1
JUDICIAL POWER
CONSTITUTIONAL PROTECTION
PRESCRIBED JURISDICTION i.e. OVER SUBJECT
MATTER, BY LAW
SINDICO V DIAZ
440 SCRA 50
CARPIO-MORALES; October 1, 2004
NATURE
Petition for review on certiorari of a decision of the RTC of Iloilo
FACTS
-Virgilio Sindico, is the registered owner of a parcel of land, which he
let the spouses Eulalio and Concordia Sombrea cultivate, without him
sharing in the produce, as his "assistance in the education of his
cousins" including defendant Felipe Sombrea
-After the death of the Eulalio Sombrea, Felipe continued to cultivate
the lot
-On June 20, 1993, Sindico requested Felipes wife for the return of the
possession of the lot but the latter requested time to advise her
husband
-Repeated demands for the return of the possession of the lot
remained unheeded, forcing Sindico to file a civil case before the RTC
against the spouses Sombrea for Accion Reivindicatoria with
Preliminary Mandatory Injunction
-The defendants filed a Motion to Dismiss, alleging that the RTC has
no jurisdiction over their person and that as the subject matter of the
case is an agricultural land which is covered by the Comprehensive
Agrarian Reform Program (CARP) of the government, the case is
within the exclusive original jurisdiction of the DARAB in accordance
with Section 50 of Republic Act 6657 (THE COMPREHENSIVE
AGRARIAN REFORM LAW OF 1988)
-The plaintiff filed an Opposition alleging that the case does not involve
an agrarian dispute, there being no tenancy relationship or leasehold
agreement with the defendants.
-The RTC of Iloilo granted the Motion to Dismiss
-As their Motion for Reconsideration was denied by the trial court, the
plaintiffs, herein petitioners, lodged the present Petition for Review on
Certiorari
ISSUE
WON the Department of Agrarian Reform Adjudication Board (DARAB)
has original and exclusive jurisdiction over the case at bar
HELD No.
Ratio. Jurisdiction over the subject matter is determined by the
allegations of the complaint. It is not affected by the pleas set up by the
defendant in his answer or in a motion to dismiss, otherwise,
jurisdiction would be dependent on his whims.
Reasoning.The allegations in petitioners complaint show that the
action is one for recovery of possession, not one which involves an
agrarian dispute.
-Section 3(d) of RA 6657 or the CARP Law defines "agrarian dispute"
over which the DARAB has exclusive original jurisdiction as:
(d) any controversy relating to tenurial arrangements, whether
leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farmworkers associations or
representation of persons in negotiating, fixing, maintaining, changing
or seeking to arrange terms or conditions of such tenurial
arrangements including any controversy relating to compensation of
lands acquired under this Act and other terms and conditions of
transfer of ownership from landowners to farmworkers, tenants and
other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and
tenant, or lessor and lessee.
-Since petitioners action is one for recovery of possession and
does not involve an agrarian dispute, the RTC has jurisdiction
over it.
Disposition Petition is granted.
JURISDICTION DISTINGUISHED FROM VENUE
MANILA RAILROAD V ATTY. GENERAL
20 PHIL 523
MORELAND; December 11, 1911
NATURE
Appeal from CFI Tarlacs judgment dismissing the action before it on
motion of the plaintiff upon the ground that the court had no jurisdiction
of the subject matter
FACTS
- On Dec 1907, Mla Railroad Co. began an action in CFI Tarlac for the
condemnation of 69,910 sq. m. real estate located in Tarlac. This is for
construction of a railroad line "from Paniqui to Tayug in Tarlac," as
authorized by law.
- Before beginning the action, Mla Railroad had caused to be made a
thorough search in the Office of the Registry of Property and of the Tax
where the lands sought to be condemned were located and to whom
they belonged. As a result of such investigations, it alleged that the
lands in question were located in Tarlac.
- After filing and duly serving the complaint, the plaintiff, pursuant to
law and pending final determination of the action, took possession of
and occupied the lands described in the complaint, building its line and
putting the same in operation.
- On Oct 4, Mla Railroad gave notice to the defendants that on Oct. 9,
a motion would be made to the court to dismiss the action upon the
ground that the court had no jurisdiction of the subject matter, it having
just been ascertained by the plaintiff that the land sought to be
condemned was situated in the Province of Nueva Ecija, instead of the
Province of Tarlac, as alleged in the complaint. This motion was heard
and, after due consideration, the trial court dismissed the action upon
the ground presented by the plaintiff.
ISSUE/S
1. WON CFI Tarlac has power and authority to take cognizance of
condemnation of real estate located in another province
2. WON Sec. 3771 of the Code of Civil Procedure and Act. No. 1258
are applicable and so the CFI has no jurisdiction
HELD
1.YES
1
SEC. 377. Venue of actions. Actions to confirm title to real estate, or to secure
a partition of real estate, or to cancel clouds, or remove doubts from the title to
real estate, or to obtain possession of real estate, or to recover damages for
injuries to real estate, or to establish any interest, right, or title in or to real estate,
or actions for the condemnation of real estate for public use, shall be brought in
the province were the lands, or some part thereof, is situated ; actions against
executors, administrators, and guardians touching the performance of their
official duties, and actions for account and settlement by them, and actions for
the distribution of the estates of deceased persons among the heirs and
distributes, and actions for the payment of legacies, shall be brought in the
province in which the will was admitted to probate, or letters of administration
were granted, or the guardian was appointed. And all actions not herein
otherwise provided for may be brought in any province where the defendant or
any necessary party defendant may reside or be found, or in any province where
the plaintiff, except in cases were other special provision is made in this Code. In
case neither the plaintiff nor the defendant resides within the Philippine Islands
and the action is brought to seize or obtain title to property of the defendant
within the Philippine Islands and the action is brought to seize or obtain title to
property of the defendant within the Philippine Islands, the action shall be
brought in the province where the property which the plaintiff seeks to seize or to
obtain title to is situated or is found: Provided, that in an action for the foreclosure
of a mortgage upon real estate, when the service upon the defendant is not
personal, but is by publication, in accordance with law, the action must be
brought in the province where the land lies. And in all cases process may issue
from the court in which an action or special proceeding is pending, to be enforced
in any province to bring in defendants and to enforce all orders and decrees of
the court. The failure of a defendant to object to the venue of the action at the
time of entering his appearance in the action shall be deemed a waiver on his
part of all objection to the place or tribunal in which the action is brought, except
in the actions referred to in the first sixteen lines of this section relating to real
estate, and actions against executors, administrators, and guardians, and for the
distribution of estates and payment of legacies.

Ratio Sections 55 and 562 of Act No. 136 of the Philippine Commission
confer perfect and complete jurisdiction upon the CFI of these Islands
with respect to real estate in the Philippine Islands. Such jurisdiction is
not made to depend upon locality. There is no suggestion of limitation.
The jurisdiction is universal. It is nowhere suggested, much less
provided, that a CFI of one province, regularly sitting in said province,
may not under certain conditions take cognizance of an action arising
in another province or of an action relating to real estate located
outside of the boundaries of the province to which it may at the time be
assigned.
JURISDICTION OVER PERSON OF THE PLAINTIFF
- Procedure does not alter or change that power or authority; it simply
directs the manner in which it shall be fully and justly exercised. To be
sure, in certain cases, if that power is not exercised in conformity with
the provisions of the procedural law, purely, the court attempting to
exercise it loses the power to exercise it legally. This does not mean
that it loses jurisdiction of the subject matter. It means simply that he
may thereby lose jurisdiction of the person or that the judgment may
thereby be rendered defective for lack of something essential to
sustain it. There is, of course, an important distinction between person
and subject matter are both conferred by law. As to the subject matter,
nothing can change the jurisdiction of the court over diminish it or
dictate when it shall attach or when it shall be removed. That is a
matter of legislative enactment which none but the legislature may
change. On the other hand, the jurisdiction of the court over the person
is, in some instances, made to defend on the consent or objection, on
the acts or omissions of the parties or any of them. Jurisdiction over
the person, however, may be conferred by consent, expressly or
impliedly given, or it may, by an objection, be prevented from attaching
or removed after it has attached.
2. NO
Ratio Sec. 377 contains no express inhibition against the court. The
prohibition provided therein is clearly directed against the one who
begins the action and lays the venue. The court, before the action is
commenced, has nothing to do with it either. The plaintiff does both.
Only when that is done does the section begin to operate effectively so
far as the court is concerned. The prohibition is not a limitation on the
power of the court but on the rights of the plaintiff. It establishes a
relation not between the court and the subject, but between the plaintiff
and the defendant. It relates not to jurisdiction but to trial. It simply
gives to defendant the unqualified right, if he desires it, to have the trial
take place where his land lies and where, probably, all of his witnesses
live. Its object is to secure to him a convenient trial.
JURISDICTION OVER PERSON OF THE PLAINTIFF
- That it had jurisdiction of the persons of all the parties is indisputable.
That jurisdiction was obtained not only by the usual course of practice -
that is, by the process of the court - but also by consent expressly
given, is apparent. The plaintiff submitted itself to the jurisdiction by
beginning the action. The defendants are now in this court asking that
the action be not dismissed but continued. They are not only nor
objecting to the jurisdiction of the court but, rather, are here on this
appeal for the purpose of maintaining that very jurisdiction over them.
Nor is the plaintiff in any position to asked for favors. It is clearly guilty
of gross negligence in the allegations of its complaint, if the land does
not lie in Tarlac as it now asserts.
*DISTINGUISHED FROM VENUE
- The fact that such a provision appears in the procedural law at once
raises a strong presumption that it has nothing to do with the
jurisdiction of the court over the subject matter. It becomes merely a
matter of method, of convenience to the parties litigant. If their interests
are best subserved by bringing in the Court Instance of the city of
Manila an action affecting lands in the Province of Ilocos Norte, there is
no controlling reason why such a course should not be followed. The
matter is, under the law, entirely within the control of either party. The
2
SEC. 55. Jurisdiction of Courts of First Instance. The jurisdiction of Courts of
First Instance shall be of two kinds: 1. Original; and 2. Appellate.
SEC. 56. Its original jurisdiction. Courts of First Instance shall have original
jurisdiction:
2. In all civil actions which involve the title to or possession of real property, or
any interest therein, or the legality of any tax, impost, or assessment, except
actions of forcible entry into, and detainer of lands or buildings, original
jurisdiction of which is by this Act conferred upon courts of justice of the peace.
2
plaintiff's interests select the venue. If such selection is not in
accordance with section 377, the defendant may make timely objection
and, as a result, the venue is changed to meet the requirements of the
law.
- Section 377 of the Code of Civil Procedure is not applicable to
actions by railroad corporations to condemn lands; and that, while with
the consent of defendants express or implied the venue may be laid
and the action tried in any province selected by the plaintiff
nevertheless the defendants whose lands lie in one province, or any
one of such defendants, may, by timely application to the court, require
the venue as to their, or, if one defendant, his, lands to be changed to
the province where their or his lands lie. In such case the action as to
all of the defendants not objecting would continue in the province
where originally begun. It would be severed as to the objecting
defendants and ordered continued before the court of the appropriate
province or provinces. While we are of that opinion and so hold it can
not affect the decision in the case before us for the reason that the
defendants are not objecting to the venue and are not asking for a
change thereof. They have not only expressly submitted themselves
to the jurisdiction of the court but are here asking that that jurisdiction
be maintained against the efforts of the plaintiff to remove it.
Disposition The judgment must be REVERSED and the case
REMANDED to the trial court with direction to proceed with the action
according to law.
JURISDITION VOID
ABBAIN V. CHUA
22 SCRA 748
Sanchez; February 26, 1968
NATURE
Direct appeal to the SC
FACTS
- March 12, 1958: Tongham Chua commenced suit for forcible entry
and illegal detainer against Hatib Abbain with the Justice of the Peace
(JOP) Court of Bongao, Sulu. Chua's averred that he is the owner of a
4-hectare land together with the improvements thereon mostly coconut
trees located in Maraning, Bongao, Sulu; that this land was donated to
him by his father, Subing Chua, in 1952 and from that date he has
assumed ownership thereof, taken possession of the land and paid the
corresponding taxes yearly; that from 1952-1958, Abbain has been his
tenant and the two divided the fruits or copra harvested therefrom on
50-50basis; that in 1957, Abbain by means of force, strategy and
stealth unlawfully entered and still occupies the land in question after
Chua have repeatedly demanded of him to vacate the premises due to
his failure to give chuas share of the several harvests.
LC: JOP Managula rendered judgment directing Abbain to vacate the
premises and place Chua in possession of the plantation, with costs.
This judgment was predicated upon the findings that sometime before
WWII, Abbain, because of financial hardship, sold for P225 to Subing
Chua the coconut plantation; that after the sale, Abbain became the
tenant of Chua, the harvests of the land divided on a 50-50 basis; that
subsequently, Subing Chua donated the plantation to his son,
Tongham Chua, and Abbain, the same tenant of the father, continued
to be the tenant on the land.
- Abbain filed a petition in the CFI of Sulu against Tongham Chua and
Judge Managula, seeking relief from the judgment of the JOTP Court
anr/or annulment of its decision with preliminary injunction. He averred
that the JOTP Court did not have jurisdiction over the civil case
and that said case was within the exclusive original jurisdiction of
the Court of Agrarian Relations (CAR).
CFI of Sulu: petition dismissed without cause
-petitioner has not presented any proof or showing of landlord and
tenant relationship between the parties" to bring the case within the
jurisdiction of the CAR, and that upon the allegations of the complaint,
the case is "clearly one of ejectment."
ISSUE
WON the JOTP Court has jurisdiction over the case filed by Chua

HELD
NO
Ratio. Where a judgment or judicial order is void in this sense it may
be said to be a lawless thing, which can be treated as an outlaw and
slain at sight, or ignored wherever and whenever it exhibits its head.
And in Gomez vs. Concepcion, this Court quoted with approval the
following from Freeman on Judgments: "A void judgment is in legal
effect no judgment. By it no rights are divested. From it no rights can
be obtained. Being worthless in itself, all proceedings founded upon it
are equally worthless. It neither binds nor bars any one. All acts
performed under it and all claims flowing out of it are void. The parties
attempting to enforce it may be responsible as trespassers. The
purchaser at a sale by virtue of its authority finds himself without title
and without redress."
Since the judgment here on its face is void ab initio, the limited periods
for relief from judgment in Rule 38 are inapplicable. That judgment is
vulnerable to attack "in any way and at any time, even when no appeal
has been taken."
Reasoning. The provisions of Sec. 21 of RA 1199 (approved August
30, 1954), known as the Agricultural Tenancy Act of the Philippines,
read:
"SEC. 21. Ejectment; violation; jurisdiction. All cases involving the
dispossession of a tenant by the landholder or by a third party and/or
the settlement and disposition of disputes arising from the relationship
of landholder and tenant, as well as the violation of any of the
provisions of this Act, shall be under the original and exclusive
jurisdiction of such court as may now or hereafter be authorized by law
to take cognizance of tenancy relations anddisputes."
Sec. 7, RA 1267, creating the First Court of Agrarian Relations,
effective June 14, 1955, as amended by Republic Act 1409 which took
effect on September 9, 1955,provides:
"SEC. 7. Jurisdiction of the Court. The Court shall have original and
exclusive jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle all questions, matters, controversies or
disputes involving all those relationships established by law which
determine the varying rights of persons in the cultivation and use of
agricultural land where one of the parties works the land."
- Chua's complaint was filed on March 12, 1958 long after RAs
1199, 1267 and 1409 were incorporated in our statute books. Chua's
complaint positively averred that Hatib Abbain is his tenant on a 50-50
sharing basis of the harvest; and that he seeks ejectment of Hatib
Abbain "due to his non-compliance of our agreement of his giving my
share of the several harvests he made." The JOTP Court itself found
that Abbain continued to be the tenant of Chua after the latter became
owner of the plantation which he acquired from his father by virtue of a
donation; and that Abbain refused to give "the share of his landlord of
the harvest."
- If both the complaint and the inferior court's judgment have any
meaning at all, it is that the JOTP Court had no jurisdiction over the
case. Right at the outset, the complaint should have been rejected.
Failing in this, the case should have been dismissed during the course
of the trial, when it became all the more evident that a landlord-tenant
relationship existed. The judge had no power to determine the case.
Because Chua's suit comes within the coverage of Sec. 21, R.A. 1199
- that "cases involving the dispossession of a tenant by the landholder,"
shall be under the "original and exclusive jurisdiction of such court as
may now or hereafter be authorized by law to take cognizance of
tenancy relations and disputes", and the broad sweep of Section 7, RA
1267, which lodged with the CAR "original and exclusive
jurisdiction . . . to consider, investigate, decide, and settle all questions,
matters, controversies or disputes involving all those relationships
established by law which determine the varying rights of persons in the
cultivation and use of agricultural land where one of the parties works
the land."
Jurisprudence has since stabilized the jurisdiction of the CAR over
cases of this nature. Such exclusive authority is not divested by a mere
averment on the part of the tenant that he asserts ownership over the
land, "since the law does not exclude from the jurisdiction" of the CAR,
"cases in which a tenant claims ownership over the land given to him
for cultivation by the landlord."
The judgment and proceedings of the Justice of the Peace Court are
null and void.
The judgment of the JOTP Court is not merely a voidable
judgment. It is void on its face. It may be attacked directly or
collaterally. Here, the attack is direct. Abbain sought to annul the
judgment. Even after the time for appeal or review had elapsed,
3
appellant could bring, as he brought, such an action. More, he also
sought to enjoin enforcement of that judgment. In varying language,
the Court has expressed its reprobation for judgments rendered by a
court without jurisdiction. Such a judgment is held to be a dead limb
on the judicial tree, which should be lopped of' or wholly
disregarded as the circumstances require.
Disposition The decision of the JOTP Court of Sulu is annulled.
JURISDICTION BY ESTOPPEL
General rule:
SEAFDEC V NLRC (LAZAGA)
206 SCRA 283
NOCON, February 14, 1994
NATURE
Petition for certiorari to review the decision of the NLRC
FACTS
-SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries Development Center. Private Respondent
Lazaga was hired as a Research Associate and eventually became the
Head of External Affairs Office of SEAFDEC-AQD. However, he was
terminated allegedly due to financial constraints being experienced by
SEAFEC-AQD. He was supposed to receive separation benefits but
SEAFDEC-AQD failed to pay private respondent his separation pay so
Lazaga filed a complaint for non-payment of separation benefits, plus
moral damages and attorneys fees with the NLRC.
-In their ANSWER WITH COUNTERCLAIM, SEAFDEC alleged that
NLRC has no jurisdiction over the case because: (1) It is an
international organization; (2) Lazaga must first secure clearances
from the proper departments for property or money accountability
before any claim for separation pay will be paid (and clearances has
not been paid)
COUNTERCLAIM: Lazaga had property accountability and outstanding
obligation to SEAFDEC-AQD amounting to P27, 532.11 and that
Lazaga was not entitled to the accrued sick leave benefits due to his
failure to avail of the same during his employment
-LA: for Lazaga
-NLRC: affirmed LA, deleted attorneys fees and actual damages
-SEAFDEC-AQD filed MFR, denied
ISSUES
1. WON SEAFEC-AQD is immune from suit owing to its international
character
2. WON SEAFDEC-AQD is estopped from claiming that the court had
no jurisdiction
HELD
1. YES
Ratio. Being an intergovernmental organization, SEAFDEC including
its departments enjoys functional independence and freedom from
control of the state in whose territory its office is located.
Reasoning. One of the basic immunities of an international
organization is immunity from local jurisdiction (immune from legal
writs and processes issued by the tribunals of the country where it is
found) that the subjection of such an organization to the authority of
the local courts would afford a convenient medium thru which the host
government may interfere in their operations or even influence or
control its policies and decisions of the organization. Such subjection
to local jurisdiction would impair the capacity of such body to discharge
its responsibilities impartially on behalf of its member-states.
2. NO
Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that
has none over a cause of action. Jurisdiction is conferred by law.
Where there is none, no agreement of the parties can provide one.
Settled is the rule that the decision of a tribunal not vested with
appropriate jurisdiction is null and void.
-The lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal.
-The issue of jurisdiction is not lost by waiver or by estoppel

