DIEGEST1

Remedial Law Review
Case Digests
Atty. Tranquil G.S. Salvador III
Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

Magallanes, Mapalo Navarro,D, Navarro,K, Ngo, Octaviano, Reyes, Ruga, Salanguit, Velasco
Civil Procedure

I.
Filing Fees
Rule 141, Sections 1, 2 , 3, 4, 7, 8 and 19

Ruby Shelter Builders and Realty Development
Corporation V. Formaran, G.R. No. 175914,
February 10, 2009

FACTS:
- Ruby Shelter obtained a loan from Tan and
Obiedo secured by a REM consisting of 5
parcels of land in the name of the former.
- Despite an extension granted by Tan and
Obiedo and several negotiations, Ruby was
not able to pay.
- Hence, Tan and Obiedo, by virtue of a MOA,
executed Deeds of Absolute sale in their favor
covering the 5 parcels of land. The MOA
provided that if Ruby fails to pay the loan, 5
deeds of absolute sale would be executed in
favor of Tan and Obiedo.
- So Ruby Shelter filed complaint for
declaration of nullity of the deeds. Believing
that their action was one which was incapable
of pecuniary estimation, they paid docket fees
amounting to about 13K. It said that it only
wanted to annul the deeds so no issue of title
or recovery of possession is present to
classify it as a real action.
- Tan and Obiedo moved to dismiss the
complaint and ask for damages (also
pursuant to the MOA there was a provision
that if Ruby Shelter brought suit against them,
it would be liable for P 10M) contending that
the RTC did not acquire jurisdiction over the
case because the case involved recovery of
real property making it a real action which
requires payment of docket fees equivalent to
a percentage of the fair market value of the
land (P 700K).
- RTC and CA ruled in favor of Tan and Obiedo
ordering Ruby Shelter to pay additional
docket fees. Hence, this petition.

ISSUE: W/N Ruby Shelter should pay additional
docket fees.

HELD/RATIO: YES. For the court to acquire

jurisdiction, docket fees must be paid first. Payment
is mandatory and jurisdictional.

To determine whether an action is real, it must affect
title to or recovery of possession of real property. In
this case, Ruby Shelter did not disclose certain facts
which would classify the complaint it filed as a real
action (like the execution of deeds of sale pursuant to
a MOA). The action was really one for recovery of
possession of the parcels of land. Hence, it is a real
action.

The docket fees for cases involving real property
depend on the fair market value (or the stated value)
of the same: the higher the value, the higher the fees
due. For those incapable of pecuniary estimation, a
fixed or flat rate is imposed.

Do-All Metals Industries, Inc. v. Security Bank
Corporation, et al., G.R. No. 176339, January 10,
2011

Abad, J.

FACTS: DMI and the Lims (lessees) filed a complaint
for damages with prayer for the issuance of a TRO or
Preliminary Injunction against Security Bank Corp
(lessor). Plaintiffs alleged that while negotiations for
their exercise of the right of first refusal were
ongoing, the Bank placed private security guards on
the property and on several occasions, on
instructions of the Bank, padlocked the entrances to
the place and barred plaintiffs from entering the
property. Later on, plaintiffs filed a supplemental
complaint where they alleged that on entering the
building after the issuance of a TRO, they were
unable to find the movable properties they left there.
Thus, plaintiffs prayed for actual damages.

ISSUE 1: WON the Court retained jurisdiction over
the action despite plaintiffs non-payment of filing
fees on its supplemental complaint

HELD: YES. The RTC acquired jurisdiction over
plaintiffs action from the moment they filed their
original complaint accompanied by the payment of
the filing fees due on the same.
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ISSUE 2: WON the damages claimed under the

supplemental complaint could be awarded despite
non-payment of filing fees on the supplemental
complaint

HELD: NO. A supplemental complaint is like any
complaint and the rule is that the filing fees due on a
complaint need to be paid upon its filing. Plaintiffs
did not give any reason for their non-payment.
Plaintiffs have no excuse for their continuous failure
to pay the fees they owed to the court.
Respondent raised the issue of non-payment only
after the RTC had rendered its decision.
However, it is not for a party to the case or
even for the trial court to waive the payment
of the additional filing fees due on the
supplemental complaint. Only the Supreme
Court can grant exemptions to the payment of
the fees due the

Philippine First Insurance v. First Logistics, G.R.
No. 165147, July 9, 2008

FACTS: Pyramid Logistics and Trucking Corporation
(Pyramid) alleged in its complaint that its delivery
van, which was loaded with goods belonging to
California Manufacturing Corporation (CMC) valued
at 907,149.07, left the CMC Bicutan Warehouse.
However, the van, together with the goods, failed to
reach its destination and its driver and helper were
nowhere to be found, to its damage and prejudice.

It filed a criminal complaint against the driver
and helper for qualified theft, and a claim with
Philippine First Insurance Co., Inc., and Paramount
Insurance General Corporation as co-insurers for the
lost goods. However, the insurance companies
refused to compensate for the loss in violation of
their undertaking under the insurance policies. For
this reason, Pyramid suffered damages and was
constrained to engage the services of counsel to
enforce and protect its right to recover compensation
under the insurance policies, and for which services,
it obligated itself to pay the sum equivalent to 25% of
any recovery in the instant action, as and for
attorneys fees and legal expenses. It prayed that
judgment be rendered ordering the insurance
companies to comply with their obligation under
their respective insurance policies to pay to it jointly
and severally the sum of 50,000 plus 1,500 for each
court session attended by counsel until the case is
terminated as attorneys fees, and the costs of suit.
Pyramid was assessed a docket fee of 610 on the

basis of the amount of 50,000.

Pyramid later filed an amended complaint
containing minor changes in the body but bearing the
same prayer. Branch 148 of the Makati RTC, to which
the complaint was raffled, admitted the amended
complaint.

The insurance companies filed a motion to
dismiss on the ground of lack of jurisdiction, Pyramid
not having paid the docket fees in full. It argued that
in the body of its amended complaint, Pyramid
alleged that it suffered damages, but in the prayer, it
deliberately omitted to specify what these damages
are. This deliberate omission by Pyramid was
intended to evade the payment of the correct filing
fee. The insurance companies invoked the doctrine in
Manchester Development Corporation vs. CA that a
pleading which does not specify in the prayer the
amount sought shall not be admitted or shall
otherwise be expunged, and that the court acquires
jurisdiction only upon the payment of the prescribed
docket fee.
Pyramid, on the other hand, insists the application of
Sun Insurance Office, Ltd. vs. Asuncion and
subsequent rulings relaxing the Manchester ruling by
allowing payment of the docket fee within a
reasonable time, in no case beyond the applicable
prescriptive or reglementary period, where the filing
of the initiatory pleading is not accompanied by the
payment of the prescribed docket fee.
The CA applied the liberal rule in Sun Insurance.

ISSUE: WON the CA erred in applying the liberal rule
in Sun Insurance???

RULING: YES, the CA erred. The Manchester rule
applies.
In the case of Tacay vs. Regional Trial Court of
Tagum, Davao del Norte, the SC clarified the effect of
the Sun Insurance ruling on the Manchester ruling as
follows: The requirement in Circular No. 7 that
complaints, petitions, answers, and similar pleadings
should specify the amount of damages being prayed
for not only in the body of the pleading but also in the
prayer, has not been altered. What has been revised
is the rule that subsequent amendment of the
complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of
the docket fee based on the amount sought in the
amended pleading, the trial court now being
authorized to allow payment of the fee within a
reasonable time but in no case beyond the applicable
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prescriptive
period
or
reglementary
period. Moreover, a new rule has been added,
governing the awards of claims not specified in the
pleading i.e., damages arising after the filing of the
complaint or similar pleading as to which the
additional filing fee therefore shall constitute a lien
on the judgment.

In the case at bar, Pyramid failed to specify in
its prayer the amount of claims/damages it was
seeking both in the original and amended complaint.
It reasoned out that it was not aware of the extent of
the liability of the insurance companies under their
respective policies. It left the matter of liability to the
trial courts determination.

Even assuming that the amounts are yet to be
determined, the rule in Manchester, as modified by
Sun Insurance, still applies. In the case of Ayala
Corporation vs. Madayag, the SC pronounced the
following: While it is true that the determination of
certain damages x x x is left to the sound discretion of
the court, it is the duty of the parties claiming such
damages to specify the amount sought on the basis of
which the court may make a proper determination,
and for the proper assessment of the appropriate
docket fees. The exception contemplated as to claims
not specified or to claims although specified are left
for determination of the court is limited only to any
damages that may arise after the filing of the
complaint or similar pleading for then it will not be
possible for the claimant to specify nor speculate as
to the amount thereof.

Benjamin Bautista v. Shirley Unangast, G.R. No.
173002, July 4, 2008

Facts. On November 15, 1996, Hamilton Salak rented
a car from GAB Rent-A-Car, a car rental shop owned
by Benjamin Bautista. The lease was for 3
consecutive days, P1,000.00 per day. However, Salak
failed to return the car after three (3) days prompting
petitioner to file a complaint against him for estafa,
violation
of
BP
22
and
carnapping.

On February 2, 1997, Salak and his common-
law wife, respondent Shirley Unangst, were arrested
while riding the rented car along QC. The next day,
Bautista demanded from Salak the sum of
P232,372.00 as payment for car rental fees, fees
incurred in locating the car, attorney's fees, capital
gains tax, transfer tax, and other incidental expenses.

Salak and Unangst expressed willingness to
pay but since they were then short on cash, Salak
proposed to sell to Bautista a house and lot. Bautista

welcomed the proposal after consulting his wife,
Cynthia. Cynthia, on the other hand, further agreed to
pay the mortgage loan of Unangst over the subject
property to a certain Jojo Lee in the amount of
P295,000.00. Unangst and Bautista also executed a
separate deed of sale with right to repurchase.

Unangst failed to repurchase the property. As
a result, Bautista filed, on June 5, 1998, a complaint
for specific performance or recovery of possession,
for sum of money, for consolidation of ownership and
damages against Unangst and other unnamed
persons
before
the
RTC
of
Olongapo.
On the other hand, respondents controverted the
allegations in the complaint.

RTC rendered a decision in favor of
petitioner. Respondents failed to interpose a timely
appeal. However, on September 10, 2004, Unangst
filed a petition for relief pursuant to Section 38 of the
1997 Rules on Civil Procedure. She argued that she
learned of the decision of the RTC only on September
6, 2004 when she received a copy of the motion for
execution filed by petitioner. Unangst initially paid
P200.00 as docket fees as this was the amount
assessed by the Clerk of Court of the RTC. Said
amount was insufficient as the proper filing fees
amount to P1,715.00. Nevertheless, the correct
amount was subsequently paid by said respondent
on February 22, 2005, a little less than 2 months after
the period for filing the petition lapsed. Petition was
granted.

Bautista contends that respondents' "Petition
for Relief to Be Able to Appeal Judgment," which
paved the way for the allowance of respondents'
appeal of the RTC decision, was filed within the
prescriptive period but the proper docket fees for it
were belatedly paid. He thus posits that the RTC did
not acquire jurisdiction over said petition. Having no
jurisdiction, the RTC could not have allowed
respondents to appeal

Issue. Whether the CA committed grave error in
finding that the respondent perfected an appeal via
Petition for Relief To Be Able To Appeal Judgment
even when the proper docket fees were paid beyond
the period prescribed. NO.

Held. Failure to pay the correct amount of docket
fees was due to a justifiable reason.
Indeed, the right to appeal is a purely statutory right.
Not being a natural right or a part of due process, the
right to appeal may be exercised only in the manner
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and in accordance with the rules provided

therefor. For this reason, payment of the full amount
of the appellate court docket and other lawful fees
within the reglementary period is mandatory and
jurisdictional. Nevertheless, as this Court ruled
in Aranas v. Endona, the strict application of the
jurisdictional nature of the above rule on payment of
appellate docket fees may be mitigated under
exceptional circumstances to better serve the interest
of justice. It is always within the power of this Court
to suspend its own rules, or to except a particular
case from their operation, whenever the purposes of
justice
require
it.

In not a few instances, the Court relaxed the rigid
application of the rules of procedure to afford the
parties the opportunity to fully ventilate their cases
on the merits. This is in line with the time-honored
principle that cases should be decided only after
giving all parties the chance to argue their causes and
defenses. As early as 1946, in Segovia v. Barrios, the
Court ruled that where an appellant in good faith
paid less than the correct amount for the docket fee
because that was the amount he was required to pay
by the clerk of court, and he promptly paid the
balance, it is error to dismiss his appeal because
"(e)very citizen has the right to assume and trust that
a public officer charged by law with certain duties
knows his duties and performs them in accordance
with law. To penalize such citizen for relying upon
said officer in all good faith is repugnant to justice."

Technicality and procedural imperfections should
thus not serve as bases of decisions. In that way, the
ends of justice would be better served.
As regards the substantive issue, Unangst was correct
in alleging that the deed of sale with right to
repurchase qualifies as an equitable mortgage under
Article 1602. She merely secured the payment of the
unpaid car rentals and the amount advanced by
petitioner to Jojo Lee.

IN RE: EXEMPTION OF THE NATIONAL POWER
CORPORATION FROM PAYMENT OF FILING/
DOCKET FEES, [ A.M. No. 05-10-20-SC, March 10,
2010 ]

Mendoza

FACTS:
On December 6, 2005, the Court issued A.M. No. 05-
10-20-SC, In re: Exemption of the National Power
Corporation from the Payment of Filing/Docket

Fees, on the basis of Section 13, Republic Act No.
6395 (An Act Revising the Charter of the National
Power Corporation) where it declared that the NPC is
still exempt from the payment of filing fees, appeals
bond, and supersedeas bonds.

On October 27, 2009, however, the Court issued A.M.
No. 05-10-20-SC where it denied the request of NPC
for exemption from the payment of filing fees
pursuant to Section 10 of Republic Act No. 6395, as
amended by Section 13 of Presidential Decree No.
938. The request appears to run counter to Section
5(5), Article VIII of the Constitution, in the rule-
making power of the Supreme Court over the rules
on pleading, practice and procedure in all courts,
which includes the sole power to fix the filing fees of
cases in courts.

Hence, NPC seeks clarification from the Court on
whether or not it is exempt from the payment of
filing fees, appeal bonds and supersedeas bonds.

ISSUE: WON NPC is exempt

HELD: NO
Section 22 of Rule 141 provides that the Republic of
the Philippines, its agencies and instrumentalities are
exempt from paying the legal fees provided in this
rule. Local government units and government-
owned or controlled corporations with or without
independent charters are not exempt from paying
such fees.

Section 70 of Republic Act No. 9136 (Electric Power
Industry Reform Act of 2001), on privatization of NPC
assets, expressly states that the NPC shall remain as
a national government-owned and controlled
corporation. Thus, NPC is not exempt from payment
of filing fees.

In A.M. No. 08-2-01-0 (In re: Petition for Recognition
of the Exemption of the Government Service Insurance
System (GSIS) from Payment of Legal Fees), the Court,
citing Echegaray v. Secretary of Justice, stressed that
the 1987 Constitution took away the power of
Congress to repeal, alter or supplement rules
concerning pleading, practice, and procedure; and
that the power to promulgate these rules is no longer
shared by the Court with Congress and the Executive.
Section 5(5), Article VIII provides: ..The Supreme
Court shall have the following powersPromulgate
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rules concerning the protection and enforcement

of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of
law, the Integrated Bar, and legal assistance to the
underprivileged. Such rules shall provide a simplified
and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive
rights. Rules of procedure of special courts and quasi-
judicial bodies shall remain effective unless
disapproved by the Supreme Court. The 1987
Constitution took away the power of Congress to
repeal, alter, or supplement rules concerning
pleading, practice and procedure.

With the foregoing categorical pronouncement of the
Court, it is clear that NPC can no longer invoke
Republic Act No. 6395 (NPC Charter), as amended by
Presidential Decree No. 938, as its basis for
exemption from the payment of legal fees.

David Lu v. Paterno Lu Ym, G.R. No. 153690,
August 26, 2008

Carpio-Morales, J.

FACTS: The three consolidated cases herein stemmed
from the complaint for Declaration of Nullity of
Share Issue, Receivership and Dissolution filed
by David Lu, et al. against Paterno Lu Ym, Sr. and sons
(Lu Ym father and sons) and LLDC. The RTC ruled in
favor of David et al. by annulling the issuance of the
shares of stock subscribed and paid by Lu Ym father
and sons at less than par value, and ordering the
dissolution and asset liquidation of LLDC.

G.R. No. 170889 involved the denial by the appellate
court of Lu Ym father and sons application in CA-G.R.
CV No. 81163 for a writ of preliminary
injunction. The Court dismissed the petition after
finding no merit on their argument which they
raised for the first time in their motion for
reconsideration before the appellate court of lack of
jurisdiction for non-payment of the correct RTC
docket fees.

The Court, in a turnaround, by Resolution of
August 4, 2009, reconsidered its position on the
matter of docket fees. It ruled that the trial court did
not acquire jurisdiction over the case for David Lu, et
al.s failure to pay the correct docket fees, hence, all
interlocutory matters and incidents subject of the

present petitions must consequently be denied.

ISSUE: WON the value of the 600,000 shares of stock,
which are the properties in litigation, should be the
basis for the computation of the filing fees
HELD: NO. David Lu, et al.s complaint is one
incapable of pecuniary estimation, hence, the correct
docket fees were paid.
The complaint filed by David, et al. is one
for declaration of nullity of share issuance. The main
relief prayed for both in the original complaint and
the amended complaint is the same, that is, to declare
null and void the issuance of 600,000 unsubscribed
and unissued shares to Lu Ym father and sons, et
al. for a price of 1/18 of their real value, for being
inequitable, having been done in breach of directors
fiduciarys duty to stockholders, in violation of the
minority stockholders rights, and with unjust
enrichment.

It bears noting that David, et al. are not claiming to
own the 600,000 shares of stock. They do not claim
to be the owners thereof entitled to be the
transferees of the shares of stock. The mention of the
real value of the shares of stock, over which David, et
al. do not, it bears emphasis, interpose a claim of right
to recovery, is merely narrative or descriptive in
order to emphasize the inequitable price at which the
transfer was effected.
The test in determining whether the subject matter of
an action is incapable of pecuniary estimation is by
ascertaining the nature of the principal action or
remedy sought.

Assuming arguendo that the docket fees were
insufficiently paid, the doctrine of estoppel already
applies.

Proton Pilipinas v. Banque Nacional de Paris, G.R.
No. 151242, June 15, 2005

Facts:
Proton Pilipinas availed of credit facilities of
Banque Nacional de Paris (BNP).
Protons resulting debt of $2M was
guaranteed by Automotive Corporation
Philippines, Asea One Corp., and Autocorp
Group.
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BNP and Proton subsequently executed trust

receipt agreements, where Proton would
receive passenger motor vehicles in trust for
BNP, with the option to sell them, subject to
the condition that Proton would deliver the
proceeds of the sale to BNP, to be applied to
the formers debt. Vehicles remaining unsold
would be returned to BNP. Proton allegedly
failed to deliver.
BNP demanded from Protons corporate
guarantors $1.5M, the total outstanding
obligation. The guarantors refused. BNP filed
a complaint with the Makati RTC praying for
$1.5M plus accrued interest and other related
charges.
Respondent Proton filed a motion to dismiss,
contending that 1) BNP failed to pay the
correct docket fees which is supposed to
include interest, based on Admin Circ. No. 11-
94, and therefore the court could not have
acquired jurisdiction over the case, 2) the
clerk of court failed to apply the correct
exchange rate, and that 3) since no demand
letter was given, the complaint was
premature.
The court denied the petition, stating that the
petitioner properly paid the docket fees. It
stated that Section 7(a) of Rule 141 of the
Rules of Court excludes interest accruing
from the principal amount being claimed in
the pleading in the computation of the
prescribed filing fees. It court further added
that assuming the correct filing fees were not
paid, the rule is that the court may allow a
reasonable time for the payment of the
prescribed fees, or the balance thereof, and
upon such payment, the defect is cured and
the court may properly take cognizance of the
action, unless in the meantime prescription
has set in and consequently barred the right
of action.
Regarding the correct dollar-peso rate of
exchange, the Office of the Clerk of Court of
the RTC of Makati pegged it at P 43.00 to
US$1. Absent any office guide of the rate of
exchange which said court functionary was
duty bound to follow, the rate he applied is
presumptively correct.
With regard to the demand letter, the court
said that the failure to make a formal demand
is not among the legal grounds for the

dismissal of the case.

Issues:
1) Whether BNP failed to pay the correct docket
fees
2) Whether the Clerk of court applied the wrong
exchange rate
3) Whether the amount of interest was not
specified in the prayer, rendering the
complaint void.

Held:
1) Petitioner relied on a case decided in 1989
where Rule 141 was applied, the interest and
costs having been excluded in the
computation of the aggregate amount.
However, the present case was filed in 1998,
when such rule had already been amended by
Administrative Circular No. 11-94. The
amended rule includes the interest, damages
of whatever kind, attorneys fees, litigation
expenses, and other costs in the computation
of the aggregate amount. In the complaint,
respondent prayed for accrued interest
subsequent to August 15, 1998 until fully
paid. The complaint having been filed on
September 7, 1998, respondents claim
includes the interest from August 16, 1998
until such date of filing. Respondent not
having paid the fees for such, cannot claim the
interest within such duration, unless
respondent is allowed by motion to amend its
complaint within a reasonable time and
specify the precise amount of interest
petitioners owe within the period and pay the
corresponding docket fee.

With respect to the interest accruing after the
filing of the complaint, the same can only be
determined after a final judgment has been
handed down. Respondent cannot thus be
made to pay the corresponding docket fee.
Pursuant, however, to Section 2, Rule 141, as
amended by Administrative Circular No. 11-
94, respondent should be made to pay
additional fees which shall constitute a lien in
the event the trial court adjudges that it is
entitled to interest accruing after the filing of
the complaint.

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2) In the Clerk of Courts application of exchange

rate, the presumption of regularity is
disputable, not conclusive. Petitioners have
presented rebutting evidence that the
exchange rate when the case was filed was
P43.21 to US$1, not P43.00. Thus, the docket
fees were insufficient.

However, the trial court did acquire
jurisdiction. Respondent merely relied on the
assessment made by the Clerk of court. In
such a case, where there exists no effort in
defrauding the government, respondent even
demonstrating his willingness to abide by the
rules by paying the additional docket fees as
required, the court acquires jurisdiction.

3) Where the trial court acquires jurisdiction
over a claim by the filing of the appropriate
pleading and payment of the prescribed filing
fee but, subsequently, the judgment awards a
claim not specified in the pleading, or if
specified, has been left for determination by
the court, the additional filing fee shall
constitute a lien on the judgment. It shall be
the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien
and assess and collect the additional fee. The
amount of any claim for damages, therefore,
arising on or before the filing of the complaint
or any pleading should be specified. While the
determination of certain damages is left to
the discretion of the court, it is the duty of the
parties claiming such damages to specify the
amount sought on the basis of which the
court may make a proper determination, and
for the proper assessment of the appropriate
docket fees. The exception to the rule is
limited only to any damages that may arise
after the filing of the complaint or similar
pleading for then it will not be possible for
the claimant to specify nor speculate as to the
amount thereof.

Petition is partially granted. The Clerk of Court is
ordered to reassess and determine the docket fees
that should be paid by respondent within fifteen (15)
days, provided the applicable prescriptive or
reglementary period has not yet expired.

Request of National Committee on Legal Aid to

Exempt Legal Aid Clients from paying Filing and
Docket Fees, A.M. No. 08-11-7-SC, August 28, 2009

On September 23, 2008 the Misamis Oriental Chapter
of the Integrated Bar of the Philippines (IBP)
promulgated Resolution No. 24. The resolution
requested the IBPs National Committee on Legal Aid
(NCLA) to ask for the exemption from the payment of
filing, docket and other fees of clients of the legal aid
offices in the various IBP chapters like the exemption
granted to PAO clients under RA 9406. The Court
lauded the Misamis Oriental Chapter of the IBP for its
effort to help improve the administration of justice,
particularly, the access to justice by the poor. In
promulgating Resolution No. 24, the Misamis Oriental
Chapter of the IBP has effectively performed its duty
to "participate in the development of the legal system
by initiating or supporting efforts in law reform and
in the administration of justice."

In approving the Rule, the Court stressed that the
Constitution guarantees the rights of the poor to free
access to the courts and to adequate legal assistance.
It found the legal aid service rendered by the NCLA
and legal aid offices of IBP chapters nationwide
addresses the right to adequate legal assistance and
that the recipients of the service of the NCLA and
legal aid offices of IBP Chapters may enjoy free access
to courts by exempting them from the payment of
fees assessed in connection with the filing of a
complaint or action in court. The Court held that
with these twin initiatives, the guarantee of Section
11, Article III of the Constitution is advanced and
access to justice is increased by bridging a significant
gap and removing a major roadblock.

The Court concluded with a declaration that access to
justice is essential in a democracy and in the rule of
law. Recognizing the right of access to justice as the
most important pillar of legal empowerment of the
marginalized sectors of our society, it has exercised
its power to promulgate rules concerning the
protection and enforcement of constitutional rights
to open the doors of justice to the underprivileged
and to allow them to step inside the court to be heard
of their plaints.

A.M. No. 08-11-7-SC (IRR): Re: Rule on the
Exemption From the Payment of Legal Fees of the
Clients of the National Committee on Legal Aid
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and of the Legal Aid Offices in the Local Chapters

of the Integrated Bar of the Philippines

Rule on the Exemption From the Payment of Legal
Fees of the Clients of the National Committee on
Legal Aid (NCLA) and of the Legal Aid Offices in
the Local Chapters of the Integrated Bar of the
Philippines (IBP)

ARTICLE I
Purpose

Section 1. Purpose. This Rule is issued for the
purpose of enforcing the right of free access to courts
by the poor guaranteed under Section 11, Article III
of the Constitution. It is intended to increase the
access to justice by the poor by exempting from the
payment of legal fees incidental to instituting an
action in court, as an original proceeding or on
appeal, qualified indigent clients of the NCLA and of
the legal aid offices in local IBP chapters nationwide.

ARTICLE II
Definition of Terms

Section 1. Definition of important terms. For
purposes of this Rule and as used herein, the
following terms shall be understood to be how they
are defined under this Section:
(a) "Developmental legal aid" means the rendition of
legal services in public interest causes involving
overseas workers, fisherfolk, farmers, laborers,
indigenous cultural communities, women, children
and other disadvantaged groups and marginalized
sectors;
(b) "Disinterested person" refers to the punong
barangay having jurisdiction over the place where an
applicant for legal aid or client of the NCLA or
chapter legal aid office resides;
(c) "Falsity" refers to any material misrepresentation
of fact or any fraudulent, deceitful, false, wrong or
misleading statement in the application or affidavits
submitted to support it or the affidavit of a
disinterested person required to be submitted
annually under this Rule which may substantially
affect the determination of the qualifications of the
applicant or the client under the means and merit
tests;
(d) "Legal fees" refers to the legal fees imposed under
Rule 141 of the Rules of Court as a necessary incident
of instituting an action in court either as an original
proceeding or on appeal. In particular, it includes
filing or docket fees, appeal fees, fees for issuance of

provisional remedies, mediation fees, sheriffs fees,
stenographers fees (that is fees for transcript of
stenographic notes) and commissioners fees;
(e) "Means test" refers to the set of criteria used to
determine whether the applicant is one who has no
money or property sufficient and available for food,
shelter and basic necessities for himself and his
family;
(f) "Merit test" refers to the ascertainment of whether
the applicants cause of action or his defense is valid
and whether the chances of establishing the same
appear reasonable and
(g) "Representative" refers to the person authorized
to file an application for legal aid in behalf of the
applicant when the said applicant is prevented by a
compelling reason from personally filing his
application. As a rule, it refers to the immediate
family members of the applicant. However, it may
include any of the applicants relatives or any person
or concerned citizen of sufficient discretion who has
first-hand knowledge of the personal circumstances
of the applicant as well as of the facts of the
applicants case.

ARTICLE III
Coverage

Section 1. Persons qualified for exemption from
payment of legal fees. Persons who shall enjoy the
benefit of exemption from the payment of legal fees
incidental to instituting an action in court, as an
original proceeding or on appeal, granted under this
Rule shall be limited only to clients of the NCLA and
the chapter legal aid offices.
The said clients shall refer to those indigents
qualified to receive free legal aid service from the
NCLA and the chapter legal aid offices. Their
qualifications shall be determined based on the tests
provided in this Rule.

Section 2. Persons not covered by the Rule. The
following shall be disqualified from the coverage of
this Rule. Nor may they be accepted as clients by the
NCLA and the chapter legal aid offices.
(a) Juridical persons; except in cases covered by
developmental legal aid or public interest causes
involving juridical entities which are non-stock, non-
profit
organizations,
non-governmental
organizations and peoples organizations whose
individual members will pass the means test
provided in this Rule;
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(b) Persons who do not pass the means and merit

tests;
(c) Parties already represented by a counsel de parte;
(d) Owners or lessors of residential lands or
buildings with respect to the filing of collection or
unlawful detainer suits against their tenants and
(e) Persons who have been clients of the NCLA or
chapter legal aid office previously in a case where the
NCLA or chapter legal aid office withdrew its
representation because of a falsity in the application
or in any of the affidavits supporting the said
application.

Section 3. Cases not covered by the Rule. The NCLA
and the chapter legal aid offices shall not handle the
following:
(a) Cases where conflicting interests will be
represented by the NCLA and the chapter legal aid
offices and
(b) Prosecution of criminal cases in court.

ARTICLE IV
Tests of Indigency

Section 1. Tests for determining who may be clients
of the NCLA and the legal aid offices in local IBP
chapters. The NCLA or the chapter legal aid
committee, as the case may be, shall pass upon
requests for legal aid by the combined application of
the means and merit tests and the consideration of
other relevant factors provided for in the following
sections.

Section 2. Means test; exception. (a) This test shall
be based on the following criteria: (i) the applicant
and that of his immediate family must have a gross
monthly income that does not exceed an amount
double the monthly minimum wage of an employee
in the place where the applicant resides and (ii) he
does not own real property with a fair market value
as stated in the current tax declaration of more than
Three Hundred Thousand (P300,000.00) Pesos.

In this connection, the applicant shall execute
an affidavit of indigency (printed at the back of the
application form) stating that he and his immediate
family do not earn a gross income abovementioned,
nor own any real property with the fair value
aforementioned, supported by an affidavit of a
disinterested person attesting to the truth of the
applicants affidavit. The latest income tax return
and/or current tax declaration, if any, shall be
attached to the applicants affidavit.
(b) The means test shall not be applicable to

applicants who fall under the developmental legal aid
program such as overseas workers, fisherfolk,
farmers, laborers, indigenous cultural communities,
women, children and other disadvantaged groups.

Section 3. Merit test. A case shall be considered
meritorious if an assessment of the law and evidence
at hand discloses that the legal service will be in aid
of justice or in the furtherance thereof, taking into
consideration the interests of the party and those of
society. A case fails this test if, after consideration of
the law and evidence presented by the applicant, it
appears that it is intended merely to harass or injure
the opposite party or to work oppression or wrong.

Section 4. Other relevant factors that may be
considered. The effect of legal aid or of the failure to
render the same upon the rule of law, the proper
administration of justice, the public interest involved
in a given case and the practice of law in the locality
shall likewise be considered.

ARTICLE V
Acceptance and Handling of Cases

Section 1. Procedure in accepting cases. The
following procedure shall be observed in the
acceptance of cases for purposes of this Rule:
(a) Filing of application An application shall be
made personally by the applicant, unless there is a
compelling reason which prevents him from doing so,
in which case his representative may apply for him. It
shall adhere substantially to the form made for that
purpose. It shall be prepared and signed by the
applicant or, in proper cases, his duly authorized
representative in at least three copies.
Applications for legal aid shall be filed with the NCLA
or with the chapter legal aid committee.
The NCLA shall, as much as possible, concentrate on
cases of paramount importance or national impact.
Requests received by the IBP National Office shall be
referred by the NCLA to the proper chapter legal aid
committee of the locality where the cases have to be
filed or are pending. The chapter president and the
chairman of the chapters legal aid committee shall be
advised of such referral.
(b) Interview The applicant shall be interviewed by
a member of the chapter legal aid committee or any
chapter member authorized by the chapter legal aid
committee to determine the applicants qualifications
based on the means and merit tests and other
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relevant factors. He shall also be required to submit

copies of his latest income tax returns and/or current
tax declaration, if available, and execute an affidavit
of indigency printed at the back of the application
form with the supporting affidavit of a disinterested
person attesting to the truth of the applicants
affidavit.lawph!l
After the interview, the applicant shall be informed
that he can follow up the action on his application
after five (5) working days.
(c) Action on the application The chapter legal aid
committee shall pass upon every request for legal aid
and submit its recommendation to the chapter board
of officers within three (3) working days after the
interview of the applicant. The basis of the
recommendation shall be stated.
The chapter board of officers shall review and act on
the recommendation of the chapter legal aid
committee within two (2) working days from receipt
thereof; Provided, however, that in urgent matters
requiring prompt or immediate action, the chapters
executive director of legal aid or whoever performs
his functions may provisionally act on the
application, subject to review by the chapter legal aid
committee and, thereafter, by the chapter board of
officers.
The action of the chapter board of officers on the
application shall be final.
(d) Cases which may be provisionally accepted. In
the following cases, the NCLA or the chapter legal aid
office, through the chapters executive director of
legal aid or whoever performs his functions may
accept cases provisionally pending verification of the
applicants indigency and an evaluation of the merit
of his case.
(i) Where a warrant for the arrest of the applicant
has been issued;
(ii) Where a pleading has to be filed immediately to
avoid adverse effects to the applicant;
(iii) Where an appeal has to be urgently perfected or
a petition for certiorari, prohibition or mandamus
filed has to be filed immediately; and
(iv) Other similar urgent cases.
(e) Assignment of control number Upon approval of
the chapter board of officers of a persons application
and the applicant is found to be qualified for legal
assistance, the case shall be assigned a control
number. The numbering shall be consecutive starting
from January to December of every year. The control
number shall also indicate the region and the chapter
handling the case.
(f) Issuance of a certification After an application is

approved and a control number duly assigned, the
chapter board of officers shall issue a certification
that the person (that is, the successful applicant) is a
client of the NCLA or of the chapter legal aid office.
The certification shall bear the control number of the
case and shall state the name of the client and the
nature of the judicial action subject of the legal aid of
the NCLA or the legal aid office of a local IBP chapter.
The certification shall be issued to the successful
applicant free of charge.

Section 2. Assignment of cases. After a case is given
a control number, the chapter board of officers shall
refer it back to the chapter legal aid committee. The
chapter legal aid committee shall assign the case to
any chapter member who is willing to handle the
case.

handle the case voluntarily, the chapter legal
aid committee shall refer the matter to the chapter
board of officers together with the names of at least
three members who, in the chapter legal aid
committees discretion, may competently render
legal aid on the matter. The chapter board of officers
shall appoint one chapter member from among the
list of names submitted by the chapter legal aid
committee. The chapter member chosen may not
refuse the appointment except on the ground of
conflict of interest or other equally compelling
grounds as provided in the Code of Professional
Responsibility,19 in which case the chapter board of
officers shall appoint his replacement from among
the remaining names in the list previously submitted
by the chapter legal aid committee.

The chapter legal aid committee and the
chapter board of officers shall take the necessary
measures to ensure that cases are well-distributed to
chapter members.

Section 3. Policies and guidelines in the acceptance
and handling of cases. The following policies and
guidelines shall be observed in the acceptance and
handling of cases:
(a) First come, first served Where both the
complainant/plaintiff/petitioner and defendant/
respondent apply for legal aid and both are qualified,
the first to seek assistance shall be given preference.
(b) Avoidance of conflict of interest Where
acceptance of a case will give rise to a conflict of
interest on the part of the chapter legal aid office, the
applicant shall be duly informed and advised to seek
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the services of a private counsel or another legal aid

organization.
Where handling of the case will give rise to a conflict
of interest on the part of the chapter member
assigned to the case, the client shall be duly informed
and advised about it. The handling lawyer shall also
inform the chapter legal aid committee so that
another chapter member may be assigned to handle
the case. For purposes of choosing the substitute
handling lawyer, the rule in the immediately
preceding section shall be observed.
(c) Legal aid is purely gratuitous and honorary No
member of the chapter or member of the staff of the
NCLA or chapter legal aid office shall directly or
indirectly demand or request from an applicant or
client any compensation, gift or present for legal aid
services being applied for or rendered.
(d) Same standard of conduct and equal treatment
A chapter member who is tasked to handle a case
accepted by the NCLA or by the chapter legal aid
office shall observe the same standard of conduct
governing his relations with paying clients. He shall
treat the client of the NCLA or of the chapter legal aid
office and the said clients case in a manner that is
equal and similar to his treatment of a paying client
and his case.
(e) Falsity in the application or in the affidavits Any
falsity in the application or in the affidavit of
indigency or in the affidavit of a disinterested person
shall be sufficient cause for the NCLA or chapter legal
aid office to withdraw or terminate the legal aid. For
this purpose, the chapter board of officers shall
authorize the handling lawyer to file the proper
manifestation of withdrawal of appearance of the
chapter legal aid office in the case with a motion for
the dismissal of the complaint or action of the erring
client. The court, after hearing, shall approve the
withdrawal of appearance and grant the motion,
without prejudice to whatever criminal liability may
have been incurred.
Violation of this policy shall disqualify the erring
client from availing of the benefits of this Rule in the
future.
(f) Statement in the initiatory pleading To avail of
the benefits of the Rule, the initiatory pleading shall
state as an essential preliminary allegation that (i)
the party initiating the action is a client of the NCLA
or of the chapter legal aid office and therefore
entitled to exemption from the payment of legal fees
under this Rule and (ii) a certified true copy of the
certification issued pursuant to Section 1(e), of this
Article is attached or annexed to the pleading.
Failure to make the statement shall be a ground for

the dismissal of the action without prejudice to its
refiling.
The same rule shall apply in case the client, through
the NCLA or chapter legal aid office, files an appeal.
(g) Attachment of certification in initiatory pleading
A certified true copy of the certification issued
pursuant to Section 1(e), of this Article shall be
attached as an annex to the initiatory pleading.
Failure to attach a certified true copy of the said
certification shall be a ground for the dismissal of the
action without prejudice to its refiling.
The same rule shall apply in case the client, through
the NCLA or chapter legal aid office, files an appeal.
(h) Signing of pleadings All complaints, petitions,
answers, replies, memoranda and other important
pleadings or motions to be filed in courts shall be
signed by the handling lawyer and co-signed by the
chairperson or a member of the chapter legal aid
committee, or in urgent cases, by the executive
director of legal aid or whoever performs his
functions.
Ordinary motions such as motions for extension of
time to file a pleading or for postponement of hearing
and manifestations may be signed by the handling
lawyer alone.
(i) Motions for extension of time or for postponement
The filing of motions for extension of time to file a
pleading or for postponement of hearing shall be
avoided as much as possible as they cause delay to
the case and prolong the proceedings.
(j) Transfer of cases Transfer of cases from one
handling lawyer to another shall be affected only
upon approval of the chapter legal aid committee.

Section 4. Decision to appeal. (a) All appeals must
be made on the request of the client himself. For this
purpose, the client shall be made to fill up a request
to appeal.
(b) Only meritorious cases shall be appealed. If the
handling lawyer, in consultation with the chapter
legal aid committee, finds that there is no merit to the
appeal, the client should be immediately informed
thereof in writing and the record of the case turned
over to him, under proper receipt. If the client insists
on appealing the case, the lawyer handling the case
should perfect the appeal before turning over the
records of the case to him.

Section 5. Protection of private practice. Utmost
care shall be taken to ensure that legal aid is neither
availed of to the detriment of the private practice of
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law nor taken advantage of by anyone for purely

personal ends.

ARTICLE VI
Withdrawal of Legal Aid and Termination of
Exemption

Section 1. Withdrawal of legal aid. The NCLA or the
chapter legal aid committee may, in justifiable
instances as provided in the next Section, direct the
handling lawyer to withdraw representation of a
clients cause upon approval of the IBP Board of
Governors (in the case of the NCLA) or of the chapter
board of officers (in the case of the chapter legal aid
committee) and through a proper motion filed in
Court.

Section 2. Grounds for withdrawal of legal aid.
Withdrawal may be warranted in the following
situations:
(a) In a case that has been provisionally accepted,
where it is subsequently ascertained that the client is
not qualified for legal aid;
(b) Where the clients income or resources improve
and he no longer qualifies for continued assistance
based on the means test. For this purpose, on or
before January 15 every year, the client shall submit
an affidavit of a disinterested person stating that the
client and his immediate family do not earn a gross
income mentioned in Section 2, Article V, nor own
any real property with the fair market value
mentioned in the same Section;
(c) When it is shown or found that the client
committed a falsity in the application or in the
affidavits submitted to support the application;
(d) When the client subsequently engages a de parte
counsel or is provided with a de oficio counsel;
(e) When, despite proper advice from the handling
lawyer, the client cannot be refrained from doing
things which the lawyer himself ought not do under
the ethics of the legal profession, particularly with
reference to their conduct towards courts, judicial
officers, witnesses and litigants, or the client insists
on having control of the trial, theory of the case, or
strategy in procedure which would tend to result in
incalculable harm to the interests of the client;
(f) When, despite notice from the handling lawyer,
the client does not cooperate or coordinate with the
handling lawyer to the prejudice of the proper and
effective rendition of legal aid such as when the client
fails to provide documents necessary to support his
case or unreasonably fails to attend hearings when

his presence thereat is required; and
(g) When it becomes apparent that the
representation of the clients cause will result in a
representation of conflicting interests, as where the
adverse party had previously engaged the services of
the NCLA or of the chapter legal aid office and the
subject matter of the litigation is directly related to
the services previously rendered to the adverse
party.

Section 3. Effect of withdrawal. The court, after
hearing, shall allow the NCLA or the chapter legal aid
office to withdraw if it is satisfied that the ground for
such withdrawal exists.

Except when the withdrawal is based on
paragraphs (b), (d) and (g) of the immediately
preceding Section, the court shall also order the
dismissal of the case. Such dismissal is without
prejudice to whatever criminal liability may have
been incurred if the withdrawal is based on
paragraph (c) of the immediately preceding Section.

ARTICLE VII
Miscellaneous Provisions

Section 1. Lien on favorable judgment. The amount
of the docket and other lawful fees which the client
was exempted from paying shall be a lien on any
judgment rendered in the case favorable to the
indigent, unless the court otherwise provides.

In case, attorneys fees have been awarded to
the client, the same shall belong to the NCLA or to the
chapter legal aid office that rendered the legal aid, as
the case may be. It shall form part of a special fund
which shall be exclusively used to support the legal
aid program of the NCLA or the chapter legal aid
office. In this connection, the chapter board of
officers shall report the receipt of attorneys fees
pursuant to this Section to the NCLA within ten (10)
days from receipt thereof. The NCLA shall, in turn,
include the data on attorneys fees received by IBP
chapters pursuant to this Section in its liquidation
report for the annual subsidy for legal aid.

Section 2. Duty of NCLA to prepare forms. The NCLA
shall prepare the standard forms to be used in
connection with this Rule. In particular, the NCLA
shall prepare the following standard forms: the
application form, the affidavit of indigency, the
supporting affidavit of a disinterested person, the
affidavit of a disinterested person required to be
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submitted annually under Section 2(b), Article VI, the

certification issued by the NCLA or the chapter board
of officers under Section 1(f), Article V and the
request to appeal.
The said forms, except the certification, shall be in
Filipino. Within sixty (60) days from receipt of the
forms from the NCLA, the chapter legal aid offices
shall make translations of the said forms in the
dominant dialect used in their respective localities.

Section 3. Effect of Rule on right to bring suits in
forma pauperis. Nothing in this Rule shall be
considered to preclude those persons not covered
either by this Rule or by the exemption from the
payment of legal fees granted to clients of the Public
Attorneys Office under Section 16-D of RA 9406 to
litigate in forma pauperis under Section 21, Rule 3
and Section 19 Rule 141 of the Rules of Court.

Section 4. Compliance with Rule on Mandatory Legal
Aid Service. Legal aid service rendered by a lawyer
under this Rule either as a handling lawyer or as an
interviewer of applicants under Section 1(b), Article
IV hereof shall be credited for purposes of
compliance with the Rule on Mandatory Legal Aid
Service.
The chairperson of the chapter legal aid office shall
issue the certificate similar to that issued by the Clerk
of Court in Section 5(b) of the Rule on Mandatory
Legal Aid Service.

ARTICLE
VIII
Effectivity
Section 1. Effectivity. This Rule shall become
effective after fifteen days following its publication in
a newspaper of general circulation.
The above rule, in conjunction with Section 21, Rule 3
and Section 19, Rule 141 of the Rules of Court, the
Rule on Mandatory Legal Aid Service and the Rule of
Procedure for Small Claims Cases, shall form a solid
base of rules upon which the right of access to courts
by the poor shall be implemented. With these rules,
we equip the poor with the tools to effectively,
efficiently and easily enforce their rights in the
judicial system.

Query of Mr. Roger C. Prioreschi re exemption
form legal and filing fees of the Good Shepherd
Foundation, Inc., A.M. No. 09-6-9-SC

Facts: Roger was the administrator of the Good

Shepherd Foundation. As such administrator, he
wrote a letter to the Chief Justice (this was 2009 so
Puno). In essence, the letter stated the ff:
1) They were thanking the court for their 1st
indorsement that the foundation pays the nominal
fee of P5000 and balance upon collection action of
P10M.
2) Court Administrator Jose Perez pointed out
the need to comply with OCA Circular No.42-2005
and Rule141 that reserves this privilege ---
exemption from filing fees --- to indigent persons.
However, the law mainly deals with an individual
indigent and does not include foundations or
associations that work with and for indigent persons.
3) It was noted that the Good Shepherd
Foundation reach out to the poorest of the poor,
newly born and abandoned babies, children who
never saw a smile of their mother, old people who
cannot afford to pay for common prescriptions,
broken families...etc.
4) They were asking the courts to grant to the
foundation the same option to be exempted from
filing fees as given to indigent people (2 executive
judges they previously approached disapproved this
interpretation).

Issue: Whether the special privilege (referring to the
exemption from filing fees) granted under Rule141
and
OCA
Circular
is
applicable
to
foundations/associations?

Held: NO!

The basis for the exemption from legal and
filing fees is the free access clause under Sec11, Art3
of the Consti. Free access to the courts and quasi
judicial bodies and adequate legal assistance shall not
be denied to any person by reason of poverty. This
provision is very important. In fact, a move that it be
removed because it was already covered by the equal
protection clause was defeated.

To implement the free access clause, SC
promulgated Sec21, Rul3 and Sec19, Rule141 of the
Rules of Court. (very long provisions so I wont put it
here but you have to read it) The clear intent and
precise language of the provisions indicate that only a
natural party litigant may be regarded as an indigent
litigant.
Good Shepherd Foundation is a corporation
with a separate and distinct juridical personality and
as such cannot be exempted from legal and filing fees.
This is the ruling even if the foundation is working
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for indigent and underprivileged people. The Consti

premised the free access clause on a persons poverty
which only a natural person can suffer.
Another reason why the exemption cannot
be granted to juridical persons even if they work for
indigent and underprivileged people is because it
may be prone to abuse. Also, the scrutiny of
compliance with the documentation requirements
may prove too time consuming and wasteful for the
courts.

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II.

Jurisdiction

Batas Pambansa Bilang 129
Republic Act 7691
1991 Rules on Summary Procedure as amended
Rules on Small Claims

Thornton v. Thornton, G.R. No. 154598, August
16, 2004

FACTS: American husband and Filipina wife got
married here and had a daughter. Three years into
the marriage, wife became bored as a housewife and
wanted to go back to her life as a GRO. Because of
this, their relationship turned sour and one day, the
wife left the family home with her daughter without
notifying her husband.
Husband filed a petition for habeas corpus before the
Family Court of Makati. Dismissed since the child daw
was in Basilan and hence it did not have jurisdiction.
Husband went to Basilan but could not find his wife
and child there. He had a lead that his wife and child
may be somewhere in Cavite, Nueva Ecija, or Manila.
Therefore, he filed a petition for habeas corpus
before the CA (para enforceable within the country)
but CA denied the petition, claiming that it does not
have jurisdiction because the Family Courts Act
(which gave the FC jurisdiction regarding petition for
habeas corpus in cases involving custody of minors)
impliedly repealed BP129 (which gave CA
jurisdiction over habeas corpus cases)
CA: Family Courts Act (RA 8369) uses the word
exclusive in granting the FC jurisdiction over
habeas corpus cases.
Issue: Does CA have jurisdiction over habeas corpus
cases involving custody of minors?
Held: YES
SC:
The CA should take cognizance of the case since there
is nothing in RA 8369 that revoked its jurisdiction to
issue writs of habeas corpus involving the custody of
minors.
CAs reasoning will result in an iniquitous situation,
leaving individuals like petitioner without legal
recourse in obtaining custody of their children.
Individuals who do not know the whereabouts of
minors they are looking for would be helpless since
they cannot seek redress from family courts whose
writs are enforceable only in their respective
territorial jurisdictions. Thus, if a minor is being
transferred from one place to another, which seems
to be the case here, the petitioner in a habeas corpus

case will be left without legal remedy.
The primordial consideration is the welfare
and best interests of the child. In the case at bar, a
literal interpretation of the word exclusive will
result in grave injustice and negate the policy to
protect the rights and promote the welfare of
children under the Constitution and the United
Nations Convention on the Rights of the Child. This
mandate must prevail over legal technicalities and
serve as the guiding principle in construing the
provisions of RA 8369.
The provisions of RA 8369 reveal no manifest intent
to revoke the jurisdiction of the CA and SC to issue
writs of habeas corpus relating to the custody of
minors. Further, it cannot be said that the
provisions of RA 8369 and BP 129 are absolutely
incompatible since RA 8369 does not prohibit the CA
and the SC from issuing writs of habeas corpus in
cases involving the custody of minors.
In any case, whatever uncertainty there was has been
settled with the adoption of A.M. No. 03-03-04-SC Re:
Rule on Custody of Minors and Writ of Habeas Corpus
in Relation to Custody of Minors(SEC20: The petition
may likewise be filed with the SC, CA, or with any of its
members and, if so granted, the writ shall be
enforceable anywhere in the Philippines.

Bernabe L. Navida, et al. v. Hon. Teodoro A. Dizon
et al., G.R. No. 125078, May 30, 2011

FACTS:
1993, a number of personal injury suits were filed in
different Texas state courts by citizens of 12 foreign
countries, including Philippines ! claim: damages
for injuries they allegedly sustained from their
exposure to dibromochloropropane (DBCP), a
chemical used to kill nematodes (worms), while
working on farms in 23 foreign countries. The cases
were consolidated in the Federal District Court for
the Southern District of Texas, Houston Division.

The cases involving plaintiffs from the Philippines
were:
Jorge Colindres Carcamo, et al. v. Shell Oil Co.,
et al., which was docketed as Civil Action
No. H-94-1359, and
Juan Ramon Valdez, et al. v. Shell Oil Co., et
al., which was docketed as Civil Action No.
H-95-1356
The defendants prayed for the dismissal of all the
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actions under the doctrine of forum non conveniens.

In the Memorandum and Order dated July 11,
1995, the Federal District Court conditionally
granted the defendants motion to dismiss (NOTE:
please see case for full recitation of order):

Delgado, Jorge Carcamo,
Valdez and Isae Carcamo will be
dismissed 90 days after the entry of
this Memorandum and Order provided
that defendants and third- and fourth-
party defendants have: xxx

(2) either waived or accepted
service of process and
waived
any
other
jurisdictional
defense
within 40 days after the
entry of this Memorandum
and Order in any action
commenced by a plaintiff in
these actions in his home
country or the country in
which his injury occurred.
Any plaintiff desiring to
bring such an action will do
so within 30 days after the
entry of this Memorandum
and Order; xxx

Notwithstanding
the
dismissals that may result from this
Memorandum and Order, in the event
that the highest court of any foreign
country finally affirms the dismissal
for lack of jurisdiction of an action
commenced by a plaintiff in these
actions in his home country or the
country in which he was injured, that
plaintiff may return to this court and,
upon proper motion, the court will
resume jurisdiction over the action as
if the case had never been dismissed
for [forum non conveniens].

Because of the above Memorandum and Order,

1. Gen San Cases: 336 plaintiffs from General Santos
City (NAVIDA, et al.) filed a Joint Complaint in the
RTC of General Santos City against defendants such
as SHELL, Dow Chemical Co., Dole., Del Monte, etc.
prayer: payment of damages in view of the

illnesses and injuries to the reproductive
systems which they allegedly suffered
because of their exposure to DBCP (having
been exposed to this chemical during 1970s
to 1980s when they used the same in the
banana plantations where they worked at;
and/or when they resided within the
agricultural area where such chemical was
used)
basis: illnesses and injuries were due to the
fault or negligence of each of the defendant
companies in that they produced, sold and/or
otherwise put into the stream of commerce
DBCP-containing products ! Navida et. al.
were allowed to be exposed to the said
products, which the defendant companies
knew, or ought to have known, were highly
injurious to the formers health and well-
being

Defendants filed Motions for Bill of Particulars while
DOW later filed an Answer with Counterclaim.

RTC: dismissed the complaint because of:
lack of jurisdiction to hear the case REASON
cause of action is based on activity of
defendant companies which took place
abroad and had occurred outside and beyond
the territorial domain of the Philippines
the tort alleged by NAVIDA, et al., in their
complaint is a tort category (product liability
tort) that is not recognized in Philippine laws
(NCC)
the act of NAVIDA, et al., of filing the case in
the Philippine courts violated the rules on
forum shopping and litis pendencia

NAVIDA, et al., filed a petition for review on certiorari
with SC.

2. Davao Cases: 155 plaintiffs (ABELLA, et al)filed
another joint complaint for damages against
defendant companies before Branch 16 RTC of Davao
City by from Davao City with similar allegations as
NAVIDA, et al]

RTC of Davao City: dismissed the complaint for lack
of jurisdiction since causes of action occurred abroad
citing the opinion of legal experts in an Inquirer
interview reporting on Pesticide Cause Mass
Sterility
Remedial Law Review

Case Digests

1. Former
Justice
Secretary
Demetria:
Philippines inconvenient forum since the
causes of action alleged in the petition do not
exist under Philippine laws
2. Retired SC Justice Sarmiento: Mass sterility
will not qualify as a class suit injury within
Philippine statute
3. Retired High Court Justice Nocom: No product
liability ever filed or tried here

ABELLA, et al filed petition for review with
SC.

ISSUE: whether the concerned RTCs had jurisdiction
over the dismissed cases

RULING: YES, both have jurisdiction over the
dismissed cases
jurisdiction over the subject matter of a case
is:
o conferred by law and
o determined by the
" allegations in the complaint
and
" character of the relief sought,
irrespective of whether the
plaintiffs are entitled to all or
some of the claims asserted
therein
Once vested by law, on a particular court or
body, the jurisdiction over the subject matter
or nature of the action cannot be dislodged by
anybody other than by the legislature through
the enactment of a law
o At the time of the filing of the
complaints, the jurisdiction of the RTC
in civil cases Sec 19 (8), BP 129, was:
In all other cases in which the
demand, exclusive of interest,
damages of whatever kind, attorneys
fees, litigation expenses, and costs or
the value of the property in
controversy exceeds One hundred
thousand pesos (P100,000.00) or, in
such other cases in Metro Manila,
where the demand, exclusive of the
abovementioned items exceeds Two
hundred
thousand
pesos
(P200,000.00).
o SC AC No. 09-94: The exclusion of the
term damages of whatever kind in
determining the jurisdictional amount
under Section 19 (8) and Section 33

(1) of B.P. Blg. 129, as amended by
R.A. No. 7691, applies to cases where
the damages are merely incidental to
or a consequence of the main cause of
action. However, in cases where the
claim for damages is the main cause of
action, or one of the causes of action,
the amount of such claim shall be
considered in determining the
jurisdiction of the court.
In the concerned cases, the prayer asked for
the ff to be paid to each plaintiff:
o moral damages P1,500,00.00;
o nominal damages P400,000.00;
o exemplary damages P600,000.00;
o attorneys fees P200,000.00; an
o pay costs of suit
It is clear that the claim for damages is the
main cause of action and that the total
amount sought in the complaints is
approximately P2.7 million for each of the
plaintiff claimants
o Thus, the RTCs have jurisdiction over
the cases filed in General Santos City
and Davao City, as both claims by
NAVIDA, et al., and ABELLA, et al., fall
within the definition of the
jurisdiction of the RTC under BP 129
ALSO, the allegations (NOTE: please refer to
original case for the list of actions by
defendants e.g. failed to inform plaintiffs of
harmful effects caused by use of DBCP, failed
to put in place proper safety measures in
handling DBCP etc. ! manufacturing,
producing, selling, using, and/or otherwise
putting into the stream of commerce,
nematocides which contain DBCP, without
informing the users of its hazardous effects
on health and/or without instructions on its
proper use and application.) in the Amended
Joint-Complaints of NAVIDA, et al., and
ABELLA, et al., attribute to defendant
companies certain acts and/or omissions
which led to their exposure to nematocides
containing the chemical DBCP. ! exposure is
claimed to have caused ill effects, injuries and
illnesses,
specifically
to
plaintiffs
reproductive system
o Thus, these allegations in the
complaints constitute the cause of
action of plaintiff claimants: a quasi-
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Case Digests

delict, which under the Civil Code is

defined as an act, or omission which
causes damage to another, there being
fault or negligence
o Citibank, N.A. v. CA: jurisdiction of the
court over the subject matter of the
action is determined by the
allegations of the complaint,
irrespective of whether or not the
plaintiffs are entitled to recover upon
all or some of the claims asserted
therein
" Thus, the acts and/or
omissions attributed to the
defendant
companies
constitute a quasi-delict which
is the basis for the claim for
damages filed by NAVIDA, et
al., and ABELLA, et al., with
individual
claims
of
approximately P2.7 million for
each plaintiff claimant, which
obviously falls within the
purview of the civil action
jurisdiction of the RTCs.
CONCLUSION: RTCs erred when they
dismissed the cases on the ground of lack of
jurisdiction on the mistaken assumption that
the cause of action narrated by NAVIDA, et al.,
and ABELLA, et al., took place abroad and had
occurred outside and beyond the territorial
boundaries of the Philippines, i.e., the
manufacture of the pesticides, their packaging
in containers, their distribution through sale
or other disposition, resulting in their
becoming part of the stream of
commerce,and,
hence,
outside
the
jurisdiction of the RTCs
o the cases below are not criminal cases
where territoriality, or the situs of the
act complained of, would be
determinative of jurisdiction and
venue for trial of cases
o In personal civil actions, such as
claims for payment of damages, the
Rules of Court allow the action to be
commenced and tried in the
appropriate court, where any of the
plaintiffs or defendants resides, or in
the case of a non-resident defendant,
where he may be found, at the
election of the plaintiff
HERE, most of the evidence

required to prove the claims
of NAVIDA, et al., and ABELLA,
et al., are available only in the
Philippines
First,
plaintiff
claimants are all
residents
of
the
Philippines, either in
General Santos City or
in Davao City
Second, the specific
areas where they were
allegedly exposed to
the chemical DBCP are
within the territorial
jurisdiction of the
courts a quo wherein
NAVIDA, et al., and
ABELLA, et al., initially
filed their claims for
damages
Third, the testimonial
and
documentary
evidence
from
important witnesses,
such as doctors, co-
workers,
family
members and other
members
of
the
community, would be
easier to gather in the
Philippines
Also, there are a great
number of plaintiff
claimants thus safe to
assume
that
voluminous records
are involved in the
presentation
of
evidence to support
the claim of plaintiff
claimants ! thus
making both RTCs also
the convenient fora for
trying these cases
SUBISSUE: jurisdiction over defendant companies
RULING: All parties are one in asserting that the RTCs
have validly acquired jurisdiction over the persons of
the defendant companies since all parties voluntarily,
unconditionally and knowingly appeared and
submitted themselves to the jurisdiction of the courts
"
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Case Digests

a quo
Rule 14, Section 20 of the 1997 Rules of Civil
Procedure provides that [t]he defendants
voluntary appearance in the action shall be
equivalent to service of summons
o HERE,
" all the defendant companies
designated and authorized
representatives to receive
summons and to represent
them in the proceedings
before the courts a quo
" all the defendant companies
submitted themselves to the
jurisdiction of the courts a quo
by making several voluntary
appearances, by praying for
various affirmative reliefs, and
by actively participating
during the course of the
proceedings below
o Meat Packing v. Sandiganbayan:
jurisdiction over the person of the
defendant in civil cases is acquired
either by his voluntary appearance in
court and his submission to its
authority or by service of summons !
active participation of a party in the
proceedings is tantamount to an
invocation of the courts jurisdiction
and a willingness to abide by the
resolution of the case, and will bar
said party from later on impugning
the court or bodys jurisdiction
Thus, the RTCs have validly acquired
jurisdiction over the persons of the defendant
companies, as well as over the subject matter
of the instant case ! Moreover, this
jurisdiction, which has been acquired and has
been vested on the courts a quo, continues
until the termination of the proceedings
o jurisdiction vs. exercise of
jurisdiction
" Jurisdiction: authority to
decide a case, not the orders
or the decision rendered
therein ! where a court has
jurisdiction over the persons
of the defendants and the
subject matter, as in the case
of the courts a quo, the
decision on all questions
arising therefrom is but an

exercise of such jurisdiction.
Any error that the court may
commit in the exercise of its
jurisdiction is merely an error
of judgment, which does not
affect its authority to decide
the case, much less divest the
court of the jurisdiction over
the case
DISPOSITIVE: GRANTS the petitions for review on
and REMAND the records of this case to the
respective RTCs of origin for further and appropriate
proceedings

Land Bank of the Philippines v. Corazon M.
Villegas, G.R. No. 180384, March 26, 2010

FACTS:
Land Bank (petitioner) filed cases for determination
of just compensation against
(respondent) Corazon M. Villegas in Civil Case
2007-14174 ! property in Hibaiyo,
Guihulngan City, Negros Oriental: and
(respondent) heirs of Catalino V. Noel and
Procula P. Sy in Civil Case 2007-14193 !
property in Nangca, Bayawan City, Negros
Oriental
before the RTC of Dumaguete City - Branch 32, sitting
as a Special Agrarian Court for the province of Negros
Oriental. The properties-lands of the respondents
happened to be outside the regular territorial
jurisdiction of concerned RTC.

RTC, Branch 32 dismissed
Civil Case 2007-14174 for lack of jurisdiction
reasoning that although it had been
designated Special Agrarian Court for Negros
Oriental, the designation did not expand its
territorial jurisdiction to hear agrarian cases
under the territorial jurisdiction of the RTC,
Branch 64 of Guihulngan City where
respondent Villegas property can be found.
Civil Case 2007-14193 for lack of jurisdiction
reasoning that RTC, Branch 63 of Bayawan
City had jurisdiction over the case since
respondent heirs property was within the
latter courts territorial jurisdiction.
RTC basis: Deputy Court Administrator Elepaos
opinion that single sala courts have jurisdiction over
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Case Digests

agrarian cases involving lands located within its

territorial jurisdiction thus an RTC branch acting as a
special agrarian court, she claimed, did not have
expanded territorial jurisdiction

Land Bank filed
MRs on the dismissal of the two cases ! RTC:
denied
petitions for certiorari to SC

Villegas argument: adopts DCA Elepaos opinion
and that in hearing just compensation cases, RTC,
Branch 64 in Guihulngan City should be no different
from the situation of other single sala courts that
concurrently hear drugs and family-related cases
even as the Supreme Court has designated family and
drugs courts in Dumaguete City within the same
province. Further, Guihulngan City is more than 100
kilometers from Dumaguete City where RTC, Branch
32 sits thus more practical if Branch 64 of
Guihulngan City hears and decides the case

Respondent heirs of Noel meanwhile had been paid
their due thus no longer interested in the outcome of
the case.

ISSUE: whether or not an RTC, acting as Special
Agrarian Court, has jurisdiction over just
compensation cases involving agricultural lands
located outside its regular jurisdiction but within the
province where it is designated as an agrarian court
under the Comprehensive Agrarian Reform Law of
1998

RULING:
Jurisdiction:
o courts authority to hear and
determine a case
o conferred by law
" here, law that confers
jurisdiction
on
Special
Agrarian Courts designated
by the Supreme Court in
every province is R.A. 6657
or Comprehensive Agrarian
Reform Law of 1988
" Relevant parts: Sections 56
and 57 SEC. 56. Special
Agrarian Court. - The
Supreme
Court
shall
designate at least one (1)
branch of the Regional Trial
Court (RTC) within each

province to act as a Special
Agrarian Court.

The Supreme Court may
designate more branches to
constitute such additional
Special Agrarian Courts as
may be necessary to cope
with the number of agrarian
cases in each province. In the
designation, the Supreme
Court shall give preference to
the Regional Trial Courts
which have been assigned to
handle agrarian cases or
whose presiding judges were
former judges of the defunct
Court of Agrarian Relations.

The Regional Trial Court
(RTC) judges assigned to said
courts shall exercise said
special
jurisdiction
in
addition to the regular
jurisdiction
of
their
respective courts.

SEC. 57. Special Jurisdiction. -
The Special Agrarian Courts
shall have original and
exclusive jurisdiction over all
petitions
for
the
determination
of
just
compensation to landowners,
and the prosecution of all
criminal offenses under this
Act. The Rules of Court shall
apply to all proceedings
before the Special Agrarian
Courts unless modified by
this Act.

The Special Agrarian Courts
shall decide all appropriate
cases under their special
jurisdiction within thirty (30)
days from submission of the
case for decision.
o THUS, an RTC branch designated as a
Special Agrarian Court for a province
has the original and exclusive
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Case Digests

jurisdiction over all petitions for the

determination of just compensation
in that province
o Republic v. CA: Special Agrarian Courts
have original and exclusive
jurisdiction over two categories of
cases: (1) all petitions for the
determination of just compensation
to landowners, and (2) the
prosecution of all criminal offenses
under R.A. 6657.
By special jurisdiction
o Special Agrarian Courts exercise
power in addition to or over and
above the ordinary jurisdiction of the
RTC, such as taking cognizance of
suits involving agricultural lands
located outside their regular
territorial jurisdiction, so long as
they are within the province where
they sit as Special Agrarian Courts
o R.A. 6657 requires the designation by
the SC before an RTC Branch can
function as a Special Agrarian Court
" Here, SC has not designated
the single sala courts of RTC,
Branch 64 of Guihulngan City
and RTC, Branch 63 of
Bayawan City as Special
Agrarian
Courts
!
consequence: they cannot
hear just compensation cases
just because the lands subject
of such cases happen to be
within
their
territorial
jurisdiction
" Since RTC, Branch 32 of
Dumaguete City is the
designated Special Agrarian
Court for the province of
Negros Oriental, it has
jurisdiction over all cases for
determination
of
just
compensation
involving
agricultural lands within that
province,
regardless
of
whether or not those
properties are outside its
regular
territorial
jurisdiction.

DISPOSITIVE: GRANTS the petitions, SETS ASIDE the
RTC orders dismissing the cases for lack of

jurisdiction and DIRECTS RTC Branch 32 of
Dumaguete City to immediately hear and decide the
two cases unless a compromise agreement has in the
meantime been approved in the latter case

Celia S. Vda. De Herrera v. Emelita bernardo, et
al., G.R. No. 170251, June 01, 2011.
Nature: petition for review on certiorari (R45)

Facts:
" Heirs of Crisanto Bernardo (respondents)
filed a complaint before the Commission on
the Settlement of Land Problems (COSLAP)
against Alfredo Herrera for interference,
disturbance, unlawful claim, harassment and
trespassing over a portion of a parcel of land
at Brgy. Dalig, Cardona, Rizal.
" Respondents: land was originally owned by
Crisanto Bernardo which was later on
acquired by Crisanto S. Bernardo. Tax
Declaration was under respondents name.
" Petitioner: 700 sqm of the subject property
was bought by Diosdado Herrera (Alfredos
father) from Domingo Villaran. Alfredo
inherited such portion.
" 1999 COSLAP Resolution: respondents have a
rightful claim over the subject property
" Alfredo filed MR and/or reopening of the
proceedings COSLAP denied
" Petitioner (Celia vda. de Herrera = surviving
spouse of Alfredo) filed petition for certiorari
with the CA CA dismissed
" CA: COSLAP has exclusive jurisdiction over
the case. Assuming COSLAP has no
jurisdiction over the land dispute, petitioner
is already estopped from raising the issue of
jurisdiction because Alfredo failed to raise the
issue of lack of jurisdiction before the COSLAP
and he actively participated in the
proceedings before the COSLAP.
" MR denied Certiorari with SC (R45)
" Petitioner: COSLAP has no adjudicatory
power to decide the question of ownership.
RTC has jurisdiction over controversies
relative to ownership
Issue: WON COSLAP had jurisdiction to decide the
question of ownership? No
Ruling:
" COSLAP was created by EO 561 = admin body
established for the expeditious settlement of
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Case Digests
"
"
"
"
"
"
"

land problems among small settlers,

landowners and members of the cultural
minorities to avoid social unrest
Sec. 3, EO 561: COSLAP may assume
jurisdiction and resolve land problems or
disputes which are critical and explosive in
nature considering, for instance, the large
number of the parties involved, the presence
or emergence of social tension or unrest, or
other similar critical situations requiring
immediate action:
1. Between occupants/squatters and
pasture lease agreement holders
or timber concessionaires;
government reservation grantees;
public
land
claimants
or
applicants;
4. Petitions for classification, release
and/or subdivision of lands of the
public domain; and
5.
Other similar land problems of
grave urgency and magnitude.
Admin agencies, like
COSLAP, are tribunals of limited jurisdiction
that can only wield powers which are
specifically granted to it by its enabling
statute.
Under Sec. 3, EO 561,
COSLAP has 2 options in acting on a land
dispute or problem lodged before it:
1. refer the matter to the agency
having appropriate jurisdiction
for settlement/resolution
2. assume jurisdiction if the matter
is one of those enumerated, if
such case is critical and explosive
in nature, taking into account the
large number of parties involved,
the presence or emergence of
social unrest, or other similar
critical
situations
requiring
immediate action.
The law does not vest jurisdiction on the
COSLAP over any land dispute or problem
COSLAP has no jurisdiction over the subject
matter of the complaint.
Case does not fall under Sec. 3, par (2) of EO
561
Jurisdiction of a tribunal over the nature and
subject matter of a petition or complaint is
"
"
"
"
"
"
"
"
"
"
"
determined by the material allegations

therein and the character of the relief prayed
for,
irrespective
of
whether
the
petitioner/complainant is entitled to any or
all such reliefs.
Cause of action: claim of ownership over the
subject property = action involving title or
possession of real property, or any interest
Jurisdiction is vested with the RTCs or the
MTCs depending on the assessed value of the
subject property
Since COSLAP has no jurisdiction over the
action, all the proceedings therein, including
decision rendered, are null and void.
A judgment issued by a quasi-judicial body
w/o jurisdiction is void. It cannot be the
source of any right or create any obligation.
Petitioner is not estopped from raising the
jurisdictional issue. It may be raised at any
stage of the proceedings, even on appeal, and
is not lost by waiver or by estoppel.
That a person attempts to invoke
unauthorized jurisdiction of a court does not
estop him from thereafter challenging its
jurisdiction over the subject matter, since
such jurisdiction must arise by law and not by
mere consent of the parties.
Regalado v. Go: laches should be clearly
present for Sibonghanoy to apply
Sibonghanoy: Laches = failure or neglect for
an unreasonable and unexplained length of
time, to do that which, by exercising due
diligence, could or should have been done
earlier, it is negligence or omission to assert a
right within a reasonable length of time,
warranting a presumption that the party
entitled to assert it either has abandoned it or
declined to assert it.
The factual settings in Sibonghanoy are not
present in this case.
No considerable period had yet elapsed for
laches to attach.
Petitioner is not estopped from assailing the
jurisdiction of COSLAP. No laches will even
attach because the judgment is null and void
for want of jurisdiction.

Herald Black Dacasin v. Sharon del Mundo
Dacasin, G.R. No. 168785, February 05, 2010

Facts:
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Case Digests

Herald (American) and Sharon (Filipino)

were married in Manila in 1994
" 1 daughter = Stephanie
" 1999: Sharon sought and obtained from the
Illinois Court a divorce decree against Herald.
Illinois court awarded Sharon sole custody of
Stephanie and retained jurisdiction over the
case for enforcement purposes.
" 2002: Herald and Sharon executed in Manila a
contract for the joint custody of Stephanie.
Parties chose PH courts as exclusive forum to
adjudicate disputes arising from the
Agreement.
" Sharon undertook to obtain from the Illinois
court an order relinquishing jurisdiction over
PH courts
" 2004: Herald sued Sharon in RTC Makati to
enforce the agreement
" Sharon sought the dismissal of the complaint
for lack of jurisdiction because of the Illinois
courts retention of jurisdiction to enforce the
divorce decree.
" RTC dismissed the case for lack of jurisdiction
" Herald: the agreement novated the valid
divorce decree, modifying the terms of child
custody from sole to joint; or the agreement is
independent of the divorce decree obtained
by Sharon
Issue: Whether the trial court has jurisdiction to take
cognizance of Heralds suit and enforce the
agreement on the joint custody of the child? Yes
Ruling:
" RTCs vested with jurisdiction to enforce
contracts
" Subject matter jurisdiction is conferred by
law. At the time Herald filed his suit in RTC,
the law vests on RTCs exclusive original
jurisdiction over civil actions incapable of
pecuniary estimation.
" Jurisdiction-wise, Herald went to the right
court.
" RTCs refusal to entertain Heralds suit was
grounded not on its lack of power to do so
but on its thinking that the Illinois courts
divorce decree stripped it of jurisdiction.
This conclusion is unfounded.
" What the Illinois court retained was
jurisdiction for the purpose of enforcing all
and subdry the various provisions of its
judgment for dissolution.
" Heralds suit seeks the enforcement not of
the various provisions of the divorce decree
"
"
but of the post-divorce agreement on joint

child custody.
Such action lies beyond the zone of the
Illinois
courts
so-called
retained
jurisdiction.

Far East Bank v. Shemberg, G.R. No.163878,
December 12, 2006

FACTS
Respondents are the registered owners of a
parcel of several realties located in Mandaue City.
Prior to 1998, respondents entered into several
credit transactions with petitioner secured by
several real estate mortgage. Respondents failed
to pay the loans thus the petitioner sought to
foreclose the mortgage.
On February 28, respondents filed with the RTC a
Complaint for Declaratory Relief, Injunction,
Damages, Annulment of Promissory Notes,
Documents, and Contracts against petitioner.
They allege that prior to 1998, respondents
obtained credit accommodations from petitioner.
The latter required the respondents
representatives to sign standard pre-printed
bank forms in fine print. Respondents complied
since they trusted petitioner. However, it turned
out that petitioners employees filled the blanks
with false and inaccurate entries.Respondents
deny and dispute the genuineness and due
execution of the documents and pray for the
following relief: ex-parte TRO and thereafter
upon summary hearing TRO for 20 days,
preliminary injunction issued upon posting of
bond enjoining defendant, etc.
On March 9, the trial court issued an order
granting respondents order for the issuance of a
TRO. Petitioner filed its Answer with Affirmative
Defenses, Counterclaim, Vigorous Opposition to
the Order directing the issuance of a TRO and/or
preliminary mandatory injunction. Likewise,
petitioner filed a Motion to Dismiss Based on
Affirmative Defense alleging that 1.) the venue is
improperly laid; 2.) the trial court did not acquire
jurisdiction over the case for non-payment of
docket fees; 3.) there is non-joinder of
indispensable parties; and 4.) the trial court has
no jurisdiction to enjoin the foreclosure
proceedings.
On March 27, the trial court issued an order
denying petitioners motion to dismiss. Venue has
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Case Digests

been properly laid. Records show, as well as

defendants annexes to its answer admits, that
the plaintiffs business address and principal
place of business are at Mandaue City. Likewise,
similarly situated are the properties sought to be
foreclosed. It is to be noted that the question of
jurisdiction has not been raised by defendant
except with the cause of action regarding
annulment of mortgages on defendants
insistence that the tax declaration attached is not
the latest. Considering however that annulment
of mortgage is incapable of pecuniary estimation
the court feels that jurisdiction is proper since,
according to jurisprudence, what determines the
nature of an action and the court which has
jurisdiction over it are the allegations made by
the plaintiff. Evidence has not been introduced, to
the satisfaction of the court that indeed Far East
Bank and Trust Company no longer exists and
BPI has taken over its assets and liabilities.
Besides, the commercial linkage was between
FEBTX and Shemberg as records show. It is an
inherent power of the court concomitant to its
very existence to issue provisional remedies to
protect the rights and interest of parties pending
litigation.
The motion for reconsideration was denied thus
the petitioner filed with the Court of Appeals a
petition for certiorari, prohibition and mandamus
contending that the trial court acted with grave
abuse of discretion amounting to lack or excess of
jurisdiction. The CA dismissed the petition for
certiorari as well as the motion for
reconsideration. Thus this petition.

ISSUES & ARGUMENTS
W/N the trial court has jurisdiction
o Petitioner: In real actions, the assessed
value of the property or if there is none,
the estimated value thereof, must be
alleged in the complaint and shall serve as
the basis for computing the fees
o Respondents: Since the suit primarily
involves cancellation of mortgages, an
action incapable of pecuniary estimation,
there is no deficiency in the payment of
docket fees
W/N petitioner bank is entitled to writs of
certiorari, prohibition, and mandamus

HOLDING & RATIO DECIDENDI

YES. UNDER SCTION 19 (1) OF BP 180 AS AMENDED

BY RA 7691
The RTC have sole, exclusive, original jurisdiction
to hear, try and decide all civil actions in which
the subject of litigation is incapable of pecuniary
estimation. In Singsong v. Isabela Sawmill, this
Court laid the test for determining whether the
subject matter of an action is incapable of
pecuniary estimation:
1. Ascertain the nature of the principal
action or remedy sought
2. If the action is primarily for recovery of a
sum of money, the claim is considered
capable of pecuniary estimation. Whether
the trial court has jurisdiction would
depend upon the amount of the claim
3. However, there the basic issue is
something other than the right to recover
a sum of money, where the money claim
is only incidental or a consequence of the
principal relief sought, the action is
incapable of pecuniary estimation
Here, the primary reliefs prayed for is the
cancellation of the mortgages for want of
consideration. Jurisprudence provides that where
the issue involves the validity of the mortgage,
the action is one incapable of pecuniary
estimation.
NO.
There is grave abuse of discretion where the acts
complained of amount to an evasion of positive
duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation
of law, as where the power is exercised in an
arbitrary and despotic manner by reasons of
passion personal hostility. It is such whimsical
and capricious exercise of judgment as is
equivalent to lack of jurisdiction.

Arriola v. Nabor Arriola, G.R.No. 177703, January
28, 2008

John Arriola (respondent) filed a case with the RTC
for judicial partition of the properties of decedent
Fidel Arriola against herein petitioners Vilma and
Ronald Arriola. John is a son of the decedent with the
1st wife; Vilma is the 2nd wife, Ronald her kid with
the deceased.

The RTC rendered a decision ordering partition of the
subject lot into 1/3 share to each party. This decision
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became final in March 4, 2004. However, since the

parties failed to agree on how to partition the lot,
John sought its sale through public auction, which the
court ordered. After the date for the public auction
had been scheduled, it had to be reset because the
petitioners Vilma and Roland refused to include in
the auction sale the house standing on the land. Thus,
John filed with the RTC an Urgent Manifestation and
Motion for Contempt of Court praying that
petitioners be held in contempt.

RTC denied the motion, ruling that the non-inclusion
of the house was justified since the decision of the
court earlier shows that nothing was mentioned
about the house. Even Johns initiatory complaint
never mentioned the house. The court said it could
not grant a relief not alleged and prayed for in the
complaint. MR with the RTC also denied.

In a petition for certiorari with CA, the court granted
the petition, reversing and setting aside the RTC
ruling. It ordered the sale of the lot, including the
house standing thereon. Petitioners filed MR with CA,
but it was denied, hence the present case.

Issue: Did the lower court err in taking jurisdiction
over the contempt proceeding? Yes, it was wrong
for it to do so for failure to comply with reqts

Ruling: The contempt proceeding initiated by the
John Arriola is one for indirect contempt. Under Rule
71, it is to be initiated by the court motu propio or by
a verified petition, with supporting particulars and
certified true copies of docs/papers involved and
with full compliance with the reqts for filing
initiatory pleadings for civil actions. The law is clear.
The filing of a verified petition that has complied with
the reqts for the filing of initiatory pleading is
mandatory and for failure to do so, the court should
dismiss it outright.

Here, John Arriola merely filed an Urgent
Manifestation and Motion for Contempt. It was not
verified, and it failed to conform with the reqts for
initiatory pleadings such as submission of
certification against non-forum shopping and
payment of docket fees. The RTC clearly erred in
taking jurisdiction over the contempt proceeding.
Even if the contempt proceedings stemmed from the
main case over which the court already acquired
jurisdiction, the rules direct that the petition for
contempt be treated independently of the principal
action. Consequently, the necessary prerequisites for

the filing of initiatory pleadings, such as the filing of a
verified petition, attachment of a certification on non-
forum shopping, and the payment of the necessary
docket fees, must still be faithfully observed. (Before,
it was actually allowed that contempt proceedings be
initiated by mere motion and without compliance
with the reqts for initiatory pleadings, but since the
1997 Revised Rules of Civil Procedure, such practice
was no longer countenanced).
[Substantive part: even if the motion complied with
the reqts of the Rules of Court, it should still fail on
substantive grounds since it turned out that the
house is a family home and despite the death of one
or both spouses, it shall continue for a period of 10y
or for as long as there is a minor beneficiary, and the
heirs cannot partition it unless there is a compelling
reason. No such reason here.]
CA ruling is modified. The house is declared part of
the lot, but it is exempted from partition by public
auction until the period provided for in the law.

Spouses Manila v. Spouses Manza, G.R. No.
163602, September 07, 2011

Facts:
Ederlinda Galardo leased 2 parcels of land
situated along Las Pinas Meto Manila to
Eulogila Manila for a period of 10 years at a
monthly rental of P2000 for the first 2 years
and thereafter an increase of 10 percent
every after 2 years. They also agreed that the
lessee shall have the option to buy the
property within 2 years from the date of
execution of the contract of lease at a FMV of
150,000.
The contract of lease expired on July 1, 1992
but the lessee continued in possession of the
property despite a formal demand letter
dated August 8, 1992, to vacate the same and
pay the rental arrearages.
In a letter reply dated August 12, 1992, herein
defendant claimed that no rental fee is due
because she allegedly became the owner of
the property at the time she communicated to
the plaintiff her desire to exercise the option
to buy the said property.
Their disagreement was later brought to the
Barangay for conciliation but the parties
failed to reach a compromise, hence the
present action.
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MTC: rendered judgment in favor of plaintiffs

ordering defendants to vacate the land
Petitioners appealed to RTC of Makati
RTC: reversed MTC. The court ordered the
respondents to sell their property to
petitioners.
Respondents filed a motion for reconsideration
on December 23, 1994.
In its Order dated March 24, 1995, the RTC
denied the motion for having been filed beyond
the fifteen (15)-day period considering that
respondents received a copy of the decision on
December 7, 1994.Consequently, the
November 18, 1994 decision of the RTC
became final and executory.
On December 22, 1998, respondents filed a
petition for annulment of the RTC decision in
the CA. Respondents assailed the RTC for
ordering them to sell their property to
petitioners arguing that said courts appellate
jurisdiction in ejectment cases is limited to
the determination of who is entitled to the
physical possession of real property and the
only judgment it can render in favor of the
defendant is to recover his costs, which
judgment is conclusive only on the issue of
possession and does not affect the ownership
of the land. They contended that the sale of
real property by one party to another may be
ordered by the RTC only in a case for specific
performance falling under its original
exclusive jurisdiction, not in the exercise of its
appellate jurisdiction in an ejectment case
CA: reinstated the METC decision-
Petitioners: assail the CA in holding that the RTC
decision is void because it granted a relief inconsistent
with the nature of an ejectment suit and not even
prayed for by the respondents in their answer. They
contend that whatever maybe questionable in the
decision is a ground for assignment of errors on appeal
or in certain cases, as ground for a special civil action
for certiorari under Rule 65- and not as ground for its
annulment.
Issue: WON CA erred in annulling the RTC decision
on the ground of lack of jurisdiction?
Held: Yes, CA erred in annulling the decision of the
RTC on the ground of lack of jurisdiction.
Ratio: Lack of jurisdiction as a ground for annulment
of judgment refers to either lack of jurisdiction over
the person of the defending party or over the subject
matter of the claim.In a petition for annulment of
judgment based on lack of jurisdiction, petitioner

must show not merely an abuse of jurisdictional
discretion but an absolute lack of jurisdiction.
Lack of jurisdiction: means absence of or no
jurisdiction, that is, the court should not have taken
cognizance of the petition because the law does not
vest it with jurisdiction over the subject matter.
Jurisdiction over the nature of the action or subject
matter is conferred by law.
- There is no dispute that the RTC is vested with
appellate jurisdiction over ejectment cases decided
by the MeTC, MTC or MCTC. We note that petitioners
attack on the validity of the RTC decision pertains to
a relief erroneously granted on appeal, and beyond
the scope of judgment provided in Section 6 (now
Section 17) of Rule 70.While the court in an
ejectment case may delve on the issue of ownership
or possession de jure solely for the purpose of
resolving the issue of possession de facto, it has no
jurisdiction to settle with finality the issue of
ownership and any pronouncement made by it on the
question of ownership is provisional in nature.
! In this case, the RTC acted in excess of its
jurisdiction in deciding the appeal of respondents
when, instead of simply dismissing the complaint and
awarding any counterclaim for costs due to the
defendants (petitioners), it ordered the respondents-
lessors to execute a deed of absolute sale in favor of
the petitioners-lessees, on the basis of its own
interpretation of the Contract of Lease which granted
petitioners the option to buy the leased premises
within a certain period (two years from date of
execution) and for a fixed price (P150,000.00). This
cannot be done in an ejectment case where the only
issue for resolution is who between the parties is
entitled to the physical possession of the property.
! Such erroneous grant of relief to the defendants on
appeal, however, is but an exercise of jurisdiction by
the RTC. Jurisdiction is not the same as the exercise
of jurisdiction. As distinguished from the exercise of
jurisdiction, jurisdiction is the authority to decide a
cause, and not the decision rendered therein. The
ground for annulment of the decision is absence of, or
no, jurisdiction; that is, the court should not have
taken cognizance of the petition because the law does
not vest it with jurisdiction over the subject matter.
! Thus, while respondents assailed the content of
the RTC decision, they failed to show that the RTC did
not have the authority to decide the case on appeal

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EDNA DIAGO LHUILLIER, PETITIONER, VS.

BRITISH AIRWAYS, G.R. No. 171092, March 15,
2010

Del Castillo

FACTS:
Edna Diago Lhuillier took British Airway flight 548
from London to Rome. Once on board, she requested
Julian Halliday, one of its flight attendants, to assist
her in placing her hand-carried luggage in the
overhead bin. Halliday allegedly refused to help and
assist her, and even sarcastically remarked that "If I
were to help all 300 passengers in this flight, I would
have a broken back!". Edna further alleged that when
the plane was about to land in Rome, another flight
attendant, Nickolas Kerrigan (Kerrigan), singled her
out from among all the passengers in the business
class section to lecture on plane safety. Upon arrival
in Rome, petitioner complained to British Airwayss
ground manager and demanded an apology.
However, the latter declared that the flight stewards
were "only doing their job."

Edna then filed a complaint against British Airways
before the Regional Trial Court (RTC) of Makati City.
Summons, together with a copy of the complaint, was
served on British Airways through Violeta
Echevarria, General Manager of Euro-Philippine
Airline Services, Inc. British Airways filed a Motion to
Dismiss on grounds of lack of jurisdiction over the
case and over the person of the respondent. It alleged
that only the courts of London, United Kingdom or
Rome, Italy, have jurisdiction over the complaint for
damages pursuant to the Warsaw Convention, Article
28(1).

The RTC of Makati City granted the Motion to
Dismiss. Edna filed a Motion for Reconsideration but
the motion was denied. Hence, this petition.

ISSUE: WON Philippine Courts have jurisdiction

HELD: NO
It is settled that the Warsaw Convention has the force
and effect of law in this country. The Convention is
thus a treaty commitment voluntarily assumed by the
Philippine government and, as such, has the force and
effect of law in this country.

When the place of departure and the place of
destination in a contract of carriage are situated
within the territories of two High Contracting Parties,

said carriage is deemed an "international carriage".
The High Contracting Parties referred to herein were
the signatories to the Warsaw Convention and those
which subsequently adhered to it. In the case at
bench, petitioners place of departure was London,
United Kingdom while her place of destination was
Rome, Italy. Both the United Kingdom and
Italy signed and ratified the Warsaw Convention. As
such, the transport of the petitioner is deemed to be
an "international carriage" within the contemplation
of the Warsaw Convention. Since the Warsaw
Convention applies in the instant case, then the
jurisdiction over the subject matter of the action is
governed by the provisions of the Warsaw
Convention.

Under Article 28(1) of the Warsaw Convention, the
plaintiff may bring the action for damages before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place
of business;
3. the court where the carrier has an establishment
by which the contract has been made; or
4. the court of the place of destination.

In this case, it is not disputed that respondent is a
British corporation domiciled in London, United
Kingdom with London as its principal place of
business. Hence, under the first and second
jurisdictional rules, the petitioner may bring her case
before the courts of London in the United Kingdom.
In the passenger ticket and baggage check presented
by both the petitioner and respondent, it appears that
the ticket was issued in Rome, Italy. Consequently,
under the third jurisdictional rule, the petitioner has
the option to bring her case before the courts of
Rome in Italy. Finally, both the petitioner and
respondent aver that the place of destination is
Rome, Italy, which is properly designated given the
routing presented in the said passenger ticket and
baggage check. Accordingly, petitioner may bring her
action before the courts of Rome, Italy. The Court
finds that the RTC of Makati correctly ruled that it
does not have jurisdiction over the case filed by the
petitioner.

The Court further held that Article 28(1) of the
Warsaw Convention is jurisdictional in character and
not a venue provision. In other words, where the
matter is governed by the Warsaw Convention,
jurisdiction takes on a dual concept. Jurisdiction in
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the international sense must be established in

accordance with Article 28(1) of the Warsaw
Convention, following which the jurisdiction of a
particular court must be established pursuant to the
applicable domestic law. Only after the question of
which court has jurisdiction is determined will the
issue of venue be taken up. This second question
shall be governed by the law of the court to which the
case is submitted.

Tortious conduct as ground for the Lhuillers
complaint is within the purview of the Warsaw
Convention. It is thus settled that allegations of
tortious conduct committed against an airline
passenger during the course of the international
carriage do not bring the case outside the ambit of
the Warsaw Convention.
British Airways, in seeking remedies from the trial
court through special appearance of counsel, is not
deemed to have voluntarily submitted itself to the
jurisdiction of the trial court. The second sentence of
Sec. 20, Rule 14 of the Revised Rules of Civil
Procedure clearly provides: The defendants
voluntary appearance in the action shall be
equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of
jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance. Thus, a
defendant who files a motion to dismiss, assailing the
jurisdiction of the court over his person, together
with other grounds raised therein, is not deemed to
have appeared voluntarily before the court. What the
rule on voluntary appearance the first sentence of
the above-quoted rule means is that the voluntary
appearance of the defendant in court is without
qualification, in which case he is deemed to have
waived his defense of lack of jurisdiction over his
person due to improper service of summons. The
current view in our jurisdiction that a special
appearance before the courtchallenging its
jurisdiction over the person through a motion to
dismiss even if the movant invokes other groundsis
not tantamount to estoppel or a waiver by the
movant of his objection to jurisdiction over his
person; and such is not constitutive of a voluntary
submission to the jurisdiction of the court.

De Barrera v. Heirs of Legaspi, G.R. No. 174346,

September 12, 2008

FACTS: This is a land dispute between De Barrera and
Legaspi who is the present possessor of a parcel of
land in Misamis Occidental. Legaspi was evicted by
peace officers from the land on the pretense that the
property was owned by De Barrera as evidenced by
an OCT. Legaspi filed an action for recovery of
possession with preliminary mandatory injunction
and damages with the RTC.

De Barrera interposed the affirmative defense
of ownership and likewise assailed the jurisdiction of
the court on the ground that the assessed value of the
land was only 11,160 as evidenced by the tax
declaration.

RTC sustained its jurisdiction claiming that
what determines jurisdiction are the allegations in
the complaint and not those in the answer. Since the
complaint alleges that the land was worth 50,000, it
is within the jurisdiction of the RTC.

CA sustained.

ISSUE: Whether or not the RTC has jurisdiction
NONE

HELD: According to BP 129, accion publiciana
and/or accion reivindicatioria is within the exclusive
jurisdiction of the MTC if the assessed value of the
land does not exceed 20,000 outside Metro Manila
and 50,000 within Metro Manila. Thus the action is
within the jurisdiction of the MTC it appearing that
the assessed value of the land was only 11,160.

Assessed value is defined as the worth of the
land as determined by the tax authorities against
which the tax rate is applied. It is not similar to fair
market value. Thus, it was an error for the court to
base its jurisdiction to the uncorroborated allegation
of Legaspi that the land was worth 50,000

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III. Cause of Action

(Rule 2)

Mindanao Terminal v. Phoenix Assurance, G.R.
No. 162467, May 8, 2009

Facts: Del Monte Philippines contracted Mindanao
Terminal, a stevedoring company, to load and stow
bananas and pineapples owned by Del Monte
Produce (note: not by Del Monte Philippines) into the
cargo hold of a vessel. Del Monte Produce insured the
shipment of fruits under an open cargo policy with
Phoenix (insurer) and McGee & Co (underwriting
manager/agent of Phoenix).

The cargo was damaged so Del Monte Produce filed a
claim against Phoenix and McGee. Phoenix and
McGee paid del Monte Produce and was issued a
subrogation receipt. So Phoenix and McGee filed an
action for damages against Mindanao Terminal in the
RTC of Davao.

The RTC ruled against Phoenix and McGee stating,
among others, that they did not have a cause of action
against Mindanao because Mindanao was contracted
by Del Monte Philippines, and not with the insured
Del Monte Produce.

On appeal, the CA reversed, stating that there was a
cause of action based on Article 2176 (Quasi-delict).

Issue: Do Phoenix and McGee have a cause of action
against Mindanao Terminal?

Held: Yes, there was a cause of action.
The present action is based on quasi-delict, arising
from the negligent and careless loading and stowing
of the cargoes belonging to Del Monte Produce. Even
assuming that both Phoenix and McGee have only
been subrogated in the rights of Del Monte Produce,
who is not a party to the contract of service between
Mindanao Terminal and Del Monte, still the insurance
carriers may have a cause of action in light of the
Courts consistent ruling that the act that breaks the
contract may be also a tort. In fine, a liability for tort
may arise even under a contract, where tort is that
which breaches the contract.

In the present case, Phoenix and McGee are not suing
for damages for injuries arising from the breach of
the contract of service but from the alleged negligent
manner by which Mindanao Terminal handled the

cargoes belonging to Del Monte Produce. Despite the
absence of contractual relationship between Del
Monte Produce and Mindanao Terminal, the
allegation of negligence on the part of the defendant
should be sufficient to establish a cause of action
arising from quasi-delict.

Dolores Macaslang v. Renato Zamora, G.R. No.
156375, May 30, 2011

Facts:
1. Mar 10, 1999: Zamoras FILED: Unlawful
detainer with MTCC, alleging among others:
a. Macaslang sold to them a residential
lot in Sabang, Davao City. 400sqm.
Including a residential house, where
Macaslang was then living.
b. After the sale, Macaslang requested to
be allowed to live in the house.
Zamora granted the request on the
reliance of Macaslangs promise to
vacate as soon as she would be able to
find a new residence
c. After 1 year, Zamoras demanded
upon the defendant to vacate but she
failed and refused. The demand letter
(Sept 1998) reads:
i. This is to give notice that
since the mortgage to your
property has long been
expired and that since the
property is already in my
name, I will be taking over the
occupancy of said property
two (2) months from the date
of this letter.
d. Zamoras sought the help of the
Lupon, but no settlement was reached
as shown by certification to file.
2. Despite the due service of summons,
Macaslang did not file an answer. Hence
MTCC declared her in default.
3. MTC: In favor of Zamoras, ordered Macaslang
to vacate, pay attys fees, and rental until they
shall have vacated the properties in question.
4. Macaslang appealed to the RTC alleging:
a. Extrinsic Fraud
b. Meritorious defense: there was no
actual sake considering that the deed
of absolute sale relied upon is a patent
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nullity as her signature therein was

procured through fraud and trickery.
5. RTC: Ruled in favor of Macaslang and
DISMISSED Zamoras complaint, for failure to
state a COA. The same maybe refilled in the
same court by alleging a COA, if any. Zamoras
M for Execution of MTCC decision rendered
moot by this judgment.
6. CA: REVERSED RTC decision for having no
basis in fact and law. MTCC decision
reinstated.

Issues: w/n RTC in its appellate juris limited to
assigned errors
w/n in an action for unlawful detainer, where
there was no prior demand to vacate and
comply with the conditions of the lease, a
valid COA exists.
w/n there was a violation of the Rules on
Summary procedure.

Decision:
1. RTC in its appellate jurisdiction may rule
upon an issue not raised on appeal.
a. CA said that RTC cannot rule on issue
not assigned as an error. This may
have been correct if the appeal to the
CA was a first appeal from RTC to CA
(R41). There is an express limitation
of the review to only specified in the
assignment of errors.
b. But HERE this is a, MTC to RTC appeal
governed by a specific rule for
unlawful detainer cases. R70 18
provides that MTC judgment may be
appealed to the RTC which shall
decide the same on the basis of the
entire record.
c. This difference in procedure is
traceable from BP129 22, then in the
1991 Rules on summary procedure
21, then 1997 Rules of Civil
Procedure R40 7. (Please see code)
d. Even if the rules did not differentiate
in the procedure, the review on the
entire case is still allowed as an
exception (c) and (d).
GN: Appellate court may only review
errors assigned and properly argued1
Comilang v. Burcena GR 146853 (2006)
EXCS: (a) When the question affects

jurisdiction

(b) Matters that evidently
plain or clerical errors

(c)
Matters
whose
consideration is necessary for a just
and complete resolution

(d) Matters of record having
bearing on the issue that parties failed
to raise

(e) Matters closely related to
an error assigned

(f) Matters upon which the
determination of a question is
dependent

2. CA Correctly delved into w/n there was a
COA.
a. RTC: there is no COA because there
was no demand to vacate.
b. CA: No, the complaint readily reveals
that there was a demand to vacate.
c. A complaint for Unlawful detainer is
sufficient if it alleges the withholding
of possession or the refusal is
unlawful
without
necessarily
employing the terminology of the law.
(See Fact #1 (c)i) Demand was not
only made but also alleged in the
complaint.
d. A complaint has sufficient COA for
unlawful det. If it states the FF2:
i. Initial
possession
by
defendant was by contract or
tolerance
ii. Eventually possession became
illegal
upon
notice
re:termination
iii. Defendant still remained in
possession and deprived
plaintiff of its enjoyment
iv. Complaint was instituted
within one year from last
demand to vacate.
e. TEST for sufficiency of complaint: is
w/n the court can render a valid
judgment based on facts alleged in
complaint.
f. SC: Complaint sufficiently stated a
COA. Complaint complied with 1-4.
2
Cabrera v. Getaruela GR 164213 (2009)
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BUT Fail to state and Lack of COA are

different. RTC said there is failure to
state COA when in fact its basis was
that there was no demand to vacate.
Again RTC erred in this regard, see
Fact #1 (c)i.
i. Golden Gate Realty Co. v. IAC:
The term vacate is not a
talismatic word that must be
employed in all notices to
vacate.

3. Ejectment was not proper due to defense of
ownership.
a. Zamoras COA is based on right to
posses resulting from ownership.
b. BUT exhibits show that the real
transaction is one of equitable
mortgage not sale. NCC1602 instances
where a contract may be presumed to
be an equitable mortgage.
i. Land was sold for P100K,
when the demand letter was
for a sum of P1.6M. Price
inadequate. Then the vendor
remained in possession of the
property. Deed of sale was
executed as a result or by
reason of a loan.
c. Nonetheless, findings favorable to
Macaslangs ownership are not finally
definitive because R70 16 provides:
that when the defendant raises
ownership, and the Q of possession
cannot be resolved, ownership shall
only be resolved to determine
possession [not title].

4. MTC committed procedural lapses.
a. MTC granted M to Declare Macaslang
in default for failure to file an answer.
i. This motion is expressly
prohibited under R70 13 (8)
ii. What MTC should have done
was provided for in R70 7:
to simply render judgment as
may be warranted by the facts
alleged in the comlaint and
limited to what is prayed for
therein.
iii. Failure to file an answer
under R70, results only to a
judgment by default not a

declaration of default.
b. MTCs reception of oral testimony is
also a procedural lapse.
i. R70 envisions the submission
only of affidavits of the
witnesses under 10
ii. 11 (2) that should the MTC
need to clarify material facts,
it may require parties to
submit affidavits or other
evidence.
(note:in
both
sections no mention of
testimony, only affidavits.)
WHEREFORE GRANTED.

Philip Turner, et al. v. Lorenzo Shipping
Corporation, G.R. No. 157479, November 24, 2010

Facts: Sps. Philip and Elnora Turner held 1.10 million
shares of stock of Lorenzo Shipping Corporation
(LSC), a domestic corporation engaged in cargo
shipping. LSC decided to amend its articles of
incorporation to remove the stockholders' pre-
emptive rights to newly issued shares of stock. As it is
prejudicial to their interest as stockholders, Sps.
Turner voted against the amendment and demanded
payment of their shares (at the rate of P2.3/share
based on the book value of the shares, totaling
P2.3M). LSC disagreed on the amount, but an
appraisal committee settled the matter and set the
valuation at P2.5M in total. Sps. Turner then
demanded payment based on this amount, but LSC
still refused to pay. LSC argued that, according to the
Corporation Code, payment can be made only if a
corporation has unrestricted retained earnings
(earnings that can be distributed as dividends) in its
books to cover the value of the shares.3 In January 22,
2001, upon LSCs refusal to pay, the Turners filed a
complaint for collection and damages. RTC ruled in
their favor and ordered LSC to pay after it was
proven that LSC actually had retained earnings
amounting to P12M in March 21, 2002. CA, however,
reversed the RTC and dismissed the case, stating that
3
Pursuant to the Corporation Code, the dissenting stockholders

exercising their appraisal rights is subject to the legal condition that no
payment shall be made to any dissenting stockholder unless the
corporation has unrestricted retained earnings in its books to cover
such payment. The purpose of this is to ensure that the corporate
assets cannot be distributed among the stockholders without first
paying the creditors, based on the trust fund doctrine.
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the cause of action had not yet accrued due to the

lack of unrestricted retained earnings in the books of
LSC.

Issues: Did RTC Judge Tipon exceed his jurisdiction in
entertaining the complaint and issuing writs of
garnishment against LSC? - Yes. Did the spouses have
a cause of action? No. When is the proper time to
determine cause of action in this case? At the time
the demand of payment is made (2001).

Ruling: Subject to certain qualifications, and except as
otherwise provided by law, an action commenced
before the cause of action has accrued is prematurely
brought and should be dismissed. It does not matter
if the cause of action accrues after the action is
commenced and while it is pending. It is settled rule
that to recover at all, there must be some cause of
action at the commencement of the suit.

Before an action can properly be commenced, all the
essential elements of the cause of action must be in
existence, that is, the cause of action must be
complete. All valid conditions precedent to the
institution of the particular action, whether
prescribed by statute, fixed by agreement of the
parties or implied by law must first be performed or
complied with, unless the conduct of the adverse
party has been such as to prevent or waive
performance or excuse non-performance of the
condition. In this case, the condition precedent for a
cause of action is the existence of unrestricted
retained earnings in the books of LSC. Without it, the
action is premature.

An action prematurely brought is a groundless suit.
Unless the plaintiff has a valid and subsisting cause of
action at the time his action is commenced, the defect
cannot be cured or remedied by the acquisition or
accrual of one while the action is pending, and a
supplemental complaint or an amendment setting up
such after-accrued cause of action is not permissible.

The evidence here shows that in its quarterly
financial statement submitted to the SEC, LSC indeed
has retained earnings of P12M as of 2002. However,
this fact is neither material nor disputed. The valid
argument against paying is that there must be
unrestricted retained earnings at the time the
demand for payment is made (i.e. filing of the suit in
2001). At the time of Sps. Turners demand, LSC had
no retained earnings yet and in fact even had a deficit
of P73M. This is borne out by LSCs Financial

Statements for Fiscal Year 1999. Thus, any retained
earnings made in 2002a year after the case was
filedis irrelevant to the Sps. Turner's right to
recover. Well-settled rule is if no right existed at the
time the action was commenced, the suit cannot be
maintained, although such right of action may have
accrued thereafter.

Chua v. Metrobank, et al., G. R. No.182311, August
19, 2009

FACTS: Petitioner Chua, president of Filiden (a
domestic corporation), obtained a loan from
Metrobank which was secured by a REM on parcels of
land he owned. Upon maturity, Metrobank demanded
that Filden and Chua fully pay and settle their
accounts, but the latter failed to do so. Thus,
Metrobank extra-judicially foreclosed the REMs
constituted on the subject properties.

Upon a verified Petition for Foreclosure filed
by Metrobank, Atty. Celestra issued a Notice of Sale.
Chua filed a Complaint for Injunction with Prayer for
Issuance of TRO, Preliminary Injunction and
Damages4 (first case) against Atty. Celestra. After the
expiration of the TRO, Atty. Celestra reset the
schedule of the auction sale on Nov. 8, 2001.
However, on the day of the auction sale (Nov 8), the
RTC issued an Order directing that the said sale be
reset anew AFTER Nov. 8, 2001. Said Order was not
received by Atty. Celestra on time, thus, the auction
sale proceeded on Nov. 8, 2001 and a Certificate of
Sale was issued to Metrobank as the highest bidder.

Petitioners (Chua and Filiden) filed with the
RTC a Motion to Admit Amended Complaint in Civil
Case No. CV-01-0207. The amended complaint
basically questioned the validity of the auction sale.
The RTC ruled in favor of Metrobank, saying that the
auction sale was valid and denied Petitioners
application for injunction. Upon appeal, the CA
reversed the RTC decision and remanded the case for
further proceedings. Then, petitioners (Chua and
Filiden) filed a Complaint for Damages5 (second case)
against Metrobank and Atty. Celestra. A Motion to
Consolidate the action for damages and injunction
case was then filed by the Petitioners. Metrobank
opposed the Consolidation on the ground of forum
4
5
Civil Case No. CV-01-0207 First case

Civil Case No. CV-05-0402 Second case
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shopping. The RTC ruled in favor of Metrobank. The

CA affirmed the RTC decision.

ISSUE: W/N the successive filing of the first
(injunction) and second (action for damages) cases
amounted to forum shopping.

HELD/RATIO: YES.

Forum shopping can be committed in three ways: (1)
filing multiple cases based on the same cause of
action and with the same prayer, the previous case
not having been resolved yet (where the ground for
dismissal is litis pendentia); (2) filing multiple cases
based on the same cause of action and the same
prayer, the previous case having been finally resolved
(where the ground for dismissal is res judicata); and
(3) filing multiple cases based on the same cause of
action, but with different prayers (splitting of causes
of action, where the ground for dismissal is also
either litis pendentia or res judicata).

In this case, petitioners committed forum shopping
by filing multiple cases based on the same cause of
action, although with different prayers. Forum
shopping occurs although the actions seem to be
different, when it can be seen that there is a splitting
of a cause of action. A cause of action is understood to
be the delict or wrongful act or omission committed
by the defendant in violation of the primary rights of
the plaintiff. It is true that a single act or omission can
violate various rights at the same time, as when the
act constitutes juridically a violation of several
separate and distinct legal obligations. However,
where there is only one delict or wrong, there is but a
single cause of action regardless of the number of
rights that may have been violated belonging to one
person.

Petitioners would like to make it appear that the
injunction case was solely concerned with the
nullification of the auction sale and certification of
sale, while the action for damages was a totally
separate claim for damages. Yet, a review of the
records reveals that petitioners also included an
explicit claim for damages in their Amended
Complaint in the injunction case. Also, there is no
question that the claims of petitioners for damages in
both cases are premised on the same cause of action,
i.e., the alleged wrongful conduct of respondents in
connection with the foreclosure sale of the
properties.

Catalina Chu, et al. v. Spouses Fernando and
Trinidad Cunanan, G.R. No. 156185, September
12, 2011

Facts:
Spouses Chu executed a deed of sale with
assumption of mortgage over 5 parcels of
land in favor of Cunanan. The Cunanans
transferred two of the lots to Spouses Carlos
and the three to Cool Town Realty. Spouses
Carlos later sold the two lots to Benelda
Estate Corp.
2 Lots: Cunanan ! Carloses ! Benalda Estate
3 Lots: Cunanan ! Cool Town Realty

Spouses Chu filed a civil complaint (first civil
case) to recover the unpaid balance with the
Cunanans, Cool Town Realty and Benelda
Estate as defendants.
SC: Upheld the dismissal of the civil case Chu
vs. Benelda Estate Corp.
The Chus, Cunanans and Cool Town Realty
entered into a compromise agreement.
The Chus brought another civil case (second
civil case) with the Cunanans, Carloses and
Benelda Estate as defendants. The suit sought
to cancel the TCT of the two lots. (see
diagram)
The Cunanans filed MTD on the ground of 1)
res judicata and 2) claim or demand had been
paid, waived. Benelda Estate filed an MTD on
the grounds of 1) forum shopping 2) bar by
prior judgment 3) failure to state cause of
action. The Carloses raised affirmative
defenses: 1) failure to state a cause of action
2) res judicata 3) bar by statute of limitations
RTC: Denied the MTDs. The compromise
agreement involved only the three parcels of
land.
CA: Nullified the challenged orders of the
RTC. The compromise agreement had ended
the legal controversy between the parties
with respect to the cause of action arising
from the deed of sale with assumption of
mortgage covering ALL FIVE parcels of land.
Issue:
Whether or not the Spouses Chu split a single cause
of action by filing two civil cases (YES)

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Held:
The pertinent portions of the compromise
agreement indicate that the parties intended
to settle all their claims against each other
which arose on the deed of sale with
assumption of mortgage. There is no question
that the deed covered all FIVE lots.
To limit the compromise agreement only to
the three lots would contravene the objective
of the first civil case which was to enforce or
to rescind the entire deed. Such interpretation
is akin to saying that the Cunanans separately
sold the five lots.
Petitioners were guilty of splitting the single
cause of action to enforce or rescind the deed
of sale with assumption of mortgage.
Splitting a single cause of action is the act of
dividing a single or indivisible cause of action
into several parts or claims and instituting
two or more actions upon them.
The Chus were not at liberty to split their
demand to enforce or rescind the deed and to
prosecute piecemeal or present only a
portion of the grounds upon which a special
relief was sought under the deed and leave
the rest to be presented in another suit;
otherwise there would be no end to litigation.
[The Court went on to discuss that all
elements for res judicata were met. The third
element is identity of causes of action.]
The two civil cases were rooted in one and
the same cause of action the failure of
Cunanan to pay in full the purchase price of
the five lots subject of the deed. In fine, the
rights and obligations of the parties vis--vis
the five lots were all defined and governed by
the deed of sale with assumption of mortgage,
the only contract between them. The contract
was single and indivisible insofar as the
parties were concerned.
The Chus could not proceed with the second
civil case despite the silence of the
compromise agreement as to the Carloses and
the Benelda Estate because there can only be
one action where the contract is entire and
the breach total, and the petitioners must
therein recover all their claims and damages.

NM Rothschild & Sons (AUSTRALIA) Limited, v.

Lepanto Consolidated Mining Company, G.R. No.
175799, November 28, 2011

Facts:
Lepanto Consolidated filed a civil complaint
against NM Rothschild to declare the loan and
hedging contracts between the parties void
for being contrary to Art. 20186 of the Civil
Code.
Lepanto asserts in the complaint that the
hedging contracts are void. Under the
hedging contracts, despite the express
stipulation for deliveries of gold, the intention
of the parties was allegedly merely to compel
each other to pay the difference between the
value of the gold at the forward price stated
in the contract and its forward price at the
supposed time of delivery.
NM Rothschild filed a Motion to Dismiss
(MTD) on the grounds (among others) of
failure of the Complaint to state a cause of
action and absence of a cause of action.
TC: Denied the MTD.
The TC held that the complaint contains all
three elements of a cause of action.

Elements of a Cause of Complaint alleges that:
Action
1. Right existing in favor Plaintiff has the right to
of plaintiff
ask to declare the hedging
contracts null for being
null and void and contrary
to Art. 2018, NCC
2. Duty on the part of Defendant
has
the
the defendant to respect obligation not to enforce
plaintiffs right
the said contracts, they
being in the nature of
wagering or gambling
agreements, making the
transactions
implementing
those
contracts void under Phil.
laws
3. Act or omission of the defendant ignored the
defendant in violation of advice and intends to
such right
enforce the contracts by
6
Art. 2018. If a contract which purports to be for the delivery of goods,

securities or shares of stock is entered into with the intention that the
difference between the price stipulated and the exchange or market price at the
time of the pretended delivery shall be paid by the loser to the winner, the
transaction is null and void. The loser may recover what he has paid. (n)
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Case Digests

demanding payments due

therefrom.

NM Rothschild filed an MR which was denied
by the TC.
NM Rothschild filed a Petition for Certiorari
before the CA alleging that the TC committed
grave abuse of discretion in denying its MTD.
CA: Dismissed the petition for certiorari.

Issue:
1) W/N the denial of the MTD (MTD on the ground of
absence of a cause of action) was valid (YES)
2). W/N the denial of the MTD (MTD on the ground of
failure of a cause of action) was valid (YES)

Held:
First Issue
Absence of cause of action: This is not a
ground in an MTD under Sec. 1, Rule 16 of the
ROC. Such a defense raises evidentiary issues
closely related to the validity and/or
existence
of
respondents
(Lepanto
Consolidated) alleged cause of action and
should therefore be threshed out during trial.

Second Issue:
Failure to state a cause of action: The same is
available as a ground in an MTD. HOWEVER,
in the present petition, said ground cannot be
ruled upon without going into the very merits
of the case.
In an MTD, a defendant hypothetically admits
the truth of the material allegations of the
ultimate facts contained in the plaintiffs
complaint. But this rule admits of exceptions.
In Tan vs. CA: An MTD does not admit
allegations of legal conclusions or mere
conclusions of law Courts are fairly entitled
to examine the records/documents duly
incorporated into the complaint by the
pleader himself in ruling on the demurrer to
the complaint.
In the case at bar, respondent asserts in the
complaint that the hedging contracts are void.
Whether such an agreement (that the
intention of the parties was to compel each
other to pay the difference of the value of the
gold) is void is a mere allegation of a
conclusion of law, which cannot be
hypothetically admitted.
Therefore, the determination of whether or

not the complaint stated a cause of action
would involve an inquiry into whether or not
the assailed contracts are void under
Philippine laws, which is the very issue to be
determined in the civil case.
The defense of NM Rothschild requires the
presentation of evidence on the merits of the
case. An issue that requires the
contravention of the allegations of the
complaint, as well as the full ventilation, in
effect, of the main merits of the case, should
not be within the province of a mere MTD.
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Case Digests
IV.

Parties
(Rule 3)

Philip Go, et al. v. Distinction Properties
Development, G.R. No. 194024, April 25, 2012

FACTS
Petitioners are
registered
owners
of
condominium units in Phoenix Heights
Condominium; respondent Distinction Properties
Development and Construction, Inc. (DPDCI) is
engaged in the development of condominium
projects, among which was Phoenix Heights
February 1996 - Petitioner Pacifico Lim, then
president of DPDCI, executed a Master Deed and
Declaration of Restrictions (MDDR) of Phoenix
Heights Condominium, which was filed with the
Registry of Deeds.
o DPDCI undertook, among others, the
marketing aspect of the project and the sale
of the units
Phoenix
Heights
Condominium
Corporation (PHCC) was formally organized and
incorporated.
o DPDCI turned over to PHCC ownership and
possession of the condominium units except
for two commercial units/spaces (used as
PHCCs administration office and living
quarters by the building administrator),
which, though used by PHCC, DPDCI was
assessed association dues
August 2004 - PHCC approved a settlement offer
from DPDCI for the set-off of the latters
association dues arrears with the assignment of
title over the two units and their conversion into
common areas
o CCT Nos. PT-43400 and PT-43399 were
issued by the Registrar of Deeds of Pasig City
in favor of PHCC
o With the conformity of PHCC, DPDCIs
application for alteration (conversion of
unconstructed 22 storage units and units
GF4-A and BAS from saleable to common
areas) was granted by the HLURB
August 2008 Petitioners, as condominium unit
owners, filed a complaint before the HLURB
against DPDCI for unsound business practices
and violation of the MDDR
o alleged
that
DPDCI
committed
misrepresentation in their circulated flyers
and brochures as to the facilities or amenities
that would be available in the condominium

and failed to perform its obligation to comply
with the MDDR
o DPDCI denied that it breached its promises
and representations to the public concerning
the facilities in the condominium; DPDCI
questioned the petitioners personality to sue
as the action was a derivative suit
The HLURB ruled in favor of petitioners, holding
as invalid the agreement between DPDCI and
PHCC, for the reason that it was not approved by
the majority of the members of PHCC as required
under Section 13 of the MDDR.
o DPDCIs defense, that the brochure was a
mere draft, was against human experience
and a convenient excuse to avoid its
obligation to provide the facility of the
project.
o the case was not a derivative suit but one
which involved contracts of sale of the
respective units between the complainants
and DPDCI, hence, within its jurisdiction
pursuant to Section 1, PD 957
DCCPI filed a petition for certiorari; the CA ruled
that the HLURB had no jurisdiction over the
complaint.
o The HLURB not only relied heavily on the
brochures which, according to the CA, did not
set out an enforceable obligation on the part
of DPDCI, but also erroneously cited Section
13 of the MDDR
o Jurisdiction over PHCC, an indispensable
party, was neither acquired nor waived by
estoppel. Citing Carandang v. Heirs of De
Guzman, it held that, in any event, the action
should be dismissed because the absence of
PHCC, an indispensable party, rendered all
subsequent actuations of the court void, for
want of authority to act, not only as to the
absent parties but even as to those present

ISSUE
Whether PHCC is an indispensable party which
warranted the dismissal of the case by reason of it
not having been impleaded in the case

HELD
An indispensable party is defined as one who has
such an interest in the controversy or subject
matter that a final adjudication cannot be made,
in his absence, without injuring or affecting that
interest
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It is precisely when an indispensable party is

not before the court that an action should be
dismissed. The absence of an indispensable
party renders all subsequent actions of the
court null and void for want of authority to
act, not only as to the absent parties but even
to those present. (NLMK-OLALIA-KMU) v.
Keihin Philippines Corporation)
o A final decree would necessarily affect the
rights of indispensable parties so that the
Court could not proceed without their
presence (Plasabas v. Court of Appeals)
PHCC is an indispensable party and should have
been impleaded, either as a plaintiff or as a
defendant, in the complaint filed before the
HLURB as it would be directly and adversely
affected by any determination therein.
o The causes of action, or the acts complained
of, were the acts of PHCC as a corporate
body.
o In the judgment rendered by the HLURB, the
dispositive portion in particular, DPDCI was
ordered (1) to pay 998,190.70, plus
interests and surcharges, as condominium
dues in arrears and turnover the
administration office to PHCC; and (2) to
refund to PHCC 1,277,500.00, representing
the cost of the deep well, with interests and
surcharges.
o Also, the HLURB declared as illegal the
agreement regarding the conversion of the 22
storage units and Units GF4-A and BAS, to
which agreement PHCC was a party
The cause of action rightfully pertains to PHCC.
Petitioners cannot exercise the same except through
a derivative suit. In

Hacienda Luisita Incorporated v. Presidential
Agrarian Reform Council, G.R. No. 171101, July
05, 2011

FACTS
In 1958, the Spanish owners of Compaia
General de Tabacos de Filipinas (Tabacalera) sold
Hacienda Luisita and the Central Azucarera de Tarlac,
the sugar mill of the hacienda, to the Tarlac
Development Corporation (Tadeco), then owned and
controlled by the Jose Cojuangco Sr. Group. The
Central Bank of the Philippines assisted Tadeco in
obtaining a dollar loan from a US bank. Also, the GSIS
extended a PhP5.911 million loan in favor of Tadeco
o
to pay the peso price component of the sale, with the

condition that the lots comprising the Hacienda
Luisita be subdivided by the applicant-corporation and
sold at cost to the tenants, should there be any, and
whenever conditions should exist warranting such
action under the provisions of the Land Tenure
Act. Tadeco however did not comply with this
condition.

On May 7, 1980, the martial law
administration filed a suit before the Manila RTC
against Tadeco, et al., for them to surrender Hacienda
Luisita to the then Ministry of Agrarian Reform
(MAR) so that the land can be distributed to farmers
at cost. Responding, Tadeco alleged that Hacienda
Luisita does not have tenants, besides which sugar
lands of which the hacienda consisted are not
covered by existing agrarian reform legislations. The
Manila RTC rendered judgment ordering Tadeco to
surrender Hacienda Luisita to the MAR. Therefrom,
Tadeco appealed to the CA.

On March 17, 1988, during the administration
of President Corazon Cojuangco Aquino, the Office of
the Solicitor General moved to withdraw the
governments case against Tadeco, et al. The CA
dismissed the case, subject to the PARCs approval of
Tadecos proposed stock distribution plan (SDP) in
favor of its farmworkers. [Under EO 229 and later RA
6657, Tadeco had the option of availing stock
distribution as an alternative modality to actual land
transfer to the farmworkers.] On August 23,
1988, Tadeco organized a spin-off corporation,
herein petitioner HLI, as vehicle to facilitate stock
acquisition by the farmworkers. For this purpose,
Tadeco conveyed to HLI the agricultural land portion
(4,915.75 hectares) and other farm-related
properties of Hacienda Luisita in exchange for HLI
shares of stock.

On May 9, 1989, some 93% of the then
farmworker-beneficiaries (FWBs) complement of
Hacienda Luisita signified in a referendum their
acceptance of the proposed HLIs Stock Distribution
Option Plan (SODP). On May 11, 1989, the SDOA was
formally entered into by Tadeco, HLI, and the 5,848
qualified FWBs. This attested to by then DAR
Secretary Philip Juico. The SDOA embodied the basis
and mechanics of HLIs SDP, which was eventually
approved by the PARC after a follow-up referendum
conducted by the DAR on October 14, 1989, in which
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5,117 FWBs, out of 5,315 who participated, opted to

receive shares in HLI.

On August 15, 1995, HLI applied for the
conversion of 500 hectares of land of the hacienda
from agricultural to industrial use, pursuant to Sec.
65 of RA 6657. The DAR approved the application on
August 14, 1996, subject to payment of three percent
(3%) of the gross selling price to the FWBs and to
HLIs continued compliance with its undertakings
under the SDP, among other conditions.

On December 13, 1996, HLI, in exchange for
subscription of 12,000,000 shares of stocks of
Centennary Holdings, Inc. (Centennary), ceded 300
hectares of the converted area to the latter.
Subsequently, Centennary sold the entire 300
hectares for PhP750 million to Luisita Industrial Park
Corporation (LIPCO), which used it in developing an
industrial complex. From this area was carved out 2
parcels, for which 2 separate titles were issued in the
name of LIPCO. Later, LIPCO transferred these 2
parcels to the Rizal Commercial Banking Corporation
(RCBC) in payment of LIPCOs PhP431,695,732.10
loan obligations to RCBC. LIPCOs titles were
cancelled and new ones were issued to RCBC. Apart
from the 500 hectares, another 80.51 hectares were
later detached from Hacienda Luisita and acquired by
the government as part of the Subic-Clark-Tarlac
Expressway (SCTEX) complex. Thus, 4,335.75
hectares remained of the original 4,915 hectares
Tadeco ceded to HLI.

Such, was the state of things when two
separate petitions reached the DAR in the latter part
of 2003. The first was filed by the Supervisory Group
of HLI (Supervisory Group), praying for a
renegotiation of the SDOA, or, in the alternative, its
revocation. The second petition, praying for the
revocation and nullification of the SDOA and the
distribution of the lands in the hacienda, was filed
by Alyansa ng mga Manggagawang Bukid ng
Hacienda Luisita (AMBALA). The DAR then
constituted a Special Task Force (STF) to attend to
issues relating to the SDP of HLI. After investigation
and evaluation, the STF found that HLI has not
complied with its obligations under RA 6657 despite
the implementation of the SDP. On December 22,
2005, the PARC issued the assailed Resolution No.
2005-32-01, recalling/revoking the SDO plan of
Tadeco/HLI. It further resolved that the subject lands
be forthwith placed under the compulsory coverage

or mandated land acquisition scheme of the CARP.

From the foregoing resolution, HLI sought
reconsideration. Its motion notwithstanding, HLI also
filed a petition before the Supreme Court in light of
what it considers as the DARs hasty placing of
Hacienda Luisita under CARP even before PARC could
rule or even read the motion for reconsideration.
PARC would eventually deny HLIs motion for
reconsideration via Resolution No. 2006-34-01 dated
May 3, 2006.

ISSUE
Whether the Supervisory Group, AMBALA
and their respective leaders are real parties-
in-interest

HELD
YES
HLI would deny real party-in-interest
status to the purported leaders of the
Supervisory Group and AMBALA, i.e., Julio
Suniga, Windsor Andaya, and Rene
Galang, who filed the revocatory petitions
before the DAR.
o Galang, the self-styled head of
AMBALA, gained HLI employment in
June 1990 and, thus, could not have
been a party to the SDOA executed a
year earlier.
o As regards the Supervisory Group,
HLI alleges that supervisors are not
regular farmworkers, but the
company nonetheless considered
them FWBs under the SDOA as a mere
concession to enable them to enjoy
the same benefits given qualified
regular farmworkers.
The SDOA no less identifies the SDP
qualified
beneficiaries
as
the
farmworkers who appear in the annual
payroll, inclusive of the permanent and
seasonal employees, who are regularly or
periodically employed by [HLI].
o Galang, per HLIs own admission, is
employed by HLI, and is, thus, a
qualified beneficiary; he comes within
the definition of a real party-in-
interest, one who stands to be
benefited or injured by the judgment
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in the suit or is the party entitled to

the avails of the suit
o The same holds true with respect to
the Supervisory Group whose
members were admittedly employed
by HLI and whose names and
signatures even appeared in the
annex of the SDOA.
" Being qualified beneficiaries of
the SDP, Suniga and the other 61
supervisors are certainly parties
who would benefit or be
prejudiced by the judgment
recalling the SDP or replacing it
with some other modality to
comply with RA 6657
Even assuming that members of the
Supervisory Group are not regular
farmworkers, but are in the category of
other farmworkers mentioned in Sec. 4,
Article XIII of the Constitution, thus only
entitled to a share of the fruits of the land,
this does not detract from the fact that
they are still identified as being among
the SDP qualified beneficiaries. As such,
they are, thus, entitled to bring an action
upon the SDP
Further, under Sec. 50, paragraph 4 of RA
6657, farmer-leaders are expressly
allowed to represent themselves, their
fellow farmers or their organizations in
any proceedings before the DAR

Metrobank v. Rural Bank of Gerona, G.R. No.
159097, July 05, 2010

Facts: The Central Bank and the Rural Bank of
Gerona (RBG) entered into an agreement where RBG
would facilitate loan applications of farmers-
borrowers. In accordance with the agreement, RBG
opened a special savings account with Metrobank
which was designated to receive the credit advice
released by the Central Bank representing the
proceeds of the loan of the farmers-borrowers;
Metrobank, in turn, would credit the proceeds to
RBGs special savings account for the latters release
to the farmers-borrowers.
Throughout 1978, the Central Bank approved the
loan application of 3 farmer-borrowers, Dominador
de Jesus, Basilio Panopio, and Ponciano Lagman in
the amounts of P178,652.00, P189,052.00 and
P220,000.00 respectively. The amounts were

credited to Metrobanks demand deposit
account. Metrobank, in turn, credited RBGs special
savings account. RBG withdrew the credited amount
from its account.
Subsequently, the Central Bank issued debit
advices, reversing all the approved IBRD loans. The
Central Bank debited from Metrobanks demand
deposit account the amount corresponding to all
three loans. Metrobank, in turn, debited the amounts
from RBGs special savings account Metrobank
claimed that these amounts were insufficient to cover
all the credit advices that were reversed by the
Central Bank.
Metrobank claimed that RBG had an outstanding
balance of P334,220.00. To collect this amount, it
filed a complaint for collection of sum of
money against RBG before the RTC
The RTC ruled for Metrobank, finding that legal
subrogation had ensued
the CA declared that the Central Bank should be
impleaded as a necessary party so it could shed light
on the loan reversals, noting that no evidence exists
why the Central Bank reversed the credit advices it
had previously confirmed, . Thus, the CA set aside the
RTC decision, and remanded the case to the trial
court for further proceedings after the Central Bank
is impleaded as a necessary party.
Issue: Whether the CAs ruling to implead the Central
Bank as a necessary party and to remand the case to
the RTC for further proceedings was correct
Ratio: NO
We agree with the CAs conclusion that the
agreement governed only the parties involved the
Central Bank and the RBG. Metrobank was simply an
outsider to the agreement. Based on these
arrangements between the Central Bank and RBG,
the Central Banks immediate recourse, should have
been against the farmers-borrowers and the RBG;
thus, it erred when it deducted the amounts covered
by the debit advices from Metrobanks demand
deposit account. Under the Project Terms and
Conditions, Metrobank had no responsibility over the
proceeds of the loans other than serving as a conduit
for their transfer from the Central Bank to the RBG
once credit advice has been issued.
Our disagreement with the appellate court is in its
conclusion that no legal subrogation took place; the
present case exemplifies the circumstance
contemplated under paragraph 2, of Article 1302 of
the Civil Code which provides:
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Art. 1302. It is presumed that there is legal

subrogation:
(1) When a creditor pays another creditor
who is preferred, even without the debtors
knowledge;
(2) When a third person, not interested in
the obligation, pays with the express or tacit
approval of the debtor;
(3) When, even without the knowledge of
the debtor, a person interested in the
fulfillment of the obligation pays, without
prejudice to the effects of confusion as to the
latters share. [Emphasis supplied.]
Metrobank was a third party to the Central Bank-RBG
agreement, had no interest except as a conduit, and
was not legally answerable for the loans. Despite
this, it was Metrobanks demand deposit account,
instead of RBGs, which the Central Bank proceeded
against, on the assumption perhaps that this was the
most convenient means of recovering the cancelled
loans. That Metrobanks payment was involuntarily
made does not change the reality that it was
Metrobank which effectively answered for RBGs
obligations.
With regard to express or tacit approval by RBG of
the payment enforced against Metrobank, after
Metrobank received the Central Banks debit advices,
Metrobank accordingly debited the amounts it could
from RBGs special savings account without any
objection from RBG. RBGs President and Manager
even wrote Metrobank with proposals regarding
possible means of settling the amounts debited by
Central Bank from Metrobanks demand deposit
account.[ These instances are indicative of RBGs
approval of Metrobanks payment of the loans. That
RBGs tacit approval came after payment had been
made does not completely negate the legal
subrogation that had taken place.
Article 1303 states that subrogation transfers to the
person subrogated the credit with all the rights
thereto appertaining, either against the debtor or
against third persons. As the entity against which the
collection was enforced, Metrobank was subrogated
to the rights of Central Bank and has a cause of action
to recover from RBG the amounts it paid to the
Central Bank.
Under this situation, impleading the Central Bank as
a party is completely unnecessary. The CA
erroneously believed that the Central Banks
presence is necessary in order to shed light
on the matter of reversals made by it
concerning the loan applications of the end
users and to have a complete determination

or settlement of the claim. In so far as
Metrobank is concerned, however, the
Central Banks presence and the reasons for
its reversals of the loans are immaterial after
subrogation has taken place; Metrobanks
interest is simply to collect the amounts it
paid the Central Bank. Whatever cause of
action RBG may have against the Central Bank
for the unexplained reversals and any undue
deductions is for RBG to ventilate as a third-
party claim; if it has not done so at this point,
then the matter should be dealt with in a
separate case that should not in any way
further delay the disposition of the present
case.

Legaspi Towers 300 v. Amelia Muer, et al., G.R. No.
170783, June 18, 2012

Facts:

The incumbent Board of Directors of Legaspi Towers
300, Inc, set the annual meeting of the members of
the condominium corporation and the election of the
new Board of Directors for the years 2004-2005
on April 2, 2004. Of the 5,723 members who were
entitled to vote, 1,358 were supposed to vote
through their respective proxies and their votes were
critical in determining the existence of a quorum,
which was at least 2,863. The Committee on Elections
of Legaspi Towers 300, Inc., however, found most of
the proxy votes, at its face value, irregular, thus,
questionable; and for lack of time to authenticate the
same, petitioners adjourned the meeting for lack of
quorum.

The group of respondents challenged the
adjournment of the meeting. Respondents pushed
through with the scheduled election and were elected
as the new Board of Directors and officers of Legaspi
Towers 300, Inc.

Petitioners filed a Complaint for the Declaration of
Nullity of Elections with Prayers for the lssuance of
Temporary Restraining Orders and Writ of Preliminary
Injunction and Damages against respondents with the
RTC of Manila. Before respondents could file
an Answer to the original Complaint, petitioners filed
an Amended Complaint, which was admitted by the
RTC.

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On May 3, 2004, respondents filed a Comment on the

Motion to Amend Complaint, praying that the name
of Legaspi Towers 300, Inc., as party-plaintiff in the
Second Amended Complaint, be deleted as the said
inclusion by petitioners was made without the
authority of the current Board of Directors, which
had been recognized by the trial court in its Order
dated April 26, 2004.

During the pre-trial conference held on July 21, 2004,
one of the incidents acted upon by the trial court was
petitioners' motion to amend complaint to implead
Legaspi Towers 300, Inc. as plaintiff, which motion
was denied with the issuance of two Orders both
dated July 21, 2004. The first Order held that the said
motion could not be admitted for being improper.
The trial court denied a motion for reconsideration
for lack of merit.

Petitioners filed a petition for certiorari with the
Court of Appeals, but the Court of Appeals dismissed
the petition for lack of merit. It held that RTC did not
commit grave abuse of discretion in denying
petitioners' Motion To Admit Second Amended
Complaint.
Petitioners contend that Legaspi Towers 300, Inc. is a
real party-in- interest as it stands to be affected the
most by the controversy, because it involves the
determination of whether or not the corporations
by-laws was properly carried out in the meeting held
on April 2, 2004, when despite the adjournment of
the meeting for lack of quorum, the elections were
still conducted. Although petitioners admit that the
action involves their right to vote, they argue that it
also involves the right of the condominium
corporation to be managed and run by the duly-
elected Board of Directors, and to seek redress
against those who wrongfully occupy positions of the
corporation and who may mismanage the
corporation.

The Court of Appeals stated that petitioners
complaint sought to nullify the election of the Board
of Directors held on April 2, 2004, and to protect and
enforce their individual right to vote. The appellate
court held that as the right to vote is a personal right
of a stockholder of a corporation, such right can only
be enforced through a direct action; hence, Legaspi
Towers 300, Inc. cannot be impleaded as plaintiff in
this case.

Issue: Whether Legaspi Towers 300, Inc. can be

impleaded as plaintiff in this case?

Ratio: No

In the Amended Complaint, petitioners as plaintiffs
stated that they are the incumbent reconstituted
Board of Directors of Legaspi Towers 300, Inc., and
that defendants, herein respondents, are the newly-
elected members of the Board of Directors; while in
the Second Amended Complaint, the plaintiff is
Legaspi Towers 300, Inc., represented by petitioners
as the allegedly incumbent reconstituted Board of
Directors of Legaspi Towers 300, Inc.

The Court agrees with the Court of Appeals that the
Second Amended Complaint is meant to be a
derivative suit filed by petitioners in behalf of the
corporation. The Court of Appeals stated in its
Decision that petitioners justified the inclusion of
Legaspi Towers 300, Inc. by invoking the doctrine of
derivative suit. But is a derivative suit proper in this
case?

An individual stockholder is permitted to institute a
derivative suit on behalf of the corporation wherein
he holds stock in order to protect or vindicate
corporate rights, whenever officials of the
corporation refuse to sue or are the ones to be sued
or hold the control of the corporation. In such
actions, the suing stockholder is regarded as
the nominal party, with the corporation as the party-
in- interest

Since it is the corporation that is the real party-in-
interest in a derivative suit, then the reliefs prayed
for must be for the benefit or interest of the
corporation. When the reliefs prayed for do not
pertain to the corporation, then it is an improper
derivative suit.

The requisites for a derivative suit are as
follows:
a) the party bringing suit should be a
shareholder as of the time of the act or

transaction complained of, the
number of his shares not being material;
b) he has tried to exhaust intra-
corporate remedies, i.e., has
made a demand on the board
of
directors
for
the
appropriate relief but the
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latter has failed or refused to

heed his plea; and
c) the cause of action actually
devolves
on
the
corporation, the wrongdoing
or harm having been, or being
caused to the corporation and
not
to
the
particular
stockholder bringing the suit.

In this case, petitioners, as members of the Board of
Directors of the condominium corporation before the
election in question, filed a complaint against the
newly-elected members of the Board of Directors for
the years 2004-2005, questioning the validity of the
election held on April 2, 2004, as it was allegedly
marred by lack of quorum, and praying for the
nullification of the said election.

Petitioners complaint seek to nullify the said
election, and to protect and enforce their individual
right to vote. Petitioners seek the nullification of the
election of the Board of Directors for the years 2004-
2005, composed of herein respondents, who pushed
through with the election even if petitioners had
adjourned the meeting allegedly due to lack of
quorum. Petitioners are the injured party, whose
rights to vote and to be voted upon were directly
affected by the election of the new set of board of
directors. The party-in-interest are the petitioners as
stockholders, who wield such right to vote. The cause
of action devolves on petitioners, not the
condominium corporation, which did not have the
right to vote.

Hence, the complaint for nullification of the election
is a direct action by petitioners, who were the
members of the Board of Directors of the
corporation before the election, against respondents,
who are the newly-elected Board of Directors. Under
the circumstances, the derivative suit filed by
petitioners in behalf of the condominium corporation
in the Second Amended Complaint is improper. the
Court of Appeals correctly upheld the Orders of the
trial court dated July 21, 2004 and September 24,
2004denying petitioners Motion to Admit Second
Amended Complaint.

Republic of the Philippines v. Agunoy, G.R. No.

155394. February 17, 2005.

FACTS: Gregorio Agunoy filed his application for free
patent over Lots 1341 and 1342, an 18-ha. parcel of
land. This application was granted. The free patent
led to the issuance of OCT P-4522. Shortly after, the
heirs of Perez caused an annotation of an adverse
claim in their favor over 15.1 hectares of the land
covered by OCT P-4522. The heirs of Perez later filed
a formal protest. The investigation of the Bureau of
Lands show that the free patent in favor of Agunoy
was indeed fraudulently obtained. Despite the
protest, numerous transactions regarding the land
were made on the Agunoy side (subdivision of the
lots, sales, mortgages) causing the heirs of Perez to
file a supplemental protest. On investigation by the
Bureau of Lands, it was found that an OCT for the lot
covered by the free patent already existed at the time
of the granting of the free patent. These facts brought
the Republic, through the OSG, to file a case against
several defendants who are successors-in-interest of
Agunoy.

ISSUE:
W/N the Republic is a real party-in-interest

HELD:
The Republic is not the real party-in-interest.
To qualify a person to be a real party-in-interest in
whose name an action must be prosecuted, he must
appear to be the present real owner of the right
sought to be enforced. A real party in interest is the
party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the
avails of the suit. And by real interest is meant a
present substantial interest, as distinguished from a
mere expectancy or a future, contingent, subordinate
or consequential interest.
As stated in the facts, the land sought to be
reconveyed in the Republic's suit belongs to a private
party by virtue of the OCT previously issued to such
party and is no longer a disposable public land at the
time of the fraudulent granting of free patent. Case
dismissed ruling against Republic.

RATIO: By the Republics admission in its pleadings,
the lands in question were already private property
of Perez/Espiritu, which means that the property in
question was no longer a disposable public land. As
the Bureau of Lands no longer had any jurisdiction
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and control, the Republic cannot be considered real-

party-in-interest anymore.

Juana Complex I Homeowners Association v. Fil-
Estate Land, Inc. G.R. No. 152272, March 05, 2012
(class suit)

FACTS
Juana Complex I Homeowners Association,
Inc. (JCHA), together with individual residents
of Juana Complex I and other neighboring
subdivisions (collectively referred as JCHA, et.
al.),in its own behalf and as a class suit, filed
for damages against Fil-Estate.
o regular commuters and motorists
who used the La Paz Road (a right-of-
way public road) for more than 10 yrs
to get to SLEX
o Respondents deprived them of use
after excavation. This was fixed by the
petitioners but respondents re-
excavated the same.
Petitioners filed for the issuance of a TRO and
a writ of preliminary injunction.
Respondent filed a motion to dismiss arguing
that the complaint failed to state a cause of
action and that it was improperly filed as a
class suit.

RTC: Motion to dismiss was denied.
CA: decision with regards the Motion to dismiss was
upheld.
Complaint was properly filed as a class suit as
it was shown that the case was of common interest
and that the individuals sought to be represented
were so numerous that it was impractical to include
all of them as parties

ISSUE: WON it was proper to institute a class suit.
RATIO: Yes.
Section 12, Rule 3 of the Rules of Court
:
Sec. 12. Class suit. When the subject matter of the
controversy is one of common or general interest to
many persons so numerous that it is impracticable to
join all as parties, a number of them which the court
finds to be sufficiently numerous and representative
as to fully protect the interests of all concerned may
sue or defend for the benefit of all. Any party in
interest shall have the right to intervene to protect
his individual interest.

The necessary elements for the maintenance of a
class suit are: 1) the subject matter of controversy is
one of common or general interest to many persons;
2) the parties affected are so numerous that it is
impracticable to bring them all to court; and 3) the
parties bringing the class suit are sufficiently
numerous or representative of the class and can fully
protect the interests of all concerned
This is of common or general interest to many
persons. Records reveal that numerous
individuals have filed manifestations with the
lower court, conveying their intention to join
private respondents in the suit
individuals sought to be represented by private
respondents in the suit are so numerous that
it is impractic

Sylvia Banda v. Eduardo R. Ermita G.R. No.
166620, April 20, 2010

FACTS:
Petitioners characterize their action as a class
suit filed on their own behalf and on behalf of
all their co-employees at the National
Printing Office (NPO) when they assailed the
constitutionality of Executive Order No. 378.
Before, the NPO enjoys exclusive jurisdiction
over the printing services requirements of the
government. EO 378 now provides, among
others, that government agencies and
instrumentalities are now allowed to source
their printing services from the private sector
through competitive bidding.
Perceiving EO. 378 as a threat to their
security of tenure as employees of the NPO
(because it paves the way for the gradual
abolition of the NPO) petitioners now
challenge its constitutionality.
ISSUE: WON the filing of a class suit was proper.
RULING: NO.
courts must exercise utmost caution before
allowing a class suit, which is the exception to
the requirement of joinder of all
indispensable parties.
Section 12, Rule 3 of the ROC defines a class
suit.
Requisites:1) the subject matter of
controversy is one of common or general
interest to many persons; 2) the parties
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affected are so numerous that it is

impracticable to bring them all to court; and
3) the parties bringing the class suit are
sufficiently numerous or representative of the
class and can fully protect the interests of all
concerned.
Mathay v. The Consolidated Bank and Trust
Company:An action does not become a class
suit merely because it is designated as such in
the pleadings. It depends upon the attending
facts.
In this case, petitioners failed to meet the
requirements. The SolGen pointed out that:
o there were about 549 employees in
the NPO.
o 67 petitioners undeniably comprised
a small fraction of the NPO employees
whom they claimed to represent.
o 32 of the original petitioners executed
an Affidavit of Desistance
o 1 signed a letter denying ever signing
the petition
= reducing the number of petitioners
to 34
o Assuming
the
desistance
or
withdrawal of some of the petitioners
were not to be deducted (petitioners
insinuated that such desistance was
due to pressure from people "close to
the seat of power), the requirements
will still not be met because out of the
67 petitioners who signed the
Verification/Certification of Non-
Forum Shopping, only 20 petitioners
were in fact mentioned in the jurat as
having duly subscribed the petition
before the notary public.
=only 20 petitioners effectively
instituted the present case.
MVRS Publications, Inc. v. Islamic Dawah
Council of the Philippines, Inc: an element
of a class suit or representative suit is the
adequacy of representation. The court
must consider (a) whether the interest of
the named party is coextensive with the
interest of the other members of the class;
(b) the proportion of those made a party,
as it so bears, to the total membership of
the class; and (c) any other factor bearing
on the ability of the named party to speak
for the rest of the class.
Ibaes v. Roman Catholic Church: where

the interests of the plaintiffs and the other
members of the class they seek to
represent are diametrically opposed, the
class suit will not prosper.
o In this case, a Manifestation of
Desistance.was filed by the
President of the National Printing
Office
Workers
Association
(NAPOWA).
Even if we take into account the contention of
petitioners counsel that the NAPOWA President had
no legal standing to file such manifestation, the said
pleading is a clear indication that there is a
divergence of opinions and views among the
members of the class sought to be represented, and
not all are in

Napere v. Barbarona, G.R. No. 160426, January 31,
2008.

FACTS:
- Barbarona is the owner of a parcel of land in
Leyte. A lot owned by Anacleto Napere
adjoined the lot of Barbarona on one side.
- When Anacleto Napere died, his son Juan
Napere and his wife (petitioner) planted
coconut trees on some portions.
- Barbarona then filed a complaint against Juan
Napere for encroaching on a portion of his lot
and cultivating the coconut planted on the
formers lot. Despite demands from
Barbarona, Napere refused to vacate.
- Juan Napere died. His counsel informed the
court about this but no formal substitution of
the heirs were made.
- Eventually, a judgment in favor of Barbarona
was rendered. The heirs of Napere appealed
to the CA that the judgment rendered was
void for lack of jurisdiction because of failure
of the court to formally substitute Naperes
heirs to the case. CA affirmed the RTC. Hence,
this petition.

ISSUE: W/N the judgment is void.

HELD/RATIO: NO. Failure of the court to formally
substitute the heirs of a party in a case which
survives his death does not render the judgment
void. The party alleging nullity must instead prove
that there was undeniable violation of due process.
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The rule on substitution is not a matter of jurisdiction
but a requirement of due process. Thus, a proceeding
is void and the judgment nullified only if the party
who dies is not represented by any legal
representative or heir.

Formal substitution of heirs is not necessary when
they themselves appear in court, participate in the
case and present evidence in the defense of the
deceased. In this case, the heirs of Juan were present,
participated and testified for the defense of Juan.
Hence, formal substitution was not necessary. They
cannot claim denial of due process when they were
given every opportunity to participate in the trial.

Sumaljap v. Spouses Literato, G.R. No. 149787,
June 18, 2008

Facts: (1st civil case) Josefa Maglasang (Josefa) filed a
complaint with the RTC for the nullity of a deed of
sale of real property purportedly executed between
her as vendor and the spouses Diosdidit and
Menendez Literato (spouses) as vendees. Josefa was
the sister of Menendez and were 2 of the 6 heirs who
inherited equal parts of a property (Josefa w/ Lot
1220-D and Menendez w/ Lot 1220-E) passed on to
them by their parents. The spouses responded by
filing a counterclaim denying Josefas allegation and
impleaded Josefa as a counterclaim defendant,
alleging that petitioner Judge Antonio Sumaljag
(Sumaljag), occupied both Lots 1220-D and E) at the
instance of Josefa w/out their authority. They
claimed that Lot 1220-E is theirs by inheritance and
Lot 1220-D by purchase from Josefa. RTC dismissed
the counterclaim.
(2nd civil case) After the RTC dismissed the
counterclaim, Menendez filed a complaint for
declaration of the inexistence of a lease contract,
recovery of possession of land and damages against
Sumaljag & Josefa.
Josefa died during pendency of both cases. Atty.
Puray, Sumaljag and Josefas common counsel, filed a
notice of death and substitution of party, praying that
Josefa be substituted by Sumaljag, alleging that prior
to her death, Josefa executed a Quitclaim Deed over
Lot 1220-D in favor Maglasang(her nephew), who in
turn sold the same to Sumaljag. RTC denied the
motion for substitution and instead ordered
Michaeles (Josefas sister) to serve as Josefas
representative. MR denied. CA upheld the RTC.

Issue: W/N Sumaljag as a transferee pendete lite,
may substitute Josefa pursuant to Rule 3 of the Rules
of Court?

Held and Ratio: He cannot. The legal representatives
contemplated under Sec. 16, Rule 3 of the Rules refer
to those authorized by law the administrator,
executor or guardian, who, under the rule on
settlement of estate of deceased persons, is
constituted to take over the estate of the deceased.
*Sec. 16, Rule 3 expressly provides that the heirs of
the deceased may be allowed to be substituted for the
deceased, without requiring the appointment of an
executor or administrator. Sumaljag is not one of
those mentioned. Instead he is a counterclaim co-
defendant of Josefa whose proffered justification for
substitution is the transfer to him of the interests of
Josefa in the litigation prior to her death.
Moreover, the notice of death and substitution that
Atty. Puray filed reflect a claim against the interest of
the Josefa through the transfer of her remaining
interest in the litigation to another party. The reason
for rule 3, section 16 on substitution is to protect all
concerned who may be affected by the intervening
death, particularly Josefa and her estate. To suggest
then that Sumaljag substitute Josefa would bring to
naught such protection since the transferee who has
his own interest to protect, cannot at the same time
represent and fully protect the interest of the
deceased transferor.
While Atty. Puray has every authority to manifest to
court changes in interest that transpire in the course
of litigation, pursuant to Sec. 19, Rule3, this can only
happen while the client-transferor was alive and
while the manifesting counsel was still the effective
and authorized counsel for the client-transferor, not
after the death of the client when the lawyer-client
relationship was terminated. Thus at most, Sumaljag
can be said to be a transferee pendete lite whose
status is pending with the lower court. Lastly, the
documents attached disclose that the subject matter
of the quitclaim is Lot 1220-E while the subject
matter of the deed of sale executed by Maglasang in
favor of Sumaljag is Lot 1220-D.
*The rule that it is only in case of unreasonable delay
in the appointment of an executor or administrator,
or where the heirs resort to an extrajudicial
settlement of the estate that the court may adopt the
alternative of allowing the heirs of the deceased to be
substituted for the deceased is no longer true.

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Memoracion Cruz v. Oswaldo Z. Cruz, G.R. No.

173292, September 01, 2010
(substitution
by reason of death)

Facts:
Memoracion (petitioner/plaintiff) filed with the RTC
in Manila a Complaint against her son, Oswaldo
(respondent/defendant) for Annulment of Sale,
Reconveyance and Damages. She alleged that the
title to a parcel of land she acquired was transferred
by Oswaldo and his wife in their names through a
Deed of Sale which was executed through fraud,
forgery, misrepresentation and simulation.
After presenting her evidence in chief, Memoracion
died on 30 October 1996. Her counsel notified the
trial court of such death on 13 January 1997, through
a Manifestation stating the fact of death (w/
Certificate of Death) and the name and address of the
legal representative of the deceased (her son
Edgardo). Oswaldo moved to dismiss the case
alleging that reconveyance is a personal action which
did not survive Memoracions death. The RTC
granted the motion and dismissed the case.
Edgardo filed with the RTC a Manifestation stating
that he is retaining the services of Atty. Neri (as heir
of Memoracion & plaintiff). Edgardo, as heir,
appealed to the CA. The CA affirmed the RTC.

Issue 1:
W/N a Petition for Annulment of Deed of Sale,
Reconveyance and Damages is a purely personal
action which does not survive death. NO.
Ratio 1:
The question as to whether an action survives or not
depends on the nature of the action and the damage
sued for. In the causes of action which survive, the
wrong complained of affects primarily and
principally property and property rights, the injuries
to the person being merely incidental, while in the
causes of action which do not survive, the injury
complained of is to the person, the property and
rights of property affected being incidental. (Bonilla
v. Barcena) The petition for annulment of deed of sale
involves property and property rights. It survives the
death of petitioner Memoracion.

Issue 2:
W/N the appeal should have been dismissed. NO.
Ratio 2:
If the action survives despite death of a party, it is the
duty of the deceaseds counsel to inform the court of
such death, and to give the names and addresses of
the deceaseds legal representatives. The deceased

may be substituted by his heirs in the pending action.
(Sec. 16, Rule 3) The moment of death is the
determining factor when the heirs acquire a definite
right to the inheritance whether such right be pure or
contingent. The heirs acquire interest in the
properties in litigation and became parties in interest
in the case (Bonilla).
If no legal representative is named by the counsel of
the deceased, or the legal representative fails to
appear within a specified period, it is the duty of the
court where the case is pending to order the
opposing party to procure the appointment of an
executor or administrator for the estate of the
deceased. (Sec. 16, Rule 3) The reason for this rule is
to protect all concerned who may be affected by the
intervening death, particularly the deceased and his
estate.
The RTC was informed, albeit belatedly, of the death
of Memoracion, and was supplied with the name and
address of her legal representative, Edgardo. What
the RTC could have done was to require Edgardo to
appear in court and substitute Memoracion as party
to the pending case. Edgardos Manifestation, signed
by him, and retaining Atty. Neris services as counsel
was a formal substitution of the deceased by her heir,
Edgardo (Heirs of Haberer v. Court of Appeals).
Oswaldo, although also an heir of Memoracion,
should be excluded as a legal representative in the
case for being an adverse party.

Heritage Park Management v. CIAC, G.R. No.
148133, October 8, 2008

FACTS:
Public Estates Authority (PEA) was designated by the
Bases Conversion Development Authority to develop
the first class memorial park known as the Heritage
Park, located in Fort Bonifacio, Taguig, Metro Manila.
PEA engaged the services of Elpidio Uy, doing
business under the name and style of EDC, under a
Landscaping and Construction Agreement. In the
agreement, EDC undertook to perform all
landscaping works on the 105 hectare Heritage Park,
to be completed within 450 days. Due to delays, the
contract period was extended to 693 days. Among the
causes of delay was PEAs inability to deliver to EDC
45 hectares of the property landscaping due to the
existence of squatters and public cemetery.
EDC constituted a complaint with the Construction
Industry Arbitration Commission (CIAC) seeking to
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collect from PEA damages arising from its delay in

the delivery of the entire property for landscaping.
Damages include additional rental costs for
equipment which were kept on standby and labor
costs for idle manpower; added costs for the
depletion of topsoil of the original supplier;
additional costs to mobilize water trucks for the
plants and trees which had already been delivered at
the site; and the necessity to construct a nursery
shade to protect and preserve the young plants and
trees prior to actual transplanting at the landscaped
area.
Sometime in March 2000, PEA executed a Deed of
Assignment in favor of Heritage Park Management
Corporation, whereby PEA and Heritage agreed as
follows:
1. That the ASSIGNOR hereby transfers, cedes
and assigns the development contracts
hereinbefore enumerated in favor of the
ASSIGNEE, including all rights, interests,
causes of action, and its corresponding
obligations under said contracts.
2. That the ASSIGNEE hereby accepts the
assignment of all contracts herein before
listed, which were entered into and executed
by ASSIGNOR as Project Manager of the
Heritage Park Project, approved and
confirmed by the HPP Execom, and shall
assume ASSIGNORs rights, interests and
responsibilities, obligations, undertakings
and liabilities arising from the said contracts
including judgment awards, costs or expenses
relative to the said contracts, particularly the
terrasoleum 1B & 4 and the Landscaping
contract, which are now subject of litigation
pending before various courts in Paraaque,
and the Construction Industry Arbitration
Commission.
In April 2000, Heritage filed a petition with the CA for
prohibition/injunction with prayer for preliminary
injunction and temporary restraining order against
CIAC and EDC. It alleged that CIAC has no jurisdiction
over the Heritage Park Project funds against which
any award against the PEA would be enforced.
Heritage also alleged that it has complete control,
custody, and authority over the funds and has never
submitted itself and the funds to CIACs arbitral
jurisdiction.
However, CIAC has already finished hearing the case
and rendered a decision in favor of EDC.

ISSUE#1:
WON the CIAC decision is null and void for having

been conducted and resolved without impleading an
indispensable party???

RULING:
NO. The decision is valid and binding.
When the case was filed by EDC with CIAC on January
2000, PEA had not yet transferred its rights and
obligations over the Project to Heritage. By
impleading PEA as respondent, the CIAC had
jurisdiction over the case at that time. Heritage,
however, claims that when PEA transferred its rights
and obligations over the Project to Heritage, the CIAC
lost its jurisdiction. In other words, Heritage alleges
that a court may lose jurisdiction over a case based
on the subsequent actions of the parties. This is
unacceptable.
The settled rule is that jurisdiction once acquired is
not lost upon the instance of the parties but
continues until the case is terminated. Certainly, it
would be the height of injustice to allow parties that
disagree with the decision of a judicial tribunal to
annul the same through the expedient of transferring
their interests or rights involved in the case.

ISSUE#2: (RULE 3)
WON Heritage is an indispensable party???

RULING:
NO. It is a proper but not an indispensable party.
Heritage is mistaken when it claims that it is an
indispensible party to the case and that it was not
included in the case before the CIAC. Being a
transferee of the interests of PEA over the Project
during the pendency of the case before the CIAC, it is
bound by the proceedings in like manner as PEA.
Rule 3 of Section 20 (now Section 19, Rule 3) of the
Rules of Court provides:
SEC. 20. Transfer of Interest. In case of any transfer
of interest, the action may be continued by or against
the original party unless the court upon motion
directs the person to whom the interest is
transferred to be substituted in the action or joined
with the original party.
This Court has declared in a number of decisions that
a transferee pendente lite stands in exactly the same
position as its predecessor-in-interest, the original
defendant, and is bound by the proceedings had in
the case before the property was transferred to it. It
is a proper but not an indispensible party as it would
in any event be bound by the judgment against his
predecessor. This would follow even if it is not
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formally included as a defendant through an

amendment of the complaint.
Verily, the non-inclusion of Heritage in the
proceedings before the CIAC is of no moment as the
Rules of Court specifically allows the proceedings to
proceed with the original parties while binding the
transferee.

William Genato v. Benjamin Bayhon, G.R. No.
171035, August 24, 2009

Facts:
Respondent Bayhon contracted a loan from
petitioner Genato. Bayhon, together with his hers as
co-parties, filed an action for the declaration of
nullity of a dacion en pago (transfer of a lot to cover
the loan) allegedly executed by Bayhon in favor of
Genato. Genato filed an action for specific
performance before the RTC alleging that Bayhon
failed to pay the loan and that Bayhon executed a
dacion en pago in his favor. The two cases were
consolidated. The RTC upheld Bayhons liability to
Genato. Bayhon (respondents) appealed. He died
while the case was pending before the CA. The CA
held that the dacion en pago was void and that while
the loan was valid, the death of Bayhon extinguished
it.

Issue:
W/N the obligation to pay the principal loan and
interest contracted by Bayhon was extinguished by
his death. NO.

Ratio:
As a general rule, obligations derived from a contract
are transmissible except where they are not
transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the
value of the property he received from the decedent.
(Art. 1311, par.1, CC). While the responsibility of the
heirs for the debts of their decedent cannot exceed
the value of the inheritance they receive from him,
the principle remains intact that these heirs succeed
not only to the rights of the deceased but also to his
obligations. (Art. 7747 & 7768, CC).
7
Succession is a mode of acquisition by virtue of which the property,

rights and obligations to the extent of the value of the inheritance,
of a person are transmitted through his death to another or others
either by his will or by operation of law.
8
The inheritance includes all the property, rights and obligations of
a person which are not extinguished by his death.
The rule is a consequence of the progressive

"depersonalization" of patrimonial rights and duties.
From the Roman concept of a relation from person to
person, the obligation has evolved into a relation
from patrimony to patrimony, with the persons
occupying only a representative position, barring
those rare cases where the obligation is strictly
personal, i.e., is contracted intuitu personae, in
consideration of its performance by a specific person
and by no other. The transition is marked by the
disappearance of the imprisonment for debt. (Estate
of Hemady v. Luzon Surety Co.) While the deceased
may no longer be compelled to pay the loan, the debt
subsists against his estate. No property or portion of
the inheritance may be transmitted to his heirs
unless the debt has first been satisfied.
The procedure in vindicating monetary claims
involving a defendant who dies before final judgment
is governed by Rule 3, Sec. 209. Petitioners remedy
lies in filing a claim against the estate of the deceased
respondent.

Algura v. LGU of the City of Naga, G.R. No. 15013;5,
October 30, 2006

Facts. On September 1, 1999, spouses Algura filed a
Verified Complaint for damages against the Naga City
Government and its officers, arising from the alleged
illegal demolition of their residence and boarding
house and for payment of lost income derived from
fees paid by their boarders (7k/month).
Simultaneously, petitioners filed an Ex-Parte Motion
to Litigate as Indigent Litigants, to which petitioner
Antonio Algura's Pay Slip was appended, showing a
gross monthly income of P10,474 and a net pay of
P3,616.99 for July 1999. Also attached to the motion
was a Certification issued by the Office of the City
Assessor, which stated that the Alguras had no
property declared. Executive Judge Atienza granted
petitioners' plea for exemption from filing fees.
On March 13, 2000, respondents filed a Motion to
Disqualify the Plaintiffs for Non-Payment of Filing
Fees dated March 10, 2000. They asserted that in
9
When the action is for recovery of money arising from contract,

express or implied, and the defendant dies before entry of final
judgment in the court in which the action was pending at the time of
such death, it shall not be dismissed but shall instead be allowed to
continue until entry of final judgment. A favorable judgment
obtained by the plaintiff therein shall be enforced in the manner
especially provided in these Rules for prosecuting claims against the
estate of a deceased person.
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addition to the more than PhP 3,000.00 net income of

petitioner Antonio Algura, who is a member of the
PNP, spouse Lorencita Algura also had a mini-store
and a computer shop. Also, respondents claimed that
petitioners' second floor was used as their residence
and as a boarding house, from which they earned
more than PhP 3,000.00 a month. In addition, it was
claimed that petitioners derived additional income
from their computer shop patronized by students
and from several boarders who paid rentals to them.
Hence, respondents concluded that petitioners were
not indigent litigants.
RTC issued an Order disqualifying petitioners as
indigent litigants on the ground that they failed to
substantiate their claim for exemption from payment
of legal fees and to comply with the third paragraph
of Rule 141, Section 18 of the Revised Rules of Court.
The spouses filed a MR. RTC Acting Presiding Judge
denied the petition and ratiocinated that the pay slip
of Antonio F. Algura showed that the GROSS INCOME
or TOTAL EARNINGS of Algura [was] 10,474.00
which amount was over and above the amount
mentioned in the first paragraph of Rule 141, Section
18 (P3,000) for pauper litigants residing outside
Metro Manila."

Issue. Whether petitioners should be considered as
indigent litigants who qualify for exemption from
paying filing fees. YES

Held. It is undisputed that the Complaint (Civil Case
No. 99-4403) was filed on September 1, 1999.
However, the Naga City RTC, in its April 14, 2000 and
July 17, 2000 Orders, incorrectly applied Rule 141,
Section 18 on Legal Fees when the applicable rules at
that time were Rule 3, Section 21 on Indigent
Party which took effect on July 1, 1997 and Rule 141,
Section 16 on Pauper Litigants which became
effective on July 19, 1984 up to February 28, 2000.

The old Section 16, Rule 141 requires applicants to
file an ex-parte motion to litigate as a pauper litigant
by submitting an affidavit that they do not have a
gross income of PhP 2,000.00 a month or PhP
24,000.00 a year for those residing in Metro Manila
and PhP 1,500.00 a month or PhP 18,000.00 a year
for those residing outside Metro Manila or those who
do not own real property with an assessed value of
not more than PhP 24,000.00 or not more than PhP
18,000.00 as the case may be. Thus, there are two
requirements: a) income requirementthe
applicants should not have a gross monthly income of
more than PhP 1,500.00, and b) property

requirementthey should not own property with an
assessed value of not more than PhP 18,000.00.

In the case at bar, petitioners Alguras submitted the
Affidavits of petitioner Lorencita Algura and neighbor
Erlinda Bangate, the pay slip of petitioner Antonio F.
Algura showing a gross monthly income of PhP
10,474.00, and a Certification of the Naga City
assessor stating that petitioners do not have property
declared in their names for taxation. With respect to
the income requirement, it is clear that the gross
monthly income of PhP 10,474.00 of petitioner
Antonio F. Algura and the PhP 3,000.00 income of
Lorencita Algura when combined, were above the
PhP 1,500.00 monthly income threshold prescribed
by then Rule 141, Section 16 and therefore, the
income requirement was not satisfied. The trial court
was therefore correct in disqualifying petitioners
Alguras as indigent litigants although the court
should have applied Rule 141, Section 16 which was
in effect at the time of the filing of the application on
September 1, 1999. Even if Rule 141, Section 18
(which superseded Rule 141, Section 16 on March 1,
2000) were applied, still the application could not
have been granted as the combined PhP 13,474.00
income of petitioners was beyond the PhP 3,000.00
monthly income threshold.\

Petitioners however argue in their MR that the rules
have been relaxed by relying on Rule 3, Section 21 of
the 1997 Rules of Civil procedure which authorizes
parties to litigate their action as indigents if the court
is satisfied that the party is "one who has no money
or property sufficient and available for food, shelter
and basic necessities for himself and his family." The
trial court did not give credence to this view of
petitioners and simply applied Rule 141 but ignored
Rule 3, Section 21 on Indigent Party.

The position of petitioners on the need to use Rule 3,
Section 21 on their application to litigate as indigent
litigants brings to the fore the issue on whether a trial
court has to apply both Rule 141, Section 16 and Rule
3, Section 21 on such applications or should the court
apply only Rule 141, Section 16 and discard Rule 3,
Section 21 as having been superseded by Rule 141,
Section 16 on Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141,
Section 16 (later amended as Rule 141, Section 18 on
March 1, 2000 and subsequently amended by Rule
141, Section 19 on August 16, 2003, which is now the
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present rule) are still valid and enforceable rules on

indigent litigants.
For one, the history of the two seemingly conflicting
rules readily reveals that it was not the intent of the
Court to consider the old Section 22 of Rule 3, which
took effect on January 1, 1994 to have been amended
and superseded by Rule 141, Section 16, which took
effect on July 19, 1984 through A.M. No. 83-6-389-0.
Furthermore, Rule 141 on indigent litigants was
amended twice: first on March 1, 2000 and the
second on August 16, 2004; and yet, despite these
two amendments, there was no attempt to delete
Section 21 from said Rule 3. This clearly evinces the
desire of the Court to maintain the two (2) rules on
indigent litigants to cover applications to litigate as
an indigent litigant.
Instead of declaring that Rule 3, Section 21 has been
superseded and impliedly amended by Section 18
and later Section 19 of Rule 141, the Court finds that
the two rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and
Rule 141, Section 19 because it is a settled principle
that when conflicts are seen between two provisions,
all efforts must be made to harmonize them. In the
light of the foregoing considerations, therefore, the
two (2) rules can stand together and are compatible
with each other.
When an application to litigate as an indigent litigant
is filed, the court shall scrutinize the affidavits and
supporting documents submitted by the applicant to
determine if the applicant complies with the income
and property standards prescribed in the present
Section 19 of Rule 141. If the trial court finds that the
applicant meets the income and property
requirements, the authority to litigate as indigent
litigant is automatically granted and the grant is a
matter of right.
However, if the trial court finds that one or both
requirements have not been met, then it would set a
hearing to enable the applicant to prove that the
applicant has "no money or property sufficient and
available for food, shelter and basic necessities for
himself and his family." In that hearing, the adverse
party may adduce countervailing evidence to
disprove the evidence presented by the applicant;
after which the trial court will rule on the application
depending on the evidence adduced.
Recapitulating the rules on indigent litigants,
therefore, if the applicant for exemption meets the
salary and property requirements under Section 19
of Rule 141, then the grant of the application is
mandatory. On the other hand, when the application
does not satisfy one or both requirements, then the

application should not be denied outright; instead,
the court should apply the "indigency test" under
Section 21 of Rule 3 and use its sound discretion in
determining the merits of the prayer for exemption.

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V.

Venue
(Rule 4)

Spouses Ochoa v. Chinabank, G.R. No. 192877,
March 23, 2011

Facts:
- Petitioners insist that it was error for the CA to rule
that the stipulated exclusive venue of Makati City is
binding only on petitioners complaint for Annulment
of Foreclosure, Sale, and Damages filed before the
Regional Trial Court of Paraaque City, but not on
respondent banks Petition for Extrajudicial
Foreclosure of Mortgage, which was filed with the
same court.

Issue: WON the exclusive venue stipulation is binding
on respondent banks petition for EJ foreclosure of
mortgage? NO.

Ratio: The extrajudicial foreclosure sale of a real
estate mortgage is governed by Act No. 3135, as
amended by Act No. 4118, otherwise known as "An
Act to Regulate the Sale of Property Under Special
Powers Inserted In or Annexed to Real-Estate
Mortgages.
- The case at bar involves petitioners mortgaged real
property located in Paraaque City over which
respondent bank was granted a special power to
foreclose extra-judicially. Thus, by express provision
of Section 2, the sale can only be made in Paraaque
City:
Sec. 2. Said sale cannot be made legally outside of the
province in which the property sold is situated; and
in case the place within said province in which the
sale is to be made is the subject of stipulation, such
sale shall be made in said place or in the municipal
building of the municipality in which the property or
part thereof is situated.5
The exclusive venue of Makati City, as

stipulated by the parties6 and sanctioned by Section
4, Rule 4 of the Rules of Court,7 cannot be made to
apply to the Petition for Extrajudicial Foreclosure
filed by respondent bank because the provisions of
Rule 4 pertain to venue of actions, which an
extrajudicial foreclosure is not.
- VENUE v. ACTIONS:
action means an ordinary suit in a court of justice, by
which one party prosecutes another for the
enforcement or protection of a right, or the
prevention or redress of a wrong."
Hagans v. Wislizenus does not depart from this

definition when it states that "[A]n action is a formal
demand of one's legal rights in a court of justice in
the manner prescribed by the court or by the law. x x
x." It is clear that the determinative or operative fact
which converts a claim into an "action or suit" is the
filing of the same with a "court of justice." Filed
elsewhere, as with some other body or office not a
court of justice, the claim may not be categorized
under either term. Unlike an action, an extrajudicial
foreclosure of real estate mortgage is initiated by
filing a petition not with any court of justice but with
the office of the sheriff of the province where the sale
is to be made.1avvphi1 By no stretch of the
imagination can the office of the sheriff come under
the category of a court of justice. And as aptly
observed by the complainant, if ever the executive
judge comes into the picture, it is only because he
exercises administrative supervision over the sheriff.
But this administrative supervision, however, does
not change the fact that extrajudicial foreclosures are
not judicial proceedings, actions or suits.
- Verily then, with respect to the venue of
extrajudicial foreclosure sales, Act No. 3135, as
amended, applies, it being a special law dealing
particularly with extrajudicial foreclosure sales of
real estate mortgages, and not the general provisions
of the Rules of Court on Venue of Actions.
- Consequently, the stipulated exclusive venue of
Makati City is relevant only to actions arising from or
related to the mortgage, such as petitioners
complaint for Annulment of Foreclosure, Sale, and
Damages.

San Miguel Corporation v. Monasterio, G.R. No.
151037, June 23, 2005

Facts: San Miguel entered into an Exclusive
Warehouse Agreement (EWA) with SMB
Warehousing Service represented by Monasterio
(this was for San Miguels route operations at
Sorsogon and Camarines Norte).

In addition, the EWA also contained a
stipulation on venue of actions. It was provided that
should it be necessary that an action be brought in
court... that the proper court should be in the courts
of Makati or Pasig, Metro Manila, to the exclusion of
the other courts at the option of the company.

Monasterio, a resident of Naga, filed a
complaint for collection of sum of money against San
Miguel before the RTC of Naga City. He was claiming
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Case Digests

P900,600 for unpaid cashiering fees. It was alleged

that aside from rendering services as a
warehouseman, he was given the additional task of
cashiering at San Miguels sorsogon and camarines
norte sales offices and was promised a separate fee
for it.

San Miguel filed a motion to dismiss on the
ground of improper venue. San Miguel alleged that
Monasterios money claim for unpaid cashiering
services arose from his function as a warehouse
contractor and thus the EWA should be followed. San
Miguel cited Sec4b in relation to Sec2 of Rule4 of the
Rules of Court allowing agreement of parties on
exclusive venue of actions.

Monasterio opposed saying that the
cashiering service was distinct and separate from the
services under the EWA. Thus, EWA being
inapplicable he can file at Naga City.

RTC: denied the motion to dismiss. EWA
limited to warehousing services only. MR was filed.
While MR was pending, Monasterio filed an amended
complaint deleting his claim for unpaid warehousing
and cashiering fees but increasing the demand for
damages.

CA: San Miguel appealed via certiorari. CA
held that cashiering service inseparable from
warehousing service thus, EWA should be followed as
to stipulation of venue. However, since Monasterio
filed an amended complaint, CA dismissed the
petition for certiorari because the case was now moot
and academic.

Issue: Whether the EWA should be followed as to
venue?

Held: EWA stipulation on venue is clear so it should
be respected. But the cause of action of Monasterio
was not based on the EWA. In the amended
complaint, Monasterio specifically limited the cause
of action to the collection of the sum owing to him for
his cashiering service. He omitted the warehousing
fees only (this part confuses me because the case said
earlier that the warehousing AND cashiering fees were
deleted).

Allegations in the complaint determines the
nature of the case. Thus, contrary to what the CA
ruled, the case is a collection suit pertaining solely to
the cashiering service.

Exclusive venue stipulation embodied in a
contract restricts or confines parties thereto when
the suit relates to the breach of such contract. But if
the exclusivity clause is not all encompassing, such
that even those not related to the enforcement of the

contract should be subjected to the exclusive venue,
then the stipulation designating exclusive venues
should be strictly confined to the specific agreement.

Besides, restrictive stipulations are in
derogation of the general policy of making it more
convenient for the parties to institute actions arising
or in relation to their agreement. Thus, said
restriction should be strictly construed as relating
solely to the agreement in which the exclusivity
clause is embodied.

Lastly, since convenience is the reason behind
the rules on venues, venue stipulations should be
deemed merely permissive. The interpretation to be
adopted should be that which most serves the
parties convenience. Otherwise, the rules of court
will govern.

URC v. Albert Lim, G.R. NO. 154338, October 05,
2007

The present controversy stemmed from a
contract of sale between Universal Robina
Corporation, petitioner, and Albert Lim,
respondent. Pursuant to the contract,
petitioner sold to respondent grocery
products in the total amount of P808,059.88.
After tendering partial payments, respondent
refused to settle his obligation despite
petitioners repeated demands.
Thus, Petitioner filed with the RTC a
complaint against respondent for sum of
money.
The Trial Court issued an Order dismissing
the complaint motu proprio on grounds of
lack of jurisdiction and improper venue.
Petitioner filed a motion for reconsodieration
alleging that the parties alleged that the
proper venue for any dispute relative to the
transaction is QC.
RTC granted the motion
Summons was served upon respondent. For
his failure to file an answer, the trial court
declared him in default.
However, the trial court still unsure whether
venue was properly laid, issued an order
directing petitioner to file a memorandum of
authorities on whether it can file a complaint
in QC.
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Subsequently the trial court again issued an

order dismissing the complaint on the ground
of improper venue, Thus:
It appears that there is no
connection whatsoever between
Quezon City and the parties.
Plaintiffs official place of business
is in Pasig whereas the defendants
residence is stated to be in Laoag
City both stipulated in the
Complaint. The filing is based on
the stipulation at the back of the
delivery receipt that venue shall be
in Quezon City --- which is not even
stated in the Complaint nor
admitted to have been signed by
the defendant.
CA: dismissed petition for review

Issue: WON the trial court may dismiss motu proprio
petitioners complaint on the ground of improper
venue? No.

SC: A court may not dismiss an action motu proprio
on the ground of improper venue as it is not one of
the grounds wherein the court may dismiss an action
motu proprio on the basis of the pleadings.
- Section 1, Rule 9 of the same Rules provides for the
instances when the trial court may motu proprio
dismiss a claim, thus:
Section 1. Defenses and objections not pleaded.
Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed
waived. However, when it appears from the pleadings
or the evidence on record that the court has no
jurisdiction over the subject matter, that there is
another action pending between the same parties for
the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall
dismiss the claim.
In Dacoycoy v. Intermediate Appellate
Court,[9] this Court held that a trial court
may not motu proprio dismiss a complaint
on the ground of improper venue, thus:
Dismissing the complaint on the ground of
improper venue is certainly not the appropriate
course of action at this stage of the proceedings,
particularly as venue, in inferior courts as well as in
the courts of first instance (now RTC), may be waived
expressly or impliedly. Where the defendant fails to
challenge timely the venue in a motion to dismiss as
provided by Section 4 of Rule 4 of the Rules of Court,
and allows the trial to be held and a decision to be

rendered, he cannot on appeal or in a special action
be permitted to belatedly challenge the wrong venue,
which is deemed waived.
! In the instant case, respondent, despite proper
service of summons, failed to file an answer and was
thus declared in default by the trial court. Verily,
having been declared in default, he lost his standing
in court and his right to adduce evidence and present
his defense, including his right to question the
propriety of the venue of the action.

Irene Marcos Araneta v. Court of Appeals, G.R. No.
154096, August 22, 2008

FACTS: Irene and several co-plaintiffs filed a case
before the RTC of Batac, Ilocos Norte against
Benedicto and his business associates for conveyance
of shares of stocks. Irene alleges that several years
back, Benedicto created 2 companies where 65% of
the shareholdings were being held by Benedicto and
associates in trust for Irene. Benedicto filed a motion
to dismiss on the ground that the venue is improperly
laid. Benedicto was claiming that Irene is not a
resident of Batac but rather, a resident of Makati City.
Irene, on the other hand, claims that her co-plaintiffs
are residing in Batac.
RTC: venue improperly laid since Irene is a resident
of Makati and not Batac.
CA: since co-plaintiffs are residents of Batac, venue is
not improperly laid

Issue: Is the venue improperly laid?

SC: YES. Motion to dismiss granted.
First of all, the action is one in personam. The fact
that the companies assets include properties does
not materially change the nature of the action.
Second, there can be no serious dispute that the real
party-in-interest plaintiff is Irene. As self-styled
beneficiary of the disputed trust, she stands to be
benefited or entitled to the avails of the present suit.
It is undisputed too that three other persons, all from
Ilocos Norte, were included as co-plaintiffs in the
complaint as Irene's new designated trustees. As
trustees, they can only serve as mere representatives
of Irene.
Sec. 2 of Rule 4 indicates quite clearly that when
there is more than one plaintiff in a personal action
case, the residences of the principal parties should
be the basis for determining proper venue. According
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to the late Justice Jose Y. Feria, "the word `principal'

has been added [in the uniform procedure rule] in
order to prevent the plaintiff from choosing the
residence of a minor plaintiff or defendant as the
venue." Eliminate the qualifying term "principal" and
the purpose of the Rule would "be defeated where a
nominal or formal party is impleaded in the action
since the latter would not have the degree of interest
in the subject of the action which would warrant and
entail the desirably active participation expected of
litigants in a case."

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VI.

Summary Procedure
(Rule 5; 1991 Rules on Summary Procedure as

amended)

Macadangdang v. Gaviola, G.R. No. 156809, March
4, 2009

FACTS: Atty. Macadangdang is the administrator for
the Estate of Felomina Macadangdang. He filed a case
against all the respondents (madami sila, 12, all
unrelated) for Unlawful Detainer. Respondents were
occupying by mere tolerance, 4 parcels of land in the
name of the late Felomina. The MTCC of Davao ruled
in favor of the Estate. Respondents were ordered to
vacate the land, remove their structures, pay
damages.

Respondents appealed to the RTC, which dismissed
the appeal for failure to file an appeal memorandum.
Respondents
then
filed
a
Motion
for
Reconsideration/ New Trial, which RTC denied,
ruling that it no longer had jurisdiction over the
motion after the dismissal of the appeal. (Meanwhile,
the MTCC ordered the issuance of a writ of
execution).

Undaunted, the respondents filed a petition for
review with the CA. It ruled that the order of the RTC
dismissing the appeal for failure of filing an appeal
memorandum should be set aside, since the dismissal
of an appeal on purely technical ground is frowned
upon. (Not so important: It also said that there is a
difference between failure to file a notice of appeal
within the reglementary period and failure to file the
appeal memorandum. The former would result to
failure of the court to obtain jurisdiction, but the
latter would only result to abandonment of appeal,
which could lead to its dismissal upon failure to move
for reconsideration). Thus, it ruled the RTC erred in
denying the MR.

In the present case, Atty. Macadangdang argues that
the CA erred when it allowed the filing of MR before
the RTC. Because this case originated from an
unlawful detainer case where the Rules on Summary
Procedure apply, then the MR is a prohibited
pleading.

Issue: is MR a prohibited pleading in this case? No.

Ruling: Jurisdiction over forcible entry and unlawful

detainer cases fall with the M(etropolitan)TC, MTCC,
M(unicipal)TC, MCTCs. Since the case was one for
unlawful detainer, it was governed by the Rules on
Summary Procedure. The purpose of the Rules is to
prevent undue delays in the disposition of cases and
to achieve this, filing of certain pleadings is not
allowed, including the filing of an MR.

However, the MR in this case was filed before the RTC
acting as an appellate court. Thus, the appeal before
the RTC is no longer covered by the Rules on
Summary Procedure. The Rules only apply before
appeal to the RTC, hence the MR before the RTC is not
a prohibited pleading.

[Minor issues: On the failure to file an appeal
memorandum and negligence of counsel. Rule 40 of
the Rules of Court states that within 15 days from
notice of appeal, it is the duty of the appellant to
submit a memorandum and failure to do so is a
ground for dismissal of appeal. Here, the excuse for
failure to file was the negligence of respondents
counsel. CA held that the respondents were not
bound by their lawyers gross negligence. SC
disagrees. Failure of the counsel to file the appeal
memo is due to heavy backlog of paperwork this is
not gross negligence. Moreover, the respondents
were not deprived of due process since appeal is not
part thereof. It is merely a statutory privilege and
may be exercised only in accordance with provisions
of the law.]

Petition is granted, the CA decision is set aside and
reversed.

Republic v. Sunvar Reality Development
Corporation, G.R. No. 194880, June 20, 2012

Facts:

Petitioners Republic of the Philippines (Republic)
and National Power Corporation (NPC) are registered
co-owners of a parcel of land located along Pasong
Tamo Extension and Vito Cruz in Makati City. Eighty
percent (80%) of the subject property is owned by
petitioner Republic, while the remaining twenty
percent (20%) belongs to petitioner NPC.
Meanwhile, respondent Sunvar Realty Development
Corporation (Sunvar) occupied the subject property
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by virtue of sublease agreements, which had in the

meantime expired.

Here, Republic and NPC leased the said parcel to the
Technology Resource Center Foundation, Inc.,
(TRCFI) for a period of 25 years beginning 01 January
1978 and ending on 31 December 2002. They
granted TRCFI the right to sublease any portion of
the land. TRCFI subleased a majority of the subject
property to respondent Sunvar through several
sublease agreements, that were set to expire on 31
December 2002, the expiration date of TRCFIs main
lease contract with petitioners, but subject to
renewal at the option of respondent.

In 1987, following a reorganization of the
government, TRCFI was dissolved. In its stead, the
Philippine Development Alternatives Foundation
(PDAF) was created, assuming the functions
previously performed by TRCFI.

On 03 June 2002, six months before the main
contract of lease was to expire, petitioner NPC
notified PDAF of the formers decision not to renew
the contract of lease. In turn, PDAF notified Sunvar of
NPCs decision. Republic likewise notified PDAF of its
decision not to renew the lease contract. The
Republic reasoned that the parties had earlier agreed
to shorten the corporate life of PDAF and to transfer
the latters assets to the former for the purpose of
selling them to raise funds.

December 31, 2002 the main lease contract as well
as all the sublease agreements expired.

February 22, 2008Republic advised respondent
Sunvar to completely vacate the subject property
within thirty (30) days.

February 3, 2009Sunvar received from theOSG a
final notice to vacate within 15 days. When the
period lapsed, Sunvar again refused to vacate the
property and continued to occupy it.

July 23, 2009petitioners filed the Complaint dated
26 May 2009 for unlawful detainer with the
Metropolitan Trial Court (MeTC) of Makati City.

Respondent Sunvar moved to dismiss the Complaint
and argued that petitioners cause of action was more
properly an accion publiciana, which fell within the
jurisdiction of the RTC, and not the MeTC,
considering that the petitioners supposed

dispossession of the subject property by respondent
had already lasted for more than one year. MeTC
denied the motion to dismiss.

Despite the filing of its Answer in the summary
proceedings for ejectment, respondent Sunvar filed a
Rule 65 Petition for Certiorari with the RTC of Makati
City to assail the denial by the MeTC of respondents
Motion to Dismiss.

In answer to the Rule 65 Petition of respondent,
petitioners placed in issue the jurisdiction of the RTC
and reasoned that the Rules on Summary Procedure
expressly prohibited the filing of a petition for
certiorari against the interlocutory orders of the
MeTC. Hence, they prayed for the outright dismissal
of the certiorari Petition of respondent Sunvar.

The RTC denied the motion for dismissal and ruled
that extraordinary circumstances called for an
exception to the general rule on summary
proceedings. In the assailed Order dated 01
December 2010, which discussed the merits of the
certiorari Petition, the RTC granted the Rule 65
Petition and directed the MeTC to dismiss the
Complaint for unlawful detainer for lack of
jurisdiction.

Issue:
Was it proper for the RTC top have taken cognizance
of the Rule 65 petition of RESP Sunvar given that the
the Rules on Summary Procedure expressly prohibit
this relief for unfavorable interlocutory orders of the
MeTC?

Held:

Under the Rules on Summary Procedure, a certiorari
petition under Rule 65 against an interlocutory order
issued by the court in a summary proceeding is a
prohibited pleading. The RTC should have dismissed
outright respondent Sunvars Rule 65 Petition,
considering that it is a prohibited pleading.
Petitioners have already alerted the RTC of this legal
bar and immediately prayed for the dismissal of the
certiorari Petition. Yet, the RTC not only refused to
dismiss the certiorari Petition, but even proceeded to
hear the Rule 65 Petition on the merits.

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Sunvar relied in the doctrine on Bayog v. Natino 10and

Go v. CA11, none of which applies to the case at bar.
Bayog and Go are two cases which illustrate the
exception to the general rule that no special civil
action for certiorari may be filed with a superior
court from cases covered by the Revised Rules on
Summary Procedure.

Since neither Bayog nor Go applies, the general rule
should apply in this case. Here, the subject matter of
the Petition was the denial of respondents Motion to
Dismiss, which was necessarily an interlocutory
order, which is generally not the subject of an appeal.

When confronted with the MeTCs adverse denial of
its Motion to Dismiss in the ejectment case, the
expeditious and proper remedy for respondent
should have been to proceed with the summary
hearings and to file its answer. Indeed, its resort to a
10
Alejandro Bayog filed with the Municipal Circuit Trial Court

(MCTC) of Patnongon-Bugasong-Valderama, Antique an ejectment
case against Alberto Magdato, an agricultural tenant-lessee who had
built a house over his property. When Magdato, an illiterate farmer,
received the Summons from the MCTC to file his answer within 10
days, he was stricken with pulmonary tuberculosis and was able to
consult a lawyer in San Jose, Antique only after the reglementary
period. Hence, when the Answer of Magdato was filed three days after
the lapse of the 10-day period, the MCTC ruled that it could no longer
take cognizance of his Answer and, hence, ordered his ejectment from
Bayogs land. When his house was demolished in January 1994,
Magdato filed a Petition for Relief with the RTC-San Jose, Antique,
claiming that he was a duly instituted tenant in the agricultural property,
and that he was deprived of due process. Bayog, the landowner,
moved to dismiss the Petition on the ground of lack of jurisdiction on
the part of the RTC, since a petition for relief from judgment covering a
summary proceeding was a prohibited pleading. The RTC, however,
denied his Motion to Dismiss and remanded the case to the MCTC for
proper disposal.
In resolving the Rule 65 Petition, the Court ruled that
although a petition for relief from judgment was a prohibited pleading
under the Revised Rules on Summary Procedure, the Court
nevertheless allowed the filing of the Petition pro hac vice,
since Magdato would otherwise suffer grave injustice and irreparable
injury
11
Here, the preliminary conference in the subject ejectment

suit was held in abeyance by the Municipal Trial Court in Cities
(MTCC) of Iloilo City until after the case for specific performance
involving the same parties shall have been finally decided by the RTC.
The affected party appealed the suspension order to the RTC. In
response, the adverse party moved to dismiss the appeal on the
ground that it concerned an interlocutory order in a summary
proceeding that was not the subject of an appeal. The RTC denied the
Motion to Dismiss and subsequently directed the MTCC to proceed
with the hearing of the ejectment suit, a ruling that was upheld by the
appellate court.
In affirming the Decisions of the RTC and CA, the Supreme
Court allowed the filing of a petition for certiorari against an
interlocutory order in an ejectment suit, considering that the affected
party was deprived of any recourse to the MTCCs erroneous
suspension of a summary proceeding.
certiorari Petition in the RTC over an interlocutory

order in a summary ejectment proceeding was not
only prohibited. The certiorari Petition was already a
superfluity on account of respondents having
already taken advantage of a speedy and available
remedy by filing an Answer with the MeTC.

Banares v. Balising, G.R. No. 132624, March 13,
2000

Facts: Balising filed complaints for estafa against
Banares and other accused. They pleaded not guilty
and filed a motion to dismiss on the ground that the
filing of the same was premature, in view of the
failure of the parties to undergo conciliation
proceedings before the Lupong Tagapamayapa.
Banares furthermore contended that since they lived
in the same barangay and the amount involved in
each of the cases did not exceed P200.00, the cases
were to be referred to the Lupong Tagapamayapa
first before being filed in court (based on the LGC and
Rules on Summary Procedure).

The MTC ruled in favour of Banares and
dismissed the cases pursuant to the Rules on
Summary Procedure. After 2 months, Balising filed a
motion to revive the criminal cases stating that the
requirement of referral to the Lupon had already
been complied with. This was granted by the MTC.

Banares contends that he Order of the MTC
dismissing the cases had long become final and
executory, thus Balising should have re-filed the
cases instead of filing a motion to revive.

Balising, on the other hand, claimed that the
revival was in accordance with sec. 18 of the Rules on
Summary Procedure. They state that the rule on
finality of judgments do not apply to cases covered by
the Rules on Summary Procedure. They further insist
that cases dismissed without prejudice for non-
compliance with the requirement of conciliation
before the Lupong Tagapamayapa may be revived
summarily by the filing of a motion to revive
regardless of the number of days which has lapsed
after the dismissal of the case.

Issue: Does the rule on finality of judgments apply
to the Rules on Summary Procedure?

Ruling:
Yes.
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First, one must distinguish between a final
order and interlocutory order. A "final order" issued
by a court has been defined as one which disposes of
the subject matter in its entirety or terminates a
particular proceeding or action, leaving nothing else
to be done but to enforce by execution what has been
determined by the court. As distinguished therefrom,
an "interlocutory order" is one which does not
dispose of a case completely, but leaves something
more to be adjudicated upon. Previous jurisprudence
state that an order dismissing a case without
prejudice is a final order if no motion for
reconsideration or appeal therefrom is timely filed.
As such, the dismissal of the criminal cases against
Banares is a final order.

The law grants an aggrieved party a period of
15 days from his receipt of the court's decision or
order disposing of the action or proceeding to appeal
or move to reconsider the same. After the lapse of the
fifteen-day period, an order becomes final and
executory and is beyond the power or jurisdiction of
the court which rendered it to further amend or
revoke.

But what about the contention of Balising that
these rules do not apply to the Rules on Summary
Procedure? THIS IS WRONG! First, let us take a look
at Sec. 18 of the Rules on Summary Procedure. It
states that cases requiring referral to the Lupon for
conciliation under the provisions of Presidential
Decree No. 1508 where there is no showing of
compliance with such requirement, shall be dismissed
without prejudice, and may be revived only after such
requirement shall have been complied with. This
provision shall not apply to criminal cases where the
accused was arrested without a warrant.

The contention of Balising that the case may
be revived by a motion is wrong because Section 18
merely states that when a case covered by the 1991
Revised Rule on Summary Procedure is dismissed
without prejudice for non-referral of the issues to the
Lupon, the same may be revived only after the
dispute subject of the dismissed case is submitted to
barangay conciliation as required under the Local
Government Code. There is no declaration to the
effect that said case may be revived by mere motion
even after the fifteen-day period within which to
appeal or to file a motion for reconsideration has
lapsed.

Lastly, Sec. 22 of the Rules on Summary
Procedure state that the regular procedure
prescribed in the Rules of Court shall apply to the
special cases herein provided for in a suppletory
capacity insofar as they are not inconsistent
therewith.

Angelina Soriente v. Estate of Arsenio Concepcion,
G.R. No. 160239, November 25, 2009

Facts:

Respondent Nenita S. Concepcion established that
she was the registered owner of the lot occupied by
petitioner Angelina Soriente at No. 637 Cavo F.
Sanchez Street, Mandaluyong City, Metro Manila.

During the lifetime of Arsenio E. Concepcion, who
acquired the lot in 1978, he allowed and tolerated the
occupancy of the lot by petitioner, who was already
staying on the property. Petitioner was allowed to
stay on the lot for free, but on a temporary basis until
such time that Concepcion and/or his family needed
to develop the lot.

After Arsenio E. Concepcion died on December 27,
1989, his family initiated steps to develop the lot,
but petitioners occupancy of the lot prevented
them from pursuing their plan.

Elizabeth Concepcion-Dela Cruz, daughter of
respondent, sent petitioner a demand letter dated
September 22, 2000 by registered mail, demanding
that she peacefully surrender the property and
extending financial assistance for her relocation.
Despite receipt of the demand letter, petitioner did
not vacate the premises.

On April 27, 2001, respondent filed against petitioner
a Complaint for unlawful detainer with the
Metropolitan Trial Court of Mandaluyong City,
Branch 59 (trial court).

Petitioner Soriente, as a defendant in the lower court,
did not file a separate Answer, but affixed her
signature to the Answer filed by defendant Alfredo
Caballero in another ejectment case, docketed as Civil
Case No. 17974, which was filed by respondent
against Caballero. Hence, respondent, through
counsel, filed a Motion to Render Judgment under
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Section 7, Rule 70 of the 1997 Revised Rules of Civil

Procedure for Sorientes failure to file an Answer to
the Complaint. Petitioner filed an Opposition to the
Motion to Render Judgment.

The trial court denied the Motion to Render
Judgment. It stated that the allegations of the
Complaint in Civil Case No. 17973 and 17974 are
similar, the only substantial difference being the time
when defendants occupied the subject property
allegedly through the tolerance of Arsenio
Concepcion. The trial court believed that in signing
the Answer filed in Civil Case No. 17974, Soriente
intended to adopt the same as her own, as both
defendants Caballero and Soriente had a common
defense against plaintiffs (respondents) separate
claim against them. The trial court denied the Motion
to Render Judgment in the interest of justice and
considered that the two cases, including Civil Case
No. 17932 against Severina Sadol, had been
consolidated.

Pursuant to Section 7 of the 1991 Revised Rule on
Summary Procedure, the trial court set a preliminary
conference on October 9, 2001 at 8:30 a.m. The
preliminary conference was reset to November 15,
2001, and then to December 18, 2001 because the
Motion to Render Judgment was still pending
resolution. The preliminary conference was reset
several times due to absences of the parties and their
counsels.

In the scheduled preliminary conference held on
February 18, 2003, only plaintiffs (respondents)
counsel and defendants Severina Sadol and Alfredo
Caballero were present. In view of the absence of
defendant Angelina Soriente or her authorized
representative, plaintiffs (respondents) counsel
moved that the case be submitted for decision, and
that he be given 15 days within which to submit his
position paper.

The trial court granted the motion of plaintiffs
(respondents) counsel and considered the case
against defendant (petitioner) Angelina Soriente
submitted for decision in accordance with Section 7
of the Rules on Summary Procedure. The trial court
eventually rendered a decision against Angelina
Soriente.

Here, petitioner contends that the lower court erred
in deciding this case in accordance with Section 7 of
the Rules on Summary Procedure, asserting that

considering that the cases against her, defendants
Caballero and Sadol were consolidated, and she and
defendant Caballero signed and filed one common
Answer to the Complaint, thus, pleading a common
defense, the trial court should not have rendered
judgment on her case based on Section 7 of the 1991
Revised Rules on Summary Procedure when she
failed to appear in the preliminary conference.

Held:

SEC. 6. Effect of failure to
answer. Should the defendant fail to
answer the complaint within the
period above provided, the court,
motu proprio, or on motion of the
plaintiff, shall render judgment as
may be warranted by the facts alleged
in the complaint and limited to what
is prayed for therein: Provided,
however, That the court may in its
discretion reduce the amount of
damages and attorneys fees claimed
for being excessive or otherwise
unconscionable. This is without
prejudice to the applicability of
Section 4, Rule 18 of the Rules of
Court, if there are two or more
defendants.

SEC. 7. Preliminary conference;
appearance of parties. Not later than
thirty (30) days after the last answer
is filed, a preliminary conference shall
be held. The rules on pre-trial in
ordinary cases shall be applicable to
the preliminary conference unless
inconsistent with the provisions of
this Rule.

The failure of the plaintiff to
appear in the preliminary conference
shall be a cause for the dismissal of
his complaint. The defendant who
appears in the absence of the plaintiff
shall be entitled to judgment on his
counterclaim in accordance with
Section 6 hereof. All cross-claims
shall be dismissed.

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If a sole defendant shall fail to

appear, the plaintiff shall be entitled
to judgment in accordance with
Section 6 hereof. This Rule shall not
apply where one of two or more
defendants sued under a common
cause of action who had pleaded a
common defense shall appear at the
preliminary conference

The Court holds that Soriente and Caballero were not
co-defendants in the same case. The ejectment case
filed against petitioner was distinct from that of
Caballero, even if the trial court consolidated the
cases and, in the interest of justice, considered the
Answer filed by Caballero in Civil Case No. 17974 as
the Answer also of petitioner since she affixed her
signature thereto.

Considering that petitioner was sued in a separate
case for ejectment from that of Caballero and Sadol,
petitioners failure to appear in the preliminary
conference entitled respondent to the rendition of
judgment by the trial court on the ejectment case
filed against petitioner, docketed as Civil Case No.
17973, in accordance with Section 7 of the 1991
Revised Rules on Summary Procedure.

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VII. Pleadings
(Rules 6 to 8)

Cosco Philippines Shipping v. Kemper Insurance
Company, G.R. No. 179488, April 23, 2012

Facts:
Respondent Kemper Insurance Company is a foreign
insurance company based in Illinois, USA. It insured
the shipment of imported frozen boneless beef
owned by Genosi, Inc. The beef was loaded at a port
in Brisbane, Australia for shipment to Genosi in the
Philippines. By reason of spoilage caused by alleged
temperature fluctuations, Genosi rejected a portion of
the shipment. It then filed a claim against petitioner
Cosco and Respondent Kemper.

Kemper paid the claim of Genosi and thus, was
subrogated to the claims of Genosi against Cosco.
Upon refusal of Cosco to pay Kemper, the latter filed a
complaint for Insurance Loss and Damages.

Cosco filed a Motion to Dismiss the complaint
contending that the same was filed by Atty. Lat who
failed to show his authority to sue and sign the
corresponding certification against forum-shopping
in violation of Section 5, Rule 7 of the Rules of Court

Trial Court: granted the MTD and dismissed the case
without prejudice. It is mandatory that the
certification must be executed by the petitioner
himself and not by counsel. Since Kempers counsel
did not have a Special Power of Attorney to act on its
behalf, hence, the certification against forum
shopping executed by said counsel was fatally
defective and constituted a valid cause for dismissal
of the complaint.

Court of Appeals: Ruled that required certificate of
non-forum shopping is mandatory and that the same
must be signed by the plaintiff or principal party
concerned and not by counsel; and in case of
corporations, the physical act of signing may be
performed in behalf of the corporate entity by
specifically authorized individuals. However, the
factual circumstance of the case warrant a liberal
application of the rules. Remanded the case to TC.
Issue: Whether Atty. Lat was properly authorized by
respondent to sign the certification against forum
shopping on its behalf.
Held: No. Atty. Lat was not properly authorized thus,

the certification against forum-shopping was fatally
defective.
Ratio:
1. Since respondent is a corporation, the
certification must be executed by an officer or
member of the board of directors or by one
who is duly authorized by a resolution of the
board of directors; otherwise, the complaint
will have to be dismissed. The lack of
certification against forum shopping is
generally not curable by mere amendment of
the complaint, but shall be a cause for the
dismissal of the case without prejudice. The
same rule applies to certifications against
forum shopping signed by a person on behalf
of a corporation which are unaccompanied by
proof that said signatory is authorized to file
the complaint on behalf of the corporation.
There is no proof that respondent, a
private corporation, authorized Atty. Lat,
through a board resolution, to sign the
verification and certification against forum
shopping on its behalf. Accordingly, the
certification against forum shopping
appended to the complaint is fatally defective,
and warrants the dismissal of respondent's
complaint.
According to the SC in Republic v.
Coalbrine International Philippines, Inc, citing
previous cases, the instances wherein the
lack of authority of the person making the
certification of non-forum shopping was
remedied through subsequent compliance by
the parties therein are:
a. When the board resolution which was
subsequently attached recognized the pre-
existing status of the officer as an authorized
signatory.(ChinaBank
v.
Mondragon
International)
b. When the merits of the case warrant the same
and to avoid a re-litigation of the issues and
further delay the administration of justice,
since the case had already been decided by
the lower courts on the merits. Moreover, the
officers authority to sign the certification was
ratified by the BOD.(Abaya Investments Corp.
v. Merit Philippines)
No relaxation of the rules is necessary in the case at
bar.
a. There was no proof of authority submitted,
even belatedly, to show subsequent
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compliance with the requirement of the law.

Neither was there a copy of the board
resolution
or
secretary's
certificate
subsequently submitted to the trial court that
would attest to the fact that Atty. Lat was
indeed authorized to file said complaint and
sign the verification and certification against
forum shopping, nor did respondent
satisfactorily explain why it failed to comply
with the rules.
b. The SPA dated May 11, 2000, submitted by
respondent allegedly authorizing Atty. Lat to
appear on behalf of the corporation, in the
pre-trial and all stages of the proceedings,
signed by Brent Healy, was fatally defective
and had no evidentiary value. It failed to
establish Healy's authority to act in behalf of
respondent, in view of the absence of a
resolution from respondent's board of
directors or secretary's certificate proving the
same. Like any other corporate act, the power
of Healy to name, constitute, and appoint
Atty. Lat as respondent's attorney-in-fact,
with full powers to represent respondent in
the proceedings, should have been evidenced
by a board resolution or secretary's
certificate

2. Cosco is not estopped by laches from raising
the defect in Kempers complaint.

a. Tamondong v. CA - if a complaint is
filed for and in behalf of the plaintiff
who is not authorized to do so, the
complaint is not deemed filed. An
unauthorized complaint does not
produce any legal effect. Hence, the
court should dismiss the complaint on
the ground that it has no jurisdiction
over the complaint and the plaintiff.
b. No valid complaint was ever filed with
the RTC, Branch 8, Manila, the same
did not acquire jurisdiction over the
person of respondent.
c. Petitioner is not estopped from
challenging
the
trial
court's
jurisdiction, even at the pre-trial stage
of the proceedings. This is so because
the issue of jurisdiction may be raised
at any stage of the proceedings, even
on appeal, and is not lost by waiver or
by estoppel

Iglesia ni Kristo v. Ponferrada, G.R. No. 168943,
October 27, 2006

FACTS:

Enrique Santos was the owner of a 936-square-meter
parcel of land located in Tandang Sora, Quezon City
covered by Transfer Certificate of Title issued by the
Register of Deeds on July 27, 1961 which cancelled
TCT No. 57193-289.

He had been in possession of the owners duplicate of
said title and had been in continuous, open, adverse
and peaceful possession of the property. He died on
February 9, 1970 and was survived by his wife, Alicia
Santos, and other plaintiffs, who were their children.
Thereafter, plaintiffs took peaceful and adverse
possession of the property, and of the owners
duplicate of said title. When the Office of the Register
of Deeds of Quezon City was burned on June 11,
1988, the original copy of said title was burned as
well.

The Register of Deeds had the title reconstituted
based on the owners duplicate. Sometime in
February 1996, plaintiffs learned that defendant was
claiming ownership over the property based on TCT
No. 321744 issued on September 18, 1984 which, on
its face, cancelled TCT No. 320898, under the name of
the Philippine National Bank, which allegedly
cancelled TCT No. 252070 in the names of the
spouses Marcos and Romana dela Cruz.
They insisted that TCT Nos. 321744, 320898 and
252070 were not among the titles issued by the
Register of Deeds of Quezon City and even if the
Register of Deeds issued said titles, it was contrary to
law.

As gleaned from the caption of the complaint,
plaintiffs appear to be the heirs of Enrique Santos,
represented by Enrique G. Santos. The latter signed
the Verification and Certificate of Non-Forum
Shopping.

Defendant asserted that the case involved more than
one plaintiff but the verification and certification
against forum shopping incorporated in the
complaint was signed only by Enrique Santos.
Although the complaint alleges that plaintiffs are
represented by Enrique Santos, there is no showing
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Case Digests

that he was, indeed, authorized to so represent the

other plaintiffs to file the complaint and to sign the
verification and certification of non-forum shopping.
Thus, plaintiffs failed to comply with Section 5, Rule 7
of the Rules of Court. Defendant cited the ruling of
this Court in Loquias v. Office of the Ombudsman.

Defendant maintained that the complaint is defective
in that, although there is an allegation that Enrique
Santos represents the other heirs, there is nothing in
the pleading to show the latters authority to that
effect; the complaint fails to aver with particularity
the facts showing the capacity of defendant
corporation to sue and be sued; and the pleading
does not state the address of plaintiffs. Defendant
likewise averred that the complaint should be
dismissed on the ground of prescription.

In their comment, on the motion, plaintiffs averred
that the relationship of a co-owner to the other co-
owners is fiduciary in character; thus, anyone of them
could effectively act for another for the benefit of the
property without need for an authorization.
Consequently, Enrique Santos had the authority to
represent the other heirs as plaintiffs and to sign the
verification and certification against forum shopping.

In its reply, defendant averred that absent any
authority from his co-heirs, Enrique Santos must
implead them as plaintiffs as they are indispensable
parties. In response, plaintiffs aver that a co-owner of
a property can execute an action for quieting of title
without impleading the other co-owners.

The trial court issued an order, denying defendants
motion to dismiss. It declared that since Enrique
Santos was one of the heirs, his signature in the
verification and certification constitutes substantial
compliance with the Rules. The court cited the ruling
of this Court in Dar v. Alonzo-Legasto.

Petitioner averred that, of the plaintiffs below, only
plaintiff Enrique Santos signed the verification and
certification of non-forum shopping. Under Section 5,
Rule 7 of the 1997 Rules of Civil Procedure, all the
plaintiffs must sign, unless one of them is authorized
by a special power of attorney to sign for and in
behalf of the others. Petitioner argues that the bare
claim of Enrique Santos that he signed the
verification and certification in his behalf and of the
other plaintiffs who are his co-heirs/co-owners of the
property does not even constitute substantial
compliance of the rule. Contrary to the ruling of the

trial court, the absence or existence of an authority of
Enrique Santos to sign the verification and
certification for and in behalf of his co-plaintiffs is not
a matter of evidence. The defect is fatal to the
complaint of respondents and cannot be cured by an
amendment of the complaint. The trial court erred in
applying the ruling of this Court in Dar v. Alonzo-
Legasto.

On April 7, 2005, the CA rendered the assailed
decision dismissing the petition, holding that the RTC
did not commit grave abuse of its discretion
amounting to lack or excess of jurisdiction in denying
petitioners motion to dismiss. As the Court held in
DAR v. Alonzo-Legasto and in Gudoy v.
Guadalquiver,the certification signed by one with
respect to a property over which he shares a common
interest with the rest of the plaintiffs (respondents
herein) substantially complied with the Rules. As to
the issue of prescription, the appellate court held that
the prescriptive period should be reckoned from
1996, when petitioner claimed ownership and barred
respondents from fencing the property.

ISSUE:
WHETHER OR NOT THE COURT OF APPEALS ERRED
IN RULING THAT THE CERTIFICATION OF NON-
FORUM SHOPPING SIGNED BY RESPONDENT
ENRIQUE G. SANTOS ALONE IS A SUBSTANTIAL
COMPLIANCE WITH SECTION 5, RULE 7 OF THE
1997 RULES OF CIVIL PROCEDURE AND IN
APPLYING THE CASE OF GUDOY V. GUADALQUIVER,
429 SCRA 723, WITHOUT REGARD TO MORE
RECENT JURISPRUDENCE.

RULING: No the CA did not err.
RATIO:
The issue in the present case is not the lack of
verification but the sufficiency of one executed by
only one of plaintiffs. This Court held in Ateneo de
Naga University v. Manalo, that the verification
requirement is deemed substantially complied with
when, as in the present case, only one of the heirs-
plaintiffs, who has sufficient knowledge and belief to
swear to the truth of the allegations in the petition
(complaint), signed the verification attached to it.
Such verification is deemed sufficient assurance that
the matters alleged in the petition have been made in
good faith or are true and correct, not merely
speculative.
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The same liberality should likewise be applied to the

certification against forum shopping. The general
rule is that the certification must be signed by all
plaintiffs in a case and the signature of only one of
them is insufficient. However, the Court has also
stressed in a number of cases that the rules on forum
shopping were designed to promote and facilitate the
orderly administration of justice and thus should not
be interpreted with such absolute literalness as to
subvert its own ultimate and legitimate objective.
The rule of substantial compliance may be availed of
with respect to the contents of the certification. This
is because the requirement of strict compliance with
the provisions merely underscores its mandatory
nature in that the certification cannot be altogether
dispensed with or its requirements completely
disregarded.
The substantial compliance rule has been applied by
this Court in a number of cases: Cavile v. Heirs of
Cavile, where the Court sustained the validity of the
certification signed by only one of petitioners
because he is a relative of the other petitioners and
co-owner of the properties in dispute; Heirs of
Agapito T. Olarte v. Office of the President of the
Philippines, where the Court allowed a certification
signed by only two petitioners because the case
involved a family home in which all the petitioners
shared a common interest; Gudoy v. Guadalquiver,
where the Court considered as valid the certification
signed by only four of the nine petitioners because all
petitioners filed as co-owners pro indiviso a
complaint against respondents for quieting of title
and damages, as such, they all have joint interest in
the undivided whole; and Dar v. Alonzo-Legasto,
where the Court sustained the certification signed by
only one of the spouses as they were sued jointly
involving a property in which they had a common
interest.
It is noteworthy that in all of the above cases, the
Court applied the rule on substantial compliance
because of the commonality of interest of all the
parties with respect to the subject of the controversy.
Applying the doctrines laid down in the above cases,
we find and so hold that the CA did not err in
affirming the application of the rule on substantial
compliance. In the instant case, the property involved
is a 936-square-meter real property. Both parties
have their respective TCTs over the property.
Respondents herein who are plaintiffs in the case
below have a common interest over the property
being the heirs of the late Enrique Santos, the alleged
registered owner of the subject property as shown in
one of the TCTs. As such heirs, they are considered

co-owners pro indiviso of the whole property since no
specific portion yet has been adjudicated to any of
the heirs. Consequently, as one of the heirs and
principal party, the lone signature of Enrique G.
Santos in the verification and certification is
sufficient for the RTC to take cognizance of the case.
The commonality of their interest gave Enrique G.
Santos the authority to inform the RTC on behalf of
the other plaintiffs therein that they have not
commenced any action or claim involving the same
issues in another court or tribunal, and that there is
no other pending action or claim in another court or
tribunal involving the same issues. Hence, the RTC
correctly denied the motion to dismiss filed by
petitioner.
Considering that at stake in the present case is the
ownership and possession over a prime property in
Quezon City, the apparent merit of the substantive
aspects of the case should be deemed as a special
circumstance or compelling reason to allow the
relaxation of the rule.
Time and again, this Court has held that rules of
procedure are established to secure substantial
justice. Being instruments for the speedy and efficient
administration of justice, they may be used to achieve
such end, not to derail it. In particular, when a strict
and literal application of the rules on non-forum
shopping and verification will result in a patent
denial of substantial justice, these may be liberally
construed. The ends of justice are better served when
cases are determined on the merits after all parties
are given full opportunity to ventilate their causes
and defenses rather than on technicality or some
procedural imperfections.

Vallacar Transit, Inc. v. Jocelyn Catubig, G.R. No.
175512, May 30, 2011

Facts:
Petitioner is the franchise owner of a Ceres
Bulilit Bus driven by Cabanilla, its regular bus
driver. Said bus figured in an accident
wherein Catubigs husband who was then
driving a motorcycle died. Cabanilla was
charged with reckless imprudence resulting
in double homicide.
MCTC resolution: criminal charge against
Cabanilla was dismissed since he was not
criminally liable there being no negligence on
his part.
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Respondent: Complaint for Damages

Petitioner:Answer with Counterclaim, deaths
were due solely to Catubigs negligence in
overtaking another vehicle at a curve. It also
asked for the dismissal of the complaint for
not being verified and/or for failure to state a
cause of action, as there was no allegation
that petitioner was negligent in the selection
or supervision of its employee driver. The
certification against forum shopping attached
to the complaint, signed by respondent, is not
a valid substitute for respondents
verification that she "has read the pleading
and that the allegations therein are true and
correct of her personal knowledge or based
on authentic records. Petitioner cited
jurisprudence in which the Court ruled that a
pleading lacking proper verification is treated
as an unsigned pleading, which produces no
legal effect under Section 3, Rule 7 of the
Rules of Court.
Issue: Whether or not the complaint for damages

should be dismissed for not being verified.

Held: Yes.
1. At the outset, the court found no procedural
defect that would have warranted the
outright dismissal of respondents complaint.
Respondent filed her complaint for damages
against petitioner on July 19, 1995, when the
1964 Rules of Court was still in effect.
Rule 7, Section 6 of the 1964 Rules of Court
provided:
Sec.
6. Verification.A
pleading is verified only by an
affidavit stating that the
person verifying has read the
pleading and that the
allegations thereof are true of
his own knowledge.

Verifications
based
on
"information and belief," or
upon "knowledge, information
and belief," shall be deemed
insufficient.
Rule 7, Section 4 of the 1997 Rules of Court
SEC. 4. Verification. Except when otherwise
specifically required by law or rule, pleadings
need not be under oath, verified or

accompanied by affidavit.
A pleading is verified by an affidavit that the
affiant has read the pleading and that the
allegations therein are true and correct of his
knowledge and belief.
A pleading required to be verified which
contains a verification based on "information
and belief" or upon "knowledge, information
and belief," or lacks a proper verification,
shall be treated as an unsigned pleading.
A.M. No. 00-2-10 effective 2000:
SEC. 4. Verification. - Except when
otherwise specifically required by law
or rule, pleadings need not be under
oath, verified or accompanied by
affidavit.
A pleading is verified by an affidavit
that the affiant has read the pleading
and that the allegations therein are
true and correct of his personal
knowledge or based on authentic
records.
A pleading required to be verified
which contains a verification based on
"information and belief" or upon
"knowledge, information and belief,"
or lacks a proper verification, shall be
treated as an unsigned pleading.
2. The 1997 Rules of Court, even prior to its
amendment by A.M. No. 00-2-10, clearly
provides that a pleading lacking proper
verification is to be treated as an unsigned
pleading which produces no legal effect.
However, it also just as clearly states that
"[e]xcept when otherwise specifically
required by law or rule, pleadings need not be
under oath, verified or accompanied by
affidavit." No such law or rule specifically
requires that respondents complaint for
damages should have been verified.
3. Although parties would often submit a joint
verification and certificate against forum
shopping, the two are different.
4. In the case before us, we stress that as a
general rule, a pleading need not be verified,
unless there is a law or rule specifically
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requiring the same. Examples of pleadings

that require verification are: (1) all pleadings
filed in civil cases under the 1991 Revised
Rules on Summary Procedure; (2) petition for
review from the Regional Trial Court to the
Supreme Court raising only questions of law
under Rule 41, Section 2; (3) petition for
review of the decision of the Regional Trial
Court to the Court of Appeals under Rule 42,
Section 1; (4) petition for review from quasi-
judicial bodies to the Court of Appeals under
Rule 43, Section 5; (5) petition for review
before the Supreme Court under Rule 45,
Section 1; (6) petition for annulment of
judgments or final orders and resolutions
under Rule 47, Section 4; (7) complaint for
injunction under Rule 58, Section 4; (8)
application for preliminary injunction or
temporary restraining order under Rule 58,
Section 4; (9) application for appointment of
a receiver under Rule 59, Section 1; (10)
application for support pendente lite under
Rule 61, Section 1; (11) petition for certiorari
against the judgments, final orders or
resolutions of constitutional commissions
under Rule 64, Section 2; (12) petition for
certiorari, prohibition, and mandamus under
Rule 65, Sections 1 to 3; (13) petition for quo
warranto under Rule 66, Section 1; (14)
complaint for expropriation under Rule 67,
Section 1; (15) petition for indirect contempt
under Rule 71, Section 4, all from the 1997
Rules of Court; (16) all complaints or
petitions
involving
intra-corporate
controversies under the Interim Rules of
Procedure on Intra-Corporate Controversies;
(17) complaint or petition for rehabilitation
and suspension of payment under the Interim
Rules on Corporate Rehabilitation; and (18)
petition for declaration of absolute nullity of
void marriages and annulment of voidable
marriages as well as petition for summary
proceedings under the Family Code.
5. In contrast, all complaints, petitions,
applications, and other initiatory pleadings
must be accompanied by a certificate against
forum shopping, first prescribed by
Administrative Circular No. 04-94, which took
effect on April 1, 1994, then later on by Rule
7, Section 5 of the 1997 Rules of Court. It is
not disputed herein that respondents
complaint for damages was accompanied by

such a certificate.
6. In addition, verification, like in most cases
required by the rules of procedure, is a
formal, not jurisdictional, requirement, and
mainly intended to secure an assurance that
matters which are alleged are done in good
faith or are true and correct and not of mere
speculation. When circumstances warrant,
the court may simply order the correction of
unverified pleadings or act on it and waive
strict compliance with the rules in order that
the ends of justice may thereby be served

Korean Technologies v. Alberto Lerma, G.R. No.
143581, January 7, 2008

FACTS
Korea Technologies Co., Ltd. (KOGIES) is a Korean
corporation which is engaged in the supply and
installation of Liquefied Petroleum Gas (LPG)
Cylinder manufacturing plants, while Pacific General
Steel Manufacturing Corp. (PGSMC) is a domestic
corporation.

PGSMC and KOGIES executed a contract in the
Philippines whereby KOGIES would set up an LPG
Cylinder Manufacturing Plant in Carmona, Cavite. In
Korea, the parties executed an Amendment to the
contract regarding the terms of payment.

However, after the installation of the plant, the initial
operation could not be conducted as PGSMC
encountered financial difficulties affecting the supply
of materials, thus forcing the parties to agree that
KOGIES would be deemed to have completely
complied with the terms and conditions of the
contract.

For the remaining balance aimed at the installation
and initial operation of the plant, PGSMC issued two
post-dated checks. When KOGIES deposited the
checks, these were dishonoured for the reason
"PAYMENT STOPPED." Thus, KOGIES sent a demand
letter to PGSMC threatening criminal action for
violation of Batas Pambansa Blg. 22 in case of non-
payment.

PGSMC informed KOGIES that PGSMC was cancelling
their Contract on the ground that KOGIES had altered
the quantity and lowered the quality of the
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machineries and equipment it delivered to PGSMC,

and that PGSMC would dismantle and transfer the
machineries, equipment, and facilities installed in the
Carmona plant. Five days later, PGSMC filed before
the Office of the Public Prosecutor an Affidavit-
Complaint for Estafa docketed against the President
of KOGIES.

KOGIES filed a Complaint for Specific Performance,
against PGSMC before the Muntinlupa City Regional
Trial Court (RTC). In its complaint, KOGIES alleged
that PGSMC had initially admitted that the checks
that were stopped were not funded but later on
claimed that it stopped payment of the checks for the
reason that "their value was not received" as the
former allegedly breached their contract by "altering
the quantity and lowering the quality of the
machinery and equipment" installed in the plant and
failed to make the plant operational although it
earlier certified to the contrary.

PGSMC filed its Answer with Compulsory
Counterclaim asserting that it had the full right to
dismantle and transfer the machineries and
equipment because it had paid for them in full as
stipulated in the contract, that KOGIES was not
entitled to the balance covered by the checks for
failing to completely install and make the plant
operational, and that KOGIES was liable for damages
for altering the quantity and lowering the quality of
the machineries and equipment.

ISSUE
Whether the payment of docket fees and attachment
of certificate of non-forum shopping are not required
considering that the Answer with Counterclaim is a
compulsory one and is not an initiatory pleading?
RULING and RATIO:
As aptly ruled by the CA, the counterclaims of PGSMC
were incorporated in its Answer with Compulsory
Counterclaim in accordance with Section 8 of Rule 11,
1997 Revised Rules of Civil Procedure, the rule that
was effective at the time the Answer with
Counterclaim
was
filed.

On July 17, 1998, at the time PGSMC filed its Answer
incorporating its counterclaims against KOGIES, it
was not liable to pay filing fees for said counterclaims
being compulsory in nature. We stress, however, that
effective August 16, 2004 under Sec. 7, Rule 141, as
amended by A.M. No. 04-2-04-SC, docket fees are now
required to be paid in compulsory counterclaim or
cross-
claims.

As to the failure to submit a certificate of forum
shopping, PGSMCs Answer is not an initiatory
pleading which requires a certification against forum
shopping under Sec. 5 of Rule 7, 1997 Revised Rules
of Civil Procedure. It is a responsive pleading, hence,
the courts a quo did not commit reversible error in
denying KOGIES motion to dismiss PGSMCs
compulsory counterclaims.

Filipinas Textile v. Court of Appeals, G.R. No.
119800, November 12, 2003

FACTS:
Filipinas Textile Mills, Inc. (Filtex) applied and was
issued letters of credit by State Investment House,
Inc. (SIHI) for the purchase of various textile
materials from its suppliers. The suppliers issued
several sight drafts payable to the order of SIHI,
which were duly accepted by Filtex. The sight drafts
were negotiated to and acquired in due course by
SIHI which paid the value thereof to the suppliers for
the account of Filtex. On behalf of Filtex, Bernardino
Villanueva executed a comprehensive surety
agreement whereby he guaranteed, jointly and
severally with Filtex, the full and punctual payment of
Filtexs indebtedness. To ensure the payment of the
sight drafts, Filtex issued to SIHI several trust
receipts and replacement trust receipts whereby
Filtex agreed to hold the merchandise in trust for
SIHI, with liberty to sell the same for SIHIs account
but without authority to make any other disposition
of the said goods. Filtex failed to pay. SIHI filed a
Complaint for Collection.
Petitioners argued that the comprehensive surety
agreement and the trust receipts upon which the
Complaint was based was null and void for lack of
consent; that SIHI materially altered the terms and
conditions of the surety agreement; and that the
obligation was fully paid with overpayment.
However, petitioners failed to specifically deny under
oath the genuineness and due execution of said
documents in their respective Answers. On Appeal,
petitioners claimed that the documents were
inadmissible in evidence due to the non-payment of
documentary stamp taxes as required by the NIRC.
SIHI contended that the petitioners expressly
admitted the due execution of the documents in their
respective Answers, thus, they could no longer
question their admissibility; that their allegation of
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inadmissibility is inconsistent with their defense of

full payment; and that assuming the DST is required,
it is for the sole account of Filtex not only because the
letters of credit were issued at its instance and
application but also because it was the issuer and
acceptor of the trust receipts and sight drafts,
respectively.
The RTC held that Filtex and Villanueva are jointly
and severally liable to SIHI. The CA held that the
petitioners admitted the genuineness and due
execution of said documents because of their failure
to have their answers placed under oath, the
complaint being based on actionable documents in
line with Section 7, Rule 8 of the Rules of Court. MR
Denied.
ISSUE: Whether or not the petitioners admitted the
genuineness and due execution of said documents
because of their failure to specifically deny under
oath the genuineness and due execution of the
documents in their respective Answers?
RULING: YES. Decision Affirmed.
RATIO:
The Answer with Counterclaim and Answer of Filtex
and Villanueva, respectively, did not contain any
specific denial under oath of the letters of credit,
sight drafts, trust receipts and comprehensive surety
agreement, thus giving rise to the implied admission
of the genuineness and due execution of these
documents. Under Sec. 8, Rule 8 of the Rules of Court,
when an action or defense is founded upon a written
instrument, copied in or attached to the
corresponding pleading as provided in the preceding
section, the genuineness and due execution of the
instrument shall be deemed admitted unless the
adverse party, under oath, specifically denies them,
and sets forth what he claims to be the facts.
The genuineness and due execution of a document
means that the party whose signature it bears admits
that he voluntarily signed the document or it was
signed by another for him and with his authority; that
at the time it was signed it was in words and figures
exactly as set out in the pleading of the party relying
upon it; that the document was delivered; and that
any formalities required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks,
are waived by him.
The petitioners are also estopped from claiming that
the documents are inadmissible in evidence for non-
payment of the DST because Filtex applied for the
LOC and it was the issuer and acceptor of the trust
receipts and sight drafts, and Villanueva signed the
comprehensive surety agreement on behalf of Filtex.
Further, they questioned the admissibility of these

documents rather belatedly, at the appeal stage even.
The rule is well-settled that points of law, theories,
issues and arguments not adequately brought to the
attention of the trial court need not, and ordinarily
will not, be considered by a reviewing court as they
cannot be raised for the first time on appeal because
this would be offensive to the basic rules of fair play,
justice and due process.
The contention that the petitioners have fully paid
their obligation is purely a factual issue. The
jurisdiction of this Court in cases brought before it
from the Court of Appeals under Rule 45 of the Rules
of Court is limited to reviewing or revising errors of
law.
The contention that the comprehensive surety
agreement is null and void for lack of consent of
Filtex and SIHI is specious. The consent of Filtex to
the surety may be assumed from the fact that
Villanueva was the signatory to the sight drafts and
trust receipts on behalf of Filtex. SIHIs consent to the
surety is also understood from the fact that it
demanded payment from both Filtex and Villanueva.
As regards the purported material alteration
of the terms and conditions of the comprehensive
surety agreement by granting Filtex an extension of
the period for payment thereby releasing Villanueva
from his obligation as surety, we rule that the
extension did not release Villanueva from his liability.
The neglect of the creditor to sue the principal at the
time the debt falls due does not discharge the surety,
even if such delay continues until the principal
becomes insolvent. There is nothing to prevent the
creditor from proceeding against the principal at any
time. At any rate, if the surety is dissatisfied with the
degree of activity displayed by the creditor in the
pursuit of his principal, he may pay the debt himself
and become subrogated to all the rights and remedies
of the creditor.

Sy Tiong v. Sy Chim, G.R. No. 174168, March 30,
2009

FACTS:[*this is a consolidated case, the facts in G.R. No. 179438 is the one
relevant to Rem]
The corporation Sy Siy Ho & Sons filed a criminal case
for robbery against the Sps. Sy [ Sy Chim and
Felicidad Chan Sy] after failing to respond to the
demand letter for accounting of misappropriated
money. It was alleged and found that they failed to
make cash de deposits to any of the corporations
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banks hence the total bank remittances for the past

years were less than that reflected in the corporate
financial statements. They have P67, 117, 230.30 as
unaccounted receipts and disbursements. Also, after
a demand letter was sent to them, they stopped
reporting to the company.
Sy Tiong, the Corporate VP called for a special
meeting where he was elected president and his wife
Juanita the new VP. The corporation filed an
amended complaint for accounting and damages
against the Sps. Sy for complete and true accounting
of all amounts misappropriated. The Sps Sy answered
that the meeting was without authority and that they
were the ones authorized by the by-laws to control
and administer the corporation. They also filed their
counter-claim for moral and exemplary damages.
They later filed a Motion for Leave to file a third-
party complaint against Sy Tiong and Juanita alleging
that the latter are the ones directly liable for
misappropriation. The RTC granted, the CA however
reversed stating a third-party complaint is not
allowed under the Interim Rules of Procedure
governing Intra-Corporate Controversies as it is not
included in the exclusive enumeration of the allowed
pleadings.
ISSUE: W/N a third party complaint is allowed

RULING: YES
RATIO:
The conflict arose because, for while a third-party
complaint is not included in the allowed pleadings, it
is also not among the prohibited pleadings. This can
be resolved by following the well-entrenched rule in
statutory construction that every part of the statute
must be interpreted with reference to the context,
that it be construed in light of the object to be
achieved. Looking at Sec. 3 Rule 1 of the Interim
Rules, the spirit and intent of the law can be gleamed
to be the securing of a just, speedy and inexpensive
determination of an action.
The summary nature of the interim rules and the
allowance of filing of a third-party complaint is
premised on one objective the expeditious
disposition of cases. A third party complaint is a
claim that a defending party, may, with leave of court,
file against a person to the action called the third
party defendant, for contribution, indemnity,
subrogation or any other relief. Had it not been for
Rule 6, Sec. 11 of RoC, the third party complaint
would have been filed independently and separately
from the original complaint. Allowing third party
complaint avoids circuitry of actions and unnecessary
proliferation of law suits and results to expeditious

disposition in one litigation all matters arising from
one particular set of facts.
The brining of a third-party complaint is proper if he
would be liable to the plaintiff or the defendant or
both for all part of the plaintiffs claim against the
original defendant, although the third-party
defendants liability arises out of another transaction.
The defendant may implead another as third-party
defendant: (a) on allegation of liability of the latter to
the defendant for contribution, indemnity,
subrogation or any other relief; (b) on ground of
direct liability of the third-party defendant to the
plaintiff; or (c) the liability of the third-party
defendant to both plaintiff and the defendant.

In determining sufficiency of the third party
complaint, the allegations in the original complaint
and the third-party complaint must be examined. The
third-party complaint must allege facts which prima
facie shows that the defendant is entitled to
contribution, indemnity, subrogation or other relief.

In the case at bar, the complaint attributes to the Sps
Sy liability to render full and complete accounting of
amounts misappropriated. The third party complaint
alleges that it is Sy Tiong and Juanita who should be
liable. The allegations in the third-party complaint
impute direct liability to Sy Tiong for the very same
claims the corporation interposed against Sps Sy. The
third party complaint is in respect of the
corporations thus should be allowed.

PTA of St. Matthew Academy v. Metrobank,
G.R.No. 176518, March 2, 2010

FACTS:
Spouses Ilagan obtained a loan from Metrobank in
the amount of P4,790,000.00, secured by a Real
Estate Mortgage over parcels of land covered by
various TCTs. Upon default of the spouses,
Metrobank extrajudicially foreclosed the properties,
for which a certificate of sale was issued in its favor
as the highest bidder. During the period of
redemption, Metrobank filed an Ex-Parte Petition for
Issuance of a Writ of Possession docketed as LRC
Case No. 6438.
Thereafter, St. Matthew Christian Academy of Tarlac,
Inc. filed a Petition for Injunction with Prayer for
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Restraining Order against Metrobank, docketed as

Special Civil Action No. 9793.
The judge issued a joint decision for LRC Case No.
6438 and Special Civil Action No. 9793, ruling that
Metrobank is entitled to a writ of possession. Pending
resolution of the motion for reconsideration,
petitioners PTA of St. Matthew Academy and other
teachers and students of the said school filed a
Motion for Leave to file Petition in Intervention in
Special Civil Action No. 9793, which was granted by
the trial court. However, it reversed its earlier ruling
via a subsequent order stating that petitioners
intervention would have no bearing on the issuance
and implementation of the writ of possession.
Without filing a motion for reconsideration,
petitioners filed a Petition for Certiorari and
Prohibition before the CA. The CA dismissed the
same. Hence, this petition, where among others,
petitioners claim that the Metrobank Branch Head
lacked the authority to sign the certificate of non-
forum shopping attached to the Petition for the
Issuance of the Writ of Possession.

ISSUE
Whether or not the Metrobank Branch Heads lack of
authority to sign the certificate of non-forum
shopping was fatal.

RULING and RATIO:
No, lack of authority to sign the certificate of non-
forum shopping was not fatal to Metrobank since
such certificate is only needed when filing an
initiatory pleading. This case does not involve an
initiatory pleading. Although the Petition for the
Issuance of a Writ of Possession was captioned as a
Petition, the same is to be considered merely a
motion. What distinguishes a motion from a petition
or other pleading is not its form or the title given by
the party executing it, but its purpose. The purpose of
a motion is not to initiate litigation, but to bring up a
matter arising in the progress of the case where the
motion is filed.

It is not necessary to initiate an original action in
order for the purchaser at an extrajudicial
foreclosure of real property to acquire possession.
Hence, it is immaterial that the certification on non-
forum shopping in the MBTCs petition was signed by
its branch head. Such inconsequential oversight did
not render the said petition defective in form.

Permanent Savings Bank v. Velarde, G.R. No.
140608, September 23, 2004

FACTS:
Mariano Velarde obtained a loan amounting to
P1,000,000.00 from Permanent Savings and Loan
Bank (The Bank). The Bank already sent 2 demand
letters to Velarde, however, the latter still failed to
settle his loan obligation. Thus, the Bank filed a
complaint for sum of money for the recovery of the
amount of the loan plus interests and penalties
before the RTC of Manila.
The loan was evidenced by a promissory note, a loan
release sheet and a loan disclosure statement. In his
Answer, Velarde stated that the signature appearing
at the back of the promissory note seems to be his.
However, he denied having received the proceeds of
the loan. He likewise claimed that the documents
relative to the loan do not express the true intention
of the parties.
After the Bank rested its case, Velarde, instead of
presenting evidence, filed a demurrer to evidence
based on the following grounds:
1. Plaintiff failed to prove its case by
preponderance of evidence.
2. The cause of action is barred by prescription.
The Trial Court found merit in Velardes demurer to
evidence and dismissed the Banks complaint. It ruled
that mere presentation of the documents evidencing
the loan without a testimony of a competent witness
to the transaction and the documents, coupled with
the denial of liability by Velarde does not suffice to
meet the requisite preponderance of evidence in civil
cases. On appeal, the CA affirmed the dismissal.

ISSUE:
Whether or not there is a need for the Bank to
present further evidence as to the due execution and
authenticity of the loan documents.

RULING and RATIO:
No, there is no need for the Bank to present further
evidence as to the due execution and authenticity of
the loan documents because Velarde, in his Answer,
did not specifically deny that he signed the
promissory note. What he merely stated in his
Answer was that the signature appearing at the back
of the promissory note seems to be his. Velarde also
denied any liability on the promissory note as he
allegedly did not receive the amount stated therein,
and that the loan documents do not express the true
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Case Digests

intention of the parties. These denials, according to

the Court, do not constitute an effective specific
denial as contemplated by law. In fact, respondents
allegations amount to an implied admission of the
due execution and genuineness of the promissory
note. The admission of the genuineness and due
execution of a document means that the party whose
signature it bears admits that he voluntarily signed
the document or it was signed by another for him and
with his authority; that at the time it was signed it
was in words and figures exactly as set out in the
pleading of the party relying upon it; that the
document was delivered; and that any formalities
required by law, such as a seal, an acknowledgment,
or revenue stamp, which it lacks, are waived by
him. Also, it effectively eliminated any defense
relating to the authenticity and due execution of the
document, e.g., that the document was spurious,
counterfeit, or of different import on its face as the
one executed by the parties; or that the signatures
appearing thereon were forgeries; or that the
signatures were unauthorized.
Clearly, both the trial court and the Court of Appeals
erred in concluding that Velarde specifically denied
the Banks allegations regarding the loan documents,
as Velardes Answer shows that he failed to
specifically deny under oath the genuineness and due
execution of the promissory note and its concomitant
documents. Therefore, he is deemed to have
admitted the loan documents and acknowledged his
obligation with the Bank; and with his implied
admission, it was not necessary for the Bank to
present further evidence to establish the due
execution and authenticity of the loan documents
sued upon.
While Section 22, Rule 132 of the Rules of Court
requires that private documents be proved of their
due execution and authenticity before they can be
received
in
evidence, i.e., presentation
and
examination of witnesses to testify on this fact; in the
present case, there is no need for proof of execution
and authenticity with respect to the loan documents
because of Velardes implied admission thereof.

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Case Digests

VIII. Default
(Rule 9)

Anuncacion v. Bocanegra, G.R. No. 152496, July
30, 2009

FACTS:
September 29, 2000: Petitioners filed before the RTC,
Manila, a complaint for Quieting of Title and
Cancellation of TCT No. 122452. Complaint averred
that defendants (respondents) may be served with
summons and legal processes through Atty. Rogelio
G. Pizarro, Jr., with office address at 2830 Juan Luna
St., Tondo, Manila. The summons, with the copies of
the complaint, were then served on Atty. Pizarro.
Before the filing of the said complaint, Atty. Pizarro
wrote a demand letter12 on behalf of respondents and
addressed to petitioner German Anunciacion, among
others, demanding that they vacate the land owned
by his clients (respondents), who needed the same
for their own use.

Respondents, through their counsel, Atty. Norby C.
Caparas, Jr., filed a Motion to Dismiss on the ground
that the complaint stated no cause of action. A
Supplemental Motion to Dismiss and Reply to the
Comment on the Motion to Dismiss was filed by
respondents, alleging an additional ground that
petitioners failed to pay the required filing fee.
Eventually,
respondents
filed
a
Second
Supplemental
Motion
to
Dismiss
and
Manifestation dated November 27, 2000 based on
(1) That the court has no jurisdiction over the person
of the defending party; (2) That the court has no
jurisdiction over the subject matter of the claim; and
(3) That the pleading asserting the claim states no
cause of action.
12
The said demand letter reads:

2830 Juan Luna St.Tondo, Manila
August 19, 2000
Mr. German Anunciacion, Mesdames
Liwayway Nava, Evangeline Pineda,
and Ana Ferma
2982 Rizal Ave. Ext.
Sta. Cruz, Manila
Dear Sir and Mesdames:
I write in behalf of my clients, MS. PERPETUA M. BOCANEGRA and MR. GEORGE
M. BOCANEGRA, the registered owners of the parcel of land known as Lot 1-B (LRC)
PSD-230517 located at 2982 Rizal Ave. Ext., Sta. Cruz, Manila, and duly covered by
Transfer Certificate of Title No. 122452, which you are presently occupying.
I would like to inform you that your occupation and possession of the said land is based
on mere tolerance of the owners, and without any payment on your part of any rental.
Now, the owners need the subject property for their own use.
In view thereof, I hereby demand that you vacate the said land within a period of fifteen
(15) days from receipt of this letter. Otherwise, much to our regret, I shall be constrained
to institute the proper criminal and/or civil action against you.
Trusting that you will give this matter your most serious and preferential attention.
Very truly yours,
ATTY. ROGELIO G. PIZARRO, JR.
TC sustained the respondents and dismissed the

complaint for lack of jurisdiction over the persons of
respondents as defendants. In point is Section 3, Rule
3 of the ROC ! Atty. Pizarro, Jr., has not been shown
to be a trustee of an express trust, a guardian, or any
of the above for the action to be allowed to be
defended by a representative. The fact that Atty.
Pizarro, Jr., was the lawyer of the defendants in the
demand letters do not per se make him their
representative for purposes of the present action. To
this effect, service on lawyer of defendant is an
invalid service of summons. (Cordova v. Provincial
Sheriff of Iloilo, 89 SCRA 59) Section 20, Rule 14 of
the 1997 Rules of Civil Procedure provides "The
defendants voluntary appearance in the action shall
be equivalent to service of summons. The inclusion in
a motion to dismiss of other grounds aside from lack
of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance." The
presentation of all objections then available as was
done by the movants subserves the omnibus motion
rule and the concomitant policy against multiplicity
of suits.

MR denied by RTC.

Petitioners filed before the CA a Petition for
Certiorari, seeking the nullification of the RTC Orders
dated February 19, 2001 and May 16, 2001, on the
ground that the said orders were issued with grave
abuse of discretion.

CA dismissed the petition upon finding that there was
no waiver of the ground of lack of jurisdiction on the
part of respondents in the form of voluntary
appearance. Applying Section 20, Rule 14 of the 1997
Rules of Civil Procedure, the CA held that although
the grounds alleged in the two (2) earlier Motion to
Dismiss and Supplemental Motion to Dismiss were
lack of cause of action and failure to pay the required
filing fee, the filing of the said motions did not
constitute a waiver of the ground of lack of
jurisdiction on their persons as defendants. The CA
then concluded that there was no voluntary
appearance on the part of respondents/defendants
despite the filing of the aforesaid motions. The CA
also rejected petitioners contention that the service
made to Atty. Rogelio Pizarro, Jr. was deemed service
upon respondents/defendants.
MR denied by CA.

ISSUES:
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Case Digests

(1) WON CA erred in not considering the filing of the

MTD and the Supplemental MTD a voluntary
appearance before the RTC and therefore conferring
jurisdiction of the RTC on the person of respondents.
(Yes)
(2) WON CA erred in not considering the Second
Supplemental Motion already late since the first MTD
and Supplemental MTD conferred jurisdiction of RTC
on defendants. (Yes)
(3)WON CA erred in considering these motions of
respondent as an Omnibus Motion covered by
R14S20 (Yes)
(4) WON CA erred in not considering Atty. Pizarro as
the authorized representative of respondent to
receive the summons and complaint. (Yes)

RATIONALE:
Respondents filed a motion to dismiss dated October
25, 2000, with only one ground, i.e., that the pleading
asserting the claim "states no cause of action." (I.
Defendants anchored their complaint on a WRONG
Decree of Registration; II. The Government of the
Republic of the Philippines has recognized the
authenticity of TCT No. 122452; and III. Plaintiffs do
NOT have the legal personality to quiet the title of
the subject property.)
Filing of the above-mentioned Motion to Dismiss,
without invoking the lack of jurisdiction over the
person of the respondents, is deemed a voluntary
appearance13 on the part of the respondents.
The same conclusion can be drawn from the filing of
the Supplemental Motion to Dismiss and Reply to the
Comment on the Motion to Dismiss which alleged, as
an additional ground for the dismissal of petitioners
complaint, the failure of plaintiffs to pay the required
filing fee again but failed to raise the alleged lack of
jurisdiction of the court over the person of the
respondents.
The filing of the said Second Supplemental Motion to
Dismiss did not divest the court of its jurisdiction
over the person of the respondents who had earlier
voluntarily appeared before the trial court by filing
their motion to dismiss and the supplemental motion
to dismiss.
Respondents Supplemental Motion to Dismiss and
Second Supplemental Motion to Dismiss were clearly
in violation of Rule 15, Section 8 in relation to Rule 9,
13
Section 20, Rule 14 of the 1997 Rules of Civil Procedure states: Sec. 20. Voluntary
Appearance The defendants voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from
lack of jurisdiction over the person of the defendant shall not be deemed a voluntary
appearance.
Section 1 of the Rules. 14 Respondents failure to

raise the alleged lack of jurisdiction over their
persons in their very first motion to dismiss was
fatal to their cause. They are already deemed to
have waived that particular ground for dismissal
of the complaint.
Atty. Pizarro, as the lawyer of the respondents in the
demand letters, does not per se make him their
representative for purposes of the present action, a
scrutiny of the record shows that the address of
Atty. Pizarro and Atty. Norby Caparas, Jr., (the
counsel who eventually entered his appearance
for respondents) is the same. This circumstance
leads us to believe that respondents belated
reliance on the purported improper service of
summons is a mere afterthought, if not a bad faith
ploy to avoid answering the complaint.
Philippine American Life & General Insurance
Company v. Breva ! Lingner & Fisher GMBH vs.
Intermediate Appellate Court ! A case should not be
dismissed simply because an original summons was
wrongfully served. It should be difficult to conceive,
for example, that when a defendant personally
appears before a Court complaining that he had not
been validly summoned, that the case filed against
him should be dismissed. An alias summons can be
actually served on said defendant.
Teh vs. Court of Appeals ! the petitioner therein also
filed a MTD before filing his answer as defendant in
the trial court on the ground of failure to serve the
summons on him. ! Court agreed with the appellate
court's ruling that there was no abuse of discretion
on the part of the trial court when the latter denied
the petitioner's motion to dismiss the complaint and
ordered the issuance of an alias summons.
A trial court should be cautious before dismissing
complaints on the sole ground of improper service of
summons considering that it is well within its
discretion to order the issuance and service of alias
summons on the correct person in the interest of
substantial justice.

14
Rule 15, Section 8 of the Rules provides: Sec. 8. Omnibus motion. Subject to the
provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available, and all objections not so included
shall be deemed waived.
Rule 9, Section 1, in turn, states: Sec. 1. Defenses and objections not pleaded. Defenses
and objections not pleaded either in a motion to dismiss or in the answer are deemed
waived. However, when it appears from the pleadings or the evidence on record that the
court has no jurisdiction over the subject matter, that there is another action pending
between the same parties for the same cause, or that the action is barred by prior
judgment or by statute of limitations, the court shall dismiss the claim.
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Case Digests

Martinez v. Republic, G.R. No. 160895, October 30,

2006

February 24, 2009: Martinez filed a petition for the
registration in his name of three parcels of land (Lot
No. 464-A, Lot No. 464-B, and Lot No. 370, Cad No.
597) included in the Cortes, Surigao del Sur Cadastre,
alleging that he had purchased lots in 1952 from his
uncle, whose predecessors-in-interest were traceable
up to the 1870s. He claimed that he had remained in
continuous possession of the lots; that the lots had
remained unencumbered; and that they became
private property through prescription pursuant to
Section 48(b) of Commonwealth Act No. 141. He
further claimed that he had been constrained to
initiate the proceedings because the Director of the
Land Management Services had failed to do so
despite the completion of the cadastral survey of
Cortes, Surigao del Sur.

The OSG opposed the petition on the grounds that
appellees possession was not in
accordance with Section 48(b) of Commonwealth Act
No. 141; that his muniments
of title were insufficient to prove bona-fide
acquisition and possession of the
subject parcels; and that the properties formed part
of the public domain and thus
not susceptible to private appropriation.

March 29, 2000: Despite the opposition filed by the
OSG, the RTC issued an order of general default, even
against the Republic of the Philippines. This ensued
when during the hearing of even date, no party
appeared before the Court to oppose Martinezs
petition.

The RTC proceeded to receive Martinezs oral and
documentary evidence in support of his petition. RTC
ruled that Martinez and his predecessors-in-interest
had been for over 100 years in possession
characterized as continuous, open, public, and in the
concept of an owner. The RTC thus decreed the
registration of the three lots in the name of Martinez.

OSG filed a Notice of appeal

Land Registration Authority (LRA) informed the
RTC that only Lot Nos. 464-A and 464-B were
referred to in the Notice of Hearing published in the
Official Gazette; and that Lot No. 370, Cad No. 597
had been deliberately omitted due to the lack of an
approved survey plan for that property. The LRA

manifested that this lot should not have been
adjudicated to Martinez for lack of jurisdiction. This
letter was referred by the RTC to the Court of Appeals
for appropriate action.

CA reversed the RTC and instead ordered the
dismissal of the petition for registration.

No MR was filed and aggrieved party went straight
to the SC with a Petition for review. The arguments
raised focus almost exclusively on the claim that the
OSG no longer had personality to oppose the petition,
or appeal its allowance by the RTC, following the
order of general default. Starkly put, "the [OSG] has
no personality to raise any issue at all under the
circumstances pointed out hereinabove."

The OSG raises several substantial points, including
the fact that it had duly opposed Martinezs
application for registration before the RTC; that
jurisprudence and the Rules of Court acknowledge
that a party in default is not precluded from
appealing the unfavorable judgment; that the RTC
had no jurisdiction over Lot No. 370 since its
technical description was not published in the Official
Gazette; and that as found by the Court of Appeals the
evidence presented by Martinez is insufficient for
registering the lots in his name.

ISSUE/HELD:

WON the OSG could still appealed the RTC decision
after having been declared in
default. YES.

RATIO:

A defendant party declared in default retains the
right to appeal from the judgment by default on the
ground that the plaintiff failed to prove the material
allegations of the complaint, or that the decision is
contrary to law, even without need of the prior filing
of a motion to set aside the order of default.

The Lim Toco doctrine is thus reaffirmed, denying
such right to appeal unless the order of default has
been set aside, was no longer controlling in this
jurisdiction upon the effectivity of the 1964 Rules of
Court, and up to this day.

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Lim Toco v. Go Fay: decided in 1948, where a

divided Court pronounced that a defendant in default
had no right to appeal the judgment rendered by the
trial court, except where a motion to set aside the
order of default had been filed. This, despite the point
raised by Justice Perfecto in dissent that there was no
provision in the then Rules of Court or any law
"depriving a defaulted defendant of the right to be
heard on appeal."

The enactment of the 1964 Rules of Court
incontestably countermanded the Lim Toco ruling.
Section 2, Rule 41 therein expressly stated that "[a]
party who has been declared in default may likewise
appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no
petition for relief to set aside the order of default has
been presented by him in accordance with Rule 38."
By clearly specifying that the right to appeal was
available even if no petition for relief to set aside the
order of default had been filed, the then fresh Rules
clearly rendered the Lim Toco ruling as moot.
Another provision in the 1964 Rules concerning the
effect of an order of default acknowledged that "a
party declared in default shall not be entitled to
notice of subsequent proceedings, nor to take part in
the trial." Though it might be argued that appellate
proceedings fall part of "the trial" since there is no
final termination of the case as of then, the clear
intent of the 1964 Rules was to nonetheless allow the
defaulted defendant to file an appeal from the trial
court decision. Indeed, jurisprudence applying the
1964 Rules was unhesitant to affirm a defaulted
defendants right to appeal, as guaranteed under
Section 2 of Rule 41, even as Lim Toco was not
explicitly abandoned.

The old provision expressly guaranteeing the right of
a defendant declared in default to appeal the adverse
decision was not replicated in the 1997 Rules of Civil
Procedure. This however, should not be taken as a
sign that under the 1997 Rules a defaulted defendant
no longer has the right to appeal the trial court
decision, or that the Lim Toco doctrine has been
reinstated, taking as indication post-1997
jurisprudence and the published commentaries to the
1997 Rules

The right of a defaulted defendant to appeal remains
extant. Even if it were to assume the doubtful
proposition that this contested right of appeal finds
no anchor in the 1997 Rules, the doctrine still exists,

applying the principle of stare decisis. Jurisprudence
applying the 1997 Rules has continued to
acknowledge the Lina doctrine which embodies this
right to appeal as among the remedies of a defendant,
and no argument in this petition persuades the Court
to rule otherwise.

Heirs of Medrano v. Estanislao De Vera, G.R. No.
165770, August 09, 2010

Facts:
- A 463-square meter parcel of land is owned by
Flaviana De Gracia (Flaviana). She died intestate,
leaving her half-sisters Hilaria Martin-Paguyo
(Hilaria) and Elena Martin-Alvarado (Elena) as
her compulsory heirs.
- Hilaria and Elena, by virtue of a private document
waived all their hereditary rights to Flavianas
land in favor of Francisca Medrano (Medrano) in
consideration of the expenses that she incurred
for Flavianas medication, hospitalization, wake
and burial.
- When Hilaria and Elena died, some of their
children affirmed the contents of the private
document executed by their deceased mothers.
Due to the refusal of the other children to sign a
similar renunciation, Medrano filed a Complaint
for quieting of title.
- Estanislao D. De Vera (De Vera) filed an Answer.
De Vera presented himself as the real party-in-
interest on the ground that some of the named
defendants (Faustina, Pelagia, Francisca, Elena
Kongco-Alvarado, Jesus, and Estrellita) had
executed a Deed of Renunciation of Rights in his
favor.
- Medrano filed a Motion to Expunge Answer of De
Vera and to Declare Defendants in Default. She
argued that De Vera had no personality to answer
the complaint since he was not authorized by the
named defendants to answer in their behalf.
- TC: admitted De Veras Answer. The court said
that he made a voluntary appearance in the case
as the transferee of the defendants rights to the
subject property. Also, the court declared the
named defendants in default for not answering
the complaint despite valid service of summons.
Thus, it appears that the court treated the named
defendants and De Vera as distinct and separate
parties.
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TC later set aside said Order admitting De Veras

Answer and instead asked him to file a pleading-
in-intervention so that he could be recognized as
a party-defendant. Medrano therefore presented
her evidence ex parte since the defendants are in
default.
CA: ruled in favor of De Vera. CA said that TC
should have exercised its authority to order the
substitution of the original defendants instead of
requiring De Vera to file a pleading-in-
intervention. This is allowed under Rule 3,
Section 19 of the Rules of Court. Since a
transferee pendente lite is a proper party42 to
the case, the court can order his outright
substitution for the original defendants.

Issue and Held:
- WON De Vera should be allowed to participate in
the case? Yes

Ratio:
- De Veras interest is not independent of or
severable from the interest of the named
defendants. He is a transferee pendente lite of the
named defendants (by virtue of the Deed of
Renunciation of Rights). His rights were derived
from the named defendants and, as transferee
pendente lite, he would be bound by any
judgment against his transferors under the rules
of res judicata.
- What the trial court should have done is to treat
De Vera (as transferee pendente lite) as having
been joined as a party-defendant, and to try the
case on the basis of the answer De Vera had filed
and with De Veras participation. As transferee
pendente lite, De Vera may be allowed to join the
original defendants under Rule 3, Section 19:
Transfer of interest. In case of any transfer of
interest, the action may be continued by or
against the original party, unless the court upon
motion directs the person to whom the interest is
transferred to be substituted in the action or
joined with the original party.
- The said provision gives the trial court discretion
to allow or disallow the substitution or joinder by
the transferee. Discretion is permitted because, in
general, the transferees interest is deemed by
law as adequately represented and protected by
the participation of his transferors in the case.
- As there was a transferee pendente lite whose
answer had already been admitted, the trial court
should have tried the case on the basis of that
answer, based on Rule 9, Section 3(c): Effect of

partial default. When a pleading asserting a
claim states a common cause of action against
several defending parties, some of whom answer
and the others fail to do so, the court shall try the
case against all upon the answers thus filed and
render judgment upon the evidence presented.
Thus, the default of the original defendants
should not result in the ex parte presentation of
evidence because De Vera (a transferee pendente
lite who may thus be joined as defendant under
Rule 3, Section 19) filed an answer. The trial
court should have tried the case based on De
Veras answer, which answer is deemed to have
been adopted by the non-answering defendants.
Given the Courts finding that the ex parte
presentation of evidence constituted a violation
of due process rights, the trial courts judgment
by default cannot bind De Vera. The case is
remanded.

Aquino v. Aure, G.R. No. 153567, February 18,
2008

Facts:

Aure and E.S. Lending Investors filed a
Complaint for ejectment against Aquino before the
MeTC of Quezon City. Aure alleged in the complaint
that by virtue of a Deed of Sale, they acquired a
certain parcel of land from the Aquinos, which the
Aquinos allegedly refused to vacate even after
receiving substantial consideration.

In defense, Aquino raised in her Answer that
the complaint lacks cause of action, Aure not having
any legal right over the subject property. Aquino
admitted that there was a sale but such sale was
governed by a MoA, according to which Aure shall a
secure a loan from a bank using the subject property
as collateral and then deliver the proceeds to Aquino.
Allegedly however, the Aquinos did not receive the
proceeds of the loan.

The MeTC dismissed the complaint, on the
ground of Aure' non-compliance with the barangay
conciliation process. Furthermore the MeTC ruled
that since the question of ownership was put in issue,
the action was converted from a mere detainer suit to
one that is incapable of pecuniary estimation which
properly rests within the jurisdiction of the RTC. On
appeal, the RTC affirmed the dismissal of the
complaint.

Aure appealed to the CA, which reversed the
decisions of the MeTC and the RTC and remanded the
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Case Digests

case to the MeTC for further proceedings. The CA

ruled that failure to undergo barangay conciliation is
not a jurisdictional flaw and will not affect the
sufficiency of the cause of action since Aquino failed
to seasonably raise said issue in her Answer.
Moreover, the CA ruled that mere allegation of
ownership does not deprive the MeTC of jurisdiction
for jurisdiction is conferred by law and is determined
by the allegations in the complaint.

Issues:
1.
WON non-compliance with the barangay
conciliation proceedings is a jurisictional flaw which
warrants dismissal of a case (NO)
2.
WON allegation of ownership ousts the MeTC
of its jurisdiction over an ejectment cases (NO)

Ratio:
1.
The technical effect of failure to comply with
the requirement on barangay conciliation is much the
same effect produced by non-exhaustion of
administrative reedies the complaint becomes
afflicted with the vice of prematurity, and the
complaint becomes vulnerable to a motion to dismiss.
Nevertheless, the conciliation process is not a
jurisdictional requiremet, so that non-compliance
therewith cannot affect the jurisdiction which the
court has otherwise acquired over the subject matter
or over the person of the defendant.
In Royales vs IAC, the Court held that non-compliance
with barangay conciliation would not prevent a court
of competent jurisdicton from exercising its power of
adjudication over the case before it where the
defendants failed to object such exercise of
jurisdiction in their answer.
The Court found in the case at bar that Aquino failed
to object on such ground in her Answer and cannot
now attack the jurisdiction of the MeTC after having
submitted herself voluntarily. By failing to
seasonably object to the deficiency in the complaint,
she is deemed to have already acquiesced or waived
any defect thereto. The fact that Aquino raised such
objection during the pre-trial and in her Position
Paper is of no moment, for the issue should have
been impleaded in the Answer as per Sec 1 of Rule 9.
The court could neither dismiss the case motu
proprio. The rules provide for only three instances
when the court may motu proprio dismiss the claim,
and that is when the pleadings or evidence on record
show that 1) the court has no jurisdiction over the
subject matter; 2) litis pendentia; 3) res judicata.
2.
Jurisdiction in ejectment cases is determined
by the allegations in the complaint. As long as these
allegations demonstrate a cause of action either for
forcible entry or for unlawful detainer, the court
acquires jurisdiction over the subject matter.

Republic v. Hidalgo, G.R. No. 161657, October 04,
2007

Facts: Tarcila Laperal Mendoza filed an action for the
annulment or declaration of nullity of the title and
deed of sale, reconveyance and/or recovery of
ownership and possession a property against the
Republic of the Philippines in the RTC of Manila. It is
also known as the Arlegui Residence which housed
two Philippine presidents and which now holds the
Office of the Press Secretary and the News
Information Bureau.

Mendoza alleged that she is the owner of the said
property, which the Republic forcibly dispossessed
her of.

The case was initially dismissed by the presiding
Judge of the Manila RTC (Branch 35) on the ground of
state immunity.

Upon appeal, CA reversed the RTC and remanded the
case to the court a quot for further proceedings. This
was affirmed by the SC.

Branch 35 of the trial court inhibited himself from
hearing the remanded case. The case was re-raffled
to the Manila RTC (Branch 37), with respondent
Vicente A. Hidalgo as presiding Judge.

Mendoza filed a Motion for Leave of Court to file a
Third Amended Complaint which was granted by the
court. The Republic was ordered to file an answer
thereto within 5 days from May 16, 2003.

On May 21, the Republic, represented by the OSG,
filed a motion for extension until June 20. June 20
came and went but no answer was filed. On August
19, OSG moved for another 30-day extension.

In an Order, Judge Hidalgo declared the Republic in
default for failure of Solicitor Gabriel Francisco
Ramirez, the handling solicitor, to file the required
Answer within the period prayed for in his motion for
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Case Digests

extension. Private respondent was allowed to present

her evidence ex parte.
RTC rendered a judgment by default for Mendoza and
against the Republic. The RTC awarded almost close
to two billion pesos.
The Republic moved for a new trial but was denied. A
certificate of finality and a writ of execution were also
issued by the said court.

Issue: WON the judgment by default were issued in
grave abuse of discretion

Held: NO. The act of the respondent judge in
rendering the default judgment after an order of
default was properly issued cannot be struck down as
a case of grave abuse of discretion.

The mere issuance by the trial court of the order of
default followed by a judgment by default can easily
be sustained as correct and doubtless within its
jurisdiction. Surely, a disposition directing the
Republic to pay an enormous sum without the trial
court hearing its side does not, without more, vitiate,
on due procedural ground, the validity of the default
judgment. The petitioner may have indeed been
deprived of such hearing, but this does not mean that
its right to due process had been violated. For,
consequent to being declared in default, the
defaulting defendant is deemed to have waived
his right to be heard or to take part in the trial. The
handling solicitors simply squandered the Republics
opportunity to be heard. But more importantly, the
law itself imposes such deprivation of the right to
participate as a form of penalty against one unwilling
without justification to join issue upon the allegations
tendered by the plaintiff.

The evidence adduced below indeed adequately
supports a conclusion that the Office of the President,
during the administration of then President Marcos,
wrested possession of the property in question and
somehow secured a certificate of title over it without
a conveying deed having been executed to legally
justify the cancellation of the old title in the name of
the private respondent and the issuance of a new
onein the name of petitioner Republic.

The respondent judge brazenly went around the
explicit command of Rule 9, Section 3(d) of the Rules
of Court which defines the extent of the relief that
may be awarded in a judgment by default, i.e., only so
much as has been alleged and proved. The court acts
in excess of jurisdiction if it awards an amount

beyond the claim made in the complaint or beyond
that proved by the evidence.

The monthly rental value of P500,000.00 is clearly
unconscionable, if not downright ridiculous. The
Court awarded the amount of P20,000.00/month for
the use and occupancy of the said property. While
this is arbitrary, it is reasonable and may be granted
pro hac vice considering the property is relatively
small and the said property had minimal rental value
during the martial law regime.

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Case Digests
IX.

Amendment and Supplement
(Rule 10)

PAGCOR v. Lopez, A.M. RTJ-04-1848, October 25,
2005

STATEMENT OF FACTS
- On 17 June 1999, PAGCOR entered into an
agreement with FILGAME and BELLE Jai-Alai
Corporation for the resumption of Jai-Alai
operations in the country. These two companies
will provide funds for PAGCOR for pre-operating
expenses and working capital while PAGCOR will
manage, operate and control all aspects of the Jai-
Alai operations.
- On 19 October 2000, the Office of the President
issued a memorandum to then PAGCOR President
and CEO Alicia Reyes to close down the Jai-Alai
operations. The next day, DILG, through then Sec.
Alfredo Lim, closed such Jai Alai operations.
- On 6 November 2000, Filgame and Belle filed a
case for Specific Performance and Injunction with
prayer for Damages, TRO and WPI against Pagcor,
DILG and Sec. Lim. The case was raffled to Judge
Lopez, and he issued the TRO.
- Meanwhile, in a 29 November 2000 Decision in
the case of Del Mar vs PAGCOR, et al, the SC
enjoined Pagcor, Belle and Filgame from
operating Jai-Alai games.
- Consequently, Filgame and Belle filed a Motion to
Admit Amended Complaint to change their cause
of action from Specific Performance to Recovery
of Sum of Money. Since they can't ask specific
performance anymore considering that the
agreement they had with PAGCOR was declared
already without force and effect, they just sought
to recover their pre-operating expenses and
investments worth 1.5 billion, including goodwill
money of 200 million.
- Pagcor opposed this, saying there can't be a
substantial change in the complaint and cause of
action.
- Judge Lopez however, admitted the amended
complaint.

- Pagcor filed a motion to dismiss the amended
complaint since it claimed that Belle and Filgames
did not pay the correct docket fees. They paid
only P1,212, when the docket fees should now be
P15.8 million.
Judge Lopez, denied the motion to dismiss. The

Court, he said, already had jurisdiction over the
case when the original complaint was filed and
the docket fee for that was paid. In addition, he
said that Belle and Filgames were correct in not
immediately paying an additional filing fee before
the amended complaint is admitted, for why will
it pay when there is no assurance that the
amended complaint will be admitted? Jurisdiction
is not lost by amendment of a pleading that raises
new causes of action. Jurisdiction is not lost even
if additional docket fees are required by reason of
amendment.
Thereafter, PAGCOR filed its answer, pre-trial
conference was conducted, parties commented,
and later Filgame and Belle filed a Motion for
Summary Judgment.
On 19 May 2003, Judge Lopez, without
conducting a hearing on the Motion for Summary
Judgment, rendered a decision in favor of Filgame
and Belle, ordering Pagcor to return the P1.5
billion, or the amount of pre-operating expenses
of such corporations.
PAGCOR first filed a notice of appeal but
withdrew it. Instead, it filed a petition for
certiorari with the CA.
On 8 July 2003, PAGCOR filed this administrative
case. The SC deferred action on this
administrative case until final resolution of the
petition for certiorari with the CA.
On 21 January 2004, a judgement by compromise
agreement was rendered by the CA, and so it
asked that the admin case be continued already.

Pagcor goes against Judge Lopez
- PAGCOR charged Judge Lopez for gross ignorance
of the law and procedure in
1. Admitting the amended complaint of Filgame
and Belle despite the fact that
a. It changes the theory of the case.
b. the required filing fees for the
amended complaint were not paid.
2. Rendering summary judgment
a. Even if there were 13 issues to be
resolved, as per the Pre-Trial Order
b. Without hearing the motion for
summary judgement (even if an
opposition, reply and rejoinder were
submitted by the parties, summary
hearing is still mandatory)
c. Based on an alleged implied
admission (those allegations not
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Case Digests

specifically denied by Pagcor in its

answer to the amended complaint)
rather than on personal knowledge of
witnesses and other affiants
d. Even if Belle and Filgame were
estopped for denying the existence of
the 13 issues.

-
Judge Lopez denied committing grave ignorance

of the law in admitting the amended complaint.
Cases will not be dismissed for not paying the
right docket fee. The additional filing fee will only
constitute a lien on the judgment.
As to the other issues, Judge Lopez said issues in
the pre-trial order were not final, holding trial
type hearing is not absolutely indispensable for
the court to rule on a motion for summary
judgement, and that he ruled on it based on
evidence on record.
Pagcor replied saying that some of its evidence
were suppressed because of the haste by which
the case was decided.
In Judge Lopez's rejoinder, he said that additional
docket fees were already paid, and that he did
cause the suppression of evidence since such
evidence was not attached to its answer to the
amended complaint.
Pagcor filed a sur-rejoinder, saying the additional
docket fees were based on the compromise
agreement entered into by the parties in the CA,
and not on the amended complaint.

Case goes to the CA
- On 15 September 2004, the case was referred to
CA Justice Tijam for investigation, report and
recommendation.
- Tijam eventually recommended that the case be
dismissed for lack of merit.Tijam raises the
following points:
1. Once jurisdiction of a court attaches, it continues
until the case is finally terminated. Failure to pay
docket fees for increased claim for damages under an
amended complaint does not curtail the lower court
of jurisdction, as held in PNOC Shipping vs CA.
Pursuant to Sun Insurance, the unpaid docket fee is
considered a lien on the judgment. Besides, invoking
lack of jurisdiction is too late because the case has
already become final and executory when Pagcor
voluntarily entered into a compromise agreement in
the CA.
2. Tijam likewise said Lopez's argument that the Order
was consistent with Sec. 3, Rule 10 of the Rules on
3.
4.
5.
6.
Civil Procedure and the case of Pagubovs CA. The

argument was that although amendment may
substantially change or alter the cause of action or
defense, the same must serve the higher interest of
substantial justice, and prevent delay and equally
promote the laudable objectives of the rules which is
to secure a "just, speedy and inexpensive disposition
of every action and proceedings."
PAGCOR knows income, tax and pre-operation
expenses involved in jai alai operations, and it didn't
specifically deny this its Answer to the Amended
Complaint. Even if PAGCOR made a blanket denial of
the allegations, it is found to be ineffective because
the facts are within Pagcor's knowledge and is to be
treated now as an admission.With this, Judge Lopez
correctly granted the MSJ since he had sufficient basis
to render judgment.
Trial type hearing is not necessary. The court is
merely to act on the basis of the records of the case.
Trial is only needed to determine if the issues are
genuine. Here, trial was dispensable because there
are no genuine issues. Besides, evidence was already
part of the records, and the parties were given
opportunity to be heard through the pleadings. In
addition, Pagcor did not object when the hearing on
the MSJ was cancelled, and the motion was
considered submitted for resolution.
The court, in summary judgments, can determine if
there is a genuine issue based on pleadings,
admissions,
documents,
affidavits
and/or
counteraffidavits submitted by the parties submitted
by the parties, as supported by Sec. 1 of Rule 35.
There was no gross ignorance of the law, and he did
not act in bad faith, fraud, dishonesty or corruption.
Pagcor has the burden of substantiating its charges,
and he failed to do so.

ISSUE: Should Judge Lopez be dismissed for gross
ignorance of the law? NO.

RATIONALE:
- The admin complaint should be dismissed.
Judge Lopez did not commit gross ignorance
of the law when it admitted the amended
complaint even if the substantially altered the
cause of action of Filgame and Belle.

As to the amended complaint
- Sec. 3, Rule 10 of the Rules of Court
(Amendements by leave of court) says:
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Case Digests

Except as provided in the next preceeding

section, substantial amendments may be
made only upon leave of court. But such leave
may be refused if it appears to the court that
the motion was made with intent to delay.
Orders of the court upon the matters
provided in this section shall be made upon
motion filed in court, and after notice to the
adverse party, and an opportunity to be
heard.
In Valenzuela vs CA, the SC explained that the
phrase "or that the cause of action or defense
is subtantially altered" was stricken off and
not retained in the new rules; thus,
amendment may now substantially alter the
cause of action or defense. However,
amendments to be made should serve the
higheer interests of substantial justice, prevent
delay, and equally promote the laudable
objectives of the rules, which is to secure a
"just, speedy and inexpensive disposition of
every action and proceeding."
In this case, the complaint was amended
when the SC declared that Pagcor can't enter
into an agreement with Belle and Filgames
anymore. But since they provided funds for
Pagcor, they now sought to recover such
funds. Amending their cause of action to
reflect this is allowed under Sec. 3, Rule 10.

Other issues:
- As to non-payment of docket fees, the Sun
Insurance case is applied. The unpaid docket
fees will just be considered a lien on
judgment.
- Besides, Pagcor is estopped to question
jurisdiction because Pagcor did not question
the jurisdiction of the tiral court, and even
invoked its authority when it filed a
counterclaim with its Answer.
- As to the rendering of the summary
judgment, the SC is convinced that the 13
issues in the Pre-trial order are genuine
issues that necessitate presentation of
evidence; therefore, Judge Lopez erred in
rendering summary judgement. However, he
is not held liable because the mistake or error
was not gross, patent, malicious, deliberate or
in bad faith. Judge Lopez even explained
meticulously why he found no genuine issue
as to the fact that Belle and Filgame are
entitled to recover their investments.
As with the fact that there was no hearing for

this, Pagcor's counsel acquiesced to this.

Asean Pacific v. City of Urdaneta, G.R. No. 162525,
September 23, 2008

FACTS:
Waldo C. Del Castillo, as taxpayer, filed a
complaint for annulment of contracts with prayer for
preliminary prohibitory injunction and TRO against
City of Urdaneta and Ceferino J. Capalad doing
business under the name JJEFWA Builders, and Asean
Pacific Planners, represented by Ronilo G. Goco and
Asean Pacific Planners Construction and
Development Corporation, represented by Cesar D.
Goco.

Del Castillo alleged:
- Then Urdaneta City Mayor Parayno
entered into 5 contracts for the
preliminary design, construction and
management of a 4-storey twin cinema
commercial center and hotel involving
expenditure of public funds amounting
to P250 million, funded by a loan from the
PNB.
- For minimal work, the contractor was
allegedly paid P95 million.
- All the contracts are void because the
object, a piece of land belonging to the
public domain devoted to public purpose
as a public elementary school, is outside
the commerce of men.
- The contracts, from the feasibility study
to management and lease of the future
building, are also void because they were
all awarded solely to the Goco family.

APP and APPCDC Answer:
- The contracts are valid.
- Urdaneta City Mayor Perez (filed the
Answer) said that the contracts were
properly executed by then Mayor Parayno
with
prior
authority
from
the Sangguniang Panlungsod.
- Mayor Perez also stated that Del Castillo
has no legal capacity to sue and that the
complaint states no cause of action.

Ceferino J. Capalad, via Atty. Oscar C. Sahagun, filed
an Answer with compulsory counterclaim and MTD.
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Case Digests


Norberto M. Del Prado, Jesus A. Ordono and Aquilino
Maguisa filed, as taxpayers, a Complaint-in-
Intervention.

After pre-trial, the Lazaro Law Firm entered its
appearance as counsel for Urdaneta City and filed an
Omnibus Motion. Urdaneta City wanted to rectify its
position and claimed that inadequate legal
representation caused its inability to file the
necessary pleadings in representation of its interests.

RTC of Urdaneta City, Pangasinan, Branch 45,
admitted the entry of appearance of the Lazaro Law
Firm and granted the withdrawal of appearance of
the City Prosecutor; dropped the city as defendant
and admitted its complaint for consolidation with Del
Castillo's complaint, and directed the defendants to
answer the city's complaint.

RTC denied reconsideration of the September 11,
2002 Order; granted Capalad's motion to expunge all
pleadings filed by Atty. Sahagun in his behalf; Capalad
was dropped as defendant, and his complaint filed by
Atty. Jorito C. Peralta was admitted and consolidated
with the complaints of Del Castillo and Urdaneta City;
APP and APPCDC directed to answer Capalad's
complaint.

APP and APPCDC filed a petition for certiorari before
the CA.

CA issued a Resolution dismissing the petition for (1)
defective verification and certification of non-forum
shopping, (2) failure of the petitioners to submit
certified true copies of the RTC's assailed orders as
mere photocopies were submitted, and (3) lack of
written explanation why service of the petition to
adverse parties was not personal.

MR denied. Hence, this petition for review on
certiorari under Rule 45.

ISSUES:
(1) WON the CA was correct in dismissing the
complaint despite subsequent compliance by APP
and APPCDC. (NO)
(2) WON the private respondents, as taxpayers, had
legal standing to file the complaint (YES)
(3) WON the entry of appearance of a private law
firm is allowed to represent City of Urdaneta (NO)
(4) WON Ceferino J. Capalad and the City of Urdaneta

are allowed to switch sides from defendants to
complainants (YES)
(5) WON Capalad can be allowed to change attorney
(YES)

RATIONALE:
(1)
Petitioners: CA should not have dismissed the
petition on mere technicalities since they have
attached the proper documents in MR and
substantially complied with the rules.
Respondent Urdaneta City: CA correctly dismissed
the petition because Cesar Goco had no proof he was
authorized to sign the certification of non-forum
shopping in behalf of APPCDC.

SC: Considering the substantial compliance, it was
error for the appellate court to deny reinstatement of
the petition.

Cesar Goco had no proof of his authority to sign the
verification and certification of non-forum shopping
of the petition for certiorari filed with the CA.

Substantial compliance with the procedural
requirements
! submission in the MR of the authority to sign the
verification and certification ! attachments in the
MR show that on March 5, 2003, the Board of
Directors of APPCDC authorized Cesar Goco to
institute the petition before the CA and on March 22,
2003, Ronilo Goco doing business under the name
APP, also appointed his father, Cesar Goco, as his
attorney-in-fact to file the petition. ! When the
petition was filed on March 26, 2003 before the CA,
Cesar Goco was duly authorized to sign the
verification and certification except that the proof of
his authority was not submitted together with the
petition.
! submitted in the MR certified true copies of the
assailed RTC orders
! included in the MR their explanation that copies of
the petition were personally served on the Lazaro
Law Firm and mailed to the RTC and Atty. Peralta
because
of
distance.
The
affidavit
of
service supported the explanation.

(2)
Petitioners: Taxpayer may only sue where the act
complained of directly involves illegal disbursement
of public funds derived from taxation. Project is
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Case Digests

funded by the PNB loan so the funds are not directly

derived from taxation.
Respondents: Personality to sue was not raised by
petitioners APP and APPCDC in their Answer and that
this issue was not even discussed in the RTC's
assailed orders.

SC: The RTC properly allowed the taxpayers' suits.
! Public Interest Center, Inc. v. Roxas: In the case of
taxpayers' suits, the party suing as a taxpayer must
prove that he has sufficient interest in preventing the
illegal expenditure of money raised by taxation.

Allegations in their Amended Complaint that the loan
contracts entered into by the Republic and NPC are
serviced or paid through a disbursement of public
funds are not disputed by respondents. Allegation
that P95 million of theP250 million PNB loan had
already been paid for minimal work is sufficient
allegation of overpayment, of illegal disbursement,
that invests them with personality to sue.

CC Article 1953: the city acquired ownership of the
money loaned from PNB, making the money public
fund. The city will have to pay the loan by revenues
raised from local taxation or by its internal revenue
allotment.

APP and APPCDC's lack of objection in their Answer
on the personality to sue = waiver to raise the
objection under R9S1 of ROC.

(3)
Petitioners: Only the City Prosecutor can represent
Urdaneta City.

Lazaro Law Firm: City was inutile defending its cause
before the RTC for lack of needed legal advice. The
city has no legal officer and both City Prosecutor and
Provincial Legal Officer are busy. Practical
considerations also dictate that the city and Mayor
Perez must have the same counsel since he faces
related criminal cases.

SC: Lazaro Law Firms appearance as Urdaneta City's
counsel is against the law as it provides expressly
who should represent it. The City Prosecutor should
continue to represent the city. LGC of 1991Section
481. The city's Answer was sworn to before the City
Prosecutor by Mayor Perez. The City Prosecutor
prepared the city's pre-trial brief and represented the
city in the pre-trial conference. No question was
raised against the City Prosecutor's actions until the

Lazaro Law Firm entered its appearance and claimed
that the city lacked adequate legal representation.

(4)
Petitioners: Urdaneta City is estopped to reverse
admissions in its Answer that the contracts are valid
and, in its pre-trial brief, that the execution of the
contracts was in good faith.

SC: The court may allow amendment of pleadings.
ROC R10S5 ! if evidence is objected to at the trial on
the ground that it is not within the issues raised by
the pleadings, the court may allow the pleadings to be
amended and shall do so with liberality if the
presentation of the merits of the action and the ends
of substantial justice will be subserved thereby !
necessary amendments to pleadings may be made to
cause them to conform to the evidence.

Objections need not even arise since the Pre-trial
Order dated April 1, 2002 already defined as an issue
whether the contracts are valid. ! what is needed is
presentation of the parties' evidence on the issue !
any evidence of the city for or against the validity of
the contracts will be relevant and admissible.

Despite Urdaneta City's judicial admissions, TC can
choose to consider other evidence to be presented for
said admissions may not necessarily prevail over
documentary evidence, e.g., the contracts assailed. A
party's testimony in open court may also override
admissions in the Answer.

RTC's order admitting Capalad's complaint and
dropping him as defendant affirmed. Capalad insists
that Atty. Sahagun has no authority to represent him.
Atty. Sahagun claims otherwise. Atty. Sahagun
represents petitioners who claim that the contracts
are valid. On the other hand, Capalad filed a
complaint for annulment of the contracts. Certainly,
Atty. Sahagun cannot represent totally conflicting
interests. Thus, we should expunge all pleadings filed
by Atty. Sahagun in behalf of Capalad.

(5) RTC order in allowing Capalad's change of
attorneys affirmed considering Capalad's claim that
Atty. Sahagun was never his attorney.

RE: offensive language used by Attys. Oscar C.
Sahagun and Antonio B. Escalante in their pleadings
! FINED Php2000 each.
Remedial Law Review

Case Digests

Tiu v. PBCOM, G.R. No. 151932, August 19, 2009

FACTS:
1993: Asian Water Resources, Inc. (AWRI),
represented by herein petitioners, applied for a real
estate loan with the Philippine Bank of
Communications (PBCOM) to fund its purified water
distribution business. The loan was guaranteed by
collateral over a property.

1996: AWRI applied for a bigger loan from PBCOM
for additional capitalization but without any
additional real estate collateral. PBCOM required all
the members of the Board of Directors of AWRI to
become sureties. A Surety Agreement was executed
by its Directors and acknowledged by a notary public
on the same date. All copies of the Surety Agreement,
except two, were kept by PBCOM. Of the two copies
kept by the notary public, one copy was retained for
his notarial file and the other was sent to the Records
Management and Archives Office, through the Office
of the RTC Clerk of Court.

1998: AWRI informed the bank of its desire to
surrender and/or assign in its favor, all the present
properties of the former to apply as dacion en pago
for AWRIs existing loan obligation to the bank.

1999: PBCOM sent a reply denying the request. On
May 12, 1999, PBCOM sent a letter to petitioners
demanding full payment of its obligation to the bank.

PBCoM filed a complaint for collection against
petitioners.

July 3, 1999: petitioners filed their Answer. It
alleged that they were not personally liable on the
promissory notes, because they signed the Surety
Agreement in their capacities as officers of AWRI.
They claimed that the Surety Agreement attached to
the complaint were falsified, considering that when
they signed the same, the words "In his personal
capacity" did not yet appear in the document and
were merely intercalated thereon without their
knowledge and consent.

Petitioners attached to their Answer a certified
photocopy of the Surety Agreement issued on March
25, 1999 by the Records Management and Archives
Office in Davao City, showing that the words "In his
personal capacity" were not found at the foot of page
two of the document where their signatures

appeared.

Because of this development, PBCOMs counsel
searched for and retrieved the file copy of the Surety
Agreement. The notarial copy showed that the words
"In his personal capacity" did not appear on page two
of the Surety Agreement.

Petitioners counsel then asked PBCOM to explain
the alteration appearing on the agreement. PBCOM
subsequently discovered that the insertion was
ordered by the bank auditor. It alleged that when the
Surety Agreement was inspected by the bank auditor,
he called the attention of the loans clerk as to why the
words "In his personal capacity" were not indicated
under the signature of each surety, in accordance
with bank standard operating procedures. The
auditor then ordered Mr. Cabahug to type the words
"In his personal capacity" below the second
signatures of petitioners. However, the notary public
was never informed of the insertion. Mr. Cabahug
subsequently executed an affidavit attesting to the
circumstances why the insertion was made.

PBCOM then filed a Reply and Answer to
Counterclaim with Motion for Leave of
Court to Substitute Annex "A" of the Complaint,
wherein it attached the duplicate original copy
retrieved from the file of the notary public. PBCOM
also admitted its mistake in making the insertion and
explained that it was made without the knowledge
and consent of the notary public. PBCOM maintained
that the insertion was not a falsification, but was
made only to speak the truth of the parties
intentions. PBCOM also contended that petitioners
were already primarily liable on the Surety
Agreement whether or not the insertion was made,
having admitted in their pleadings that they
voluntarily executed and signed the Surety
Agreement in the original form. PBCOM, invoking a
liberal application of the Rules, emphasized that the
motion incorporated in the pleading can be treated as
a motion for leave of court to amend and admit the
amended complaint pursuant to Section 3, Rule 10 of
the Rules of Court.

RTC allowed the substitution of the altered
document with the original Surety Agreement.
Petitioners filed a motion for reconsideration which
was denied. Petitioners filed a petition for certiorari
under Rule 65 with the CA
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Petitioners claimed that the RTC acted without or in
excess of jurisdiction, or with
GAD amounting to lack or excess of jurisdiction in
denying their motion for reconsideration and in
allowing PBCOM to substitute the altered copy of the
Surety Agreement with the duplicate original notarial
copy thereof considering that the latters cause of
action was solely and principally founded on the
falsified document marked as Annexes "A" to "A-2."

CA dismissed the petition for lack of merit. Petition
for Review filed.

ISSUE/HELD:

WON CA committed reversible error in affirming in
toto the order of the lower court
allowing the substitution of the falsified document.
NO

RATIO:

The pertinent rule on actionable documents is
found in Section 7, Rule 8 of the Rules of Court, which
provides that when the cause of action is anchored on
a document, its substance must be set forth, and the
original or a copy thereof "shall" be attached to the
pleading as an exhibit and deemed a part thereof, to
wit: Section 7. Action or defense based on document.
Whenever an action or defense is based upon a
written instrument or document, the substance of
such instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may
with like effect be set forth in the pleading.

With respect to PBCOMs right to amend its
complaint, including the documents annexed thereto,
after petitioners have filed their answer, Section 3,
Rule 10 of the Rules of Court specifically allows
amendment by leave of court.

SC has emphasized the import of Section 3, Rule 10
of the 1997 Rules of Civil Procedure in Valenzuela v.
Court of Appeals: Said provision amended the former
rule in such manner that the phrase "or that the
cause of action or defense is substantially altered"
was stricken-off and not retained in the new rules.
The clear import of such amendment in Section 3,
Rule 10 is that under the new rules, "the amendment
may (now) substantially alter the cause of action or

defense." This should only be true, however, when
despite a substantial change or alteration in the cause
of action or defense, the amendments sought to be
made shall serve the higher interests of substantial
justice, and prevent delay and equally promote the
laudable objective of the rules which is tosecure a
"just, speedy and inexpensive disposition of every
action and proceeding."

The granting of leave to file amended pleading is a
matter particularly addressed to the sound discretion
of the trial court; and that discretion is broad, subject
only to the limitations that the amendments should
not substantially change the cause of action or alter
the theory of the case, or that it was not made to
delay the action. Nevertheless, as enunciated in
Valenzuela, even if the amendment substantially
alters the cause of action or defense, such
amendment could still be allowed when it is sought
to serve the higher interest of substantial justice;
prevent delay; and secure a just, speedy and
inexpensive disposition of actions and proceedings.

The courts should be liberal in allowing
amendments to pleadings to avoid a multiplicity of
suits and in order that the real controversies between
the parties are presented, their rights determined,
and the case decided on the merits without
unnecessary delay.

Amendments to pleadings are generally favored
and should be liberally allowed in furtherance of
justice in order that every case, may so far as
possible, be determined on its real facts and in order
to speed up the trial of the case or prevent the
circuity of action and unnecessary expense. That is,
unless there are circumstances such as inexcusable
delay or the taking of the adverse party by surprise
or the like, which might justify a refusal of permission
to amend.

There was no fraudulent intent on the part of
PBCOM in submitting the altered surety agreement.
In fact, the bank admitted that it was a mistake on
their part to have submitted it in the first place
instead of the original agreement. It also admitted
that, through inadvertence, the copy that was
attached to the complaint was the copy wherein the
words "IN HIS PERSONAL CAPACITY" were inserted
to conform to the banks standard practice. This
alteration was made without the knowledge of the
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Case Digests

notary public. PBCOMs counsel had no idea that

what it submitted was the altered document, thereby
necessitating the substitution of the surety
agreement with the original thereof, in order that the
case would be judiciously resolved.

Verily, it is a cardinal rule of evidence, not just one
of technicality but of substance, that the written
document is the best evidence of its own contents. It
is also a matter of both principle and policy that
when the written contract is established as the
repository of the parties stipulations, any other
evidence is excluded, and the same cannot be used to
substitute for such contract, or even to alter or
contradict the latter. The original surety agreement is
the best evidence that could establish the parties
respective rights and obligations. In effect, the RTC
merely allowed the amendment of the complaint,
which consequently included the substitution of the
altered surety agreement with a copy of the original.

Rules of procedure are but mere tools designed to
facilitate the attainment of justice. Their strict and
rigid application that would result in technicalities
that tend to frustrate rather than promote substantial
justice must always be avoided. Applied to the instant
case, this not only assures that it would be resolved
based on real facts, but would also aid in the speedy
disposition of the case by utilizing the best evidence
possible to determine the rights and obligations of
the party- litigants.

Petitioners could not be prejudiced by the
substitution since they can still present the
substituted documents, Annexes "A" to A-2," as part
of the evidence of their affirmative defenses. The
substitution did not prejudice petitioners or delay the
action. On the contrary, it tended to expedite the
determination of the controversy. Besides, the
petitioners are not precluded from filing the
appropriate criminal action against PBCOM for
attaching the altered copy of the surety agreement to
the complaint. The substitution of the documents
would not, in any way, erase the existence of
falsification, if any. The case before the RTC is civil in
nature, while the alleged falsification is criminal,
which is separate and distinct from another. Thus,
the RTC committed no reversible error when it
allowed the substitution of the altered surety
agreement with that of the original.

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Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

Rule 141, Sections 1, 2 , 3, 4, 7, 8 and 19

HELD/RATIO: YES. For the court to acquire

Remedial Law Review

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ISSUE 2: WON the damages claimed under the

Pyramid was assessed a docket fee of 610 on the

Remedial Law Review

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proposed to sell to Bautista a house and lot. Bautista

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

and in accordance with the rules provided

Corporation from the Payment of Filing/Docket

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

rules concerning the protection and enforcement

interlocutory matters and incidents subject of the

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

BNP and Proton subsequently executed trust

is not among the legal grounds for the

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

2) In the Clerk of Courts application of exchange

Request of National Committee on Legal Aid to

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

and of the Legal Aid Offices in the Local Chapters

filing or docket fees, appeal fees, fees for issuance of

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

(b) Persons who do not pass the means and merit

(b) The means test shall not be applicable to

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

relevant factors. He shall also be required to submit

(f) Issuance of a certification After an application is

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

the services of a private counsel or another legal aid

Failure to make the statement shall be a ground for

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

law nor taken advantage of by anyone for purely

case or unreasonably fails to attend hearings when

Remedial Law Review

Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

submitted annually under Section 2(b), Article VI, the

Facts: Roger was the administrator of the Good

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Alconera, Alegre, Bejemino, Ceriles, Dayag, De Guzman, Delfin, Felizmenio, Gargar,Ko,

for indigent and underprivileged people. The Consti

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to be the case here, the petitioner in a habeas corpus

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actions under the doctrine of forum non conveniens.

prayer: payment of damages in view of the

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under Section 19 (8) and Section 33