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566 SCRA 219


This case stemmed from a Complaint for annulment of contracts with prayer for preliminary prohibitory
injunction and TRO filed by respondent Del Castillo, in his capacity as taxpayer, against respondents City of
Urdaneta and Capalad doing business under the name JJEFWA Builders, and petitioners APP and APP
Construction and Devt. Corp. (APPCDC).
Del Castillo alleged that then Urdaneta City Mayor entered into 5 contracts for the preliminary
design, construction and management of a 4-storey twin cinema commercial center and hotel amounting
to P250M, funded by a loan from the PNB. For minimal work, the contractor was allegedly paid P95M. Del
Castillo claimed that all the contracts are void because the object is outside the commerce of men, which
is a piece of land belonging to the public domain and which remains devoted to a public purpose as a
public elementary school. He also claimed that the contracts are void because they were all awarded
solely to the Goco family.
In their Answer, APP and APPCDC, and Urdaneta City asserted that the contracts were
valid. Respondent Capalad, through counsel, likewise filed an Answer with compulsory counterclaim and
motion to dismiss on the ground that Del Castillo has no legal standing to sue.
After pre-trial, Urdaneta City filed an Omnibus Motion with prayer to (1) withdraw Urdaneta Citys
Answer; (2) drop Urdaneta City as defendant and be joined as plaintiff; (3) admit Urdaneta Citys
complaint; and (4) conduct a new pre-trial, which the RTC granted.
The RTC also granted Capalads motion to expunge all pleadings filed by his counsel. Capalad
was dropped as defendant, and his complaint was admitted and consolidated with the complaints of Del
Castillo and Urdaneta City.
Aggrieved, APP and APPCDC filed a petition for certiorari before the CA, which was dismissed.
APP and APPCDCs subsequent MR was likewise denied.



WON the CA erred in denying reconsideration of its April 15, 2003 Resolution despite APP and APPCDCs
subsequent compliance.
WON the RTC erred and commited grave abuse of discretion in allowing respondents Capalad
and Urdaneta City to switch from being defendants to becoming complainants.
Yes, it was thus error for the CA to deny reinstatement of the petition. Indeed, proof of authority to sign the
certificate of non-forum shopping in behalf of a corp. must be attached; otherwise, the petition is
subject to dismissal. However, it must be pointed out that the SC had considered as substantial
compliance with the procedural requirements the submission in the MR of the authority to sign the
verification and certification, as in this case. Similarly, the SC considered as substantial compliance
petitioners submission in the MR of the certified true copies of the assailed RTC orders. Petitioners
also 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, as supported by the
affidavit of service.
No, the court may allow amendment of pleadings. Sec. 5, Rule 10 of the Rules of Court pertinently
provides that 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. Objections need not even arise in this case since the Pre-trial Order already defined as an issue
whether the contracts are valid. Thus, 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. Note also that under Sec. 5, Rule 10, necessary amendments to pleadings may be made to
cause them to conform to the evidence. In addition, despite Urdaneta Citys judicial admissions, the
RTC is still given leeway to consider other evidence to be presented for said admissions may not
necessarily prevail over documentary evidence, e.g., the contracts assailed. A partys testimony in
open court may also override admissions in the Answer.