Exception:
SOLIVEN vs FASTFORMS PHILS.
440 SCRA 389
Sandoval-Gutierrez, October 18, 2004
NATURE
-petition for review on certiorari
FACTS
-Petitioner Marie Antoinette Soliven filed a complaint for P195,155 as
actual damages with P200k as moral damages, P100k as exemplary
damages and P100k as attorneys fees against respondent Fastform
Phils., with the Makati RTC. It alleged that respondent, through its
president Dr. Escobar, obtained a loan from petitioner (P170k) payable
within 21 days with 3% interest. On the same day, respondent issued a
postdated check for P170k + P5k int. 3 weeks later, Escobar advised
petitioner not to deposit the check as the account from where it was
drawn had insufficient funds and instead proposed that the P175k be
rolled-over with 5% monthly interest, to which the latter agreed.
Respondent issued several checks as payment for interests for 5
months but thereafter refused to pay its principal obligation despite
petitioners repeated demands.
-In its counterclaim, respondent denied obtaining the loan and that it
did not authorize Escobar to secure said loan or issue checks as
payment for interests. After a trial on the merits, the court ordered
respondent to pay the amount of the loan plus interest and attorneys
fees, but moral and exemplary damages as well as the counterclaim
were dismissed.
-Respondent filed a MFR questioning the courts jurisdiction alleging
that since the principal demand (P195,155) did not exceed P200k, the
complaint should have been filed with the MTC, pursuant to RA 7691.
The TC denied the MFR since the totality of the claim exceeded 200k
and since respondent was estopped from questioning jurisdiction. On
appeal, the CA reversed the TC decision on the ground of lack of
jurisdiction and that respondent may assail jurisdiction of the TC
anytime even for the first time on appeal. Petitioner filed an MFR which
was denied by the CA, hence this petition.
ISSUE (Members of religious group)
WON the trial court has jurisdiction over the case
HELD
NO.
Ratio. While it is true that jurisdiction may be raised at any time, this
rule presupposes that estoppel has not supervened. Since respondent
actively participated in all stages of the proceedings before the TC and
even sought affirmative relief, it is estopped from challenging the TCs
jurisdiction, especially since an adverse judgment had been rendered.
A party cannot invoke the jurisdiction of a court to secure affirmative
relief against his opponent and after obtaining or failing to obtain such
relief, repudiate that same jurisdiction.
Reasoning. Section 3 of RA 7691 provides that where the amount of
the demand in the complaint instituted in Metro Manila does not
exceed P200k, exclusive of interest, damages of whatever kind, attys
fees, litigation expenses and costs, the exclusive jurisdiction over the
same is vested in the Metropolitan Trial court, Municipal Trial Court and
Municipal Circuit Trial Court.
-Administrative Circular 09-94 specifies guidelines in the
implementation of RA 7691. Par 2 of the Circular provides that the term
damages of whatever kind applies only to cases where damages are
merely a consequence of the main action. In the instant case, the main
cause of action is the collection of the debt amounting to P195k. The
damages being claimed are merely incidental and are thus not
included in determining the jurisdictional amount.
Disposition. WHEREFORE, the instant petition is GRANTED
ONCE ATTACHED, JURISDICTION NOT OUSTED BY
SUBSEQUENT STATUTE UNLESS SO PROVIDED
4
SOUTHERN FOOD SALES CORPORATION vs.
SALAS
206 SCRA 333
MEDIALDEA; Feb 18, 1992
NATURE
Petition for certiorari
FACTS
- July 1979 Private respondent Laurente (former sale supervisor of
petitioner corporation) was notified and advised of his immediate
termination for gross neglect of duty and/or dishonesty
- August 1979 - Laurente instituted a civil action for damages against
SFSC and Siao, its manager
- Laurente filed a complaint for illegal dismissal (labor case).
- January 1980 - Petitioners filed a motion to dismiss on Civil Case,
claiming that the jurisdiction should be vested with the NLRC.
- February 5, 1980 - it was found that the termination of the
complainant was for a just and valid cause
- February 28, 1980 The court in Civil Case deferred the
determination of the motion to dismiss until after trial.
- Petitioners filed a motion for reconsideration but it was denied.
Thus, this petition for the issuance of a writ of preliminary injunction.
ISSUE
WON the respondent judge committed grave abuse of discretion when
it deferred the determination or resolution of the motion to dismiss
questioning the jurisdiction of the court over claims for damages.
HELD
NO.
Ratio "(t)he rule is that where a court has already obtained and is
exercising jurisdiction over a controversy, its jurisdiction to proceed to
the final determination of the cause is not affected by new legislation
placing jurisdiction over such proceedings in another tribunal. The
exception to the rule is where the statute expressly provides, or is
construed to the effect that it is intended to operate as to actions
pending before its enactment. Where a statute changing the
jurisdiction of a court has no retroactive effect, it cannot be applied to a
case that was pending prior to the enactment of the statute." (Bengzon
v. Inciong)
Reasoning
a. Article 217 (a) (4) of the Labor Code as amended by Section 9 of
Republic Act No. 6715 clearly provides that the labor arbiter shall
have original and exclusive jurisdiction to hear and decide claims
for actual, moral, exemplary and other forms of damages arising
from an employer-employee relationship. However, when the civil
case for damages was instituted in 1979, the applicable law then
was Article 217 (a) (3) of the Labor Code as amended by
Presidential Decree No. 1367 (May 1, 1978) which provides that
Labor Arbiters shall not entertain claims for moral or other forms
of damages.
b. To require the private respondent to file a single suit combining
his actions for illegal dismissal and damages in the NLRC would
be to sanction the retroactivity of Republic Act No. 6715 which
took effect on March 21, 1989, where the same law does not
expressly so provide, or does not intend to operate as to actions
pending before its enactment, hence prejudicial to the orderly
administration of justice.
Disposition. The petition is DISMISSED for lack of merit.
ACQUIRED JURISDICTION OVER THE PERSON
Of the plaintiff
MANILA RAILROAD V ATTY. GENERAL
(page 1)
FACTS
-Manila Railroad filed an action for condemnation proceedings in CFI
of Tarlac when they knew that the lands concerned are found in Nueva
Ecija. Now they are assailing the jurisdiction of CFI Tarlac.
ACQUIRED JURISDICTION OVER THE PERSON Of the plaintiff:

Procedure does not alter or change that power or authority; it simply
directs the manner in which it shall be fully and justly exercised. To be
sure, in certain cases, if that power is not exercised in conformity with
the provisions of the procedural law, purely, the court attempting to
exercise it loses the power to exercise it legally. This does not mean
that it loses jurisdiction of the subject matter. It means simply that he
may thereby lose jurisdiction of the person or that the judgment may
thereby be rendered defective for lack of something essential to
sustain it. There is, of course, an important distinction between person
and subject matter are both conferred by law. As to the subject matter,
nothing can change the jurisdiction of the court over diminish it or
dictate when it shall attach or when it shall be removed. That is a
matter of legislative enactment which none but the legislature may
change. On the other hand, the jurisdiction of the court over the person
is, in some instances, made to defend on the consent or objection, on
the acts or omissions of the parties or any of them. Jurisdiction over
the person, however, may be conferred by consent, expressly or
impliedly given, or it may, by an objection, be prevented from attaching
or removed after it has attached.
- That it had jurisdiction of the persons of all the parties is indisputable.
That jurisdiction was obtained not only by the usual course of practice -
that is, by the process of the court - but also by consent expressly
given, is apparent. The plaintiff submitted itself to the jurisdiction by
beginning the action. The defendants are now in this court asking that
the action be not dismissed but continued. They are not only nor
objecting to the jurisdiction of the court but, rather, are here on this
appeal for the purpose of maintaining that very jurisdiction over them.
Nor is the plaintiff in any position to asked for favors. It is clearly guilty
of gross negligence in the allegations of its complaint, if the land does
not lie in Tarlac as it now asserts.
Of the defendant
1. by service of summons
2. by voluntary appearance
BOTICANO V CHU, JR
148 SCRA 541
PARAS; March 16, 1987
NATURE
Petition for review on certiorari seeking to reverse and set aside CA
ruling of denying MFR.
FACTS
- Eliseo Boticano is the registered owner of a Bedford truck which is
used in hauling logs for a fee. It was hit at the rear by another Bedford
truck owned by Manuel Chu and driven by Jaime Sigua while loaded
with logs and parked properly by the driver Maximo Dalangin at the
shoulder of the national highway.
- Chu acknowledged ownership and agreed to shoulder the expenses
of the repair, but failed to comply with the agreement. Boticano filed a
complaint at the CFI at Cabanatuan against Chu and Sigua. Summons
were issued but one was returned unserved for Sigua wile the other
served thru Chus wife.
- Boticano moved to dismiss the case against Sigua and to declare
Chu in default. The Court granted the motions and adduced from
evidence that Chu is responsible for the fault and negligence of the
driver under Art 2180 CC.
- Chu filed with the TC a notice of appeal and an urgent motion for
extension of time to file record on appeal. Court granted the motions.
- Boticano filed a MTD the appeal and for execution, but the appeal
was still approved. The case was brought to the CA. CA set aside the
TC decision for being null and void.
- Boticano filed an MFR with the CA to which CA denied.
ISSUE/S
1. WON the question of jurisdiction of the court over the person of the
defendant cannot be raised for the first time on appeal
2. WON CA erred in holding that Chu did not voluntarily submit himself
to the jurisdiction of the TC despite his voluntary appearance
HELD
1. NO
Ratio The defects in jurisdiction arising from irregularities in the
5
commencement of the proceedings, defective process or even
absence of process may be waived for failure to make seasonal
objections.
Reasoning The circumstances appear to show that there was waiver
by the defendant to allege such defect when he failed to raise the
question in the CFI and at the first opportunity.
2. YES, he voluntarily submitted himself to the courts jurisdiction.
Ratio Under Sec 23, Rule 14 ROC, the defendants voluntary
appearance in court shall be equivalent to service. It has been held by
the court that the defect of summons is cured by the voluntary
appearance by the appearance of the defendant.
Disposition The assailed decision and resolution of CA are reversed
and set aside. The decision of the CFI (now RTC) is reinstated.
3. by voluntary submission
RODRIGUEZ VS ALIKPALA
57 SCRA 455
CASTRO; June 25, 1974
NATURE
Petition for certiorari
FACTS
-Petitioner Rodriguez filed a case for recovery of the sum of P5,320.00
plus interest, attorneys fees and cost against Sps. Robellado.
-A writ of preliminary attachment was issued and served to Fe
Robellado at their store in Divisoria. Sps Robellado pleaded to the
Rodriguez for time before the attachment to be effectively enforced.
Rodriguez agreed to the suspension of the judgment on the condition
that Fe Robellados parents, the now respondents, Federico & Felisa
Tolentino, to bind themselves jointly and severally with the Robellados,
to pay the entire obligation subject of the suit. Felisa Tolentino, being
present, immediately agreed to this proposal.
-A compromise agreement was then entered to by the parties. The
Rebellados subsequently failed to comply with the terms of the
compromise agreement, thus prompting petitioner Rodriguez to
request the City Court for a writ of execution on the properties of the
Robellados and also of the Tolentinos. The request was granted by the
City Court. The Tolentinos brought an action for certiorari with the
Court of First Instance of Manila. The CFI rendered judgment
excluding the Tolentinos from the effects of the writ of execution. Thus
this appeal.
ISSUE
WON the CFI erred in excluding the Tolentinos from the effects of the
writ of execution.
HELD
YES
-The contention of the CFI that the dispositive portion of the judgment
of the City Court does not explicitly enjoin the Tolentinos to pay jointly
and severally with the Rebellados the amount due to the plaintiff, and
that the City Court never acquired jurisdiction over Tolentinos and
therefore cannot be bound by the judgment rendered by said court, is
erroneous.
-The dispositive portion of the judgment of the City Court approving the
compromise and enjoining strict compliance thereto by the parties is
adequate for the purpose of execution. Judgment on a compromise
need not specifically name a person to be subject of execution thereof
in obvious avoidance of repetition.
-On lack of jurisdiction of the court over the Tolentinos: the
Tolentinos freely and voluntarily entered into the compromise
agreement which became the basis of judgment of the City Court.
Under the circumstances, the Tolentinos are estopped the very
authority they invoked. And even assuming that estoppel lies, we
cannot set aside the principle of equity that jurisdiction over a
person not originally a party to a case may be acquired, upon
proper conditions, thru the voluntary appearance of the person
before the court. By coming forward with the original litigants in
moving for a judgment on compromise and by assuming such interest
in the final adjudication of the case together with the Robellados, the

Tolentinos effectively submitted themselves to the jurisdiction of the
City Court.
-Jurisdiction over the plaintiff can be acquired by the court upon
filing of the complaint. On the other hand, jurisdiction over the
defendants can be acquired by the court upon service of valid
summons and upon voluntary appearance/submission of a person in
court.
ACQUIRED JURISDICTION OVER THE RES
EL BANCO ESPAOL-FILINO v. PALANCA
37 Phil. 921
STREET; March 26, 1918
FACTS
- A mortgage was executed by Palanca, as security for a debt owing to
him to the bank. After the execution of this instrument, Palanca
returned to China where he died.
- As Palanca was a nonresident, it was necessary for the bank to give
notice to him by publication pursuant to section 399 of the Code of Civil
Procedure. An order for publication was accordingly obtained from the
court, and publication was made in due form in a newspaper of the city
of Manila.
- The order of the court was entered directing that publication should
be made in a newspaper, the court directed that the clerk of the court
should deposit in the post office in a stamped envelope a copy of the
summons and complaint directed to Palanca at his last place of
residence.
- The cause proceeded in the CFI and Palanca not having appeared,
judgment was taken against him by default. It was ordered that
Palanca should deliver said amount to the clerk of the court to be
applied to the satisfaction of the judgment, and it was declared that in
case of failure to satisfy the judgment, the mortgage property located in
the city of Manila should be exposed to public sale.
- Payment was never made and the court ordered the sale of the
property. The property was brought in by the bank.
- About seven years after the confirmation of this sale, a motion was
made by Vicente Palanca, as administrator of the estate of the original
defendant, wherein the applicant requested the court to set aside the
order.
ISSUE
1. WON the order of default and the judgment rendered thereon were
void because the court had never acquired jurisdiction over the
defendant or over the subject of the action.
2. WON the supposed irregularity in the proceedings was of such
gravity as to amount to a denial of due process of law.
RULING
1. NO.
- The action to foreclose a mortgage is said to be a proceeding quasi
in rem, by which is expressed the idea that while it is not strictly
speaking an action in rem yet it partakes of that nature and is
substantially such. The expression, "action in rem' is, in its narrow
application, used only with reference to certain proceedings in courts of
admiralty wherein the property alone is treated as responsible for the
claim or obligation upon which the proceedings are based. The action
quasi in rem differs from the true action in rem in the circumstance that
in the former an individual is named as defendant, and the purpose of
the proceeding is to subject his interest therein to the obligation or lien
burdening the property. All proceedings having for their sole object the
sale or other disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in general way
thus designated. The judgment entered in these proceedings is
conclusive only between the parties.
- Several principles: (1) That the jurisdiction of the court is derived from
the power which it possesses over the property; (II) that jurisdiction
over the person is not acquired and is nonessential; (III) that the relief
granted by the court must be limited to such as can be enforced
against the property itself.
- In a foreclosure proceeding against a nonresident owner it is
necessary for the court, as in all cases of foreclosure, to ascertain the
amount due, as prescribed in section 256 of the Code of Civil
Procedure, and to make an order requiring the defendant to pay the
6
money into court. This step is a necessary precursor of the order of
sale. It is clearly intended merely as compliance with the requirement
that the amount due shall be ascertained and that the defendant shall
be required to pay it. As further evidence of this it may be observed
that according to the Code of Civil Procedure a personal judgment
against the debtor for the deficiency is not to be rendered until after the
property has been sold and the proceeds applied to the mortgage debt
(sec. 260)
- Whatever may be the effect in other respects of the failure of the clerk
of the CFI to mail the proper papers to the defendant in China, such
irregularity could in no wise impair or defeat the jurisdiction of the
court, for in our opinion that jurisdiction rests upon a basis much more
secure than would be supplied by any form of notice that could be
given to a resident of a foreign country.
2. NO.
- In a foreclosure case, some notification of the proceedings to the
nonresident owner, prescribing the time within which appearance must
be made, is everywhere recognized as essential. To answer this
necessity the statutes generally provide for publication, and usually in
addition thereto, for the mailing of notice to the defendant, if his
residence is known. It is merely a means provided by law whereby the
owner may be admonished by his property is the subject of judicial
proceedings and that it is incumbent upon him to take such steps as he
sees fit to protect it.
- This mode of notification does not involve any absolute assurance
that the absent owner shall thereby receive actual notice. The idea
upon which the law proceeds in recognizing the efficacy of a means of
notification which may fall short of actual notice is apparently this:
Property is always assumed to be in the possession of its owner, in
person or by agent; and he may be safely held, under certain
conditions, to be affected with knowledge that proceedings have been
instituted for its condemnation and sale.
- Failure of the clerk to mail the notice, if in fact he did so fail in his
duty, is not such as irregularity as amounts to a denial of due process
of law; and hence in our opinion that irregularity, if proved, would not
avoid the judgment in this case. Notice was given by publication in a
newspaper and this is the only form of notice which the law
unconditionally requires.
Separate Opinion
MALCOLM; dissent
- The fundamental idea of due process of law is that no man shall be
condemned in his person or property without notice and an opportunity
of being heard in his defense.
- "A judgment which is void upon its face, and which requires only in
inspection of the judgment roll to demonstrate it want of vitality is a
dead limb upon the judicial tree, which should be lopped off, if the
power so to do exists. It can bear no fruit to the plaintiff, but is a
constant menace to the defendant."
DE MIDGELY VS FERANDOS
64 SCRA 23
AQUINO, May 13, 1975
NATURE
Original Actions. Certiorari and contempt.
FACTS
- Quemada, allegedly the illegitimate son of Alvaro Pastor, Sr., was
appointed as special administrator of the latters estate by the CFI of
Cebu. As such, he filed a complaint against his half siblings, the
spouses Alvaro Pastor, Jr. and Maria Elena Achaval, and Sofia
Midgely, who were all at that time citizens of Spain and residing in that
country. The suit also named Atlas Mining as co-respondent. The suit
was to settle the question of ownership over certain properties and
rights in some mining claims as Quemada believed that those
properties belong to the estate of Alvaro Pastor, Sr.
- Quemada, on his own, caused extraterritorial service of summons to
be made through the Department of Foreign Affairs and the Philippine
Embassy in Madrid, Spain, which effected the service of the summons
through registered mail upon De Midgely and Pastor, Jr. at their
respective addresses in Alicante and Barcelona.
- Both De Midgely and Pastor entered a special appearance and filed a

motion to dismiss on the ground of lack of jurisdiction as they are non-
residents. They further alleged that earnest efforts toward a
compromise have not been made as required in the Civil Code in suits
between members of the same family, The motion was denied by
Judge Ferandos and he ruled that the respondents were properly
summoned.
- The subsequent motion for reconsideration was denied by Ferandos
indicating in the order that the action of Quemada was for the recovery
of real property and real rights. The respondents were instructed to file
their answer.
- De Midgely filed this action with the Supreme Court.
ISSUE/S
WON Judge Ferandos gravely abused his discretion in denying De
Midgelys motion to dismissed based on the lack of jurisdiction over her
person.
HELD
NO. The fact that she alleged as a ground for dismissal the lack of
earnest effort to compromise is deemed as abandonment of her
special appearance and as voluntary submission to the courts
jurisdiction.
Ratio. When the appearance is by motion for the purpose of objecting
to the jurisdiction of the court over the person, it must be for the sole
and separate purpose of objecting to the jurisdiction of the court. If the
motion is for any other purpose than to object to the jurisdiction of the
court over his person, he thereby submits himself to the jurisdiction of
the court,
Reasoning. Even if the lower court did not acquire jurisdiction over De
Midgely, her motion to dismiss was properly denied because
Quemadas action against her maybe regarded as a quasi in rem
where jurisdiction over the person of a non-resident defendant is not
necessary and where the service of summons is required only for the
purpose of complying with the requirement of due process. Quasi in
rem is an action between parties where the direct object is to reach
and dispose of property owed by the parties or of some interest
therein.
- The SC cited the Perkins case as a precedent. In that case, it ruled
that in a quasi in rem action jurisdiction over a non resident defendant
is not essential. The service of summons by publication is required
merely to satisfy the constitutional requirement of due process. The
judgment of the court would settle the title to the properties and to that
extent it partakes of the nature of judgment in rem. The judgment is
confined to the res (properties) and no personal judgment could be
rendered against the non resident. It should be noted that the civil case
filed by Quemada is related to a testamentary proceeding as it was
filed for the purpose of recovering the properties which in the
understanding of Quemada, belonged to the estate of the Late Pastor,
Sr. and which were held by De Midgely and her brother.
Disposition. Petition is dismissed
ACQUIRED JURISDICTION OVER THE ISSUES
SPS GONZAGA V CA (SPS ABAGAT)
SCRA
CALLEJO SR; October 18, 2004
NATURE
Petition for the Review of the Decision and resolution of CA
FACTS
- October 22, 1991 > Sps Abagat filed complaint against Sps Gonzaga
for recovery of possession of land in Baclaran, Paraaque issued in
their names, as owners. Sps Abagat alleged in their complaint that
they were the owners of a small hut (barong-barong) constructed on
the lot, which was then owned by the government
- February 22, 1961 > Abagat filed an application for sales patent over
the land
- January 26, 1973 > hut was gutted by fire and after that, Sps
Gregorio built a two-storey house on the property without their consent.
Sps Abagat filed a complaint for ejectment against Sps Gregorio but
complaint was dismissed for lack of jurisdiction because in their
7
answer to the complaint, the Sps Gregorio claimed ownership over the
house
- Sps Gregorio sold house to Sps Gonzaga for P100,000 under a deed
of conditional sale, in which Sps Gregorio undertook to secure an
award of the land by the government in favor of Sps Gonzaga. In an
MOA, Sps Gregorio indicated that if they would not secure such, they
would return P90,000 as payment for the house
- January 2, 1986 > Bureau of Lands granted the application of Abagat
for a sales patent over the property. TCT No. 128186 was issued by
the Register of Deeds in his name. Sps Abagat demanded that Sps
Gonzaga vacate the property, but latter refused
- September 29, 1992 > Sps Abagat filed a motion for leave to file a
third-party complaint against the Sps Gregorio. TC no longer resolved
the motion for leave to file a third-party complaint
- Trial Court > October 10, 1994, in favor of Sps Abagat
- CA > December 19, 1997, affirmed the decision of the trial court on.
On the plea of Sps Gonzaga that the TC should have ordered the Sps
Gregorio to refund to them the P90,000.00 the latter had received as
payment for the house, CA ruled that a separate complaint should
have been filed against the Sps Gregorio, instead of appealing the
decision of the TC.
ISSUE
WON RTC and CA erred in not ordering Sps Gregorio to refund to
them the P90,000 they had paid for the house and which the latter
promised to do so under their Memorandum of Agreement
HELD
NO
Ratio The rule is that a party is entitled only to such relief consistent
with and limited to that sought by the pleadings or incidental thereto. A
trial court would be acting beyond its jurisdiction if it grants relief to a
party beyond the scope of the pleadings. Moreover, the right of a party
to recover depends, not on the prayer, but on the scope of the
pleadings, the issues made and the law.
Reasoning
- Sps Gonzaga failed to file any pleading against Sps Gregorio for the
enforcement of the deed of conditional sale, the deed of final and
absolute sale, and the Memorandum of Agreement executed by them.
The petitioners filed their motion for leave to file a third-party complaint
against the intervenors, Sps Gregorio, and appended thereto their
third-party complaint for indemnity for any judgment that may be
rendered by the court against them and in favor of the respondents.
However, Sps Gonzaga did not include in their prayer that judgment be
rendered against the third-party defendants to refund the P90,000.00
paid by them to the Sps Gregorio. Sps Gonzaga failed to assail the trial
courts order of denial in the appellate court. Even after the trial court
had granted leave to the Sps Gregorio to intervene as parties-
defendants and the latter filed their Answer-in-Intervention, Sps
Gonzaga failed to file a cross-claim against the intervenors for specific
performance for the refund of the P90,000.00 they had received from
the petitioners under their deed of conditional sale, the deed of final
and absolute sale and the memorandum of agreement and pay filing
and docket fees therefor.
Disposition Petition is DENIED DUE COURSE. CA decision and
resolution are AFFIRMED.
SPECIFIC JURISDICTION OF COURTS
A. SUPREME COURT
Question of law
URBANO V CHAVEZ
183 SCRA 347
GANCAYCO; March 19, 1990
NATURE
Petition to review decision of RTC Pasig
FACTS
- there are 2 cases involved here: a criminal action for violation of the
Anti-Graft and Corrupt Practices Act (RA 3019) and an civil action for
damages arising from a felony (defamation through a published

interview whereby Chavez imputed that Nemesio Co was a close
associate (crony?) of Marcos), both against Solicitor General Francisco
Chavez (among others)
- in the criminal case (filed in the Office of the Ombudsman), the Office
of the SolGen (OSG) entered its appearance for Chavez and the other
accused (DILG Sec and 2 sectoral reps) as far as the Prelim
Investigation is concerned. Urbano et. al. filed a special civil action for
prohibition in the SC to enjoin the SolGen and his associates from
acting as counsel for Chavez in the PI. The contention is in the event
that an information is filed against the accused, the appearance of the
OSG in the PI would be in conflict with its role as the appellate counsel
for the People of the Phils (counsel at the first instance is the
provincial/ state prosecutor).
- in the action for damages, the OSG likewise acted as counsel for
Chavez, who was then the SolGen and counsel for PCGG, the agency
responsible for the investigation of graft and corrupt practices of the
Marcoses. The OSG filed for extension of time to file required pleading,
and afterwards filed a motion to dismiss on behalf of Chavez.
Petitioner Co objected to appearance of OSG as counsel, contending
that he is suing Chavez in his personal capacity.
- OSG manifested that it is authorized to represent Chavez or any
public official even if the said official is sued in his personal capacity
pursuant to the unconditional provisions of PD478 which defines the
functions of OSG, as well as EO300 which made OSG an independent
agency under the Office of the President
- RTC denied the petition, thus allowing the appearance of OSG as
counsel. It also denied the MFR. Thus, this petition for review
ISSUE/S
1. WON the OSG has authority to appear for (a) a certain govt official
in the PI of their case before the Ombudsman and (b) the SolGen in a
suit for damages arising from a crime
HELD
1. NO
Ratio The OSG is not authorized to represent a public official at ANY
stage of a criminal case or in a civil suit for damages arising from a
felony (applies to all public officials and employees in the executive,
legislative and judicial branches).
Reasoning PD47811 defines the duties and functions of OSG:
SEC1. The OSG shall represent the Govt of the Phils, its agencies
and instrumentalities and its officials and agents in any litigation,
proceeding, investigation or matter requiring the services of a lawyer. x
xx
- the OSG submits that since there is no qualification, it can represent
any public official without any qualification or distinction in any
litigation.
- Same argument seems to apply to a similar provision in the Rev
Admin Code (Sec. 1661: As principal law officer of the Govt, the
SolGen shall have the authority to act for and represent the Govt , its
officers and agents in any official investigation, proceeding or matter
requiring the services of a lawyer). In Anti-Graft League v Ortega, SC
interpreted Sec. 1661 to embrace PI. However, should an info be filed
after, then OSG can no longer act as counsel. The rationale given was
that public officials are subjected to numerous suits, and threats of
criminal prosecution could stay the hand of the public official. OSG
provides assurance against timidity in that they will be duly
represented by counsel in the PI.
- However, the court declared this ruling abandoned in this case. The
anomaly in this ruling becomes obvious when, in the event of a
judgment of conviction, the case is brought on appeal to the appellate
courts. The OSG, as the appellate counsel of the People, is expected
to take a stand against the accused. More often than not, it does.
Accordingly, there is a clear conflict of interest here, and one which
smacks of ethical considerations, where the OSG, as counsel for the
public official, defends the latter in the PI, and where the same office,
as appellate counsel of the People, represents the prosecution when
the case is brought on appeal. This anomalous situation could not
have been contemplated and allowed by the law. It is a situation which
cannot be countenanced by the Court.
- another reason why the OSG cant represent an accused in a crim
case: the State can speak and act only by law, whatever it says or
does is lawful, and that which is unlawful is not the word or deed of the
state. As such, a public official who is sued criminally is actually sued in
his personal capacity inasmuch as his principal (the State) can never
the author of a wrongful act. The same applies to a suit for damages
8
arising from a felony, where the public official is held accountable for
his act; the state is not liable.
** Re: Question of Law (copied verbatim. This is all that is mentioned)
-both issues raise pure questions of law inasmuch as there are no
evidentiary matters to be evaluated by this Court. Moreover, if the only
issue is whether or not the conclusions of the trial court are in
consonance with law and jurisprudence, then the issue is a pure
question of law (Torres v Yu). Thus, the Court resolved to consolidate
both Petitions and to treat them as Petitions for certiorari on pure
questions of law in accordance with the provisions of the Rules of
Court.
Disposition Petition is granted.
ORTIGAS V. CA
106 SCRA 121
ABAD SANTOS, 1981
NATURE
Petition for review of the decision of the CA
FACTS
-In 1974, Ortigas and Co. filed a complaint for unlawful detainer
against Maximo Belmonte in the Municipal Court of San Juan Rizal,
praying that judgment be rendered 1.) ordering the defendant his
successors-in-interest to vacate and surrender the lot to plaintiff; 2.)
declaring the residential building constructed on the lot by defendant
as forfeited in favor of plaintiff; 3.0 condeming defendant to pay
monthly rent of 5,000 from July 18, 1971 up to the time he vacates,
together with attorney's fees and exemplary damages. The Ruled in
favor of plaintiff and granted the relieves prayed for.
-Belmonte filed a motion to dismiss in the Cfi based on lack of
jurisdiction on the part of the MC. CFI denied motion and affirmed in
totot the MC judgment. The said court also issued a writ of execution.
Belmonte filed a petition for certiorari and prohibition with preliminsry
injunction in the CA, assiling the 1.) the jurisdiction of the CFI andf MC;
2.) the propriety of the judgment on the pleadings rendered by the MC;
and 3.) the propriety of the issuance of the writ of execution issued by
the CFI. The Ca ruled in favor of Belmonte, holding that the MC has no
jurisdiction. Hence the present petition.
ISSUES
1. WON the CA has appellate jurisdiction over this case
2. WON the MC had jurisdiction to resolve the issues in the original
complaint
HELD
1. NO.
Reasoning. After analyzing the issues raised by Belmonte before the
CA, namely 1.) the jurisdiction of the CFI andf MC; 2.) the propriety of
the judgment on the pleadings rendered by the MC; and 3.) the
propriety of the issuance of the writ of execution issued by the CFI, the
SC held that the same are purely legal in nature. Since appellate
jurisdiction over cases involving purely legal questions is exclusively
vested in the SC by Sec. 17 of the Judiciary Act (RA 296), it is
apparent that the decision under review rendered by the CA without
jurisdiction should be set aside.
2. NO.
Reasoning. Where a subdivision owner seeks not just to eject the lot
buyer who defaulted in his payments but also prays that the residential
building constructed by the buyer be forfeited in plaintiff's favor,
jurisdiction over the case belongs to the CFI not the MC in an
ejectment case. The issues raised before the inferior court did not only
involved the possession of the lot but also rights and obligations of the
parties to the residential building which under Art. 45 of the CC is real
property. Aslo, plaintiff's claim to the bldg raises question of ownership.
-A CFI cannot assume jurisdiction in a case appealed to it under SECII
Rule 40 where one of the parties objected to its jurisdiction. Since the
original case was decided by the MC without jurisdiction over the
subject matter thereof, the CFI should have dismissed the cases when
it was brought before it on appeal.
Disposition. Without prejudice to the right of Ortigas to file the proper
action in the proper court, the decisions of the CA, CFI and MC of San
Juan Rizal are set aside.
 9

JOSEFA V ZHANDONG FACTS

-September 15, 1980: acting on the evidence presented by the
GR 150903 Philippine Constabulary commander at Hinigaran, Negros Occidental,
SANDOVAL-GUTIERREZ; December 8, 2003 the CFI of that province issued a search warrant for the search and
seizure of the deceased bodies of seven persons believed in the
NATURE possession of the accused MAYOR Pablo Sola in his hacienda at Sta.
Petition for review on certiorari Isabel, Kabankalan, Negros Occidental.
-September 16, 1980: armed with warrant, elements of the 332nd
FACTS PC/INP Company proceeded to the place of Sola. Diggings made in a
Tan represented himself to be the owner of hardboards and sold them canefield yielded two common graves containing the bodies of
to Josefa. Josefa paid all his obligations to Tan. The hardboards Fernando Fernandez, Mateo Olimpos, Alfredo Perez, Custodio
apparently belonged to Zhandong. When Tan failed to pay Zhandong, Juanica, Arsolo Juanica, Rollie Callet and Bienvenido Emperado.
it sent a demand letter for the payment of the hardboards to both Tan -September 23 and October 1, 1980: the PC provincial commander of
and Josefa. Negros Occidental filed seven (7) separate complaints for murder
Trial Court ruled in favor of Zhandong against the accused Pablo Sola, Francisco Garcia, Ricardo Garcia,
The Court of Appeals affirmed the trial courts Decision. Jose Bethoven Cabral, Florendo Baliscao and fourteen (14) other
Petitioner filed a motion for reconsideration but was denied. persons of unknown names. After due preliminary examination of the
Petitioner ascribes to the CA the error in affirming the ruling of the trial complainant's witnesses and his other evidence, the municipal court
court that Josefa is liabe to Zhandong despite THE MOUNTAIN OF found probable cause against the accused. It thus issued an order for
EVIDENCE showing that they had no business transaction with each their arrest.
other and that it was Tan who was solely responsible to Zhandong for -However, without giving the prosecution the opportunity to prove that
the payment of the goods. the evidence of guilt of the accused is strong, the court granted them
the right to post bail for their temporary release. The accused Pablo
ISSUE Sola, Francisco Garcia, and Jose Bethoven Cabral availed themselves
1. WON Josefa is liable to Zhandong for the payment of the of this right and have since been released from detention.
merchandise -In a parallel development, the witnesses in the murder cases informed
the prosecution of their fears that if the trial is held at the Court of First
HELD Instance branch in Himamaylan which is but 10 kilometers from
1. NO Kabankalan, their safety could be jeopardized. At least two of the
Reasoning. Evidence indicate that Tan bought the hardboards from accused are officials with power and influence in Kabankalan and they
Zhandong and, in turn, sold them to petitioner. However, both the trial have been released on bail. In addition, most of the accused remained
court and the Court of Appeals ignored this glaring reality and instead at large. Indeed, there have been reports made to police authorities of
held that petitioner purchased the boards directly from respondent. threats made on the families of the witnesses." The facts alleged argue
General Rule : Only questions of law may be entertained by the strongly for the remedies sought, namely a change of venue and the
Supreme Court in a petition for review on certiorari cancellation of the bail bonds.
Exceptions: -March 15, 1981: this Court issued the following resolution: "The Court
(1) the conclusion is grounded on speculations, surmises or Resolved to: (A) [Note] the comment of the Solicitor General on the
conjectures; urgent petition for change of venue and cancellation of bail bonds,
(2) the inference is manifestly mistaken, absurd or impossible; adopting the plea of the petition, namely, (1) the setting aside, by
(3) there is grave abuse of discretion; certiorari, of the order of the Municipal Court of Kabankalan, presided
(4) the judgment is based on a misapprehension of facts; over by Judge Rafael Gasataya, granting bail to the accused (2) the
(5) the findings of fact are conflicting; petition for a change of venue or place of trial of the same criminal
(6) there is no citation of specific evidence on which the factual findings cases to avoid a miscarriage of justice;
are based; (B) [Transfer] the venue of the aforesaid criminal cases to Branch V of
(7) the finding of absence of facts is contradicted by the presence of the Court of First Instance of Negros Occidental at Bacolod City,
evidence on record; presided by Executive Judge Alfonso Baguio, considering that District
(8) the findings of the Court of Appeals are contrary to those of the trial Judge Ostervaldo Emilia of the Court of First Instance, Negros
court; Occidental, Branch VI at Himamaylan has an approved leave of
(9) the Court of Appeals manifestly overlooked certain relevant and absence covering the period from January 12 to March 12, 1981 due to
undisputed facts that, if properly considered, would justify a different a mild attack of cerebral thrombosis and that the said Branch V is the
conclusion; nearest court station to Himamaylan; and
(10) the findings of the Court of Appeals are beyond the issues of the (C) [Await] the comment of respondents on the petition to cancel bail,
case; without prejudice to the public officials concerned taking the necessary
(11) such findings are contrary to the admissions of both parties. measures to assure the safety of the witnesses of the prosecution."
THUS, THE ISSUE OF A CHANGE OF VENUE HAS BECOME MOOT
Disposition Petition is granted. AND ACADEMIC.
-The comments respectively submitted by respondent Florendo
Baliscao on March 5, 1981, respondent Francisco Garcia on March 11,
1981 and respondent Pablo Sola on March 16, 1981, dealt solely with
Change of venue the question of the cancellation of the bail bonds. Such comments
were considered as answers, with the case thereafter deemed
PEOPLE v. MAYOR PABLO SOLA submitted for decision.
103 SCRA 393 (1981)
ISSUE
FERNANDO, C.J. Whether or not the bail bonds of respondents should be cancelled
NATURE
HELD
Petition for certiorari3
YES.
Ratio. There being a failure to abide by the basic requirement that the
prosecution be heard in a case where the accused is charged with a
3 The one who filed this appeal which partakes of a nature of certiorari are private prosecutors Francisco Cruz and Renecio Espiritu. The
The Solicitor General adopted a two-pronged thrusts in this petition: 1. the setting aside, by certiorari, of the order of the Municipal Court of
assertion of the petitioner private prosecutors is that they are instituting the action `subject to the control and supervision of the Fiscal. (CJ
Kabankalan, presided over by Judge Rafael Gasataya, granting bail to the accused in the criminal cases mentioned above, and 2. the
Fernandos prefatory statement states that the two have no legal standing to raise this petition. Since Sol Gen Mendoza never bothered to
petition for a change of venue or place of trial of the same criminal cases to avoid a miscarriage of justice."
question their legal standing, the Court contented itself with the fact that the Solicitor General has authority to raise this petition in behalf of
the People of the Philippines)

capital offense, prior to bail being granted, must be decided in favor of
petitioner. The bail bonds must be cancelled and the case remanded to
the sala of Executive Judge Alfonso Baguio for such hearing.
Reasoning. Bail was granted to the accused in the Order of the
Municipal Court without hearing the prosecution. That is to disregard
the authoritative doctrine enunciated in People v. San Diego.
-Justice Capistrano: "The question presented before us is, whether the
prosecution was deprived of procedural due process. The answer is in
the affirmative. We are of the considered opinion that whether the
motion for bail of a defendant who is in custody for a capital offense be
resolved in a summary proceeding or in the course of a regular trial,
the prosecution must be given an opportunity to present, within a
reasonable time, all the evidence that it may desire to introduce before
the court should resolve the motion for bail. If, as in the criminal case
involved in the instant special civil action, the prosecution should be
denied such an opportunity, there would be a violation of procedural
due process, and the order of the court granting bail should be
considered void on that ground."
-J. Cardozo: "THE LAW, AS WE HAVE SEEN, IS SEDULOUS IN
MAINTAINING FOR A DEFENDANT CHARGED WITH CRIME
WHATEVER FORMS OF PROCEDURE ARE OF THE ESSENCE OF
AN OPPORTUNITY TO DEFEND. PRIVILEGES SO FUNDAMENTAL
AS TO BE INHERENT IN EVERY CONCEPT OF A FAIR TRIAL THAT
COULD BE ACCEPTABLE TO THE THOUGHT OF REASONABLE
MEN WILL BE KEPT INVIOLATE AND INVIOLABLE, HOWEVER
CRUSHING MAY BE THE PRESSURE OF INCRIMINATING PROOF.
BUT JUSTICE, THOUGH DUE TO THE ACCUSED, IS DUE TO THE
ACCUSER ALSO. The concept of fairness must not be strained till it is
narrowed to a filament. We are to keep the balance true."
-the very essence of due process as the embodiment of justice
requires that the prosecution be given the opportunity to prove that
there is strong evidence of guilt. It does not suffice, as asserted herein,
that the questions asked by the municipal judge before bail was
granted could be characterized as searching. The fact did not cure an
infirmity of a jurisdictional character.
ON CHANGE OF VENUE: The constitution is quite explicit. The
Supreme Court could order "a change of venue or place of trial to
avoid a miscarriage of justice."
-People v. Gutierrez, J.B.L. Reyes: "to compel the prosecution to
proceed to trial in a locality where its witnesses will not be at liberty to
reveal what they know is to make a mockery of the judicial process,
and to betray the very purpose for which courts have been
established.
-The exercise by this Honorable Court of its above constitutional power
in this case will be appropriate. The witnesses in the case are fearful
for their lives. They are afraid they would be killed on their way to or
from Himamaylan during any of the days of trial. Because of this fear,
they may either refuse to testify or testify falsely to save their lives.
-there may be cases where the fear, objectively viewed, may, to some
individuals, be less than terrifying, but the question must always be the
effect it has on the witnesses who will testify.
-The primordial aim and intent of the Constitution must ever be kept in
mind. In case of doubt, it should be resolved in favor of a change of
venue,
Dispositive. WHEREFORE, the assailed order of judge Rafael
Gasataya granting bail to private respondents is nullified, set aside,
and declared to be without force and effect. Executive Judge Alfonso
Baguio of the Court of First Instance of Negros Occidental, to whose
sala the cases had been transferred by virtue of the resolution of this
Court of March 5, 1981, is directed forthwith to hear the petitions for
bail of private respondents, with the prosecution being duly heard on
the question of whether or not the evidence of guilt against the
respondents is strong. This decision is immediately executory. No
costs.
B. COURT OF APPEALS
ST MARTIN FUNERAL HOME VS NLRC
G.R. No. 130866
REGALADO; Sept 16, 1998
10
NATURE
Petition for certiorari which stemmed from a complaint for illegal
dismissal filed by herein private respondent before the NLRC
FACTS
- . Private respondent alleges that he started working as Operations
Manager of petitioner St. Martin Funeral Home on February 6, 1995.
However, there was no contract of employment executed between him
and petitioner nor was his name included in the semi-monthly payroll.
On January 22, 1996, he was dismissed from his employment for
allegedly misappropriating P38,000.00 which was intended for
payment by petitioner of its value added tax (VAT) to the Bureau of
Internal Revenue (BIR). Petitioner on the other hand claims that private
respondent was not its employee but only the uncle of Amelita
Malabed, the owner of petitioner St. Martin's Funeral Home. Sometime
in 1995, private respondent, who was formerly working as an overseas
contract worker, asked for financial assistance from the mother of
Amelita. Since then, as an indication of gratitude, private respondent
voluntarily helped the mother of Amelita in overseeing the business.
- In January 1996, the mother of Amelita passed away, so the latter
then took over the management of the business. She then discovered
that there were arrears in the payment of taxes and other government
fees, although the records purported to show that the same were
already paid. Amelita then made some changes in the business
operation and private respondent and his wife were no longer allowed
to participate in the management thereof. As a consequence, the latter
filed a complaint charging that petitioner had illegally terminated his
employment.
- Private respondent appealed to the NLRC. On June 13, 1997, the
NLRC rendered a resolution setting aside the questioned decision and
remanding the case to the labor arbiter for immediate appropriate
proceedings. Petitioner then filed a motion for reconsideration which
was denied by the NLRC in its resolution dated August 18, 1997 for
lack of merit, hence the present petition alleging that the NLRC
committed grave abuse of discretion.
ISSUE
WON the SC should entertain the present petition
HELD
NO (should be remanded to CA)
Ratio. All references in the amended Sec 9 of BP No. 129 to supposed
appeals from the NLRC to the SC are interpreted and hereby declared
to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should henceforth be initially filed in
the CA in strict observance of the doctrine on the hierarchy of courts as
the appropriate forum for the relief desired.
Reasoning. It will be noted that paragraph (3), Section 9 of B.P. No.
129 now grants exclusive appellate jurisdiction to the Court of Appeals
over all final adjudications of the Regional Trial Courts and the quasi-
judicial agencies generally or specifically referred to therein except,
among others, "those falling within the appellate jurisdiction of the
Supreme Court in accordance with . . . the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, . . . ."
This would necessarily contradict what has been ruled and said all
along that appeal does not lie from decisions of the NLRC. Yet, under
such excepting clause literally construed, the appeal from the NLRC
cannot be brought to the Court of Appeals, but to this Court by
necessary implication.
The same exceptive clause further confuses the situation by declaring
that the Court of Appeals has no appellate jurisdiction over decisions
falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the provisions of B.P. No. 129, and
those specified cases in Section 17 of the Judiciary Act of 1948. These
cases can, of course, be properly excluded from the exclusive
appellate jurisdiction of the Court of Appeals. However, because of the
aforementioned amendment by transposition, also supposedly
excluded are cases falling within the appellate jurisdiction of the
Supreme Court in accordance with the Labor Code. This is illogical and
impracticable, and Congress could not have intended that procedural
gaffe, since there are no cases in the Labor Code the decisions,
resolutions, orders or awards wherein are within the appellate
jurisdiction of the Supreme Court or of any other court for that matter.
-Incidentally, it was noted by the sponsor therein that some quarters
were of the opinion that recourse from the NLRC to the Court of

Appeals as an initial step in the process of judicial review would be
circuitous and would prolong the proceedings. On the contrary, as he
commendably and realistically emphasized, that procedure would be
advantageous to the aggrieved party on this reasoning: i.e., , to allow
these cases to be appealed to the Court of Appeals would give litigants
the advantage to have all the evidence on record be reexamined and
reweighed after which the findings of facts and conclusions of said
bodies are correspondingly affirmed, modified or reversed.
-Under such guarantee, the Supreme Court can then apply strictly the
axiom that factual findings of the Court of Appeals are final and may
not be reversed on appeal to the Supreme Court. A perusal of the
records will reveal appeals which are factual in nature and may,
therefore, be dismissed outright by minute resolutions.
-While the SC does not wish to intrude into the Congressional sphere
on the matter of the wisdom of a law, on this score it adds the further
observations that there is a growing number of labor cases being
elevated to this Court which, not being a trier of fact, has at times been
constrained to remand the case to the NLRC for resolution of unclear
or ambiguous factual findings; that the Court of Appeals is procedurally
equipped for that purpose, aside from the increased number of its
component divisions; and that there is undeniably an imperative need
for expeditious action on labor cases as a major aspect of
constitutional protection to labor.
-This case therefore, reiterate the judicial policy that the Supreme
Court will not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and
calling for the exercise of its primary jurisdiction.
Disposition.The instant petition for certiorari is hereby REMANDED,
and all pertinent records thereof ordered to be FORWARDED, to the
Court of Appeals for appropriate action and disposition consistent with
the views and ruling herein set forth, without pronouncement as to
costs.
C. RTC
CENTRAL BANK OF THE PHILIPPINES and HON.
JOSE B. FERNANDEZ, VS CA, JUDGE TEOFILO
GUADIZ, JR., PRODUCERS BANK OF THE
PHILIPPINES and PRODUCERS PROPERTIES, INC.
208 SCRA 652
DAVIDE; May 8, 1992
NATURE
The common origin of these cases is Producers Bank of the
Philippines and Producers Properties, Inc. vs CB, Jose B. Fernandez.
Jr. and the Monetary Board filed before the Makati RTC.
- the consolidation of the 2 cases was ordered:
FIRST CASE- a petition for review on certiorari of the decision and the
resolution of the CA. The impugned decision upheld the Order of
respondent Judge Guadiz granting the motion for issuance of a writ of
preliminary injunction enjoining CB, Fernandez and the Monetary
Board from implementing Monetary Board Resolutions No. 649 and
No. 751, or from taking the threatened appropriate alternative action
and the Order in the same case denying petitioners' motion to dismiss
and vacate said injunction. The challenged resolution, on the other
hand, denied petitioners' MFR.
SECOND CASE- a petition for review directed principally against the
decision of the CA dismissing the petition therein filed and sustained
the various Orders of the respondent Judge, but directed the plaintiffs
therein to amend the amended complaint by stating in its prayer the
specific amount of damages which Producers Bank of the Philippines
(PBP) claims to have sustained as a result of losses of operation and
the conservator's bank frauds and abuses; the Clerk of Court was also
ordered to determine the amount of filing fees which should be paid by
the plaintiffs within the applicable prescriptive or reglementary period.
FACTS
- Petitioners claim that during the regular examination of the PBP, CB
examiners stumbled upon some highly questionable loans which had
been extended by the PBP management to several entities. Upon
further examination, it was discovered that these loans, totalling
approximately P300 million, were "fictitious" as they were extended,
without collateral, to certain interests related to PBP owners
11
themselves. Said loans were deemed to be anomalous particularly
because the total paid-in capital of PBP at that time was only P
140.544 million. This means that the entire paid-in capital of the bank,
together with some P160 million of depositors' money, was utilized by
PBP management to fund these unsecured loans.
- at the height of the controversy surrounding the discovery of the
anomalous loans, several blind items about a family-owned bank in
Binondo which granted fictitious loans to its stockholders appeared in
major newspapers. These news items triggered a bank-run in PBP
which resulted in continuous over-drawings on the bank's demand
deposit account with the CB. On the basis of the report submitted by
the Supervision and Examination Sector, Department I of the CB, the
Monetary Board (MB placed PBP under conservatorship.
- PBP nonetheless requested that the same be lifted by the CB.
Consequently, the MB directed the principal stockholders of PBP to
increase its capital accounts by such an amount that would be
necessary for the elimination of PBP's negative net worth.
- CB senior deputy Governor Gabriel Singson informed PBP that the
CB would be willing to lift the conservatorship under the following
conditions:
(a) PBP's unsecured overdraft with the Central Bank will be converted
into an emergency loan, to be secured by sufficient collateral
(b) A comptroller for PBP and any number of bank examiners deemed
necessary to oversee PBP's operations shall be designated by the CB,
under terms of reference to be determined by the Governor;
(c) A letter from the Management of PBP authorizing the CB to
automatically return clearing items that would result in an overdraft in
its CB account shall be submitted to the CB.
- the MB approved the consolidation of PBP's other unsecured
obligations to the CB with its overdraft and authorizing the conversion
thereof into an emergency loan. The same resolution authorized the
CB Governor to lift the conservatorship and return PBP's management
to its principal stockholders upon completion of the documentation and
full collateralization of the emergency loan, but directed PBP to pay the
emergency loan in 5 equal annual installments, with interest and
penalty rates at MRR 180 days plus 48% per annum, and liquidated
damages of 5% for delayed payments.
- PBP submitted a rehabilitation plan to the CB. Although said proposal
was explored and discussed, no program acceptable to both the CB
and PPI was arrived at because of disagreements on certain matters
such as interest rates, penalties and liquidated damages. No other
rehabilitation program was submitted by PBP for almost 3 years; as a
result thereof, its overdrafts with the CB continued to accumulate.
Consequently, per Resolution No. 649, the CB Monetary Board
decided to approve in principle what it considered a viable
rehabilitation program for PBP.
- There being no response from both PBP and PPI on the proposed
rehabilitation plan, the MB issued Resolution No. 751 on 7 August
1987 instructing CB management to advise the bank that:
a. The CB conservatorship over PBP may be lifted only after PBP shall
have identified the new group of stockholders who will put in new
capital in PBP and after the Monetary Board shall have considered
such new stockholders as acceptable; and
b. The stockholders of PBP have to decide whether or not to accept
the terms of the rehabilitation plan as provided under Resolution
No. 649 within one week from receipt of notice hereof and if such
terms are not acceptable to them, the Central Bank will take
appropriate alternative action on the matter; . . .
- the PBP, without responding to the communications of the CB, filed a
complaint against the CB, the MB and CB Governor Jose B.
Fernandez, Jr. The complaint, alleged that the conservatorship was
unwarranted, ill-motivated, illegal, utterly unnecessary and unjustified;
that the appointment of the conservator was arbitrary; that herein
petitioners acted in bad faith; that the CB-designated conservators
committed bank frauds and abuses; that the CB is guilty of promissory
estoppel; and that by reason of the conservatorship, it suffered losses.
It prayed for a judicial review of the MB Resolutions and the issuance
of a TRO.
- The case was raffled to Branch 147 of Makati RTC court which was
then presided over by respondent Judge.
- respondent Judge issued a TRO; Subsequently, he issued an Order
enjoining defendant-petitioners or any of their agents from
implementing Monetary Board Resolutions Nos. 649 and 751 or from
taking the threatened "appropriate alternative action" including
exclusion of plaintiff bank from settlement of clearing balances at the
Central Bank clearing house or any other action that will disturb the

status quo or the viability of plaintiff bank during the pendency of this
case conditioned upon the posting of a bond in the amount of
P2,000,000.00.
- PBP filed the Amended Complaint impleading PPI as an additional
plaintiff. No new allegations or causes of action for said plaintiff were
made. Petitioners filed a Motion to Dismiss the Amended Complaint.
- the respondent Judge handed down an Order denying the motion to
dismiss on the following grounds: (a) the amended complaint alleges
ultimate facts showing that plaintiff has a right and that such a right has
been violated by defendant; the questioned MB Resolutions were
issued arbitrarily and with bad faith, "being a part of a scheme to divest
plaintiff's present stockholders of their control of PBP and to award the
same to the PDIC or its unknown transferees"; and the averments of
legality or illegality of the conservatorship are relevant to the cause of
action since the complaint seeks the lifting of the conservatorship; (b)
While it is true that under Section 28-A of the Central Bank Act the
conservator takes over the management of a bank, the Board of
Directors of such bank is not prohibited from filing a suit to lift the
conservatorship and from questioning the validity of both the
conservator's fraudulent acts and abuses and its principal's (MB)
arbitrary action; besides, PPI is now a party-plaintiff in the action; and
(c) plaintiffs have paid the correct filing fees since "the value of the
case cannot be estimated."
FIRST CASE
- Unable to accept the above Order, CB and Fernandez filed with
respondent CA a petition for certiorari with preliminary injunction to
annul the Orders of the respondent Judge, restrain the implementation
of the same and nullify the writ of preliminary injunction. They contend
therein that: 1. The trial court's injunctive order and writ are anomalous
and illegal because they are directed against CB acts and measures
which constitute no invasion of plaintiff's rights; and 2. The complaint
filed was, on its face, dismissible: (a) for failure to state a cause of
action, (b) for being unauthorized by the party in whose name it
purports to have been filed, and (c) for failure of the purported plaintiff
to pay the required filing fees.
- CA dismissed the petition for lack of merit, ruling that the CB's sudden
and untimely announcement of the conservatorship over PBP eroded
the confidence which the banking public had hitherto reposed on the
bank and resulted in the bank-run; it then concluded that when the CB
"peremptorily and illtimely announced" the conservatorship, PBP was
not given an opportunity to be heard since the CB arbitrarily brushed
aside administrative due process notwithstanding PBP's having
sufficiently established its inherent corporate right to autonomously
perform its banking activities without undue governmental interference
that would in effect divest its stockholders of their control over the
operations of the bank." It further held that the challenged resolutions
of the MB are not just advisory in character "because the same sought
to impose upon the respondent bank petitioners' governmental acts
that were specifically designed and executed to devise a scheme that
would irreparably divest from the stockholders of the respondent bank
control of the same."
On the issue of the non-payment of the correct docket fees, the said
court, in ruling that the correct amount was paid, said that "the instant
case is incapable of pecuniary estimation because the value of the
losses incurred by the respondent bank cannot be calibrated nor
pinned down to a specific amount in view of the damage that may be
caused by the appointment of a conservator to its goodwill and
standing in the community."
- petitioners filed with this Court the instant petition for review. It is
alleged therein that the respondent Court committed grave abuse of
discretion in:
(1) Ignoring petitioners' contention that since PBP did not pay the
correct filing fees, the trial court did not acquire jurisdiction over the
case; hence, pursuant to Manchester Development Corp., et al. vs.
Court of Appeals, et al., the complaint should have been dismissed for
lack of jurisdiction on the part of the court;
(2) . . . ruling on the propriety or impropriety of the conservatorship as
a basis for determining the existence of a cause of action since the
amended complaint does not seek the annulment or lifting of the
conservatorship;
(3) . . . not holding that the amended complaint should have been
dismissed because it was filed in the name of PBP without the
authority of its conservator; and
(4) . . . not setting aside the Order of the trial court granting the
issuance of a writ of preliminary injunction which unlawfully restrained
12
the CB from exercising its mandated responsibilities and effectively
compelled it to allow the PBP to continue incurring overdrafts with it.
- private respondents argue that the Manchester rule is not applicable
in the case at bar because what is primarily sought for herein is a writ
of injunction and not an award for damages; it is further alleged that an
order denying a motion to dismiss is neither appealable nor be made
the proper subject of a petition for certiorari absent a clear showing of
lack of jurisdiction or grave abuse of discretion.
SECOND CASE
- Pursuant to the powers and authority conferred upon her by the
Central Bank, Atty. Leonida Tansinsin-Encarnacion, in her capacity as
conservator, instituted reforms aimed at making PBP more viable. With
this purpose in mind, she started reorganizing the bank's personnel
and committees.
- In order to prevent her from continuing with the reorganization, PBP
filed an Omnibus Motion asking the trial court for an order:
(a) reinstating PBP officers to their original positions and restoring the
bank's standing committees to their respective compositions prior to
said reorganization; (b) enjoining the lease of any portion of the bank's
space in Producers Bank Centre building to third parties and the
relocation of departments/offices of PBP as was contemplated; and (c)
to hold, after an opportunity to be heard is given her, said conservator
in contempt of court for disobedience of and resistance to the writ of
injunction. An opposition to the contempt charge was later filed by said
petitioner.
- respondent Judge issued an Order (a) requiring conservator
Tansinsin-Encarnacion to reinstate PBP officers to their original
positions prior to the reorganization of the bank's personnel and
restore PBP's standing committees to their original compositions, and
(b) restraining her from leasing out to third parties any portion of PBP's
space in the Producers Bank Centre building.
- A second Order directed Tansinsin-Encarnacion to publish the
financial statement of PBP
- On several occasions thereafter, conservator Tansinsin-Encarnacion
caused the publication of PBP's financial statement as required by
regulations, without, however, carrying the items enumerated by the
trial court as "suspense accounts." Consequently, contempt charges
were filed against her, of which she was found guilty. Tansinsin-
Encarnacion filed a petition for certiorari against respondent Judge,
Henry L. Co and the law firm of Quisumbing, Torres and Evangelista.
She prays therein for judgment declaring respondent judge to be
without jurisdiction to entertain both the complaint and amended
complaint; declaring null and void all his orders, specially the contempt
orders; and finding respondent Judge and respondent lawyers guilty of
violating their respective oaths of office.
- In her Memorandum submitted to the CA, Tansinsin-Encarnacion
alleged that: (1) respondent Judge has no jurisdiction because the
filing of the case was not authorized by the petitioner or the
conservator in violation of Section 28-A of R.A. No. 265, as amended,
it was filed after the ten (10) day period prescribed by Section 29 of
R.A. No. 265, as amended, and the correct docket fees were not paid;
(2) respondent Judge illegally ordered her to return to PPI the
administration of the bank's three (3) properties, contrary to his own
writ of preliminary injunction and earlier order to make the bank viable,
and to publish the alleged "suspense accounts" contrary to Section 28-
A of R.A. No. 265, as amended, the writ of preliminary injunction and
her constitutional right to silence; (3) respondent Judge erred in
declaring her in contempt of court notwithstanding his lack of
jurisdiction over the case and failure to set any date for the hearing and
reception of evidence, in violation of her right to due process of law;
and (4) respondents Judge and lawyers are administratively liable for
their grossly illegal actuations and for depriving the Government of at
least P13.2 million in filing fees.
- In disposing of the issues raised, respondent Court merely adopted
with approval the ruling of the respondent Judge on the question of
jurisdiction, sustaining the respondent Judge's ruling. As to the filing of
the complaint after the lapse of the 10-day period provided for in
Section 29 of R.A. No. 265, it ruled that the Section does not apply
because the complaint essentially seeks to compel the conservator to
perform his duties and refers to circumstances and incidents which
transpired after said 10-day period.
- On the issue of lack of jurisdiction for non-payment of correct filing
fees, to which an exception was made in the dispositive portion, the
respondent Court found the same to be "partly" meritorious. It agreed
with petitioner that while the other losses and damages sought to be
recovered are incapable of pecuniary estimation, the damages inflicted

on PBP due to losses of operation and the conservator's bank frauds
and abuses were in fact pegged at P108,479,771.00 in paragraph 26
of the amended complaint. This specific amount, however, should have
been stated in the prayer of the complaint. It also held that the
Manchester case "has been legally construed in the subsequent case
of Sun Insurance Office Ltd. and the case of Filipinas Shell Petroleum
Corp. to the effect that applying the doctrine initiated in the case of
Manchester, together with said subsequent thereto (sic), plaintiffs in
the original case should be given a reasonable time to amend their
complaint, more particularly, to state in their prayer in the amended
complaint the specific amount of damages . . ."
- On the orders of contempt and the reasons therefor, respondent
Court merely stated:
. . . Generally, when the court has jurisdiction over the subject matter
and of the person, decisions upon or questions pertinent to the cause
are decisions within its jurisdiction, and however, irregular or erroneous
they may be, they cannot be corrected by certiorari.
- Finally, on the administrative liability of the respondent Judge and the
lawyers, the respondent Court declared the claim to be without merit.
ISSUE
WON the respondent Judge committed grave abuse of discretion
amounting to lack of jurisdiction in not dismissing the Civil Case on the
ground of non-payment of the correct amount of docket fee in violation
of the rule enunciated in Manchester Development Corp. vs. Court of
Appeals, et al.
HELD
Ratio The action must be dismissed for failure of the plaintiffs therein
to pay the correct docket fees, pursuant to Manchester. The said case
was decided by this Court on 7 May 1987, exactly 3 months and 20
days before the filing of the original complaint and 5 months and 18
days before the filing of the Amended Complaint. It was ruled therein
that:
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An 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
amounts sought in the amended pleading.
Reasoning The respondent Judge, in ruling that PBP and PPI had
paid the correct docket fee of P102.00, said that "the value of the case
cannot be estimated" since what is sought is an injunction against the
enforcement of the challenged resolutions of the MB; in short, the
claim for damages is merely incidental. Upon the other hand,
respondent Court, in its Resolution, ruled that the case is "incapable of
pecuniary estimation" because the value of the losses incurred by the
PBP "cannot be calibrated nor pinned down to a specific amount in
view of the damage that may be caused by the appointment of a
conservator to its goodwill and standing in the community."
Both conclusions are unfounded and are the result of a
misapprehension of the allegations and causes of action in both the
complaint and amended complaint.
- While PBP cleverly worded its complaint to make it appear as one
principally for injunction, deliberately omitting the claim for damages as
a specific cause of action, a careful examination thereof bears that the
same is in reality an action for damages arising out of the alleged
"unwarranted, ill-motivated and illegal conservatorship," or a
conservatorship which "was utterly unnecessary and unjustified," and
the "arbitrary" appointment of a conservator. Thus, as stated earlier, it
devoted the bulk of its petition to detailed events, occurrences and
transactions in support thereof and patiently enumerated the losses it
sustained and suffered.
- These are the very damages referred to in the prayer:
to fully repair the damages inflicted on PBP consisting of losses of
operation and the conservators' bank frauds and abuses
but not specified therein. To this Court's mind, this was done to evade
the payment of the corresponding filing fees which, as computed by
petitioner on the basis alone of the specified losses of
P108,479,771.00, would amount to about P 437,000.00. The PBP then
clearly acted with manifest bad faith in resorting to the foregoing clever
strategy to avoid paying the correct filing fees. The pronouncements in
the Manchester case should thus be reiterated:
The Court cannot close this case without making the observation that it
frowns at the practice of counsel who filed the original complaint in this
case of omitting any specification of the amount of damages in the
prayer although the amount of over P78 million is alleged in the body
13
of the complaint. This is clearly intended for no other purpose than to
evade the payment of the correct filing fees if not to mislead the docket
clerk in the assessment of the filing fee. . . .
- The respondent Court itself, confronted by the same issue, but
perhaps unaware of its earlier Resolution, ruled that PBP and PPI are
liable for the filing fees on the claim for damages.
- respondent Court applied the rule laid down in Sun Insurance Office
and Filipinas Shell Petroleum Corp. which were, by then, already
overturned by Manchester. Even granting for the sake of argument
that Sun Insurance and Pilipinas Shell may apply in this case, the
Court categorically stated:
It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a
trial court with jurisdiction over the subject-matter or nature of the
action. Where the filling of the initiatory pleading is not accompanied
by payment of the docket fee, the court may allow the payment of the
fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
- The prescriptive period therein mentioned refers to the period within
which a specific action must be filed. It means that in every case, the
docket fee must be paid before the lapse of the prescriptive period.
- There can be no question that in the instant case, PBP's claims for
damages arise out of an injury to its rights. Pursuant to Article 1146 of
the Civil Code, the action therefor must be initiated within 4 years from
the time the cause of action accrued. Since the damages arose out of
the alleged unwarranted, ill-motivated, illegal, unnecessary and
unjustified conservatorship, the cause of action, if any, first accrued in
1984 and continued until 1987, when the original complaint was filed.
There is no showing that PBP paid the correct filing fee for the claim
within the prescribed period. Hence, nothing can save the case from
being dismissed.
DISPOSITION
PREMISES CONSIDERED, the petitions are GRANTED. The decision
and resolution of the CA are REVERSED and SET ASIDE. Respondent
Judge is ordered to dismiss Civil Case. All proceedings undertaken
and all orders issued by respondent Judge are hereby SET ASIDE for
being null and void.
ASCUE v CA (ANTONIO)
GR No. 84330
Padilla; May 8, 1991
NATURE
Petition for review on certiorari
FACTS
- Private respondents Ramon Antonio, Salvador Salenga and Ulipia
Fernandez (lessees) filed a complaint with the MetroTC alleging that
petitioner Ascue (lessor) refused to collect their rentals. Hence, they
sought consignation of the payments with the MetroTC.
- Ascue filed a motion to dismiss complaint on the ground that it is the
RTC not MTC which has jurisdiction over consignation cases, the
subject matter of litigation being incapable of pecuniary estimation. The
MetroTC denied Ascues motion to dismiss and held that the inferior
court had jurisdiction since the consigned amount was P5,625 (well
below 20K).
- Ascue later appealed to the RTC but the same dismissed the appeal
for being premature. Ascue brought the case to the SC on direct
appeal but the case was referred back to the CA. The CA then
dismissed the petition and ruled that the jurisdiction of a court in
consignation cases depends on the amount consigned, consignation
being merely a form of payment and the opposite of a demand by a
creditor for payment.
ISSUE
WON the CA erred in holding that consignation cases fall within the
jurisdiction of the MetroTC and that the amount consigned determines
said jurisdiction
HELD
No.
Ratio In valid consignation cases, where the thing sought to be
deposited is a sum of money, the amount of debt due is determinable,
hence, the subject matter is capable of pecuniary estimation. This

amount sought to be consigned then determines the jurisdiction of the
court.
Reasoning petitioner is of the belief that it is the RTC, not the MTC,
which has jurisdiction over the case, inasmuch as the subject matter of
litigation (the amount to be consigned) is incapable of pecuniary
estimation. This is wrong. Consignation is the act of depositing the
thing due with the court or judicial authorities whenever the creditor
cannot accept or refuses to accept payment and it generally requires a
prior tender of payment. Two of the requisites of it valid consignation
are (1) that there is a debt due. and (2) the amount is placed it the
disposal of the court. Thus, where no debt is due and owing,
consignation is not proper. In a valid consignation where the thing
sought to be deposited is a sum of money, the amount of the debt due
is determinable. Clearly, the subject matter (i.e., the amount due) in
consignation cases is capable of pecuniary estimation. This amount
sought to be consigned determines the jurisdiction of the court.
- In the case at bar. the amount consigned being P5,625.00, the
respondent metropolitan trial court correctly assumed jurisdiction over
the same in accordance with Section 33(1) of BP Blg. 129.
Disposition Petition DENIED. CA decision AFFIRMED.
NEGRE v CABAHUG SHIPPING
16 SCRA 655
DIZON; April 29, 1966
NATURE
Appeal
FACTS
- On August 14, 1961, Negre (appellant) filed his complaint against
Cabahug Shipping & Co (appellee), a common carrier engaged in the
business of transporting persons and goods for a price within
Philippine waters, to recover the sum of P3,774.90, representing the
value of a cargo of dried fish belonging to him which was loaded on the
latter's vessel, and which was totally destroyed on board thereof,
before it could be transported to its place of destination, due to the
gross negligence of the officers and members of the crew of said
vessel
- As Cabahugs answer admitted liability for the loss of said cargo, but
only up to the amount of P3,733,78, appellant moved for a judgment
on the pleadings. In replying thereto, however, appellee moved to
dismiss the case on the ground that the amount of the claim did not fall
within the jurisdiction of the court. Resolving this motion, the court
dismissed the complaint for lack of jurisdiction, without prejudice to the
right of appellant to file the same with the corresponding municipal
court.
- Appellant maintains in this appeal that his action is one in admiralty
and maritime jurisdiction, which, pursuant to the provisions of Section
44 of the Judiciary Act, as amended, falls within the exclusive original
jurisdiction of the courts of first instance, irrespective of the amount or
the value of the goods involved.
ISSUE/S
WON the case falls within the jurisdiction of CFI (RTC)
HELD
YES
Ratio. It has been held that, to give admiralty jurisdiction over a
contract, the same must relate to the trade and business of the sea
Admiralty jurisdiction, it has also been held, extends to all maritime
torts.
Reasoning. The action was based upon an oral contract for the
transportation of goods by water.
-Moreover, the allegations of the complaint clearly show: first, that the
contract entered into between the parties had already been partially
performed with the loading of the goods subject-matter thereof on
board appellee's vessel and the acceptance thereof by said appellee,
and second, that the maritime contract binding the parties was
breached by the carrier because through his fault and that of his
agents and representatives the cargo became a total loss.
Disposition Reversed.
BAITO V SARMIENTO
14
109 Phil. 148
PADILLA; APR 25, 1960
NATURE
Appeal from CFI Samar
FACTS
-Lucina Baito filed action for support against her husband
Anatalio Sarmiento.
-CFI Samar dismissed her complaint on the ground that it has no
jurisdiction, the amount demanded as support being only P720
ISSUE
WON the CFI has jurisdiction over an action for support if the amount
claimed or demanded as support is only P720, or not more than
P2,000 (now P5,000)
HELD
Ratio. An action for support does not only involve the determination of
the amount to be given as support, but also the relation of the parties,
the right to support created by the relation, the needs of the claimant,
the financial resources of the person from whom support is sought, all
of which are not capable of pecuniary estimation.
Reasoning. An action for support falls within the original jurisdiction of
Courts of First Instance under section 44(a) of Republic Act No. 296,
as amended by Republic Act No. 2613.
Disposition The order appealed from is set aside and the case is
remanded
D. METROPOLITAN, MUNICIPAL, MUNICIPAL
CIRCUIT TRIAL COURTS
Exclusive original jurisdiction in civil and estate
settlement proceedings/over provisional remedies
Exclusive original jurisdiction in forcible entry and
unlawful detainer cases
LIM V CA (PIZARRO)
00 SCRA 00
GANCAYCO; March 18, 1991
NATURE
Petition to review the decision and resolution of the Court of Appeals
FACTS
- Lim Kieh Tong, Inc. owns a building in Manila. One of the rooms in
the building (Room 301) is occupied by Reginaldo Lim, an MTC judge.
- The original occupant of Room 103 was Lim Eng Piao, the father of
Reginaldo. When Lim Eng Piao died, the occupancy was continued by
Reginaldo. Eventually, Reginaldo was able to acquire a house and lot
in Quezon City but he still used the room where he kept his books,
documents, appliances and other important belongings.
- September 1987 LKT, Inc. changed the lock of the main door of the
building which was commonly used by all the occupants of the
building.
- September 30, 1987 Reginaldo was unable to enter the building
because he did not have a key to the new lock. He was unable to get
his law books for a case he was working on so he had to purchase
new ones which cost him P1,235.00.
- October 1, 1987 - He requested for a new key from the OIC of the
buiding but his request was not complied with.
- October 2, 1987 Reginaldo instituted a civil case against Rafael Lim
and Lim Kieh Tong, Inc. before the Metropolitan Trial Court. The
complaint was denominated as an action for damages with injunction
but was subsequently dismissed for lack of jurisdiction.
- October 23, 1987 Another complaint was instituted in the MTC
which had the same allegations. Reginaldo alleges that he has a clear
and unmistakable right to the use of said room, entitling him to the writ
of preliminary mandatory injunction to command petitioner to provide
him the appropriate key to the lock of the main building; and to pay
damages in the amount of P1,253.00, P5,000.00 attorney's fees and
costs of the suit.

- November 2, 1987 - A temporary restraining order was issued by
respondent judge pending trial on the merits, commanding LKT, Inc. to
deliver the appropriate keys to Reginaldo and to allow him to enter the
premises and Room 301 of the building. - November 3, 1987 LKT,
Inc. instituted the instant petition.
- The Executive Judge issued a temporary restraining order, enjoining
the enforcement of the temporary restraining order earlier issued by
respondent judge and from further taking cognizance of said civil case.
With regard to the issue of possession: Force was used by LKT,
Inc. in depriving Reginaldo of physical possession of the room when
the main doors lock was changed without the knowledge and consent
of Reginaldo.
- The issue involved is mere physical possession (possession de facto)
and not juridical possession (possession de jure) nor ownership.
- The purpose of forcible entry is that regardless of the actual condition
of the title to property, the party in peaceable and quiet possession
shall not be turned out by strong hand, violence or terror.
- Considering that respondent judge found the applicability of the Rule
in Summary Procedure, the motion to dismiss was correctly denied, a
motion to dismiss being one of the prohibited pleadings and motions
under Section 15 of the 1983 Rules on Summary Procedure.
With regard to the issue of jurisdiction:
- LKT, Inc. argued that when the amount of damages claimed is not
specifically alleged in the complaint, jurisdiction over the case would
fall under the RTC as the failure to so allege would characterize the
subject matter as one which is incapable of pecuniary estimation.
- In Singson vs. Aragon, the SC held that exemplary damages must be
specified and if not, the municipal trial court could still grant it, if
together with the other money claims, the amount of the total claim
does not exceed P10,000.00 (now P20,000).
ISSUE
WON the action for specific performance in this case falls under the
jurisdiction of the RTC
HELD
NO
Ratio In Vichanco vs. Laurilla, it was held that what confers jurisdiction
on the inferior court in forcible entry and illegal detainer cases is not
the amount of unpaid rentals or damages involved, but rather the
nature of the action because the rents or damages are only incidental
to the main action.
Reasoning
- The suit is one for forcible entry and detainer under Rule 70 of the
Rules of Court. It was through stealth that LKT, Inc. prevented
Reginaldo from using the room.
- Any person deprived of possession of any land or building or part
thereof, may file an action for forcible entry and detainer in the proper
inferior court against the person unlawfully depriving or withholding
possession from him.
- This relief is available to a landlord, vendor and vendee and also to a
tenant or lessee or any other person against whom the possession of
any land or building, or a part of it, is unlawfully withheld, or is
otherwise unlawfully deprived possession within 1 year after such
unlawful deprivation or withholding possession.
Disposition Petition is denied. No costs.
Exclusive original jurisdiction in civil actions
involving title to or possession of real
property
RUSSELL V VESTIL
304 SCRA 738
KAPUNAN; March 17, 1999
NATURE
Petition for Certiorari
FACTS
- Petitioners filed a complaint against respondents, denominated
"DECLARATION OF NULLITY AND PARTITION," with the RTC of
Mandaue City
15
- The complaint alleged that petitioners are co-owners of that parcel of
land in Liloan, Cebu. The land was previously owned by the spouses
Casimero Tautho and Cesaria Tautho.
- Upon the death of said spouses, the property was inherited by their
legal heirs, herein petitioners and private respondents. Since then, the
lot had remained undivided until petitioners discovered a public
document denominated "DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF
PARTITION"
- By virtue of this deed, respondents divided the property among
themselves to the exclusion of petitioners.
- The complaint prayed that the document be declared null and void
and an order be issued to partition the land among all the heirs.
- Respondents filed a Motion to Dismiss the complaint on the ground of
lack of jurisdiction over the nature of the case as the action is one for
re-partition and since the assessed value of the property as stated in
the complaint is P5,000.00, then, the case falls within the jurisdiction of
the MCTC of Liloan, Compostela, Cebu
- Petitioners filed an Opposition to the Motion to Dismiss saying that
the complaint is for the annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF
PREVIOUS ORAL PARTITION," which is clearly one incapable of
pecuniary estimation, thus, cognizable by the RTC
- The respondent judge issued an Order granting the Motion to
Dismiss.
- A Motion for Reconsideration of said order was filed by petitioners
- Respondents did not oppose the motion for reconsideration.
- Respondent judge issued another Order denying the motion for
reconsideration.
- Hence, this petition
ISSUE
WON the RTC has jurisdiction to entertain the civil case.
HELD
YES.
Ratio Singsong vs. Isabela Sawmill: In determining whether an action
is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the
nature of the principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in the municipal courts
or in the courts of first instance would depend on the amount of the
claim. However, where the basic issue is something other than the
right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, this Court
has considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance Examples of actions incapable of
pecuniary estimation are those for specific performance, support, or
foreclosure of mortgage or annulment of judgment; also actions
questioning the validity of a mortgage, annulling a deed of sale or
conveyance and to recover the price paid and for rescission, which is a
counterpart of specific performance.
While actions under Sec. 33(3) of B.P. 129 are also incapable of
pecuniary estimation, the law specifically mandates that they are
cognizable by the MTC, METC, or MCTC where the assessed value of
the real property involved does exceed P20,000.00 in Metro Manila, or
P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or
P50,000.00 as the case may be, it is the Regional Trial Courts which
have jurisdiction under Sec. 19(2).
Reasoning The subject matter of the complaint in this case is
annulment of a document denominated as "DECLARATION OF HEIRS
AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION."
The main purpose of petitioners in filing the complaint is to declare null
and void the document in which private respondents declared
themselves as the only heirs of the late spouses Casimero Tautho and
Cesaria Tautho and divided his property among themselves to the
exclusion of petitioners who also claim to be legal heirs and entitled to
the property. While the complaint also prays for the partition of the
property, this is just incidental to the main action, which is the
declaration of nullity of the document above-described. It is axiomatic
that jurisdiction over the subject matter of a case is conferred by law
and is determined by the allegations in the complaint and the character
of the relief sought, irrespective of whether the plaintiff is entitled to all
or some of the claims asserted therein.

Disposition The petition was GRANTED.
E. SPECIAL RULES
MANUFACTURER'S DISTRIBUTORS, INC., V
YU SIU LIONG
11 SCRA 680
REYES, JBL; April 29 1966
NATURE
Appeal on points of law from an order of the CFI Manila sustaining and
affirming an order of the MTC Manila dismissing the original complaint
for want of jurisdiction.
FACTS
-Manufacturer's Distributors, Inc. had filed action in MTC Manila,
Branch III, seeking to compel Yu Siu Liong to accept delivery of 74,500
pieces of plastifilm bags, balance of 100,000 pieces ordered by said Yu
Sio Liong and supplied by the Manufacturers Distributors; to pay
P3,376.00, the value of the 100,000 pieces of plastifilm bags ordered
by him, plus 12% interest per annum thereon until fully paid; and to pay
the amount of P844.00, for and as stipulated attorney's fees.
Manuufacturers Distributors also prayed for such other reliefs as may
be deemed just and equitable in the premises.
-Yu Sio Liong filed MTD on the ground that, the subject of the litigation
being specific performance, the same lay within the exclusive
jurisdiction of the CFI. MTC upheld Yu Sio Liong and dismissed the
complaint.
-CFI affirmed the order of dismissal with costs, saying: Manufacturers
Distributors's action before the MTC was one for specific
performance Whether refusal to accept delivery of said plastifilms
was justified or not is not capable of pecuniary estimation and was,
therefore, not cognizable by the Municipal Court."
-Manufacturers Distributors contend that the subject of the litigation
were the 100,000 plastifilm bags, contracted for by Yu Sio Liong at a
total price of P3,376.00, and, therefore, it was susceptible of pecuniary
estimation.
ISSUE
WON the issue is incapable of pecuniary estimation, and is therefore
not within the jurisdiction of MTC
HELD
YES.
-There is no controversy, as to the contractual price for the plastifilm
bags; the dispute is whether or not Yu Sio Liong was justified in its
refusal to accept the delivery of the bags. This matter plainly is not
capable of pecuniary estimation, and, therefore, is not within the
jurisdiction of the MTC.
-Speaking of the original jurisdiction of the Justice of the Peace and
Municipal Courts, the Judiciary Act, as amended, in its sec88, after
conferring original jurisdiction in Justice of the Peace and Municipal
Courts over cases where the value of the subject matter or amount of
the demand does not exceed P5,000.00, provides nevertheless in its
par2 that "The jurisdiction of a justice of the peace and judge of a
municipal court shall not extend to civil actions in which the subject of
litigation is not capable of pecuniary estimation, except in forcible entry
and detainer cases; nor to those which involve the legality of any tax,
impost or assessment; nor to actions involving admiralty or maritime
jurisdiction; nor to matters of probate, the appointments of trustees or
receiver; nor to actions for annulment of marriages; . . ." Jurisdiction
over the classes of cases thus excluded is conferred on the CFI
(Judiciary Act, sec44).
-That Manufacturers Distributors's complaint also sought the payment
by Yu Sio Liong of P3,376.00 plus interest and attorney's fees, does
not give a pecuniary estimation to the litigation, for the payment of
such amounts can only be ordered as a consequence of the specific
performance primarily sought. In other words, such payment would be
but an incident or consequence of Yu Sio Liong's liability for specific
performance. If no such liability is judicially declared, the payment
cannot be awarded. Hence, the amounts sought do not represent the
value of the subject of litigation.
-Subject matter over which jurisdiction cannot be conferred by consent,
has reference, not to the res or property involved in the litigation nor to
16
a particular case, but to the class of cases, the purported subject of
litigation, the nature of the action and of the relief sought.
-The [Municipal Trial] Court has no jurisdiction of a suit for specific
performance of a contract, although the damages alleged for its
breach, if permitted, are within the amount of which that court has
jurisdiction.
-Cruz vs. Tan (87 Phil. 627) is inapplicable. In said case, the plaintiff
had made an alternative prayer: specific performance or payment of
the sum of P644.31. The alternative prayer meant that the payment of
the latter sum was a pecuniary estimation of the specific performance
sought, since it would equally satisfy the claims of the plaintiffs. In the
present case, the payment in money is not an alternative equivalent,
but a consequence or result of the specific performance, and hence
can not constitute a pecuniary estimation thereof.
Disposition CFI order affirmed.
CRUZ V TAN
87 SCRA 627
JUGO; November 27, 1950
NATURE
Original action in the Supreme Court. Certiorari and prohibition with
injunction.
FACTS
- August 3, 1949: respondent Telesfora Yambao filed a complaint
against the petitioner Manuel Cruz, praying that the latter be ordered to
finish the construction of a house mentioned in the complaint, or to pay
her the sum of P644.31.
- Within ten days from the receipt of the summons, the petitioner filed a
motion for a bill of particulars, which was denied by the court.
- September 19, 1949: petitioner filed a motion to dismiss the case on
the ground that the CFI has no jurisdiction over the subject-matter of
the suitthe demand contained in the prayer is only for P644.31,
which falls under the Justice of the Peace or the Judge of the
Municipal Court. The motion to dismiss was denied by the court, and
trial for the merits was also set.
- Order setting the case for trial on October 10, 1949 was received by
petitioners counsel on October 12 (two days after). Since the parties
did not appear at the trial, the court dismissed the case for lack of
interest of the parties on October 10, 1949.
- October 12, 1949: respondent Yambao filed a motion praying that the
trial of the case be set for November 14, 1949. The motion was heard
on October 15, 1949, but as the petitioners counsel received notice of
the said motion on Oct. 15, he could not appear in the said hearing.
ISSUE
1. WON CFI has jurisdiction over the case.
HELD
NO
Ratio The jurisdiction of the respective courts is determined by the
value of the demand and not the value of the transaction out of which
the demand arose.
Reasoning
- The case comes within the exclusive original jurisdiction of the
municipal court or justice of the peace court.
Judiciary Act of 1948
SEC. 44. Original jurisdiction.CFI shall have original jurisdiction:
(c) In all cases in which the demand, exclusive of interest, or the
value of the property in controversy, amounts to more than two
thousand pesos.
SEC. 86. Jurisdiction of justices of the peace and judges of municipal
courts of chartered cities.
(b) Original jurisdiction in civil actions arising in their respective
municipalities, and not exclusively cognizable by the CFI.
SEC. 88. Original Jurisdiction in civil cases.
Xxx exclusive original jurisdiction where the value of the subject-
matter or amount of the demand does not exceed two thousand
pesos, exclusive of interest and costs.
- The alternative prayer for specific performance is also of the same
value, for the alternative prayers would not have been made in the
complaint if one was more valuable than the other; the specific
performance alternatively prayed for is capable of pecuniary estimation
at P644.31.
 17

respondents Guillermo delos Reyes and Marcelina Marcelo for the

DISPOSITION
Judge of CFI is declared without jurisdiction to try the case, and is
ordered to stop further proceedings by dismissing the case.
LAPITAN V SCANDIA
24 SCRA 477
REYES, J.B.L., July 31, 1968
FACTS
- Andres Lapitan has appealed directly to this Court against an order of
the CFI of Cebu, dismissing, for lack of jurisdiction, his complaint for
rescission and damages against appellees Scandia, Inc., of Manila and
General Engineering Co. of Cebu. Plaintiff avers that on April 17, 1963
he purchased from Scandia, Inc., one ABC Diesel Engine; that he
bought the engine for running a rice and corn mill; that defendants had
warranted and assured him that all spare parts for said engine are kept
in stock in their stores, enabling him to avoid loss due to long periods
of waiting, and that defendants would replace any part of the engine
that might break within 12 months after delivery.
- The cam rocker arm of the engine broke due to faulty material and
workmanship and it stopped functioning; the sellers were unable to
send a replacement until August 29, 1963; barely six days after
replacement the new part broke again due to faulty casting and poor
material, so Lapitan notified the sellers and demanded rescission of
the contract of sale; he sought return of the price and damages but
defendants did not pay.
- Scandia, Inc., moved to dismiss the complaint on the ground that the
total amount claimed was only P8,735.00, and was within the exclusive
jurisdiction of the municipal court, under RA 3828, amending the
Judiciary Act by increasing the jurisdiction of municipal courts to civil
cases involving P10,000.00 or less. The CFI dismissed the action for
lack of jurisdiction. Lapitan appealed directly to this Court, arguing (1)
that rescission was incapable of pecuniary estimation, and (2) that as
he claimed moral and exemplary damages, besides the price of
P3,735.00, P4,000.00 actual damages, and P1,000.00 attorneys' fees,
the value of his demand exceeded the jurisdiction of the municipal
court.
recovery of the sum of P1520 plus interest and the sum equivalent to
25% of the total amount due as attorneys fees, and in default of
payment thereof, to order the foreclosure of the chattel mortgage
(worth P15,340) executed by the said respondents. Gregorio
Emperado and Leonarda de la Cruz were made party defendants since
they were co-makers of the promissory note.
- Private respondents, in their answer claims that the loaned sued
upon is only one of five loans secured by them from the petitioner
wherein they were charged usurious interest. They claim that the
balance due is only P1260.
- For failure to plead, Emperado was declared in default while the case
against de la Cruz was dismissed w/o prejudice.
- Respondents file a motion to dismiss for lack of jurisdiction since the
petitioner only prays for P1520. It therefore comes under the
jurisdiction of the original jurisdiction of the municipal court. Also, since
the petitioner prays for foreclosure of chattel in Bulacan, it should have
been filed there where the deed of chattel mortgage is located. The
CFI dismissed the case. Motion for reconsideration was likewise
denied.
ISSUE/S
1. WON the city court has jurisdiction
HELD
1. YES.
Ratio Although the purpose of the action is to recover an amount plus
interest which comes within the original jurisdiction of the Justice of the
Peace Court, yet when said action involves foreclosure of chattel
mortgage covering properties valued at more than P10,000, the action
should be instituted before the CFI.
Reasoning In the case at bar, the amount sought to be recovered is
P1520 plus interest and costs, and chattel mortgage of properties
valued at P15340. It is therefore within the jurisdiction of the CFI.
Disposition Petition granted

ISSUE
WON CFI had jurisdiction

HELD
YES.
Ratio. In determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, this Court has adopted
the criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the CFI would depend on the
amount of the claim. However, where the basic issue is something
other than the right to recover a sum of money, or where the money
claim is purely incidental to, or a consequence of, the principal relief
sought, like in suits to have the defendant perform his part of the
contract and in actions for support, or for annulment of a judgment or
to foreclose a mortgage, this Court has considered such actions as
cases where the subject of the litigation may not be estimated in terms
of money, and are cognizable exclusively by theCFI. Actions for
specific performance of contracts have been expressly pronounced to
be exclusively cognizable by the CFI. And no cogent reason appears
why an action for rescission should be differently treated. We,
therefore, rule that the subject matter of actions for rescission of
contracts are not capable of pecuniary estimation.

THE GOOD DEVELOPMENT CORPORATION V

TUTAAN
73 SCRA 189
CONCEPCION; September 30, 1976
NATURE
Petition for certiorari

FACTS
- A complaint was filed before the CFI of Rizal against private
 18

1997 RULES OF CIVIL PROCEDURE Lucena bank to turn over its assets to the Central Bank's authorized
representative.
SCOPE AND CONSTRUCTION -Among the accounts receivable of the Lucena bank inventoried by the
UNIFORM PROCEDURE Central Bank's representative was the account of Hernandez. In a
ACTIONS letter dated October 29, 1963 Hernandez informed the Central Bank
NATURE that he had sent to the Lucena bank on April 25, 1962 the check for
P6,000. He again requested that his mortgage be cancelled. The
Real/personal/mixed Associate Superintendent of Banks in his answer returned the check to
Hernandez and informed him that, according to the Lucena bank's
HERNANDEZ V. RURAL BANK OF LUCENA executive vice-president, the check could not be applied to the
81 SCRA 75 payment of Hernandez' loan because the bank was already closed
when he received the check. Moreover, the check was drawn against
AQUINO, 10 Jan. 1978 the current deposits of the San Pablo Colleges in the Lucena bank
which was in the process of liquidation. Hernandez was advised to
FACTS
settle his account by paying cash or by means of a check drawn
-This case is about the propriety of a separate action to compel a
against a bank other than the Lucena bank.
distressed rural bank, which is under judicial liquidation, to accept a
-Disregarding that suggestion, Hernandez announced to the Associate
check in payment of a mortgage debt.
Superintendent of Banks in his letter that he was going to deposit the
-Spouses Francisco S. Hernandez and Josefa U. Atienza obtained
said check in the Court of First Instance of Lipa City on or before
from the Rural Bank of Lucena, Inc. a loan of P6,000 secured by a
December 26, 1963.
mortgage on their two lots situated in Cubao, Quezon City. Three
-Instead of filing a consignation complaint. Hernandez enclosed the
months after that loan was obtained, the Lucena bank became a
check with his letter to the clerk of court of the Court of First Instance
distressed bank.
at Lipa City. Hernandez wrote a letter dated January 11, 1964
-Before the expiration of the one year term of the loan, or on August
informing the Associate Superintendent of Banks of the judicial deposit
22, 1961, Hernandez went to the Lucena bank and offered to pay the
of the check. Copies of that letter were furnished the Lucena bank and
loan by means of a check for P6,000 which was drawn against the
the San Pablo Colleges.
bank by a depositor, the San Pablo Colleges, and which was payable
- Hernandez and his wife filed an action in the Court of First Instance at
to Hernandez. As the bank's executive vice-president was not
Lipa City to compel the Rural Bank of Lucena, Inc., the Central Bank
available, the payment was not consummated. At the time that the
as liquidator, and Jose S. Martinez as receiver, to accept the check
check was issued, the San Pablo Colleges had a deposit in the Lucena
and to execute the cancellation of the real estate mortgage. The
bank amounting to P11,890.16. Instead of withdrawing P6,000 from
Hernandez spouses also asked for moral damages in the amount of
that deposit, the San Pablo Colleges chose to issue a check for that
P10,000 and attorney's fees of P3,000.
amount to Hernandez. He sent to the bank by registered mail a
- Central Bank filed a motion to dismiss. It contended that there was
photostat of the check and a letter inquiring whether the bank would
improper venue because, as the action allegedly involved title to real
honor the check and when he could go personally to the bank for that
property, it should have been instituted in Quezon City where the
purpose. That letter was received by the bank. The executive vice-
encumbered lots are situated. It further contended that since the
president wrote to Hernandez and informed him that the check could
Lucena bank is under liquidation and is in the hands of a receiver, its
not be honored for the time being because of adverse events that had
properties and assets are in custodia legis and may, therefore, be
disrupted the bank's operations. What the vice-president meant was
reached only by motion or petition in Civil Case No. 50019 of the Court
that by reason of the letter of the Central Bank Governor dated June
of First Instance of Manila. The motion was denied.
16, 1961 the operations of the Lucena bank were suspended. The
-Counsel for the Lucena bank on January 30, 1967 offered to
vice-president explained that because there was a run on the bank its
compromise the case by stipulating that the Central Bank would apply
assets were exhausted, and so the check sent by Hernandez, which
the check in question to the mortgage debt of Hernandez if the balance
check was drawn against the Lucena bank, could not be accepted. The
of the deposit of the San Pablo Colleges would be enough to cover the
vice-president said that when Hernandez presented the check, the
amount of the check of P6,000 and that, by virtue of that compromise,
Lucena bank was no longer in a position to honor withdrawals and that
the complaint and counterclaim would be dismissed.That conditional
had Hernandez paid cash, his payment would have been accepted. To
and equivocal compromise offer fizzled out because the lawyers of
honor the check would have been tantamount to allowing a depositor
Hernandez and the Central Bank did not assent to it.
(San Pablo Colleges) to make a withdrawal but the Lucena bank could
-Lower court ordered the Lucena bank or the Central Bank, as
not entertain withdrawals without the consent of the Central Bank
liquidator, to accept and honor the check, to cancel the mortgage, and
examiners. Payment by check was a disbursement.
to pay the Hernandez spouse P25,000 as moral damages (not
Apparently, the vice-president did not take the trouble of asking the
P10,000 as prayed for in the complaint) plus P1,000 as attorney's fees.
Central Bank examiners whether the payment by check made by
-The Lucena bank, the Central Bank and its employee, the receiver,
Hernandez could be accepted. Hernandez himself who should have
appealed to the SC.
known that the bank was a distressed bank which had suspended
operations and which was under the supervision of Central Bank
ISSUE/S
examiners, did not bother to take up his problem with the said
1. WON the action of the Hernandez spouses to compel them to honor
examiners.
the check in question and to cancel the mortgage on their two lots is a
-Hernandez again asked the bank when he could deliver the check.
real action affecting title to real property which should have been filed
The executive vice-president told Hernandez that the bank could not
in the Court of First Instance of Rizal at Quezon City where the
yet honor the check because it had not resumed its banking
mortgaged lots are situated.
operations; that it was awaiting the outcome of a case filed by the bank
2. WON Lucena bank had not lost its juridical personality after it was
against the Central Bank; that it might reopen in January, 1962, and
placed under liquidation thus making it not fall under the jurisdiction of
that, anyway, the loan would not be due until March 21, 1962.
the liquidation court
Hernandez sent another letter and enclosed the original check (duly
endorsed) with his letter to the bank sent by registered mail and
HELD
special delivery. Letter was returned to Hernandez because the bank's
1. No it is a personal action.
manager was allegedly in Manila. Undeterred, Hernandez again mailed
Section 2(a), Rule 4 of the Rules of Court provides that "actions
the check to the bank with the request that his mortgage be cancelled.
affecting title to, or for recovery of possession, or for partition or
-Monetary Board had decided to liquidate the Lucena bank. To
condemnation of, or foreclosure of mortgage on, real property, shall be
implement the resolution of the Monetary Board for the Liquidation of
commenced and tried in the province where the property or any part
the Lucena bank, the Central Bank, pursuant to section 29 of its
thereof lies"
charter and on the assumption that the Lucena bank was insolvent,
Note that the rule mentions an action for foreclosure of a real estate
filed with the Court of First Instance of Manila a petition dated March
mortgage but does not mention an action for the cancellation of a real
27, 1962 for assistance and supervision in the liquidation of the Lucena
mortgage. In the instant case, the action is primarily to compel the
bank. Court of First Instance of Manila issued an order directing the

mortgagee to accept payment of the mortgage debt and to release the
mortgage.
That action, which is not expressly included in the enumeration
found in section 2(a) of Rule 4, does not involve the title to the
mortgage lots. It is a personal action and not a real action. The
mortgagee has not foreclosed the mortgage. Plaintiffs' title is not
in question. They are in possession of the mortgaged lots.
Hence, the venue of plaintiffs' personal action is the place where the
defendant or any of the defendants resides or may be found, or where
the plaintiff or any of the plaintiffs resides, at the election of the plaintiff
(Sec. 2[b], Rule 4).
The plaintiffs in their brief confound a real action with an action in rem
and a personal action with an action in personam. They argue that
their action is not an action in rem and, therefore, it could be brought in
a place other than the place where the mortgaged lots are located.
A real action is not the same as an action in rem and a personal
action is not the same as an action in personam.
In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of
damages. In a real action, the plaintiff seeks the recovery of real
property, or, as indicated in section 2(a) of Rule 4, a real action is
an action affecting title to real property or for the recovery of
possession, or for partition or condemnation of, or foreclosure of
a mortgage on, real property.
An action in personam is an action against a person on the basis
of his personal liability, while an action in rem is an action against
the thing itself, instead of against the person (1 C. J. S. 943-4),
Hence, a real action may at the same time be an action, in
personam and not necessarily an action in rem. In this case, the
plaintiffs alleged in their complaint that they were residents of
San Juan, Batangas, which in their brief they characterize as their
legal residence and which appears to be their domicile of origin.
On the other hand, it is indicated in the promissory note and mortgage
signed by them and in the Torrens title covering the mortgaged lots that
their residence is at 11 Chicago Street, Cubao, Quezon City, which
apparently is the place where the said lots are located. The plaintiffs
did not testify during the trial, So, they have no testimony in the records
as to their actual residence.
We hold that the trial court should have dismissed the action
because the venue thereof was improperly laid in Batangas. The
term "resides" in section 2[b] of Rule 4 refers to the place of
actual residence or the place of abode and not necessarily to the
legal residence or domicile (Dangwa Transportation Co., Inc. vs.
Sarmiento, L-22795, January 31, 1977, 75 SCRA 124, 128). (Of
course, the actual residence may also in some cases be the legal
residence or domicile.).
San Juan, Batangas might be the place where the plaintiffs have their
domicile or legal residence but there is no question that 11 Chicago
Street, Cubao, Quezon City is their place of abode or the place where
they actually reside. So, the action in this case, which is a personal
action to compel the defendants to honor the check in question and to
cancel the mortgage, should have been filed in Quezon City if the
plaintiffs intended to use their residence as the basis for their choice of
venue.
The Central Bank points out that the redemption action of the
Hernandez spouses would ultimately affect the funds and property of
the Lucena Bank. Hence, the liquidation court is the competent tribunal
to pass upon the issue as to whether the Hernandez spouses could
validly pay their mortgage debt by means of the check of the San
Pablo Colleges.
2. No. The liquidation court or the Manila court has exclusive
jurisdiction to entertain the claim of the Hernandez spouses.
At the time the Hernandez spouses filed in 1964 their consignation
complaint the Lucena bank was already under liquidation. The Manila
court in its order of March 28, 1963 had ordered the officers of the
Lucena bank to turn over to the Central Bank or to the receiver, the
Superintendent of Banks, all of its assets, properties and papers.
Among the assets turned over to the receiver was the outstanding or
unpaid account of the Hernandez spouses which appears in the
inventory as: "393. Hernandez, Francisco S., 11 Chicago St., Cubao,
Q. C.
And among the papers or obligations turned over to the receiver was
Ledger No. 056 evidencing the deposit of the San Pablo Colleges in
the Lucena bank in the sum of P11,890.16, against which the check for
19
P6,000 was drawn. It was that check which the Hernandez spouses
had issued to pay their mortgage debt to the Lucena bank.
Under section 29 of the Central Bank Act, Republic Act No. 265, when
the Monetary Board, upon information submitted by the Superintendent
of Banks, finds a bank to be insolvent, it shall forbid the bank to do
business and it shall take care of its assets according to law.
In that case, if the Monetary Board finds out that the insolvent bank
cannot resume business with safety to its creditors, it shall through the
Solicitor General, file a petition in the Court of First Instance, praying
for the assistance and super vision of the court in the liquidation of the
bank's affairs. Thereafter, the Superintendent of Banks, upon order of
the Monetary Board and under the supervision of the court, shall
convert to money the bank's assets. "Sabido es que uno de los
deberes primordiales de un depositario es hacerse cargo
inmediatamente de todo el activo y pasivo de un banco" (Luy Lam &
Co. vs. Mercantile Bank of China, 71 Phil. 573, 576).
The fact that the insolvent bank is forbidden to do business, that
its assets are turned over to the Superintendent of Banks, as a
receiver, for conversion into cash, and that its liquidation is
undertaken with judicial intervention means that, as far as lawful
and practicable, all claims against the insolvent bank should be
filed in the liquidation proceeding.
The judicial liquidation is intended to prevent multiplicity of actions
against the insolvent bank. The lawmaking body contemplated that for
convenience only one court, if possible should pass upon the claims
against the insolvent bank and that the liquidation court should assist
the Superintendent of Banks and control his operations.
In the course of the liquidation, contentious cases might arise wherein
a full-dress hearing would be required and legal issues would have to
be resolved. Hence, it would be necessary in justice to all concerned
that a Court of First Instance should assist and supervise the
liquidation and should act as umpire and arbitrator in the allowance
and disallowance of claims.
The judicial liquidation is a pragmatic arrangement designed to
establish due process and orderliness in the liquidation of the
bank, to obviate the proliferation of litigations and to avoid
injustice and arbitrariness.
DispositioN. WHEREFORE, the trial court judgment is reversed and
set aside. The case is dismissed without prejudice to the right of the
Hernandez spouses to take up with the liquidation court the settlement
of their mortgage obligation. Costs against the plaintiffs appellees. SO
ORDERED.
In personam/ in rem/ quasi in rem
DE MIDGELY VS FERANDOS
(SUPRA)
FACTS
Half-brother appointed as administrator, caused the extraterritorial
service of summons to half siblings living in Spain to settle the question
of ownership over certain properties and rights in some mining claims
as Quemada believed that those properties belong to the estate of
Alvaro Pastor, Sr. De Midgely and Pastor both filed a motion to dismiss
on the ground of lack of jurisdiction BUT further alleged that earnest
efforts towards a compromise have not been made
ON ACTIONS IN REM
Even if the lower court did not acquire jurisdiction over De Midgely, her
motion to dismiss was properly denied because Quemadas action
against her maybe regarded as a quasi in rem where jurisdiction over
the person of a non-resident defendant is not necessary and where the
service of summons is required only for the purpose of complying with
the requirement of due process. Quasi in rem is an action between
parties where the direct object is to reach and dispose of property
owed by the parties or of some interest therein.
-in a quasi in rem action jurisdiction over a non resident defendant is
not essential. The service of summons by publication is required
merely to satisfy the constitutional requirement of due process. The
judgment of the court would settle the title to the properties and to that
extent it partakes of the nature of judgment in rem. The judgment is
confined to the res (properties) and no personal judgment could be
rendered against the non resident.

COMMENCEMENT OF ACTION
CB V. CA
(supra)
FACTS
Consolidated cases. Issue was regarding the payment of the correct
docket fee.
RULING ON COMMENCEMENT OF ACTION
-It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a
trial court with jurisdiction over the subject-matter or nature of the
action. Where the filling of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow the payment of the fee
within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
- The prescriptive period therein mentioned refers to the period within
which a specific action must be filed. It means that in every case, the
docket fee must be paid before the lapse of the prescriptive period.
GO V TONG
G.R. No. 151942.
PANGANIBAN; November 27, 2003
NATURE
Petition for review on Certiorari
FACTS
- Petitioner Juana Go purchased a cashiers check of P500K from the
Far East Bank and Trust Company (FEBTC), private respondent Tong.
On Gos instruction, the cashiers check bore the words Final
Payment/Quitclaim after the name of payee Tong allegedly to insure
that Tong would honor his commitment that he would no longer ask for
further payments for his interest in the informal business partnership
which he and she had earlier dissolved. Tong deposited it with the
words Final Payment/Quitclaim already erased, hence, it was not
honored.
- Tongs lawyer requested that the check be replaced with another
payable to Johnson Tong-Final Settlement/Quitclaim with same
amount, the bank charges to be paid by his client-Tong, which was
denied by FEBTC. So, Tong filed complaint against FEBTC and Go at
RTC Manila. FEBTC and Go answered that erasure was intentional,
which justified the dishonor and refusal to replace check.
- Case pending, Gos son, George, filed a criminal complaint against
Tong falsification of the check. The criminal complaint was dismissed.
- Tong filed Motion for Leave to File a Supplemental Complaint and to
Admit the Attached Supplemental Complaint which Supplemental
Complaint alleged that Sps. Gos used their son to file the criminal
complaint against him which caused damages, hence, the prayer for
an increase in the amount of MD and ED sought to be recovered from
P2.5M to P55M and praying for the award of AD of P58K. RTC granted
the motion and admitted the Supplemental Complaint.
- Go filed a Manifestation of Deposit and deposited to the RTC Clerk of
Court P500K representing the amount of the check, subject to the
condition that it shall remain deposited until the disposition of the
case. MFRs of FEBTC and Go were denied.
- One of the defenses of FEBTC and Go: Tong cannot prosecute his
Supplemental Complaint, and the same should be dismissed, unless
the corresponding docket fee and legal fees for the monetary claims of
P55M are paid for.
- On Feb. 5, 1999, RTC, acting on the verbal motion of Tongs counsel,
allowed the release of petitioners P500K deposit to Tong. Later, RTC,
in the interest of justice and because of the huge amount of outlay
involved (the Court considers the business climate and the peso
crunch prevailing), allowed Tong to first deposit P25K on or before
Dec.15, 1999 and P20K every month thereafter until the full amount of
docket fees is paid, and only then shall the deposits be considered as
payment of docket fees. FEBTC and Go filed MFR but was denied.
Hence, this case.
ISSUE
20
WON respondent judge and the CA erred in allowing private
respondent to pay the docket fee on a staggered basis.
HELD
NO
Ratio Docket fees should be paid upon the filing of the initiatory
pleadings. However, for cogent reasons to be determined by the trial
judge, staggered payment thereof within a reasonable period may be
allowed. Unless grave abuse of discretion is demonstrated, the
discretion of the trial judge in granting staggered payment shall not be
disturbed.
Reasoning An action commences from the filing of the original
complaint and the payment of the prescribed docket fees. However,
where the filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period. (Sun Insurance Office Ltd. V
Asuncion) In other words, while the payment of the prescribed docket
fee is a jurisdictional requirement, even its nonpayment at the time of
filing does not automatically cause the dismissal of the case, as long
as the fee is paid within the applicable prescriptive or reglementary
period; more so when the party involved demonstrates a willingness to
abide by the rules prescribing such payment.
Disposition Petition is DENIED.
HEIRS OF HINOG V MELICOR
G.R. No. 140954
AUSTRIA-MARTINEZ; April 12, 2005
NATURE
Petition for certiorari and prohibition
FACTS
- Private respondents Custodio, Rufo, Tomas and Honorio, all
surnamed Balane own a 1,399- square meter parcel of land situated in
Malayo Norte, Cortes, Bohol, designated as Lot No. 1714. Sometime in
March 1980, they allowed Bertuldo Hinog to use a portion of the said
property for a period of ten years and construct thereon a small house
of light materials at a nominal annual rental of P100.00 only,
considering the close relations of the parties. After the expiration of the
ten-year period, they demanded the return of the occupied portion and
removal of the house constructed thereon but Bertuldo refused and
instead claimed ownership of the entire property by virtue of a Deed of
Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with
the knowledge and conformity of private respondents.
- Accordingly, private respondents filed a complaint for Recovery of
Ownership and Possession, Removal of Construction and Damages
against Bertuldo.
- Trial ensued but on June 24, 1998, Bertuldo died without completing
his evidence. Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog
III. Atty. Veronico G. Petalcorin then entered his appearance as new
counsel for Bertuldo.
- On September 22, 1998, Atty. Petalcorin filed a motion to expunge
the complaint from the record and nullify all court proceedings on
the ground that private respondents failed to specify in the
complaint the amount of damages claimed so as to pay the correct
docket fees; and that under Manchester Development Corporation vs.
Court of Appeals, non-payment of the correct docket fee is
jurisdictional. It was further alleged that the private respondents failed
to pay the correct docket fee since the main subject matter of the case
cannot be estimated as it is for recovery of ownership, possession and
removal of construction.
- Private respondents opposed the motion to expunge on the following
grounds: (a) said motion was filed more than seven years from the
institution of the case; (b) Atty. Petalcorin has not complied with
Section 16, Rule 3 of the Rules of Court which provides that the death
of the original defendant requires a substitution of parties before a
lawyer can have legal personality to represent a litigant and the motion
to expunge does not mention of any specific party whom he is
representing [this was later on complied with by Atty. Petalcorin]; (c)
collectible fees due the court can be charged as lien on the judgment;
and (d) considering the lapse of time, the motion is merely a dilatory
scheme employed by petitioners.
 21

- In their Rejoinder, petitioners manifested that the lapse of time does by the rules prescribing such payment. Thus, when insufficient filing
not vest the court with jurisdiction over the case due to failure to pay fees were initially paid by the plaintiffs and there was no intention to
the correct docket fees. As to the contention that deficiency in defraud the government, the Manchester rule does not apply. Under
payment of docket fees can be made as a lien on the judgment, the peculiar circumstances of this case, the reinstatement of the
petitioners argued that the payment of filing fees cannot be made complaint was just and proper considering that the cause of action of
dependent on the result of the action taken. private respondents, being a real action, prescribes in thirty years, and
- On January 21, 1999, the trial court ordered the complaint to be private respondents did not really intend to evade the payment of the
expunged from the records and the nullification of all court proceedings prescribed docket fee but simply contend that they could not be faulted
taken for failure to pay the correct docket fees. for inadequate assessment because the clerk of court made no notice
- On January 28, 1999, upon payment of deficiency docket fee, private of demand or reassessment. They were in good faith and simply relied
respondents filed a manifestation with prayer to reinstate the case. on the assessment of the clerk of court.
Petitioners opposed the reinstatement but on March 22, 1999, the trial - While the docket fees were based only on the real property valuation,
court issued the first assailed Order reinstating the case. the trial court acquired jurisdiction over the action, and judgment
- On July 14, 1999, petitioners manifested that the trial court having awards which were left for determination by the court or as may be
expunged the complaint and nullified all court proceedings, there is no proven during trial would still be subject to additional filing fees which
valid case and the complaint should not be admitted for failure to pay shall constitute a lien on the judgment. It would then be the
the correct docket fees; that there should be no case to be reinstated responsibility of the Clerk of Court of the trial court or his duly
and no case to proceed as there is no complaint filed. authorized deputy to enforce said lien and assess and collect the
- After the submission of private respondents opposition and additional fees.
petitioners rejoinder, the trial court issued the second assailed Order
on August 13, 1999, essentially denying petitioners
manifestation/rejoinder. The trial court held that the issues raised in
CAUSE OF ACTION, DEFINED
such manifestation/rejoinder are practically the same as those raised in
the amended motion to expunge which had already been passed upon FELIPE V LEUTERIO
in the Order dated January 21, 1999. Moreover, the trial court 91 Phil 482
observed that the Order dated March 22, 1999 which reinstated the Bengzon; May 30, 1952
case was not objected to by petitioners within the reglementary period
or even thereafter via a motion for reconsideration despite receipt
NATURE
thereof on March 26, 1999.
Original Action in the Supreme Court. Certiorari
- On August 25, 1999, petitioners filed a motion for reconsideration but
the same was denied by the trial court in its third assailed Order dated
FACTS:
October 15, 1999. Hence, this petition.
In an oratorical contest held in Naga, Camarines' Sur, first honor was
given by the board of five judges to Nestor Nosce, and second honor
ISSUE
to Emma Imperial. Six days later, Emma asked the court of first
WON grave abuse of discretion was committed by the trial court in
instance of that province to reverse the award, alleging that one of the
reinstating the complaint upon the payment of deficiency docket fees
judges had fallen into error in grading her performance. After a hearing,
and over the objection. of the other four judges of the contest, the court
HELD
declared Emma Imperial winner of the first place
NO
- The unavailability of the writ of certiorari and prohibition in this case is
ISSUE
borne out of the fact that petitioners principally assail the Order dated
WON the courts have the authority to reverse the award of the board of
March 22, 1999 which they never sought reconsideration of, in due
judges of an oratorical competition
time, despite receipt thereof on March 26, 1999. Instead, petitioners
went through the motion of filing a supplemental pleading and only
HELD
when the latter was denied, or after more than three months have
No.
passed, did they raise the issue that the complaint should not have
Reasoning.. The Court held: We observe that in assuming jurisdiction
been reinstated in the first place because the trial court had no
over the matter, the respondent judge reasoned out that where there is
jurisdiction to do so, having already ruled that the complaint shall be
a wrong there is a remedy and that courts of first instance are courts of
expunged.
general jurisdiction.
- After recognizing the jurisdiction of the trial court by seeking
The flaw in his reasoning lies in the assumption that Imperial suffered
affirmative relief in their motion to serve supplemental pleading upon
some wrong at the hands of the board of judges. If at all, there was
private respondents, petitioners are effectively barred by estoppel from
error on the part of one judge, at most. Error and wrong do not mean
challenging the trial courts jurisdiction. If a party invokes the
the same thing. "Wrong" as used in the aforesaid legal principle is the
jurisdiction of a court, he cannot thereafter challenge the courts
deprivation or violation of a right. As stated before, a contestant has no
jurisdiction in the same case. To rule otherwise would amount to
right to the prize unless and until he or she is declared winner by the
speculating on the fortune of litigation, which is against the policy of the
board of referees or judges
Court.
Granting that Imperial suffered some loss or injury, yet in law there are
- It must be clarified that the said order is but a resolution on an
instances of "damnum absque injuria". This is one of them. If fraud or
incidental matter which does not touch on the merits of the case or put
malice had been proven, it would be a different proposition. But then
an end to the proceedings. It is an interlocutory order since there
her action should be directed against the individual judge or judges
leaves something else to be done by the trial court with respect to the
who fraudulently or maliciously injured her. Not against the other
merits of the case. The remedy against an interlocutory order is
judges
generally not to resort forthwith to certiorari, but to continue with the
case in due course and, when an unfavorable verdict is handed down,
Disposition. The judiciary has no power to reverse the award of the
to take an appeal in the manner authorized by law. Only when the
board of judges of an oratorical contest. For that matter it would not
court issued such order without or in excess of jurisdiction or with
interfere in literary contests, beauty contests and similar competitions
grave abuse of discretion and when the assailed interlocutory order is
patently erroneous and the remedy of appeal would not afford
adequate and expeditious relief will certiorari be considered an SANTIAGO V BAUTISTA
appropriate remedy to assail an interlocutory order. Such special 32 SCRA 188
circumstances are absolutely wanting in the present case. BARREDO : MARCH 30, 1970
- Plainly, while the payment of the prescribed docket fee is a
jurisdictional requirement, even its non-payment at the time of filing NATURE
does not automatically cause the dismissal of the case, as long as the Appeal from the order of the Court of First Instance of Cotabato
fee is paid within the applicable prescriptive or reglementary period, dismissing, on a motion to dismiss, its Civil Case No. 2012 for
more so when the party involved demonstrates a willingness to abide certiorari, injunction and damages on the ground that the complaint

therein states no cause of action, and from the subsequent order of the
court a quo denying the motion for the reconsideration of the said order
of dismissal.
FACTS
-Appellant Teodoro Santiago, Jr. was a pupil in Grade Six at the Sero
Elementary School in Cotabato City.
-When the school year was about to end the "Committee On The
Rating Of Students For Honor" was constituted by the teachers
concerned at said school for the purpose of selecting the "honor
students" of its graduating class. The above-named committee
deliberated and finally adjudged Teodoro C. Santiago, Jr. as third
honor. The school's graduation exercises were thereafter set for May
21, 1965; but three days before that date, the "third placer" Teodoro
Santiago, Jr., represented by his mother, and with his father as
counsel, sought the invalidation of the "ranking of honor students" thus
made, by instituting the civil case in the Court of First Instance of
Cotabato, against the committee members along with the District
Supervisor and the Academic Supervisor of the place.
SANTIAGOs alleged that: (1) Plaintiff-petitioner Teodoro C. Santiago,
Jr. is a sixth grader at the Sero Elementary School in Cotabato City
scheduled to be graduated on May 21st, 1965 with the honor rank of
third place, which is disputed; (2) That the teachers of the school had
been made respondents as they compose the "Committee on the
Rating of Student for Honor", whoserave abuse of official discretion is
the subject of suit, while the other defendants were included as
Principal, District Supervisor and Academic Supervisor of the school;
(3) That Teodoro Santiago, Jr. had been a consistent honor pupil from
Grade I to Grade V of the Sero Elementary School, while Patricia
Ligat (second placer in the disputed ranking in Grade VI) had never
been a close rival of petitioner before, except in Grade V wherein she
ranked third; (4) That Santiago, Jr. had been prejudiced, while his
closest rival had been so much benefited, by the circumstance that the
latter, Socorro Medina, was coached and tutored during the summer
vacation of 1964 by Mrs. Alpas who became the teacher of both pupils
in English in Grade VI, resulting in the far lead Medina obtained over
the other pupil; (5) That the committee referred to in this case had
been illegally constituted as the same was composed of all the Grade
VI teachers only, in violation of the Service Manual for Teachers of the
Bureau of Public Schools which provides that the committee to select
the honor students should be composed of all teachers in Grades V
and VI; (6) That there are direct and circumstantial matters, which shall
be proven during the trial, wherein respondents have exercised grave
abuse of discretion and irregularities, such as the changing of the final
ratings on the grading sheets of Socorro Medina and Patricia Ligat;
(7) That there was a unanimous agreement and understanding among
the respondent teachers to insult and prejudice the second and third
honors by rating Socorro Medina with a perfect score, which is very
unnatural; (8) That the words "first place" in petitioner's certificate in
Grade I was erased and replaced with the words "second place", which
is an instance of the unjust and discriminating abuses committed by
the respondent teachers in the disputed selection of honor pupils they
made; (9) That petitioner personally appealed the matter to the School
Principal, to the District Supervisor, and to the Academic Supervisor,
but said officials "passed the buck to each other" to delay his
grievances, and as to appeal to higher authorities will be too late, there
is no other speedy and adequate remedy under the circumstances;
and, that petitioner and his parents suffered mental and moral
damages in the amount of P10,000.00; and (10) The petitioners prayed
to the Court to set aside the final list of honor students in Grade VI of
the Sero Elementary School for that school year 1964-1965, and,
during the pendency of the suit, to enjoin the respondent teachers from
officially and formally publishing and proclaiming the said honor pupils
in Grade VI in the graduation exercises the school was scheduled to
hold on the 21st of May of that year 1965.
LC: denied injunction
-As scheduled, the graduation exercises of the Sero Elementary
School for the school year 1964-1965 was held on May 21, with the
same protested list of honor students.
The Court then required the respondents to answer the petition within
10 days but respondents moved for the dismissal of the case instead
on the grounds (1) that the action for certiorari was improper, and (2)
that even assuming the propriety of the action, the question brought
before the court had already become academic. This was opposed by
petitioner.
The motion to dismiss was granted.
22
Upon receipt of a copy of the above-quoted order, the petitioner moved
for the reconsideration thereof, but the same was dismissed.
Petitioners appealed
ISSUE/S
WON the said committee of teachers does falls within the category of
the tribunal, board, or officer exercising judicial functions contemplated
by Rule 65
HELD:
1. NO (therefore, no cause of action exists)
Reasoning. In this jurisdiction certiorari is a special civil action
instituted against 'any tribunal, board, or officer exercising judicial
functions.' A judicial function is an act performed by virtue of judicial
powers; the exercise of a judicial function is the doing of something in
the nature of the action of the court. In order that a special civil action
of certiorari may be invoked in this jurisdiction the following
circumstances must exist: (1) that there must be a specific controversy
involving rights of persons or property and said controversy is brought
before a tribunal, board or officer for hearing and determination of their
respective rights and obligations; (2) the tribunal, board or officer
before whom the controversy is brought must have the power and
authority to pronounce judgment and render a decision on the
controversy construing and applying the laws to that end; (3) the
tribunal, board or officer must pertain to that branch of the sovereign
power which belongs to the judiciary, or at least, which does not belong
to the legislative or executive department.
- It is evident, upon the foregoing authorities, that the so called
committee on the rating of students for honor whose actions are
questioned in this case exercised neither judicial nor quasi judicial
functions in the performance of its assigned task. Before a tribunal
board, or officer may exercise judicial or quasi judicial acts, it is
necessary that there be a law that give rise to some specific rights of
persons or property under which adverse claims to such rights are
made, and the controversy ensuing therefrom is brought, in turn,
before the tribunal, board or officer clothed with power and authority to
determine what that law is and thereupon adjudicate the respective
rights of the contending parties.
- There is nothing on record about any rule of law that provides that
when teachers sit down to assess the individual merits of their pupils
for purposes of rating them for honors, such function involves the
determination of what the law is and that they are therefore
automatically vested with judicial or quasi judicial functions.
Dispositive. The judgment appealed from is affirmed, with costs
against appellant.
SAGRADA V NATIONAL COCONUT CORP.
G.R. L-3756
LABRADOR; June 30, 1952
NATURE
Action to recover piece of property
FACTS
- The land belongs to the plaintiff, in whose name the title was
registered before the war. During the Japanese occupation, the land
was acquired by a Japanese corporation, Taiwan Tekkosho, for the
sum of P140,000, and thereupon title thereto issued in its name. After
liberation, the Alien Property Custodian of the United States of America
took possession, control, and custody thereof under section 12 of the
Trading with the Enemy Act, for the reason that it belonged to an
enemy national. During the year 1946 the property was occupied by
the Copra Export Management Company under a custodianship
agreement with United States Alien Property Custodian, and when it
vacated the property it was occupied by the defendant herein. The
defendant was authorized to repair the warehouse on the land, and
actually spent thereon the repairs the sum of P26,898.27.
- Plaintiff brought an action in court to annul the sale of property of
Taiwan Tekkosho, and recover its possession. The case did not come
for trial because the parties presented a joint petition in which it is
claimed by plaintiff that the sale in favor of the Taiwan Tekkosho was
null and void because it was executed under threats, duress, and
intimidation, and it was agreed that the title issued in the name of the
Taiwan Tekkosho be cancelled and the original title of plaintiff re-

issued.
- The present action is to recover the reasonable rentals from August,
1946, the date when the defendant began to occupy the premises, to
the date it vacated it.
ISSUE/S
1. WON defendant is liable for rent of the said period
HELD
1. No
Ratio If defendant-appellant is liable at all, its obligations, must arise
from any of the four sources of obligations, namley, law, contract
or quasi-contract, crime, or negligence. (Article 1089, Spanish
Civil Code.)
Reasoning Defendant-appellant is not guilty of any offense at all,
because it entered the premises and occupied it with the
permission of the entity which had the legal control and
administration thereof, the Alien Property Administration. Neither
was there any negligence on its part. There was also no privity
(of contract or obligation) between the Alien Property Custodian
and the Taiwan Tekkosho, such that the Alien Property Custodian
or its permittee (defendant-appellant) may be held responsible
for the supposed illegality of the occupation of the property by
the said Taiwan Tekkosho. The Alien Property Administration had
the control and administration of the property not as successor to
the interests of the enemy holder of the title, the Taiwan
Tekkosho, but by express provision of law. Neither is it a trustee
of the former owner, the plaintiff-appellee herein, but a trustee of
then Government of the United States, in its own right, to the
exclusion of, and against the claim or title of, the enemy owner.
From August, 1946, when defendant-appellant took possession,
to the late of judgment on February 28, 1948, Alien Property
Administration had the absolute control of the property as trustee
of the Government of the United States, with power to dispose of
it by sale or otherwise, as though it were the absolute owner.
Therefore, even if defendant-appellant were liable to the Alien
Property Administration for rentals, these would not accrue to the
benefit of the plaintiff-appellee, the owner, but to the United
States Government.
Disposition Wherefore, the part of the judgment appealed from, which
sentences defendant-appellant to pay rentals from August, 1946, to
February 28, 1949, is hereby reversed. In all other respects the
judgment is affirmed. Costs of this appeal shall be against the plaintiff-
appellee.
MA-AO SUGAR CENTRAL CO V BARRIOS
79 PHIL 666
FERIA; December 3, 1947
NATURE
Petition for certiorari to set aside the order of the respondent judge
denying the motion to dismiss the complaint of respondents
FACTS
- respondents filed a complaint seeking to recover amounts of money
due to them from the petitioner before the outbreak of the war.
- the ground of the motion to dismiss filed by the petitioners is that the
complaint of the respondents does not state facts sufficient to
constitute a cause of action, because the plaintiffs have no right to
demand the payment of the defendants debts until after the
termination or legal cessation of the moratorium provided in EO No.
32: Enforcement of payment of payments of all debts and other
monetary obligations payable within the Philippines, except debts and
other monetary obligations, entered into in any area after declaration
by Presidential Proclamation, that such area has been freed from
enemy occupation and control, is temporarily suspended pending
action by the Commonwealth Government.
ISSUE/S
1. WON complain of the respondents states facts sufficient to
constitute a cause of action
HELD
1. NO
Ratio. A cause of action is an act or omission of one party in violation
23
of the legal rights of another, and its essential elements are: 1. legal
right of plaintiff, 2. correlative obligation of the defendant, and 3. act or
omission of defendant in violation of said legal right.
Reasoning. In this case, there was no omission on the part of the
defendant in vilation of the legal rights of the plaintiffs to be paid,
because EO No. 32 said debts are not yet payable or their payment
cannot be enforced until the legal cessation of the moratorium, which is
still in force.
***BUT (not related to topic Cause of Action): even if the complaint
of the plaintiffs respondents states no cause of action, the SC holds
that the facts stated in the petition for certiorari and prohibition filed in
the present case do NOT entitle the petitioner to said reliefs. Because
judge HAD jurisdiction and did not exceed it or act with grave abuse of
discretion in denying the petitioners motion to dismiss. This Court, in
actions of certiorari, can only determine WON the court acted without
or in excess of its jurisdiction or with grave abuse of discretion. So
disposition:
Disposition Petition is denied.
DANFOSS V. CONTINENTAL CEMENT
CORPORATION
G.R. NO. 143788
CORONA; SEPT. 9 2005
NATURE
This is a petition for review on certiorari under Rule 45 of the 1997
Rules on Civil Procedure of the decision of the Court of Appeals and its
resolution denying petitioners motion for reconsideration.
FACTS
- On November 5, 1998, respondent Continental Cement Corporation
(CCC) filed a complaint for damages against petitioner DANFOSS and
Mechatronics Instruments and Controls, Inc. (MINCI) before the RTC
of QC, Branch 80, alleging that:
(1) CCC purchased from MINCI two Danfoss Brand Frequency
Converter/Inverter for use in the Finish Mill of its Cement Plant. The
said purchase is covered by a Purchase Order which indicated the
delivery date to be within eight (8) to ten (10) weeks from the opening
of the letter of credit. CCC executed and opened a letter of credit under
in favor of DANFOSS INDUSTRIES PTE. LTD; (2) CCC through a
letter dated 7 November 1997, reiterated its demand that every delay
in the shipment of the two (2) unit Frequency Converter/Inverter will
cause substantial losses in its operations and requested for the early
work out and the immediate shipment of the frequency converter to
avoid further loss to the company; However, on 9 November 1997,
DANFOSS, informed the other MINCI through fax transmission, copy
furnished plaintiff CCC, that the reason why DANFOSS has delivery
problems was that some of the supplied components for the new VLT
5000 series did not meet the agreed quality standard. That means that
their factory was canvassing for another supplier. And at that moment,
there was no clear message when normal production will resume.
-Due to this information received, CCC surmised that defendants
MINCI and DANFOSS could not be able to deliver the two (2) unit
Frequency Converter within the maximum period of ten (10) weeks
period from the opening of the Letter of Credit, as one of the conditions
in the Purchase Order. Thereafter, no definite commitment was
received by plaintiff CCC from defendants MINCI and DANFOSS for
the delivery of the two unit Frequency Converter.
-By reason of the delay to deliver, CCC informed MINCI in a letter
dated 13 November 1997, of the plaintiffs intention to cancel the said
order. As a consequence thereof, CCC has suffered an actual
substantial production losses in the amount P8,064,000.00 due to the
time lost and delay in the delivery of the said two (2) unit Frequency
Converter/Inverter. Likewise, plaintiff CCC was compelled to look for
another supplier.
- On February 17, 1999, DANFOSS filed a motion to dismiss the
complaint on the ground that it did not state a cause of action.
- The court a quo denied the motion to dismiss in its order[4] dated
May 28, 1999.
- Danfoss filed a motion for reconsideration of the order but it was
denied. On appeal to the CA, the latter also denied Danfoss petition
for lack of merit. The CA likewise denied petitioners motion for
reconsideration, hence, this appeal.
ISSUE

WON the CA erred in affirming the denial by the court a quo of
petitioners motion to dismiss the complaint for damages on the ground
that it failed to state a cause of action.
HELD
YES.
Ratio. In order to sustain a dismissal on the ground of lack of cause of
action, the insufficiency must appear on the face of the complaint. And
the test of the sufficiency of the facts alleged in the complaint to
constitute a cause of action is whether or not, admitting the facts
alleged, the court can render a valid judgment thereon in accordance
with the prayer of the complaint. For this purpose, the motion to
dismiss must hypothetically admit the truth of the facts alleged in the
complaint.
Reasoning. After a careful perusal of the allegations in respondents
complaint for damages against petitioner, we rule that the same failed
to state a cause of action. When respondent sued petitioner for
damages, petitioner had not violated any right of respondent from
which a cause of action had arisen. Respondent only surmised that
petitioner would not be able to deliver the two units frequency
converter/inverter on the date agreed upon by them. Based on this
apprehension, it cancelled its order six days prior to the agreed date of
delivery. How could respondent hold petitioner liable for damages (1)
when petitioner had not yet breached its obligation to deliver the goods
and (2) after respondent made it impossible for petitioner to deliver
them by cancelling its order even before the agreed delivery date?
-Section 1 (g), Rule 16 of the 1997 Revised Rules on Civil
Procedure provides that:
Section 1. Grounds Within the time for but before filing the answer to
the complaint or pleading asserting a claim, a motion to dismiss may
be made on any of the following grounds:
xxx xxx xxx
(g) That the pleading asserting the claim states no cause of action;
-ON CAUSE OF ACTION: A cause of action is defined under Section
2, Rule 2 of the same Rules
Sec. 2. Cause of action, defined. A cause of action is the act or
omission by which a party violates a right of another.***
-It is the delict or wrongful act or omission committed by the
defendant in violation of the primary right of the plaintiff.
-Disposition. WHEREFORE, we hereby GRANT the petition. The
assailed decision of the CA dated February 11, 2000 and its resolution
dated June 7, 2000 are REVERSED and SET ASIDE. Civil Case
pending before the RTC of Quezon City, Branch 80, is hereby
DISMISSED.
MISJOINDER
UNION GLASS V SEC (Hofilea)
126 SCRA 32
ESCOLIN; November 28, 1983
NATURE
Petition for certiorari and prohibition seeking to annul and set aside the
order of the Securities and Exchange Commission (SEC)
FACTS
- Carolina Hofilea is a stockholder of Pioneer Glass Manufacturing
Corporation, a domestic corporation engaged in the operation of silica
mines and the manufacture of glass and glassware. Since 1967,
Pioneer Glass had obtained various loan accommodations from the
Development Bank of the Philippines [DBP], and also from other local
and foreign sources which DBP guaranteed. The proceeds were used
in the construction of a glass plant in Rosario, Cavite, and the
operation of seven silica mining claims owned by the corporation.
- As security, Pioneer Glass mortgaged and/or assigned its assets to
the DBP in addition to the mortgages executed by some of its
corporate officers over their personal assets. