Professional Documents
Culture Documents
10 AFP-RSBS,11
Espreme Realty,12 and, BPI13 filed their respective Motions to Dismiss which
respondents opposed.
!
[G.R. NO. 136051 : June 8, 2006]
ALFREDO P. ROSETE, OSCAR P. MAPALO and CHITO P. ROSETE,
Petitioners, v. JULIANO LIM and LILIA LIM, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari which seeks to set aside the
Decision1 of the Court of Appeals in CA-G.R. SP No. 45400 dated 24 August
1998 which upheld the Orders of Branch 77 of the Regional Trial Court (RTC)
of Quezon City in Civil Case No. Q-95-25803 dated 22 July 19972 and 27
August 1997,3 allowing the taking of deposition upon oral examination of
petitioners Oscar P. Mapalo and Chito P. Rosete, and its Resolution4 dated 19
October 1998 denying petitioners' Motion for Reconsideration.
Relevant to the petition are the following antecedents:
In an Order dated 12 March 1996, the Motions to Dismiss filed by all the
defendants were denied.14 The Motions for Reconsideration filed by
petitioners15 and BPI,16 which respondents opposed,17 were also denied in an
Order dated 24 May 1996.18
On 6 June 1996, BPI filed its Answer with Compulsory Counterclaim and
Cross-claim19 to which respondents filed their Reply and Answer to
Counterclaim.20 Respondents also filed a Motion21 to Serve Supplemental
Allegation against BPI and petitioner Chito Rosete which the trial court
granted in an order dated 28 July 1996.22
On 7 June 1996, petitioners manifested that on 5 June 1996, they filed a
Petition23 for Certiorari and Prohibition in the Court of Appeals, docketed as
CA-G.R. SP No. 40837, challenging the trial court's Orders dated 12 March
1996 and 24 May 1996 that denied their Motions to Dismiss and
Reconsideration, respectively.24 They likewise informed the trial court that on
6 June 1996, they filed an Ex-Parte Motion25 to Admit Answers Ex Abudanti
Cautela.26 rbl r l l lbrr
On 5 December 1995, respondents Juliano Lim and Lilia Lim filed before
Branch 77 of the RTC of Quezon City a Complaint for Annulment, Specific
Performance with Damages against AFP Retirement and Separation Benefits
System (AFP-RSBS), Espreme Realty and Development Corporation
(Espreme Realty), Alfredo P. Rosete, Maj. Oscar Mapalo, Chito P. Rosete,
Bank of the Philippine Islands (BPI), and Register of Deeds of the Province of
Mindoro Occidental, docketed as Civil Case No. Q-95-25803.5 It asked,
among other things, that the Deed of Sale executed by AFP-RSBS covering
certain parcels of lands in favor of Espreme Realty and the titles thereof under
the name of the latter be annulled; and that the AFP-RSBS and Espreme
Realty be ordered to execute the necessary documents to restore ownership
and title of said lands to respondents, and that the Register of Deeds be
ordered to cancel the titles of said land under the name of Espreme Realty
and to transfer the same in the names of respondents.
On 7 August 1996, petitioner Chito Rosete filed a motion asking that the order
granting the Motion to Serve Supplemental Allegation against BPI and him be
reconsidered and set aside, and that respondents be ordered to reduce their
supplemental allegations in the form and manner required by the Rules of
Court.27 Same was denied in an order dated 12 August 1996.28 This denial
was appealed to the Court of Appeals on 26 August 1996, which was
docketed as CA-G.R. SP No. 41821.29
Petitioner Chito Rosete filed his Supplemental Answer (Ex Abudanti Cautela)
on 9 September 1996.30
On 28 May 1997, respondents filed a Notice to Take Deposition Upon Oral
Examination giving notice that on June 18 and 20, 1997 at 9:00 a.m., they will
cause the deposition of petitioners Oscar Mapalo and Chito Rosete.31
the orders dated 12 March 1996 and 24 May 1996 that denied their Motions to
Dismiss and for Reconsideration, respectively. This is in addition to the fact
that they challenged via a Petition for Certiorari before the Court of Appeals
the lower court's Orders dated 23 July 1996 and 12 August 1996 which,
respectively, granted respondents' Motion to Serve Supplemental Allegation
Against Defendants BPI and Chito Rosete, and for the latter to plead thereto,
and denied Chito Rosete's Motion for Reconsideration of the order dated 23
July 1996. Moreover, they contend that since there are two criminal cases
pending before the City Prosecutors of Mandaluyong City and Pasig City
involving the same set of facts as in the present case wherein respondent
Juliano Lim is the private complainant and petitioners are the respondents, to
permit the taking of the deposition would be violative of their right against selfincrimination because by means of the oral deposition, respondents would
seek to establish the allegations of fact in the complaint which are also the
allegations of fact in the complaint-affidavits in the said criminal cases.
Respondents filed their Comment on the Objection to Deposition
which petitioners filed their Reply.34
Taking33
to
In an Order dated 22 July 1997, the lower court denied petitioners' motion and
objection to take deposition upon oral examination, and scheduled the taking
thereof.35 On 7 August 1997, petitioners filed a Motion for Reconsideration.36
They filed a Supplemental Motion for Reconsideration on 11 August 1997.37
On 13 August 1997, petitioners filed an Urgent Ex-parte Motion to Cancel or
Suspend the Taking of the Deposition Upon Oral Examination.38
In an Order dated 27 August 1997, the lower court denied petitioners' Motion
for Reconsideration and Supplemental Motion for Reconsideration, and
scheduled the taking of the Deposition Upon Oral Examination.39
On 22 September1997, respondents filed an Omnibus Motion: (1) To Strike
Out Answer of Defendants Mapalo and Chito Rosete; (2) to Declare
Defendants Mapalo and Chito Rosete In Default; and (3) For Reception of
Plaintiffs' Evidence Ex-parte,40 which petitioners opposed.41
On 29 September 1997, petitioners filed with the Court of Appeals a Petition
for Certiorari and Prohibition (CA-G.R. SP No. 45400) assailing the Orders of
the lower court dated 22 July 1997 and 27 August 1997.42
In an Order dated 29 October 1997, the lower court: (1) ordered the striking
out from the record of the Answer ex abudanti cautela filed by petitioners
Mapalo and Chito Rosete for their continued unjustified refusal to be sworn
It is clear, therefore, that only an accused in a criminal case can refuse to take
the witness stand. The right to refuse to take the stand does not generally
apply to parties in administrative cases or proceedings. The parties thereto
can only refuse to answer if incriminating questions are propounded. This
Court applied the exception - a party who is not an accused in a criminal case
is allowed not to take the witness stand - in administrative cases/proceedings
that partook of the nature of a criminal proceeding or analogous to a criminal
proceeding.59 It is likewise the opinion of the Court that said exception applies
to parties in civil actions which are criminal in nature. As long as the suit is
criminal in nature, the party thereto can altogether decline to take the witness
stand. It is not the character of the suit involved but the nature of the
proceedings that controls.60
In the Ayson case, it is evident that the Court treats a party in a civil case as
an ordinary witness, who can invoke the right against self-incrimination only
when the incriminating question is propounded. Thus, for a party in a civil
case to possess the right to refuse to take the witness stand, the civil case
must also partake of the nature of a criminal proceeding.
In the present controversy, the case is civil it being a suit for Annulment,
Specific Performance with Damages. In order for petitioners to exercise the
right to refuse to take the witness stand and to give their depositions, the case
must partake of the nature of a criminal proceeding. The case on hand
certainly cannot be categorized as such. The fact that there are two criminal
cases pending which are allegedly based on the same set of facts as that of
the civil case will not give them the right to refuse to take the witness stand
and to give their depositions. They are not facing criminal charges in the civil
case. Like an ordinary witness, they can invoke the right against selfincrimination only when the incriminating question is actually asked of them.
Only if and when incriminating questions are thrown their way can they refuse
to answer on the ground of their right against self-incrimination.
On the second assigned error, petitioners contend that the taking of their oral
depositions should not be allowed without leave of court as no answer has yet
been served and the issues have not yet been joined because their answers
were filed ex abudanti cautela pending final resolution of the petition for
certiorari challenging the trial court's Orders dated 12 March 1996 and 24 May
1996 that denied their motions to dismiss and for reconsideration,
respectively.
Section 1 of Rule 2461 of the Revised Rules of Court reads:
answer has not yet been filed but after jurisdiction has been obtained over any
defendant or property subject of the action, or (2) without leave of court after
an answer to the complaint has been served. In the instant case, the taking of
the deposition may be availed of even without leave of court because
petitioners have already served their answers to the complaint.
WHEREFORE, all the foregoing considered, the instant petition is dismissed
for lack of merit.
SO ORDERED.
!
[G.R. No. 133119. August 17, 2000]
because the grant of the motion ultimately results in the dismissal of the
counterclaim.
Thus, the filing of a motion to dismiss and the setting up of a
compulsory counterclaim are incompatible remedies. In the event that a
defending party has a ground for dismissal and a compulsory counterclaim at
the same time, he must choose only one remedy. If he decides to file a
motion to dismiss, he will lose his compulsory counterclaim. But if he opts to
set up his compulsory counterclaim, he may still plead his ground for
dismissal as an affirmative defense in his answer.[21] The latter option is
obviously more favorable to the defendant although such fact was lost on
Forbes Park.
The ground for dismissal invoked by Forbes Park in Civil Case No.
16540 was lack of cause of action. There was no need to plead such ground
in a motion to dismiss or in the answer since the same was not deemed
waived if it was not pleaded.[22] Nonetheless, Forbes Park still filed a motion
to dismiss and thus exercised bad judgment in its choice of remedies. Thus, it
has no one to blame but itself for the consequent loss of its counterclaim as a
result of such choice.
Inasmuch as the action for damages filed by Forbes Park should be as
it is hereby dismissed for being barred by the prior judgment in G.R. No.
79319 (supra) and/or deemed waived by Forbes Park to interpose the same
under the rule on compulsory counterclaims, there is no need to discuss the
other issues raised by the herein petitioner.
WHEREFORE, the instant petition is hereby GRANTED and the
Decision dated March 20, 1998 of the Court of Appeals in CA-G.R. CV No.
48194 is hereby REVERSED and SET ASIDE.
Second. Since Forbes Park filed a motion to dismiss in Civil Case No.
16540, its existing compulsory counterclaim at that time is now barred.
SO ORDERED.
6. Under date of January 23, 1998, defendants FERNANDO et al, without the
knowledge and consent of all the other surviving heirs of the deceased
spouses QUITERIO SAN JOSE and ANTONINA ESPIRITU SANTO, including
herein plaintiffs, executed a Deed of Extrajudicial Settlement of Estate Among
Heirs with Waiver of Rights making it appear therein that they are the
"legitimate descendants and sole heirs of QUITERIO SAN JOSE and
ANTONINA ESPIRITU SANTO"; and adjudicating among themselves, the
subject parcel of land.
Assailed in this Petition for Review on Certiorari is the Decision1 dated August
31, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 69261 which
affirmed the Order dated May 9, 2000 of the Regional Trial Court (RTC) of
Morong, Rizal, Branch 78, granting the motion for judgment on the pleadings
and the motion to dismiss counter petition for partition filed by respondents in
Civil Case No. 99-1148-M. Also questioned is the CA Resolution2 dated
December 14, 2004 denying petitioners' motion for reconsideration.
Spouses Quiterio San Jose (Quiterio) and Antonina Espiritu Santo (Antonina)
were the original registered owners of a parcel of land located in E. Rodriguez
Sr. Avenue, Teresa, Rizal covered by Transfer Certificate of Title (TCT) No.
458396 of the Register of Deeds of Rizal. The said parcel of land is now
registered in the name of Ma. Teresa F. Pion (Teresa) under TCT No.
M-94400.
Quiterio and Antonina had five children, namely, Virginia, Virgilio, Galicano,
Victoria and Catalina. Antonina died on July 1, 1970, while Quiterio died on
October 19, 1976. Virginia and Virgilio are also now deceased. Virginia was
survived by her husband Zosimo Fernando, Sr. (Zosimo Sr.) and their seven
children, while Virgilio was survived by his wife Julita Gonzales and children,
among whom is Maribeth S.J. Cortez (Maribeth).
On October 26, 1999, Galicano, represented by his children and attorneys-infact, Annalisa S.J. Ruiz and Rodegelio San Jose, Victoria, Catalina, and
Maribeth (respondents) filed with the RTC a Complaint3 for annulment of title,
annulment of deed of extra-judicial settlement, partition and damages against
Zosimo Sr. and his children Cristina F. Reillo, Leonor F. Puso, Adelia F.
Rocamora, Sofronio S.J. Fernando, Efren S.J. Fernando, Zosimo S.J.
Fernando, Jr. and Ma. Teresa (petitioners) and the Register of Deeds of
Morong, Rizal. The complaint alleged among other things:
xxx
7.1 Thus, on July 6, 1999, Transfer Certificate of Title No. M-94400 was
issued in the name of defendant MA. TERESA S.J. FERNANDO.
xxx
8. As a result, the herein plaintiffs and the other surviving heirs of the
deceased spouses QUITERIO SAN JOSE and ANTONINA ESPIRITU
SANTO, who are legally entitled to inherit from the latter's respective estates,
in accordance with the laws of intestate succession, have been duly deprived
of their respective rights, interests and participation over the subject parcel of
land.
8.1 Thus, there is sufficient ground to annul the subject Deed of Extrajudicial
Settlement of Estate Among Heirs with Waiver of Rights dated January 23,
1998, and all other documents issued on the strength thereof, particularly
Transfer Certificate of Title No. M-94400.4
On May 9, 2000, the RTC rendered its Order,10 the dispositive portion of
which reads:
It was also alleged that respondents filed a complaint before the Lupong
Tagapamayapa of their Barangay which issued the required certification to file
action for failure of the parties to settle the matter amicably.
3. The Heirs of Quiterio San Jose and Antonina Espiritu Santo is (sic) directed
to partition the subject parcel of land covered by TCT No. M-458396 in
accordance with the law of intestate succession.11
SO ORDERED.
The RTC found that, based on the allegations contained in the pleadings filed
by the parties, petitioners misrepresented themselves when they alleged in
the Deed of Extrajudicial Settlement of Estate Among Heirs with Waiver of
Rights that they are the sole heirs of the deceased spouses Quiterio and
Antonina; that petitioners prayed for a counter-petition for partition involving
several parcels of land left by the deceased spouses Quiterio and Antonina
which bolstered respondents' claim that petitioners falsified the Extrajudicial
Settlement which became the basis for the issuance of TCT No. M-94400 in
Ma. Teresa's name; thus, a ground to annul the Deed of Extrajudicial
Settlement and the title.rbl rl l lbrr
The RTC did not consider as filed petitioners' Counter-Petition for Partition
since they did not pay the corresponding docket fees.
Petitioners filed their Motion for Reconsideration, which the RTC denied in an
Order12 dated August 29, 2000.
Dissatisfied, petitioners filed an appeal with the CA. After the parties filed their
respective briefs, the case was submitted for decision.
On August 31, 2004, the CA rendered its assailed Decision affirming the May
9, 2000 Order of the RTC.
The CA found that, while the subject matter of respondents' complaint was the
nullity of the Deed of Extrajudicial Settlement of Estate among Heirs with
Waiver of Rights that resulted in the issuance of TCT No. M-94400 in Ma.
Teresa's name, petitioners included in their Answer a Counter-Petition for
Partition involving 12 other parcels of land of spouses Quiterio and Antonina
which was in the nature of a permissive counterclaim; that petitioners, being
the plaintiffs in the counter-petition for partition, must pay the docket fees
otherwise the court will not acquire jurisdiction over the case. The CA ruled
that petitioners cannot pass the blame to the RTC for their omission to pay the
docket fees.
The CA affirmed the RTC's judgment on the pleadings since petitioners
admitted that the deceased spouses Quiterio and Antonina had five children
which included herein plaintiffs; thus, petitioners misrepresented themselves
when they stated in the Deed of Extrajudicial Settlement that they are the
legitimate descendants and sole heirs of the deceased spouses Quiterio and
Antonina; that the deed is null and void on such ground since respondents
were deprived of their rightful share in the subject property and petitioners
cannot transfer the property in favor of Ma. Teresa without respondents'
consent; that TCT No. M-94400 must be cancelled for lack of basis. The CA
affirmed the RTC's Order of partition of the subject property in accordance
with the rules on intestate succession in the absence of a will.
Petitioners filed the instant Petition for Review on Certiorari raising the
following assignment of errors, to wit:
THE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE
APPEAL OF THE DEFENDANTS (HEREIN PETITIONERS) AND IN
EVENTUALLY UPHOLDING THE DECISION OF THE COURT OF ORIGIN,
CONSIDERING THAT SUCH RULING WILL RESULT TO MULTIPLICITY OF
SUITS BETWEEN THE SAME PARTIES AND IN VIOLATION OF THE
CONSTITUTIONAL GUARANTY OF DUE PROCESS OF LAW & PROPERTY
AND PROPERTY RIGHTS.
THE COURT OF APPEALS ERRED IN NOT VACATING THE ORDER OF
THE TRIAL COURT IN PARTITIONING THE ESTATE WITHOUT
PUBLICATION AS REQUIRED BY RULE 74 AND 76 OF THE 1997 RULES
OF CIVIL PROCEDURE.13
Petitioners contend that in their Comment to respondents' motion for judgment
on the pleadings, they stated that they will not oppose the same provided that
their Answer with Counter-Petition for Partition and Rejoinder will be taken
into consideration in deciding the case; however, the RTC decided the case
on the basis alone of respondents' complaint; that the Answer stated that the
deed was not a falsified document and was made and implemented in
accordance with law, thus, it was sufficient enough to tender an issue and was
very far from admitting the material allegations of respondents' complaint.
Petitioners also fault the RTC for disregarding their claim for partition of the
other parcels of land owned by the deceased spouses Quiterio and Antonina
for their failure to pay the court docket fees when the RTC could have simply
directed petitioners to pay the same; and that this error if not corrected will
result to multiplicity of suits.
Petitioners argue that the RTC erred in ordering the partition of the subject
property as it violates the basic law on intestate succession that the heirs
should be named and qualified through a formal petition for intestate
succession whereby blood relationship should be established first by the
claiming heirs before they shall be entitled to receive from the estate of the
deceased; that the order of partition was rendered without jurisdiction for lack
of publication as required under Rules 74 and 76 of the Rules of Civil
Procedure for testate or intestate succession.
We find no merit in the petition.
The CA committed no reversible error in affirming the judgment on the
pleadings rendered by the RTC.
Section 1, Rule 34 of the Rules of Court, states:
SECTION 1. Judgment on the pleadings. - Where an answer fails to tender an
issue, or otherwise admits the material allegations of the adverse party's
pleading, the court may, on motion of that party, direct judgment on such
pleading. x x x.
Where a motion for judgment on the pleadings is filed, the essential question
is whether there are issues generated by the pleadings. In a proper case for
judgment on the pleadings, there is no ostensible issue at all because of the
failure of the defending party's answer to raise an issue.14 The answer would
fail to tender an issue, of course, if it does not deny the material allegations in
the complaint or admits said material allegations of the adverse party's
limited to the property described in the pleading. The RTC cannot order the
collation and partition of the other properties which were not included in the
partition that was the subject matter of the respondents' action for annulment.
Thus, a separate proceeding is indeed proper for the partition of the estate of
the deceased spouses Quiterio and Antonina.
Finally, petitioners contend that the RTC erred when it ordered the heirs of
Quiterio and Antonina to partition the subject parcel of land covered by TCT
No. 458396 in accordance with the laws of intestate succession; that the RTC
violated the requirement of publication under Sections 1 and 2 of Rule 74 and
Section 3 of Rule 76 of the Rules of Court.
We do not agree.
We find the ruling of the CA on the matter of the RTC's order of partition of
land subject of the annulled deed of extrajudicial settlement worth quoting,
thus:
Considering that the subject document and the corresponding title were
canceled, the logical consequence is that the property in dispute, which was
the subject of the extrajudicial settlement, reverted back to the estate of its
original owners, the deceased spouses Quiterio and Antonina San Jose.
Since, it was admitted that all the parties to the instant suit are legal heirs of
the deceased spouses, they owned the subject property in common. It is a
basic rule that any act which is intended to put an end to indivision among coheirs or co-owners is deemed to be a partition. Therefore, there was no
reversible error committed by the trial court in ordering the partition of the
subject property. We find nothing wrong with such ruling considering that the
trial court ordered the partition of the subject property in accordance with the
rules on intestate succession. The trial court found the property to be
originally owned by the deceased spouses Quiterio and Antonina San Jose
and, in the absence of a will left by the deceased spouses, it must be
partitioned in accordance with the rules on intestate succession.22
As the RTC nullified the Deed of Extrajudicial Settlement of Estate Among
Heirs with Waiver of Rights executed by petitioners and the title issued in
accordance therewith, the order of partition of the land subject of the
settlement in accordance with the laws on intestate succession is proper as
respondents' action filed in the RTC and respondents' prayer in their
complaint asked for the partition of the subject property in accordance with
- versus -
PANGANIBAN, Chairman,
SANDOVAL- GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.
Promulgated:
Present:
DECISION
N-67286 which secured the 2nd TLA. The application was granted and public
auction of these properties was scheduled, and was actually carried out on
July 23, 1998.
The public auction was later nullified, however, on petitioners
move, the Locsin property covered by TCT No. 67286 which secured the 2nd
TLA having been erroneously included.
An amended application for
extrajudicial foreclosure was thus filed by petitioner, this time covering the
same Evidente properties and TCT No. 138739, the property of the Locsins
which secured the 1st TLA. Public auction of these properties was scheduled
on August 26, 1998.
Two days before the scheduled public auction or on August 24,
1998, the Locsins filed before the Quezon City Regional Trial Court (RTC) a
complaint against petitioner, the RTC Clerk of Court and Ex-Oficio Sheriff of
Quezon City, and Sheriff VI Marino V. Cahero, for Specific Performance, Tort
and Damages with Prayer for the Issuance of a Temporary Restraining Order
(TRO) and a Writ of Preliminary Injunction, docketed as Civil Case No.
Q-98-35337.[3] The pertinent allegations of the Locsins complaint are as
follows:
xxx
15.
Defendant bank, through its
Assistant Vice-President-Combank II, Agnes C.
Tuason, told plaintiffs that the loan valuation of
the two aforementioned properties [of the
spouses Evidente securing the CLA] is PHP2.5
Million, and this was in fact the amount received
by plaintiff from defendant bank . . .
16. The spouses Evidente, through
plaintiffs, paid for the monthly installments due
on the [CLA] until October, 1997, as evidenced
by OR No. 167588 dated October 31, 1997
issued by defendant bank. . . .
17.
The spouses Evidente were
unable to make subsequent payments and the
real estate mortgage over the Evidente
properties was recommended for foreclosure.
xxx
1. On the First
Cause of Action, ordering
defendant bank to faithfully
comply with its obligations
under the 1st TLA and the
CLA, revert the loan
valuation of the two
Evidente properties
covered by TCTs Nos.
N-166336 and 166337 to
PHP2.5 Million, and allow
plaintiffs to take its
property covered by TCT
No. N-138739 out of the
mortgage by paying the
balance thereon, minus
interests and penalties
accruing from February
1998;
2. On the First
and Second Causes of
Action, ordering defendant
bank to pay plaintiffs
PHP500,000.00 in actual
damages;
3. On the Third
Cause of Action, ordering
defendant bank to pay
plaintiffs PHP1 Million in
actual damages;
4. On the
Fourth Cause of Action,
ordering defendant bank to
pay
plaintiffs
PHP500,000.00 in moral
damages;
5. On the Fifth
Cause of Action, ordering
defendant bank to pay
plaintiffs PHP300,000.00 in
exemplary damages;
6. On the Sixth
Cause of Action, ordering
defendant bank to [pay]
plaintiffs PHP200,[000].00
for attorneys fees and
litigation expenses;
7. Making the
injunction issued against
defendants permanent;
and
8.
Ordering
defendants to pay costs of
suit.
Other reliefs which are just
and equitable are likewise prayed for.[4]
(Emphasis and underscoring in the original;
italics supplied).
Branch 233 of the Quezon City RTC denied the Locsins prayer for
the issuance of a TRO, by Order of August 25, 1998.
xxx
6) The Maker
or any Co-Maker fails to
pay any money due under
any other agreement,
standby letter of credit or
document evidencing,
securing, guaranteeing or
otherwise relating to
indebtedness of the Maker
or any Co-Maker to any
other creditor, or there
occurs, any event of
default or any event which,
but for the passage of time
or the giving of notice, or
both, would constitute
under
any
such
agreement, stand by letter
of credit or document (and
which has not been
remedied within any
applicable grace period):
xxx
8.3 The letter of approval of the P2.5
million loan of [the Locsins] has a crossdefault provision, which reads:
3.6 A default
on any availment under
this credit line facility shall
automatically mean a
default on [the Locsins]
existing term loan under
Promissory Note No.
29-01-9080-95 [covering
on which letter the Locsins affixed their conformity; that in light of the Locsins
default in the settlement of their monthly obligations under the CLA, it sent
them a January 7, 1998 demand letter advising them of the Past Due Status
of their promissory note covering the P2.5 million account to
thereby
automatically mean that [said promissory note] and the other loan account
under [the promissory note covering the 1st TLA] with an outstanding balance
of P460,652.95 are considered Due and Demandable already; that after a
follow up letter and a final letter of demand, the Locsins requested, by letter of
February 26, 1998, that the promissory note under the 1st TLA and that under
the CLA be treated separately and that one of their titles be released upon
payment of P1.8 million; that by letter of March 5, 1998, it advised the
Locsins that their request in their February 26, 1998 letter regarding the
release of one of the [two Evidente titles] was approved, subject to the
partial payment on Principal plus all interests and charges amounting to
P1,934,465.79 as of March 20, 1998; that to its March 5, 1998 letter, the
Locsins, by letter of March ___, (sic) 1998, replied as follows:
We would like to request for a thirty day
extension on the deadline given us today for the
payment of P1,900,000.00, or (sic) the release
of one title under PN No. 11-01-0586-96
[covering the CLA] as the person very much
interested in purchasing it has asked us for the
same. At the same time we are also going to
take out the property under PN No.
29-01-9080-95 [covering the first TLA], so that
only one property under the fire (sic) account
mentioned shall be left mortgaged to your bank.
Thank you for your kind consideration.[7]
(Underscoring supplied);
that despite the grant of the Locsins request for extension of 30 days or up to
April 20, 1998 to pay P1.9 million as a condition for the release of the title,
the Locsins failed to come up therewith; and that the inclusion of the Locsins
mortgaged title covering the 1st TLA in the amended application for extra-
2.
3.
against the Locsins before the RTC of Mandaluyong where it was docketed as
Civil Case No. MC-99-935,[13] for Collection of Sum of Money, alleging as
follows:
xxx
5.
14.
15.
11.
12.
13.
2.
3.
counterclaim. or a cross
claim, not set up shall be
barred.
Private respondent should have
raised its complaint as compulsory counterclaim
in the Regional Trial Court of Quezon City.
Failing to do so, it is now barred. The reason for
the rule relating to counterclaims is to avoid
multiplicity of suits and to enable the Courts to
dispose of the whole matter in controversy in
one action, and adjustment of defendants
demand by counterclaim rather than by
independent suit. (Reyes vs. Court of Appeals,
38 SCRA 138).
[The Locsins] second argument is
that private respondents complaint in Civil Case
No. MC-99-935 constitutes litis pendentia, and
therefore should have been dismissed by the
trial court. For litis pendentia to be a ground for
dismissal of an action, three elements must
concur: (a) identity of parties, or at least such
parties who represent the same interest in both
actions; (b) identity of rights asserted and relief
prayed for being founded on the same facts;
and (c) the identity, with respect to the two
preceding particulars in the two cases, is such
that any judgment that may be rendered in the
pending case, regardless of which party is
successful, would amount to res judicata in the
other.
Applying this test, the principle of litis
pendentia and res judicata will certainly apply to
the instant case,
all three requisites are
present. The parties are the same and what is
involved in both Civil Case No. Q-98-35337
pending before the Quezon City Trial Court and
Civil Case No. MC-99-935 before the
Mandaluyong City Trial Court are the same
subject matter and set of circumstances, which
would entail presentation of the same evidence.
I.
II.
III.
While petitioner could have, after the Locsins filed on March 26,
1999 a Supplemental Complaint in Civil Case No. Q-98-35337, set up, in its
Supplemental Answer, its claim subject of Civil Case No. MC-99-935, again
assuming arguendo that it is a Compulsory
Counterclaim, the setting up of such after-acquired counterclaim, is merely
permissive, not compulsory.[34]
At all events, even if the claim of petitioner - subject of its complaint
in Civil Case No. MC-99-935 is a compulsory counterclaim which should have
Court (RTC) of Quezon City. The complaint alleged the following: ACDC
leased Caterpillar generator sets and Amida mobile floodlighting systems from
MEC during the period of March 13 to July 15, 1998 but failed, despite
demands, to pay the rentals therefor in the total amount of P4,313,935.00;
from July 14 to August 25, 1998, various equipments from MEC were,
likewise, leased by ACDC for the latters power plant in Mauban, Quezon, and
that there was still a balance of P456,666.67; and ACDC also purchased and
took custody of various equipment parts from MEC for the agreed price of
P237,336.20 which, despite demands, ACDC failed to pay.
MEC prayed that judgment be rendered in its favor, thus:
1.
Ordering defendant to pay the plaintiff the total amount of FIVE
MILLION SEVENTY-ONE THOUSAND THREE HUNDRED THIRTY-FIVE
[PESOS] & 86/100 (P5,071,335.86);
3.
Ordering defendant to pay attorneys fees in the amount equivalent to
15% of the amount of claim;
SO ORDERED.
!!
2.
Ordering defendant to pay the plaintiff legal interest of 12% per annum
on the principal obligations in the total amount of FIVE MILLION SEVENTYONE THOUSAND THREE HUNDRED THIRTY-FIVE [PESOS] & 86/100
(P5,071,335.86) computed from the date the obligations became due until
fully paid;
4.
Plaintiff prays for such other reliefs as may be just and equitable under the
premises.[2]
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION,
petitioner, vs. COURT OF APPEALS and MONARK
EQUIPMENT CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
On March 13, 2001, Monark Equipment Corporation (MEC) filed a
Complaint[1] for a sum of money with damages against the Asian
Construction and Development Corporation (ACDC) with the Regional Trial
ACDC filed a motion to file and admit answer with third-party complaint
against Becthel Overseas Corporation (Becthel).
In its answer, ACDC
admitted its indebtedness to MEC in the amount of P5,071,335.86 but alleged
the following special and affirmative defenses:
5. Defendant has incurred an obligation with plaintiff, in
the amount of P5,071,335.86.
But third-party
defendant fails and refuses to pay its overdue
obligation in connection with the leased equipment
used by defendant to comply with its contracted
services;
7.
8.
9.
MEC then filed a motion for summary judgment, alleging therein that
there was no genuine issue as to the obligation of ACDC to MEC in the total
amount of P5,071,335.86, the only issue for the trial courts resolution being
the amount of attorneys fees and costs of litigation.[7]
ACDC opposed the motion for summary judgment, alleging that there
was a genuine issue with respect to the amount of P5,071,335.86 being
claimed by MEC, and that it had a third-party complaint against Becthel in
connection with the reliefs sought against it which had to be litigated.[8]
In its reply, MEC alleged that the demand of ACDC in its special and
affirmative defenses partook of the nature of a negative pregnant, and that
there was a need for a hearing on its claim for damages.
On August 2, 2001, the trial court issued a Resolution denying the
motion of ACDC for leave to file a third-party complaint and granting the
motion of MEC, which the trial court considered as a motion for a judgment on
the pleadings. The fallo of the resolution reads:
ACCORDINGLY, this Court finds defendant Asian Construction and
Development Corporation liable to pay plaintiff Monark Equipment
Corporation and is hereby ordered to pay plaintiff the amount of FIVE
MILLION SEVENTY-ONE THOUSAND AND THREE HUNDRED THIRTY-
FIVE & 86/100 PESOS (P5,071,335.86) plus 12% interest from the filing of
the complaint until fully paid.
SO ORDERED.[9]
that
On July 18, 2001, the CA rendered judgment dismissing the appeal and
affirming the assailed decision. The appellate court ruled that since MEC had
prayed for judgment on the pleadings, it thereby waived its claim for damages
other than the amount of P5,071,335.86; hence, there was no longer a
genuine issue to be resolved by the court which necessitated trial. The
appellate court sustained the disallowance of the third-party complaint of
ACDC against Becthel on the ground that the transaction between the said
parties did not arise out of the same transaction on which MECs claim was
based.
Its motion for reconsideration of the decision having been denied,
ACDC, now the petitioner, filed the present petition for review on certiorari,
and raises the following issues:
I.
II.
that the CA erred in ruling that in denying its motion for leave to file a thirdparty complaint, the RTC acted in accordance with the Rules of Court and
case law. The petitioner maintains that it raised genuine issues in its answer;
hence, it was improper for the trial court to render judgment on the pleadings:
With due respect, the judgment on the pleadings affirmed by the Court of
Appeals is not, likewise, proper considering that the Answer with Third-Party
Complaint, although it admitted the obligation to respondent, tendered an
issue of whether the respondents claim is connected with the third-party
claim.
As alleged in the Answer with Third-Party Complaint, it is admitted then by
respondent, for purposes of judgment on the pleadings, that failure to pay
respondent was in connection of Becthel Overseas Corporations failure to
pay its obligation to petitioner and that the equipment leased was used in
connection with the Becthel Overseas Corporation project.
This tendered issue could not just be disregarded in the light of the third-party
complaint filed by herein petitioner and third-party plaintiff which, as argued in
the first discussion/argument, is proper and should have been given due
course.[14]
The petition is denied for lack of merit.
Section 11, Rule 6 of the Rules of Court provides:
Sec. 11. Third (fourth, etc.)-party complaint. A third (fourth, etc.) party
complaint is a claim that a defending party may, with leave of court, file
against a person not a party to the action, called the third (fourth, etc.) party
defendant, for contribution, indemnity, subrogation or any other relief, in
respect of his opponents claim.
Furthermore, Section 1, Rule 34 of the Rules of Court provides that the
Court may render judgment on the pleadings, as follows:
Section 1. Judgment on the pleadings. Where an answer fails to tender an
issue, or, otherwise, admits the material allegations of the adverse partys
pleading, the court may, on motion of that party, direct judgment on such
pleading. However, in actions for declaration of nullity or annulment of
marriage or for legal separation, the material facts alleged in the complaint
shall always be proved.
Parenthetically, the Court of Appeals should have been cognizant of the wellsettled rule that an agent is also responsible for any negligence in the
performance of its function and is liable for damages which the principal may
suffer by reason of its negligent act. Hence, the Court of Appeals erred when
it opined that BA, being the principal, had no cause of action against PAL, its
agent or sub-contractor.
Also, it is worth mentioning that both BA and PAL are members of the
International Air Transport Association (IATA), wherein member airlines are
regarded as agents of each other in the issuance of the tickets and other
matters pertaining to their relationship. Therefore, in the instant case, the
contractual relationship between BA and PAL is one of agency, the former
being the principal, since it was the one which issued the confirmed ticket,
and the latter the agent.[29]
It goes without saying that the denial of the petitioners motion with
leave to file a third-party complaint against Becthel is without prejudice to its
right to file a separate complaint against the latter.
Considering that the petitioner admitted its liability for the principal
claim of the respondent in its Answer with Third-Party Complaint, the trial
court did not err in rendering judgment on the pleadings against it.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack
of merit. Costs against the petitioner.
SO ORDERED.
4.
xxx carriage to be performed hereunder by several successive
carriers is regarded as a single operation.
Prescinding from the above discussion, it is undisputed that PAL, in
transporting Mahtani from Manila to Hongkong acted as the agent of BA.
- versus -
Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
NA
CH
UR
A,
JJ.
*
Promulgated:
March 30, 2009
x----------------------------------------------------------------------------x
SY CHIM and FELICIDAD CHAN SY,
Petitioners,
versus -
DECISION
TINGA, J.:
These consolidated petitions involving the same parties. although
related, dwell on different issues.
G.R. No. 174168.
This is a petition for review[1] assailing the decision and resolution
of the Court of Appeals dated 31 May 2006 and 8 August 2006, respectively,
in CA-G.R. SP No. 91416.[2]
thereupon filed a petition for review with the Department of Justice (DOJ),
which the latter denied in a resolution issued on 02 September 2004.[10]
Their subsequent motion for reconsideration was likewise denied in the
resolution of 20 July 2005.[11]
The Spouses Sy elevated the DOJs resolutions to the Court of
Appeals through a petition for certiorari, imputing grave abuse of discretion on
the part of the DOJ. The appellate court granted the petition[12] and directed
the City Prosecutors Office to file the appropriate informations against Sy
Tiong Shiou, et al. for violation of Section 74, in relation to Section 144 of the
Corporation Code and of Articles 172 and 183 of the RPC. The appellate
court ruled that the civil case for accounting and damages cannot be deemed
prejudicial to the maintenance or prosecution of a criminal action for violation
of Section 74 in relation to Section 144 of the Corporation Code since a
finding in the civil case that respondents mishandled or misappropriated the
funds would not be determinative of their guilt or innocence in the criminal
complaint. In the same manner, the criminal complaints for falsification and/or
perjury should not have been dismissed on the ground of prejudicial question
because the accounting case is unrelated and not necessarily determinative
of the success or failure of the falsification or perjury charges. Furthermore,
the Court of Appeals held that there was probable cause that Sy Tiong Shiou
had committed falsification and that the City of Manila where the 2003 GIS
was executed is the proper venue for the institution of the perjury charges. Sy
Tiong Shiou, et al. sought reconsideration of the Court of Appeals decision but
their motion was denied.[13]
On 2 April 2008, the Court ordered the consolidation of G.R. No.
179438 with G.R. No. 174168.[14]
Sy Tiong Shiou, et al. argue that findings of the DOJ in affirming,
modifying or reversing the recommendations of the public prosecutor cannot
be the subject of certiorari or review of the Court of Appeals because the DOJ
is not a quasi-judicial body within the purview of Section 1, Rule 65 of the
Rules of Court. Petitioners rely on the separate opinion of former Chief
Justice Andres R. Narvasa in Roberts, Jr. v. Court of Appeals,[15] wherein he
wrote that this Court should not be called upon to determine the existence of
probable cause, as there is no provision of law authorizing an aggrieved party
to petition for such a determination.[16] In any event, they argue, assuming
without admitting that the findings of the DOJ may be subject to judicial review
under Section 1, Rule 65 of the Rules of Court, the DOJ has not committed
any grave abuse of discretion in affirming the findings of the City Prosecutor
of Manila. They claim that the Spouses Sys request for inspection was not
made in good faith and that their motives were tainted with the intention to
harass and to intimidate Sy Tiong Shiou, et al. from pursuing the criminal and
civil cases pending before the prosecutors office and the Regional Trial Court
(RTC) of Manila, Branch 46. Thus, to accede to the Spouses Sys request
would pose serious threats to the existence of the corporation.[17] Sy Tiong
Shiou, et al. aver that the RTC had already denied the motion for production
and inspection and instead ordered petitioners to make the corporate records
available to the appointed independent auditor. Hence, the DOJ did not
commit any grave abuse of discretion in affirming the recommendation of the
City Prosecutor of Manila.[18] They further argue that adherence to the Court
of Appeals ruling that the accounting case is unrelated to, and not necessarily
determinative of the success of, the criminal complaint for falsification and/or
perjury would unnecessarily indict petitioner Sy Tiong Shiou for the said
offenses he may not have committed but only because of an outcome
unfavorable to him in the civil action.[19]
Indeed, a preliminary proceeding is not a quasi-judicial function and that
the DOJ is not a quasi-judicial agency exercising a quasi-judicial function
when it reviews the findings of a public prosecutor regarding the presence of
probable cause.[20] Moreover, it is settled that the preliminary investigation
proper, i.e., the determination of whether there is reasonable ground to
believe that the accused is guilty of the offense charged and should be
subjected to the expense, rigors and embarrassment of trial, is the function of
the prosecution.[21] This Court has adopted a policy of non-interference in
the conduct of preliminary investigations and leaves to the investigating
prosecutor sufficient latitude of discretion in the determination of what
constitutes sufficient evidence as will establish probable cause for the filing of
information against the supposed offender.[22]
The civil action and the criminal cases do not involve any
prejudicial question.
The civil action for accounting and damages, Civil Case No. 03-106456
pending before the RTC Manila, Branch 46, seeks the issuance of an order
compelling the Spouses Sy to render a full, complete and true accounting of
all the amounts, proceeds and fund paid to, received and earned by the
corporation since 1993 and to restitute it such amounts, proceeds and funds
which the Spouses Sy have misappropriated. The criminal cases, on the
other hand, charge that the Spouses Sy were illegally prevented from getting
inside company premises and from inspecting company records, and that Sy
Tiong Shiou falsified the entries in the GIS, specifically the Spouses Sys
shares in the corporation. Surely, the civil case presents no prejudicial
question to the criminal cases since a finding that the Spouses Sy
mishandled the funds will have no effect on the determination of guilt in the
complaint for violation of Section 74 in relation to Section 144 of the
Corporation Code; the civil case concerns the validity of Sy Tiong Shious
refusal to allow inspection of the records, while in the falsification and perjury
cases, what is material is the veracity of the entries made by Sy Tiong Shiou
in the sworn GIS.
Anent the issue of probable cause, the Court also finds that there is
enough probable cause to warrant the institution of the criminal cases.
The term probable cause does not mean actual and positive
cause nor does it import absolute certainty. It is merely based on opinion and
reasonable belief. Thus a finding of probable cause does not require an
xxx
The records of all business
transactions of the corporation and the minutes
of any meeting shall be open to inspection by
any director, trustee, stockholder or member of
the corporation at reasonable hours on business
days and he may demand, in writing, for a copy
of excerpts from said records or minutes, at his
expense.
Gentlemen:
We write in behalf of our clients, SY
SIY HO, INC. ( Guan Yiac Hardware); SY
TIONG SHIOU, JUANITA TAN SY; JOLIE ROSS
TAN; CHARLIE TAN; ROMER TAN; and JESSE
JAMES TAN, relative to your letter dated 16
May 2003. Please be informed that a case for
Accounting and Damages had already been
filed against your clients, Sy Chim and Felicidad
Chan Sy before the Regional Trial Court of
Manila, Branch 46, denominated as Civil Case
No. 03-106456.
We fully understand your desire for our
clients to respond to your demands, however,
under the prevailing circumstance this would not
be advisable. The concerns that you raised in
your letter can later on be addressed after your
clients shall have filed their responsive pleading
in the abovesaid case.
We trust that this response will at the
moment be enough.[32]
Even in their Joint Counter-Affidavit dated 23 September
2003,[33] Sy Tiong Shiou, et al. did not make any allegation that the
person demanding to examine and copy excerpts from the
corporations records and minutes has improperly used any
information secured through any prior examination of the records or
minutes of such corporation or of any other corporation, or was not
acting in good faith or for a legitimate purpose in making his demand.
Instead, they merely reiterated the pendency of the civil case. There
being no allegation of improper motive, and it being undisputed that
Sy Tiong Shiou, et al. denied Sy Chim and Felicidad Chan Sys
request for inspection, the Court rules and so holds that the DOJ
erred in dismissing the criminal charge for violation of Section 74 in
relation to Section 144 of the Corporation Code.
corporate/civil case.[40] Moreover, the Court finds that the City of Manila is
the proper venue for the perjury charges, the GIS having been subscribed and
sworn to in the said place. Under Section 10(a), Rule 110 of the Revised
Rules of Court, the criminal action shall be instituted and tried in the court of
the municipality or territory where the offense was committed or where any of
its essential ingredients occurred.[41] In Villanueva v. Secretary of Justice,
[42] the Court held that the felony is consummated when the false statement
is made.[43] Thus in this case, it was alleged that the perjury was committed
when Sy Tiong Shiou subscribed and sworn to the GIS in the City of Manila,
thus, following Section 10(a), Rule 110 of the Revised Rules of Court, the City
of Manila is the proper venue for the offense.
G. R. No. 179438.
This petition assails the decision[44] and resolution[45] of the Court of
Appeals dated 26 May 2004 and 29 August 2007, respectively, in CA-G.R. SP
No. 81897.
On 3 February 2003, Juanita Tan, corporate treasurer of Sy Siy Ho &
Sons, Inc. (the corporation), a family corporation doing business under the
name and style Guan Yiac Hardware, submitted a letter[46] to the
corporations Board of Directors (Board) stating that the control, supervision
and administration of all corporate funds were exercised by Sy Chim and
Felicidad Chan Sy (Spouses Sy), corporate president and assistant treasurer,
respectively. In the same letter, Juanita Tan disclosed that Felicidad Chan Sy
did not make cash deposits to any of the corporations banks from 1
November 2001 to 31 January 2003, thus the total bank remittances for the
past years were less than reflected in the corporate financial statements,
accounting books and records. Finally, Juanita Tan sought to be free from any
responsibility
over all corporate funds. The Board granted Juanita Tans request and
authorized the employment of an external auditor to render a complete
audit of all the corporate accounting books and records.[47] Consequently,
the Board hired the accounting firm Banaria, Banaria & Company. In its
Report[48] dated 5 April 2003, the accounting firm attributed to the Spouses
Sy P67,117,230.30 as unaccounted receipts and disbursements from 1994 to
2002.[49]
A demand letter[50] was subsequently served on the Spouses Sy on
15 April 2003. On the same date, the children of the Spouses Sy allegedly
stole from the corporation cash, postdated checks and other important
counsel allegedly discovered that Sy Tiong Shiou and Juanita Tan were not
furnished with the copies of several pleadings, as well as a court order, which
resulted in their having been declared in default for failure to file their answer
to the third-party complaint; thus, they opted not to file a motion for
reconsideration anymore and instead filed a petition for certiorari before the
Court of Appeals.
In its Decision dated 26 May 2004, the Court of Appeals granted
the petition of Sy Tiong Shiou and Juanita Tan.[61]
The appellate court
declared that a third-party complaint is not allowed under the Interim Rules of
Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799
(Interim Rules), it not being included in the exclusive enumeration of allowed
pleadings under Section 2, Rule 2 thereof. Moreover, even if such a pleading
were allowed, the admission of the third-party complaint against Sy Tiong
Shiou and Juanita Tan still would have no basis from the facts or the law and
jurisprudence.[62]
The Court of Appeals also ruled that the respondent
judge committed a manifest error amounting to lack of jurisdiction in admitting
the third-party complaint and in summarily declaring Sy Tiong Shiou and
Juanita Tan in default for failure to file their answer within the purported
reglementary period. The Court of Appeals set aside the trial courts 8 October
2003 Order admitting the third-party complaint, as well as the 19 December
2003 Order, declaring Sy Tiong Shiou and Juanita Tan in default for failure to
file their answer. The trial court was further ordered to dismiss the third-party
complaint without prejudice to any action that the corporation may separately
file against Sy Tiong Shiou and Juanita Tan.[63]
The Spouses Sy filed a motion for reconsideration, but their motion
was denied on 29 August 2007.[64]
Sy Chim and Felicidad Chan Sy argue before this Court that a thirdparty complaint is not excluded or prohibited by the Interim Rules, and that the
Court of Appeals erred in ruling that their third- party complaint is not
actionable because their action is not in respect of the corporations claims.
They add that the disallowance of the third-party complaint will result in
multiplicity of suits.
The third-party complaint should be allowed.
The conflicting provisions of the Interim Rules of Procedure for InterCorporate Controversies read:
Rule 1, Sec. 8. Prohibited pleadings.The
following pleadings are prohibited:
(1) Motion to dismiss;
possible extent.[67] Otherwise stated, the spirit, rather than the letter of a law
determines its construction; hence, a statute, as in the rules in this case, must
be read according to its spirit and intent.[68]
This spirit and intent can be gleaned from Sec. 3, Rule 1 of the
Interim Rules, which reads:
Sec. 3. Construction.These Rules
shall be liberally construed in order to promote
their objective of securing a just, summary,
speedy and inexpensive determination of every
action or proceeding.[69]
Now, a third-party complaint is a claim that a defending
party may, with leave of court, file against a person not a party to the
action, called the third-party defendant, for contribution, indemnity,
subrogation or any other relief, in respect of his opponents claim. It
is actually a complaint independent of, and separate and distinct from
the plaintiffs complaint. In fact, were it not for Rule 6, Section 11 of
the Rules of Court, such third-party complaint would have to be filed
independently and separately from the original complaint by the
defendant against the third-party defendant. Jurisprudence is
consistent in declaring that the purpose of a third-party complaint is to
avoid circuitry of action and unnecessary proliferation of law suits and
of disposing expeditiously in one litigation all the matters arising from
one particular set of facts.[70]
It thus appears that the summary nature of the
proceedings governed by the Interim Rules, and the allowance of the
filing of third-party complaints is premised on one objectivethe
expeditious disposition of cases. Moreover, following the rule of liberal
interpretation found in the Interim Rules, and taking into consideration
the suppletory application of the Rules of Court under
Rule 1, Sec. 2[71] of the Interim Rules, the Court finds that a thirdparty complaint is not, and should not be prohibited in controversies
governed by the Interim Rules. The logic and justness of this
conclusion are rendered beyond question when it is considered that
Sy Tiong Shiou and Juanita Tan are not complete strangers to the
litigation as in fact they are the moving spirit behind the filing of the
liability of the third-party defendant to the plaintiff; or (c) the liability of the
third-party defendant to both the plaintiff and the defendant.[72]
In determining the sufficiency of the third-party complaint, the
allegations in the original complaint and the third-party complaint must be
examined. A third-party complaint must allege facts which prima facie show
that the defendant is entitled to contribution, indemnity, subrogation or other
relief from the third-party defendant.[73]
The complaint alleges that the Spouses Sy, as officers of the
corporation, have acted illegally in raiding its corporate funds, hence they are
duty bound to render a full, complete and true accounting of all the amounts,
proceeds and funds paid to, received and earned by the corporation since
1993 and to restitute to the corporation all such amounts, proceeds, and
funds which they took and misappropriated for their own use and benefit, to
the damage and prejudice of the plaintiff and its stockholders.[74] On the
other hand, in the third-party complaint, the Spouses Sy claim that it is Sy
Tiong Shiou and Juanita Tan who had full and complete control of the day-to
day operations
and complete control and custody of the funds of the
corporation, and hence they are the ones liable for any shortfall or
unaccounted
SO ORDERED.
G.R. No. L-25889 January 17, 1973
On 1 January 1955 the spouses Isidro Sierra and Antonia Magtaas sold a
parcel of land to Marta B. Chivi, representing to her that the land was not
registered either under the Land Registration Act or under the Spanish
Mortgage Law and assuring her that although the land was covered by a prewar free patent application, the application had not been approved and no
patent had been issued. The Sierras made that assurance because Chivi was
not willing to buy the land if it was covered by a patent, since it would then be
subject to repurchase. They agreed that the purchase price of P10,800.00
was not to be fully paid until the vendors could have the land registered under
Act 496.chanroblesvirtualawlibrarychanrobles virtual law library
At the instance of the Sierras, Chivi filed an application for registration of the
land in the Court of First Instance of Rizal. While the application was pending
Chivi, on 24 May 1958, sold her rights and interests in the land to the herein
petitioners-spouses Jaime Laico and Luz Los Banos for P25,647.00, with the
stipulation that should Chivi fail to secure and transfer title to the Laicos she
would return to them twice the amount of the aforesaid purchase price. To
induce the Laicos to buy Chivis rights and interests, the Sierras showed them
a petition withdrawing their free patent application. The Laicos thereupon
continued with the registration proceeding in substitution of Chivi, who signed
a deed of transfer of her rights.chanroblesvirtualawlibrarychanrobles virtual
law library
the registered title - to the Laicos. The action filed by the Sierras was not for
recovery of such ownership but for the exercise of their alleged right of
repurchase under the Public Land Act on the ground that the land they had
sold was covered by a patent title. In other words, the filing of the action did
not militate against the warranty to transfer title, for the very fact that the
plaintiffs wished to enforce their alleged right of repurchase was predicated on
the assumption that the title, that is, ownership, had been effectively
transferred first to Chivi an subsequently by the latter to the
Laicos.chanroblesvirtualawlibrarychanrobles virtual law library
(6) In any event, even viewing the situation in the light most favorable to the
Laicos, their cross-claim on Chivi's warranty to deliver title to them was so
inextricably linked with and so utterly dependent upon the success of the
complaint of the Sierras for the repurchase of the land that when the
complaint was dismissed the cross-claim could not possibly survive. For as
the cross-claimants themselves alleged, the cross-defendants would be liable
on the warranty "should the plaintiffs finally obtain favorable judgment in their
favor" (sic). The warranty became functus oficio after the Sierras, who turned
out after all to have a free patent title to the land issued way back in 1932,
agreed to transfer and did transfer said title to the Laicos - first by the deed of
sale executed directly in their favor by the Sierras on January 17, 1960, and
again in the amicable settlement of the case between them. The fact that the
Laicos paid P10,000.00 to the Sierras in that amicable settlement created no
liability on the part of the Chivis: first, because the latter neither knew nor
consented to such settlement; second, because the Laicos had already
acquired the land directly, from the Sierras by virtue of the aforesaid sale of
January 17, 1960; and third because the said sum of P10,000.00 was not the
subject of the cross-claim against them.chanroblesvirtualawlibrarychanrobles
virtual law library
Apropos is the following statement of the legal principle:
A cross-bill strictly speaking is one brought by a defendant in an equity suit
against ... other defendants in the same suit, touching the matters in question
in the original bill. It is considered as an auxiliary suit dependent upon the
original bill, and can be sustained only on matters growing out of the original
bill. There is a well-defined distinction between a cross-bill merely defensive in
character, and one seeking affirmative relief. The dismissal of the original bill
carries with it a purely defensive cross-bill but not one seeking affirmative
relief. 1chanrobles virtual law library
The cross-claim in this case was purely defensive in nature. It arose entirely
out of the complaint and could prosper only if the plaintiffs succeeded. Hence,
under the principle above enunciated, it could not be the subject of
independent adjudication once it lost the nexus upon which its life
depended.chanroblesvirtualawlibrarychanrobles virtual law library
Under the circumstances above set forth the dismissal of the cross-claim
should have followed the dismissal of the complaint as a matter of course,
without further proceeding; and in setting the said cross-claim for pre-trial and
receiving evidence thereon and then rendering judgment against the crossdefendants the court committed such a grave abuse of discretion amounting
to
lack
of
jurisdiction
correctible
by
certiorari.chanroblesvirtualawlibrarychanrobles virtual law library
Concerning the argument that the respondents here were guilty of laches
because they filed their petition for certiorari after the lapse of over 9 months
from the time judgment of the Court of First Instance was rendered,
respondent Court of Appeals ruled - in our opinion correctly - as follows:
xxx xxx xxxchanrobles virtual law library
To the contention that the petitioners' action is barred laches, we are bound to
disagree. The judgment by default was rendered on February 5, 1965. It is not
known when the petitioners received copy of this judgment, but the fact is that
on April 13, or after the lapse of only 2 months and 7 days from rendition of
the judgment, the petition for certiorari was filed with this Court. Principally, the
petition assails the decision and the writ of execution thereof which was
issued on April 1. Assuming that the decision complained of was actually
received by the petitioners on the date it was rendered, the intervening period
to the filing of the petition is only 2 months and 7 days, which is shorter than
the shortest period of 2 months and 26 days cited in the respondents' ex-parte
motion for reconsideration in support of their theory of laches. And a mere 12
days intervened between the issuance of the writ of execution and the filing of
the petition for certiorari.chanroblesvirtualawlibrarychanrobles virtual law
library
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Parenthetically, this Court would like to state that Judge Guillermo Torres
should not have been made to appear as active party-petitioner in this case,
his participation having become functus oficio after the rendered judgment,
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