor of
Florante Baylon is rescissible for the reason that it refers to the
parcels of land in litigation x x x without the knowledge and approval
of the plaintiffs or of this Court. However, the rescission shall not
affect the share of Florante Baylon to the estate of Rita Baylon.
21

Florante sought reconsideration of the Decision dated October 20,
2005 of the RTC insofar as it rescinded the donation of Lot No. 4709
and half of Lot No. 4706 in his favor.
22
He asserted that, at the time
of Ritas death on July 16, 2000, Lot No. 4709 and half of Lot No.
4706 were no longer part of her estate as the same had already
been conveyed to him through a donation inter vivos three years
earlier. Thus, Florante maintained that Lot No. 4709 and half of Lot
No. 4706 should not be included in the properties that should be
partitioned among the heirs of Rita.
On July 28, 2006, the RTC issued an Order
23
which denied the
motion for reconsideration filed by Florante.
The CA Decision
On appeal, the CA rendered a Decision
24
dated October 26, 2007,
the dispositive portion of which reads:
WHEREFORE, the Decision dated October 20, 2005 and Order dated
July 28, 2006 are REVERSED and SET ASIDE insofar as they decreed
the rescission of the Deed of Donation dated July 6, 1997 and the
inclusion of lot no. 4709 and half of lot no. 4706 in the estate of Rita
Baylon. The case is REMANDED to the trial court for the
determination of ownership of lot no. 4709 and half of lot no. 4706.
SO ORDERED.
25

The CA held that before the petitioners may file an action for
rescission, they must first obtain a favorable judicial ruling that Lot
No. 4709 and half of Lot No. 4706 actually belonged to the estate of
Spouses Baylon and not to Rita. Until then, the CA asserted, an
action for rescission is premature. Further, the CA ruled that the
petitioners action for rescission cannot be joined with their action
for partition, accounting and damages through a mere supplemental
pleading. Thus:
If Lot No. 4709 and half of Lot No. 4706 belonged to the Spouses
estate, then Rita Baylons donation thereof in favor of Florante
Baylon, in excess of her undivided share therein as co-heir, is void.
Surely, she could not have validly disposed of something she did not
own. In such a case, an action for rescission of the donation may,
therefore, prosper.
If the lots, however, are found to have belonged exclusively to Rita
Baylon, during her lifetime, her donation thereof in favor of Florante
Baylon is valid. For then, she merely exercised her ownership right
to dispose of what legally belonged to her. Upon her death, the lots
no longer form part of her estate as their ownership now pertains to
Florante Baylon. On this score, an action for rescission against such
donation will not prosper. x x x.
Verily, before plaintiffs-appellees may file an action for rescission,
they must first obtain a favorable judicial ruling that lot no. 4709 and
half of lot no. 4706 actually belonged to the estate of Spouses
Florentino and Maximina Baylon, and not to Rita Baylon during her
lifetime. Until then, an action for rescission is premature. For this
matter, the applicability of Article 1381, paragraph 4, of the New
Civil Code must likewise await the trial courts resolution of the issue
of ownership.
Be that as it may, an action for rescission should be filed by the
parties concerned independent of the proceedings below. The first
cannot simply be lumped up with the second through a mere
supplemental pleading.
26
(Citation omitted)
The petitioners sought reconsideration
27
of the Decision dated
October 26, 2007 but it was denied by the CA in its Resolution
28

dated March 6, 2008.
Hence, this petition.
Issue
The lone issue to be resolved by this Court is whether the CA erred
in ruling that the donation inter vivos of Lot No. 4709 and half of Lot
No. 4706 in favor of Florante may only be rescinded if there is
already a judicial determination that the same actually belonged to
the estate of Spouses Baylon.
The Courts Ruling
The petition is partly meritorious.
Procedural Matters
Before resolving the lone substantive issue in the instant case, this
Court deems it proper to address certain procedural matters that
need to be threshed out which, by laxity or otherwise, were not
raised by the parties herein.
Misjoinder of Causes of Action
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The complaint filed by the petitioners with the RTC involves two
separate, distinct and independent actions partition and
rescission. First, the petitioners raised the refusal of their co-heirs,
Florante, Rita and Panfila, to partition the properties which they
inherited from Spouses Baylon. Second, in their supplemental
pleading, the petitioners assailed the donation inter vivos of Lot No.
4709 and half of Lot No. 4706 made by Rita in favor of Florante
pendente lite.
The actions of partition and
rescission cannot be joined in a
single action.
By a joinder of actions, or more properly, a joinder of causes of
action is meant the uniting of two or more demands or rights of
action in one action, the statement of more than one cause of action
in a declaration. It is the union of two or more civil causes of action,
each of which could be made the basis of a separate suit, in the
same complaint, declaration or petition. A plaintiff may under
certain circumstances join several distinct demands, controversies or
rights of action in one declaration, complaint or petition.
29

The objectives of the rule or provision are to avoid a multiplicity of
suits where the same parties and subject matter are to be dealt with
by effecting in one action a complete determination of all matters in
controversy and litigation between the parties involving one subject
matter, and to expedite the disposition of litigation at minimum
cost. The provision should be construed so as to avoid such
multiplicity, where possible, without prejudice to the rights of the
litigants.
30

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

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

A misjoined cause of action, if not
severed upon motion of a party or
by the court sua sponte, may be
adjudicated by the court together
with the other causes of action.
Nevertheless, misjoinder of causes of action is not a ground for
dismissal. Indeed, the courts have the power, acting upon the
motion of a party to the case or sua sponte, to order the severance
of the misjoined cause of action to be proceeded with separately.
33

However, if there is no objection to the improper joinder or the
court did not motu proprio direct a severance, then there exists no
bar in the simultaneous adjudication of all the erroneously joined
causes of action. On this score, our disquisition in Republic of the
Philippines v. Herbieto
34
is instructive, viz:
This Court, however, disagrees with petitioner Republic in this
regard. This procedural lapse committed by the respondents should
not affect the jurisdiction of the MTC to proceed with and hear their
application for registration of the Subject Lots.
x x x x
Considering every application for land registration filed in strict
accordance with the Property Registration Decree as a single cause
of action, then the defect in the joint application for registration
filed by the respondents with the MTC constitutes a misjoinder of
causes of action and parties. Instead of a single or joint application
for registration, respondents Jeremias and David, more
appropriately, should have filed separate applications for
registration of Lots No. 8422 and 8423, respectively.
Misjoinder of causes of action and parties do not involve a question
of jurisdiction of the court to hear and proceed with the case. They
are not even accepted grounds for dismissal thereof. Instead, under
the Rules of Court, the misjoinder of causes of action and parties
involve an implied admission of the courts jurisdiction. It
acknowledges the power of the court, acting upon the motion of a
party to the case or on its own initiative, to order the severance of
the misjoined cause of action, to be proceeded with separately (in
case of misjoinder of causes of action); and/or the dropping of a
party and the severance of any claim against said misjoined party,
also to be proceeded with separately (in case of misjoinder of
parties).
35
(Citations omitted)
It should be emphasized that the foregoing rule only applies if the
court trying the case has jurisdiction over all of the causes of action
therein notwithstanding the misjoinder of the same. If the court
trying the case has no jurisdiction over a misjoined cause of action,
then such misjoined cause of action has to be severed from the
other causes of action, and if not so severed, any adjudication
rendered by the court with respect to the same would be a nullity.
Here, Florante posed no objection, and neither did the RTC direct
the severance of the petitioners action for rescission from their
action for partition. While this may be a patent omission on the part
of the RTC, this does not constitute a ground to assail the validity
and correctness of its decision. The RTC validly adjudicated the
issues raised in the actions for partition and rescission filed by the
petitioners.
Asserting a New Cause of Action in a Supplemental Pleading
In its Decision dated October 26, 2007, the CA pointed out that the
said action for rescission should have been filed by the petitioners
independently of the proceedings in the action for partition. It
opined that the action for rescission could not be lumped up with
the action for partition through a mere supplemental pleading.
We do not agree.
A supplemental pleading may raise
a new cause of action as long as it
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has some relation to the original
cause of action set forth in the
original complaint.
Section 6, Rule 10 of the Rules of Court reads:
Sec. 6. Supplemental Pleadings. Upon motion of a party the court
may, upon reasonable notice and upon such terms as are just,
permit him to serve a supplemental pleading setting forth
transactions, occurrences or events which have happened since the
date of the pleading sought to be supplemented. The adverse party
may plead thereto within ten (10) days from notice of the order
admitting the supplemental pleading.
In Young v. Spouses Sy,
36
this Court had the opportunity to elucidate
on the purpose of a supplemental pleading. Thus:
As its very name denotes, a supplemental pleading only serves to
bolster or add something to the primary pleading. A supplement
exists side by side with the original. It does not replace that which it
supplements. Moreover, a supplemental pleading assumes that the
original pleading is to stand and that the issues joined with the
original pleading remained an issue to be tried in the action. It is but
a continuation of the complaint. Its usual office is to set up new facts
which justify, enlarge or change the kind of relief with respect to the
same subject matter as the controversy referred to in the original
complaint.
The purpose of the supplemental pleading is to bring into the
records new facts which will enlarge or change the kind of relief to
which the plaintiff is entitled; hence, any supplemental facts which
further develop the original right of action, or extend to vary the
relief, are available by way of supplemental complaint even though
they themselves constitute a right of action.
37
(Citations omitted and
emphasis ours)
Thus, a supplemental pleading may properly allege transactions,
occurrences or events which had transpired after the filing of the
pleading sought to be supplemented, even if the said supplemental
facts constitute another cause of action.
Admittedly, in Leobrera v. Court of Appeals,
38
we held that a
supplemental pleading must be based on matters arising subsequent
to the original pleading related to the claim or defense presented
therein, and founded on the same cause of action. We further
stressed therein that a supplemental pleading may not be used to
try a new cause of action.
However, in Planters Development Bank v. LZK Holdings and
Development Corp.,
39
we clarified that, while a matter stated in a
supplemental complaint should have some relation to the cause of
action set forth in the original pleading, the fact that the
supplemental pleading technically states a new cause of action
should not be a bar to its allowance but only a matter that may be
considered by the court in the exercise of its discretion. In such
cases, we stressed that a broad definition of "cause of action"
should be applied.
Here, the issue as to the validity of the donation inter vivos of Lot
No. 4709 and half of Lot No. 4706 made by Rita in favor of Florante
is a new cause of action that occurred after the filing of the original
complaint. However, the petitioners prayer for the rescission of the
said donation inter vivos in their supplemental pleading is germane
to, and is in fact, intertwined with the cause of action in the partition
case. Lot No. 4709 and half of Lot No. 4706 are included among the
properties that were sought to be partitioned.
The petitioners supplemental pleading merely amplified the original
cause of action, on account of the gratuitous conveyance of Lot No.
4709 and half of Lot No. 4706 after the filing of the original
complaint and prayed for additional reliefs, i.e., rescission. Indeed,
the petitioners claim that the said lots form part of the estate of
Spouses Baylon, but cannot be partitioned unless the gratuitous
conveyance of the same is rescinded. Thus, the principal issue raised
by the petitioners in their original complaint remained the same.
Main Issue: Propriety of Rescission
After having threshed out the procedural matters, we now proceed
to adjudicate the substantial issue presented by the instant petition.
The petitioners assert that the CA erred in remanding the case to the
RTC for the determination of ownership of Lot No. 4709 and half of
Lot No. 4706. They maintain that the RTC aptly rescinded the said
donation inter vivos of Lot No. 4709 and half of Lot No. 4706
pursuant to Article 1381(4) of the Civil Code.
In his Comment,
40
Florante asserts that before the petitioners may
file an action for rescission, they must first obtain a favorable judicial
ruling that Lot No. 4709 and half of Lot No. 4706 actually belonged
to the estate of Spouses Baylon. Until then, Florante avers that an
action for rescission would be premature.
The petitioners contentions are well-taken.
The resolution of the instant dispute is fundamentally contingent
upon a determination of whether the donation inter vivos of Lot No.
4709 and half of Lot No. 4706 in favor of Florante may be rescinded
pursuant to Article 1381(4) of the Civil Code on the ground that the
same was made during the pendency of the action for partition with
the RTC.
Rescission is a remedy to address
the damage or injury caused to the
contracting parties or third
persons.
Rescission is a remedy granted by law to the contracting parties and
even to third persons, to secure the reparation of damages caused
to them by a contract, even if it should be valid, by means of the
restoration of things to their condition at the moment prior to the
celebration of said contract.
41
It is a remedy to make ineffective a
contract, validly entered into and therefore obligatory under normal
conditions, by reason of external causes resulting in a pecuniary
prejudice to one of the contracting parties or their creditors.
42

Contracts which are rescissible are valid contracts having all the
essential requisites of a contract, but by reason of injury or damage
caused to either of the parties therein or to third persons are
considered defective and, thus, may be rescinded.
The kinds of rescissible contracts, according to the reason for their
susceptibility to rescission, are the following: first, those which are
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rescissible because of lesion or prejudice;
43
second, those which are
rescissible on account of fraud or bad faith;
44
and third, those which,
by special provisions of law,
45
are susceptible to rescission.
46

Contracts which refer to things
subject of litigation is rescissible
pursuant to Article 1381(4) of the
Civil Code.
Contracts which are rescissible due to fraud or bad faith include
those which involve things under litigation, if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority. Thus, Article
1381(4) of the Civil Code provides:
Art. 1381. The following contracts are rescissible:
x x x x
(4) Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and approval
of the litigants or of competent judicial authority.
The rescission of a contract under Article 1381(4) of the Civil Code
only requires the concurrence of the following: first, the defendant,
during the pendency of the case, enters into a contract which refers
to the thing subject of litigation; and second, the said contract was
entered into without the knowledge and approval of the litigants or
of a competent judicial authority. As long as the foregoing requisites
concur, it becomes the duty of the court to order the rescission of
the said contract.
The reason for this is simple. Article 1381(4) seeks to remedy the
presence of bad faith among the parties to a case and/or any
fraudulent act which they may commit with respect to the thing
subject of litigation.
When a thing is the subject of a judicial controversy, it should
ultimately be bound by whatever disposition the court shall render.
The parties to the case are therefore expected, in deference to the
courts exercise of jurisdiction over the case, to refrain from doing
acts which would dissipate or debase the thing subject of the
litigation or otherwise render the impending decision therein
ineffectual.
There is, then, a restriction on the disposition by the parties of the
thing that is the subject of the litigation. Article 1381(4) of the Civil
Code requires that any contract entered into by a defendant in a
case which refers to things under litigation should be with the
knowledge and approval of the litigants or of a competent judicial
authority.
Further, any disposition of the thing subject of litigation or any act
which tends to render inutile the courts impending disposition in
such case, sans the knowledge and approval of the litigants or of the
court, is unmistakably and irrefutably indicative of bad faith. Such
acts undermine the authority of the court to lay down the respective
rights of the parties in a case relative to the thing subject of litigation
and bind them to such determination.
It should be stressed, though, that the defendant in such a case is
not absolutely proscribed from entering into a contract which refer
to things under litigation. If, for instance, a defendant enters into a
contract which conveys the thing under litigation during the
pendency of the case, the conveyance would be valid, there being
no definite disposition yet coming from the court with respect to the
thing subject of litigation. After all, notwithstanding that the subject
thereof is a thing under litigation, such conveyance is but merely an
exercise of ownership.
This is true even if the defendant effected the conveyance without
the knowledge and approval of the litigants or of a competent
judicial authority. The absence of such knowledge or approval would
not precipitate the invalidity of an otherwise valid contract.
Nevertheless, such contract, though considered valid, may be
rescinded at the instance of the other litigants pursuant to Article
1381(4) of the Civil Code.
Here, contrary to the CAs disposition, the RTC aptly ordered the
rescission of the donation inter vivos of Lot No. 4709 and half of Lot
No. 4706 in favor of Florante. The petitioners had sufficiently
established the presence of the requisites for the rescission of a
contract pursuant to Article 1381(4) of the Civil Code. It is
undisputed that, at the time they were gratuitously conveyed by
Rita, Lot No. 4709 and half of Lot No. 4706 are among the properties
that were the subject of the partition case then pending with the
RTC. It is also undisputed that Rita, then one of the defendants in
the partition case with the RTC, did not inform nor sought the
approval from the petitioners or of the RTC with regard to the
donation inter vivos of the said parcels of land to Florante.
Although the gratuitous conveyance of the said parcels of land in
favor of Florante was valid, the donation inter vivos of the same
being merely an exercise of ownership, Ritas failure to inform and
seek the approval of the petitioners or the RTC regarding the
conveyance gave the petitioners the right to have the said donation
rescinded pursuant to Article 1381(4) of the Civil Code.
Rescission under Article 1381(4) of
the Civil Code is not preconditioned
upon the judicial determination as
to the ownership of the thing
subject of litigation.
In this regard, we also find the assertion that rescission may only be
had after the RTC had finally determined that the parcels of land
belonged to the estate of Spouses Baylon intrinsically amiss. The
petitioners right to institute the action for rescission pursuant to
Article 1381(4) of the Civil Code is not preconditioned upon the
RTCs determination as to the ownership of the said parcels of land.
It bears stressing that the right to ask for the rescission of a contract
under Article 1381(4) of the Civil Code is not contingent upon the
final determination of the ownership of the thing subject of
litigation. The primordial purpose of Article 1381(4) of the Civil Code
is to secure the possible effectivity of the impending judgment by a
court with respect to the thing subject of litigation. It seeks to
protect the binding effect of a courts impending adjudication vis--
vis the thing subject of litigation regardless of which among the
contending claims therein would subsequently be upheld.
Accordingly, a definitive judicial determination with respect to the
thing subject of litigation is not a condition sine qua non before the
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rescissory action contemplated under Article 1381(4) of the Civil
Code may be instituted.
Moreover, conceding that the right to bring the rescissory action
pursuant to Article 1381(4) of the Civil Code is preconditioned upon
a judicial determination with regard to the thing subject litigation,
this would only bring about the very predicament that the said
provision of law seeks to obviate. Assuming arguendo that a
rescissory action under Article 1381(4) of the Civil Code could only
be instituted after the dispute with respect to the thing subject of
litigation is judicially determined, there is the possibility that the
same may had already been conveyed to third persons acting in
good faith, rendering any judicial determination with regard to the
thing subject of litigation illusory. Surely, this paradoxical eventuality
is not what the law had envisioned.
Even if the donation inter vivos is
validly rescinded, a determination
as to the ownership of the subject
parcels of land is still necessary.
Having established that the RTC had aptly ordered the rescission of
the said donation inter vivos in favor of Florante, the issue that has
to be resolved by this Court is whether there is still a need to
determine the ownership of Lot No. 4709 and half of Lot No. 4706.
In opting not to make a determination as to the ownership of Lot
No. 4709 and half of Lot No. 4706, the RTC reasoned that the parties
in the proceedings before it constitute not only the surviving heirs of
Spouses Baylon but the surviving heirs of Rita as well. As intimated
earlier, Rita died intestate during the pendency of the proceedings
with the RTC without any issue, leaving the parties in the
proceedings before the RTC as her surviving heirs. Thus, the RTC
insinuated, a definitive determination as to the ownership of the
said parcels of land is unnecessary since, in any case, the said parcels
of land would ultimately be adjudicated to the parties in the
proceedings before it.
We do not agree.
Admittedly, whoever may be adjudicated as the owner of Lot No.
4709 and half of Lot No. 4706, be it Rita or Spouses Baylon, the same
would ultimately be transmitted to the parties in the proceedings
before the RTC as they are the only surviving heirs of both Spouses
Baylon and Rita. However, the RTC failed to realize that a definitive
adjudication as to the ownership of Lot No. 4709 and half of Lot No.
4706 is essential in this case as it affects the authority of the RTC to
direct the partition of the said parcels of land. Simply put, the RTC
cannot properly direct the partition of Lot No. 4709 and half of Lot
No. 4706 until and unless it determines that the said parcels of land
indeed form part of the estate of Spouses Baylon.
It should be stressed that the partition proceedings before the RTC
only covers the properties co-owned by the parties therein in their
respective capacity as the surviving heirs of Spouses Baylon. Hence,
the authority of the RTC to issue an order of partition in the
proceedings before it only affects those properties which actually
belonged to the estate of Spouses Baylon.
In this regard, if Lot No. 4709 and half of Lot No. 4706, as
unwaveringly claimed by Florante, are indeed exclusively owned by
Rita, then the said parcels of land may not be partitioned
simultaneously with the other properties subject of the partition
case before the RTC. In such case, although the parties in the case
before the RTC are still co-owners of the said parcels of land, the
RTC would not have the authority to direct the partition of the said
parcels of land as the proceedings before it is only concerned with
the estate of Spouses Baylon.
WHEREFORE, in consideration of the foregoing disquisitions, the
petition is PARTIALLY GRANTED. The Decision dated October 26,
2007 issued by the Court of Appeals in CA-G.R. CV No. 01746 is
MODIFIED in that the Decision dated October 20, 2005 issued by the
Regional Trial Court, Tanjay City, Negros Oriental, Branch 43 in Civil
Case No. 11657, insofar as it decreed the rescission of the Deed of
Donation dated July 6, 1997 is hereby REINSTATED. The case is
REMANDED to the trial court for the determination of the
ownership of Lot No. 4709 and half of Lot No. 4706 in accordance
with this Decision.
SO ORDERED.


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G.R. No. 147417 July 8, 2005
SPS. VICTOR & MILAGROS PEREZ and CRISTINA AGRAVIADOR
AVISO, Petitioners,
vs.
ANTONIO HERMANO, Respondent.
D E C I S I O N
CHICO-NAZARIO, J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court assailing the Resolution
1
of the Court of Appeals dismissing
petitioners original action for certiorari under Rule 65 for being filed
out of time. Assailed as well is the Resolution
2
dismissing petitioners
motion for reconsideration.
The pertinent facts of the case are as follows:
On 27 April 1998, petitioners Cristina Agraviador Aviso and spouses
Victor and Milagros Perez filed a civil case for Enforcement of
Contract and Damages with Prayer for the Issuance of a Temporary
Restraining Order (TRO) and/or Preliminary Injunction against
Zescon Land, Inc. and/or its President Zenie Sales-Contreras, Atty.
Perlita Vitan-Ele and against respondent herein Antonio Hermano
before the Regional Trial Court (RTC) of Quezon City, Branch 224.
3

On 15 May 1998, respondent (then defendant) Hermano filed his
Answer with Compulsory Counterclaim. On 17 January 2000,
respondent Hermano filed a "Motion with Leave to Dismiss the
Complaint or Ordered Severed for Separate Trial" which was granted
by the trial court in an Order dated 28 February 2000.
This Order was received by petitioners on 21 March 2000. On 23
March 2000, petitioners moved for reconsideration which was
denied by the trial court on 25 May 2000 and received by petitioners
on 18 June 2000. On 17 August 2000, petitioners filed an original
action for certiorari before the Court of Appeals imputing grave
abuse of discretion on the part of the trial court in dismissing the
complaint against respondent Hermano.
On 19 October 2000, the Court of Appeals rendered the first assailed
Resolution dismissing the petition for certiorari "for having been
filed beyond the reglementary period pursuant to Section 4, Rule 65
of the 1997 Rules on Civil Procedure, as amended." On 02 March
2001, the second assailed Resolution was promulgated dismissing
petitioners motion for reconsideration, the Court of Appeals
holding that:
From the time petitioners received the assailed Order on March 21,
2000 and filed their motion for reconsideration, four (4) days had
elapsed. On June 18, 2000, petitioners received the denial of their
motion for reconsideration. When the instant petition was filed on
August 17, 2000, a total of 63 days had elapsed.
A.M. No. 00-2-03-50 further amending Section 4, Rule 65 of the New
Rules on Civil Procedure states that the petition shall be filed not
later than sixty (60) days from notice of the judgment, Order or
Resolution and in case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, the 60-day
period shall be counted from notice of the denial of said motion.
Viewed from its light, the assailed Orders had already attained
finality, and are now beyond the power of this Court to review.
4

Aggrieved by the foregoing ruling, petitioners are now before us
assigning the following
MANIFEST AND/OR SERIOUS ERROR COMMITTED BY THE
HONORABLE COURT OF APPEALS IN THE COMPUTATION OF THE
PERIOD WITHIN WHICH THE PETITIONERS FILED THEIR PETITION FOR
CERTIORARI BEFORE IT AND CONSEQUENTLY COMMITTED GRAVE
ABUSE OF DISCRETION IN THE APPRECIATION OF FACTS AND/OR
MISAPPREHENSION OF FACTS, WITH ITS FINDING OF FACT NOT
BEING BORNE BY THE RECORD OR EVIDENCE, AND THUS ITS
CONCLUSION IS ENTIRELY BASELESS.
5

According to petitioners, following the amendment introduced by
A.M. No. 00-2-03-SC to Section 4, Rule 65 of the 1997 Rules on Civil
Procedure, their petition was filed on the 60th day, thus, within the
reglementary period. Respondent insists, on the other hand, that
the petition was filed on the 61st day while the Court of Appeals had
declared that the petition was filed on the 63rd day.
We agree in the position taken by petitioners.
Admittedly, at the time petitioners filed their petition for certiorari
on 17 August 2000, the rule then prevailing was Section 4, Rule 65 of
the 1997 Rules on Civil Procedure, as amended by Circular No. 39-98
effective 01 September 1998, which provides:
Sec. 4. Where petition filed. The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution
sought to be assailed in the Supreme Court, or if it relates to the acts
or omissions of a lower court or of a corporation, board, officer or
person in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed
in the Court of Appeals whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
jurisdiction. If it involves the acts or omissions of a quasi-judicial
agency, and unless otherwise provided by law or these Rules, the
petition shall be filed in and cognizable only by the Court of Appeals.
If the petitioner had filed a motion for new trial or reconsideration in
due time after notice of said judgment, order, or resolution, the
period herein fixed shall be interrupted. If the motion is denied, the
aggrieved party may file the petition within the remaining period,
but which shall not be less than five (5) days in any event,
reckoned from notice of such denial. No extension of time to file
the petition shall be granted except for the most compelling reason
and in no case to exceed fifteen (15) days. (Emphasis supplied)
However, on 01 September 2000, during the pendency of the case
before the Court of Appeals, Section 4 was amended anew by A.M.
No. 00-2-03-SC
6
which now provides:
Sec. 4. When and where petition filed. The petition shall be filed
not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, the sixty (60)
day period shall be counted from notice of the denial of said
motion.
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The petition shall be filed in the Supreme Court or, if it relates to the
acts or omissions of a lower court or of a corporation, board, officer
or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed
in the Court of Appeals whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
appellate jurisdiction. If it involves the acts or omissions of a quasi-
judicial agency, unless otherwise provided by law or these rules, the
petition shall be filed in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for
compelling reason and in no case exceeding fifteen (15) days.
(Emphasis supplied)
Under this amendment, the 60-day period within which to file the
petition starts to run from receipt of notice of the denial of the
motion for reconsideration, if one is filed.
7

In Narzoles v. National Labor Relations Commission,
8
we described
this latest amendment as curative in nature as it remedied the
confusion brought about by Circular No. 39-98 because, "historically,
i.e., even before the 1997 revision to the Rules of Civil Procedure, a
party had a fresh period from receipt of the order denying the
motion for reconsideration to file a petition for certiorari." Curative
statutes, which are enacted to cure defects in a prior law or to
validate legal proceedings which would otherwise be void for want
of conformity with certain legal requirements, by their very essence,
are retroactive.
9
And, being a procedural rule, we held in Sps. Ma.
Carmen and Victor Javellana v. Hon. Presiding Judge Benito
Legarda
10
that "procedural laws are construed to be applicable to
actions pending and undetermined at the time of their passage, and
are deemed retroactive in that sense and to that extent."
Consequently, petitioners had a fresh period of 60 days from the
time they received the Order of the trial court denying their motion
for reconsideration on 18 June 2000. When they filed their petition
with the Court of Appeals on 17 August 2000, exactly 60 days had
elapsed following the rule that in computing a period, the first day
shall be excluded and the last day included.
11
Hence, there can be no
doubt that the petition was filed within the reglementary period for
doing so and it was reversible error on the part of the Court of
Appeals in not giving said petition due course. However, instead of
remanding the case to the Court of Appeals which would only
unduly prolong the disposition of the substantive issue raised, we
shall resolve the petition originally filed therein.
Petitioners brought to the Court of Appeals on petition for certiorari
under Rule 65 the lone issue of:
WHETHER OR NOT THE PUBLIC RESPONDENT [Hon. Emilio L.
Leachon, Jr., Presiding Judge, RTC, Branch 224, Quezon City] HAD
PLAINLY AND MANIFESTLY ACTED WITH GRAVE ABUSE OF
DISCRETION, IN EXCESS OF JURISDICTION, TANTAMOUNT TO LACK
OF JURISDICTION, IN DISMISSING THE COMPLAINT AS AGAINST
RESPONDENT ANTONIO HERMANO IN CIVIL CASE NO. Q-98-34211.
12

Petitioners assert that respondent Hermano should not have been
dismissed from the complaint because: (1) He did not file a motion
to dismiss under Rule 16 of the Rules of Court and, in fact, his
"Motion with Leave to Dismiss the Complaint or Ordered Severed
for Separate Trial" was filed almost two years after he filed his
Answer to the complaint; (2) There was no misjoinder of causes of
action in this case; and (3) There was no misjoinder of parties.
The case filed by petitioners against respondent Hermano and the
other defendants, namely Zescon Land, Inc. and/or its President
Zenie Sales-Contreras and Atty. Perlita Vitan-Ele, was one for
"Enforcement of Contract and Damages with Prayer for the Issuance
of a Temporary Restraining Order (TRO) and/or Preliminary
Injunction" docketed as Civil Case No. Q-98-34211 and raffled to
Branch 224.
Petitioners presented three causes of action in their complaint, the
first for enforcement of contract to sell entered into between
petitioners and Zescon Land, Inc., the second for annulment or
rescission of two contracts of mortgage entered into between
petitioners and respondent Hermano and the third for damages
against all defendants.
For the first cause of action, petitioners allege that sometime in
November 1997, they entered into a Contract to Sell with Zescon
Land, Inc., through Zenie Sales-Contreras, for the purchase of five (5)
parcels of land in the total amount of Nineteen Million One Hundred
Four Thousand Pesos (P19,104,000.00). As part of their agreement,
a portion of the purchase price would be paid to them as down
payment, another portion to be given to them as cash advance upon
the execution of the contract and another portion to be used by the
buyer, Zescon Land, Inc., to pay for loans earlier contracted by
petitioners which loans were secured by mortgages.
Re-pleading the foregoing in their second cause of action,
petitioners contend that "in a tricky machination and simultaneous
with the execution of the aforesaid Contract to Sell," they were
made to sign other documents, two of which were Mortgage deeds
over the same five properties in favor of respondent Hermano,
whom they had never met. It was allegedly explained to them by
Sales-Contreras that the mortgage contracts would merely serve to
facilitate the payment of the price as agreed upon in their Contract
to Sell. Petitioners claim that it was never their intention to
mortgage their property to respondent Hermano and that they have
never received a single centavo from mortgaging their property to
him. Petitioners acknowledge, however, that respondent Hermano
was responsible for discharging their obligations under the first
mortgage and for having the titles over the subject lands released,
albeit not to them but to respondent Hermano. They seek a TRO
against respondent Hermano who had informed them that he would
be foreclosing the subject properties.
In their third cause of action, petitioners pray for damages against all
the defendants alleging that:
Due to the failure and refusal, without any valid justification and
reason, by defendants Zescon and Contreras to comply with their
obligations under the Contract to Sell, including their failure and
refusal to pay the sums stipulated therein, and in misleading and
misrepresenting the plaintiffs into mortgaging their properties to
defendant Antonio Hermano, who in turn had not paid the plaintiffs
the proceeds thereof, putting them in imminent danger of losing the
same, plaintiffs had suffered, and continue to suffer, sleepless nights
.
By reason of defendants Zescon and Contrerass failure and refusal
to pay the sums stipulated in the Contract to Sell, and of defendant
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Antonio Hermanos not having paid plaintiffs the proceeds of the
mortgage agreements, plaintiffs had been deprived of the beneficial
use of the proceeds and stood to lose, as they continue to lose, by
way of unearned profits at least P1,000,000.00.
13

In his Answer with (Compulsory) Counterclaim dated 15 May 1998,
respondent Hermano denied petitioners allegations.
14
Then, on 19
February 1999, respondent Hermano filed a civil case entitled
"Judicial Foreclosure of Real Estate Mortgage" against petitioner
Aviso docketed as Civil Case No. Q-99-36914 and raffled to Branch
216 of the RTC of Quezon City. On 17 January 2000, respondent
Hermano filed a "Motion With Leave To Dismiss The Complaint
Against Defendant Antonio Hermano, Or Ordered Severed For
Separate Trial" before Branch 224. In said motion, respondent
Hermano argued that there was a mis-joinder of causes of action
under Rule 2, Section 6 of the Rules of Court. To quote respondent
Hermano:
3. In the instant case, the plaintiffs action for the Enforcement of
Contract and Damages with Prayer for The Issuance of a Temporary
Restraining Order And/Or Preliminary Injunction against Zescon
Land, Inc., and/or its President Zenie Sales Contreras, may not,
under Rule 2, Section 6 of the 1997 Rules of Civil Procedure, join
defendant Hermano as party defendant to annul and/or rescind the
Real Estate Mortgages of subject properties. There is a misjoinder of
parties defendants under a different transaction or cause of action;
that under the said Rule 2, Section 6, upon motion of defendant
Hermano in the instant case, the complaint against defendant
Hermano can be severed and tried separately; . . . .
15

Over petitioners opposition to said motion, the same was granted
by the trial court in its Order dated 28 February 2000 on the
justification that:
. . . [D]efendant having filed a special civil action for judicial
foreclosure of mortgage and now pending before RTC Branch 216,
he should be dropped as one of the defendants in this case and
whatever claims plaintiffs may have against defendant Hermano,
they can set it up by way of an answer to said judicial foreclosure.
16

And, in an Order dated 25 May 2000, the trial court resolved
petitioners motion for reconsideration by dismissing the same, to
wit:
After going over the arguments of the parties, the Court believes
that defendant Hermano has nothing to do with the transaction
which the plaintiffs entered into with defendant Zescon Land, Inc.
Besides, the said motion raised matters and defenses previously
considered and passed upon by the Court.
17

It is these two Orders that were brought up by petitioners to the
Court of Appeals on petition for Certiorari under Rule 65. The pivotal
issue to be resolved, therefore, is whether or not respondent trial
court committed grave abuse of discretion in dismissing the
complaint against respondent Hermano in Civil Case No. Q-98-
34211.
As far as we can glean from the Orders of the trial court, respondent
Hermano was dropped from the complaint on the ground of
misjoinder of causes of action. Petitioners, on the other hand, insist
that there was no misjoinder in this case.
To better understand the present controversy, it is vital to revisit the
rules on joinder of causes of action as exhaustively discussed in
Republic v. Hernandez,
18
thus:
By a joinder of actions, or more properly, a joinder of causes of
action, is meant the uniting of two or more demands or rights of
action in one action; the statement of more than one cause of action
in a declaration. It is the union of two or more civil causes of action,
each of which could be made the basis of a separate suit, in the
same complaint, declaration or petition. A plaintiff may under
certain circumstances join several distinct demands, controversies or
rights of action in one declaration, complaint or petition.
As can easily be inferred from the above definitions, a party is
generally not required to join in one suit several distinct causes of
action. The joinder of separate causes of action, where allowable, is
permissive and not mandatory in the absence of a contrary statutory
provision, even though the causes of action arose from the same
factual setting and might under applicable joinder rules be joined.
Modern statutes and rules governing joinders are intended to avoid
a multiplicity of suits and to promote the efficient administration of
justice wherever this may be done without prejudice to the rights of
the litigants. To achieve these ends, they are liberally construed.
While joinder of causes of action is largely left to the option of a
party litigant, Section 5, Rule 2 of our present Rules allows causes of
action to be joined in one complaint conditioned upon the following
requisites: (a) it will not violate the rules on jurisdiction, venue and
joinder of parties; and (b) the causes of action arise out of the same
contract, transaction or relation between the parties, or are for
demands for money or are of the same nature and character.
The objectives of the rule or provision are to avoid a multiplicity of
suits where the same parties and subject matter are to be dealt with
by effecting in one action a complete determination of all matters in
controversy and litigation between the parties involving one subject
matter, and to expedite the disposition of litigation at minimum
cost. The provision should be construed so as to avoid such
multiplicity, where possible, without prejudice to the rights of the
litigants. Being of a remedial nature, the provision should be liberally
construed, to the end that related controversies between the same
parties may be adjudicated at one time; and it should be made
effectual as far as practicable, with the end in view of promoting the
efficient administration of justice.
The statutory intent behind the provisions on joinder of causes of
action is to encourage joinder of actions which could reasonably be
said to involve kindred rights and wrongs, although the courts have
not succeeded in giving a standard definition of the terms used or in
developing a rule of universal application. The dominant idea is to
permit joinder of causes of action, legal or equitable, where there is
some substantial unity between them. While the rule allows a
plaintiff to join as many separate claims as he may have, there
should nevertheless be some unity in the problem presented and a
common question of law and fact involved, subject always to the
restriction thereon regarding jurisdiction, venue and joinder of
parties. Unlimited joinder is not authorized.
Our rule on permissive joinder of causes of action, with the proviso
subjecting it to the correlative rules on jurisdiction, venue and
joinder of parties and requiring a conceptual unity in the problems
presented, effectively disallows unlimited joinder.
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Section 6, Rule 2 on misjoinder of causes of action provides:
Sec. 6. Misjoinder of causes of action. - Misjoinder of causes of
action is not a ground for dismissal of an action. A misjoined cause
of action may, on motion of a party or on the initiative of the court,
be severed and proceeded with separately.
There is misjoinder of causes of action when the conditions for
joinder under Section 5, Rule 2 are not met. Section 5 provides:
Sec. 5. Joinder of causes of action. - A party may in one pleading
assert, in the alternative or otherwise, as many causes of action as
he may have against an opposing party, subject to the following
conditions:
(a) The party joining the causes of action shall comply with the rules
on joinder of parties;
(b) The joinder shall not include special civil actions or actions
governed by special rules;
(c) Where the causes of action are between the same parties but
pertain to different venues or jurisdictions, the joinder may be
allowed in the Regional Trial Court provided one of the causes of
action falls within the jurisdiction of said court and the venue lies
therein; and
(d) Where the claims in all the causes of action are principally for
recovery of money, the aggregate amount claimed shall be the test
of jurisdiction.
As far as can be gathered from the assailed Orders, it is the first
condition - on joinder of parties - that the trial court deemed to be
lacking. It is well to remember that the joinder of causes of action
may involve the same parties or different parties. If the joinder
involves different parties, as in this case, there must be a question of
fact or of law common to both parties joined, arising out of the
same transaction or series of transaction.
19

In herein case, petitioners have adequately alleged in their
complaint that after they had already agreed to enter into a contract
to sell with Zescon Land, Inc., through Sales-Contreras, the latter
also gave them other documents to sign, to wit: A Deed of Absolute
Sale over the same properties but for a lower consideration, two
mortgage deeds over the same properties in favor of respondent
Hermano with accompanying notes and acknowledgment receipts
for Ten Million pesos (P10,000,000) each. Petitioners claim that
Zescon Land, Inc., through Sales-Contreras, misled them to
mortgage their properties which they had already agreed to sell to
the latter.
From the above averments in the complaint, it becomes reasonably
apparent that there are questions of fact and law common to both
Zescon Land, Inc., and respondent Hermano arising from a series of
transaction over the same properties. There is the question of fact,
for example, of whether or not Zescon Land, Inc., indeed misled
petitioners to sign the mortgage deeds in favor of respondent
Hermano. There is also the question of which of the four contracts
were validly entered into by the parties. Note that under Article
2085 of the Civil Code, for a mortgage to be valid, it is imperative
that the mortgagor be the absolute owner of the thing mortgaged.
Thus, respondent Hermano will definitely be affected if it is
subsequently declared that what was entered into by petitioners
and Zescon Land, Inc., was a Contract of Sale (as evidenced by the
Deed of Absolute Sale signed by them) because this would mean
that the contracts of mortgage were void as petitioners were no
longer the absolute owners of the properties mortgaged. Finally,
there is also the question of whether or not Zescon Land, Inc., as
represented by Sales-Contreras, and respondent Hermano
committed fraud against petitioners as to make them liable for
damages.
Prescinding from the foregoing, and bearing in mind that the joinder
of causes of action should be liberally construed as to effect in one
action a complete determination of all matters in controversy
involving one subject matter, we hold that the trial court committed
grave abuse of discretion in severing from the complaint petitioners
cause of action against respondent Hermano.
WHEREFORE, premises considered, the Resolution of the Court of
Appeals dated 19 October 2000 dismissing petitioners petition for
certiorari and its Resolution dated 02 March 2001 denying
petitioners motion for reconsideration are REVERSED and SET
ASIDE. The petition for certiorari is hereby GRANTED. The Orders of
the Regional Trial Court of Quezon City, Branch 224, dated 28
February 2000 and 25 May 2000 are ANNULLED and SET ASIDE. The
RTC is further ordered to reinstate respondent Antonio Hermano as
one of the defendants in Civil Case No. Q-98-34211. No costs.
SO ORDERED.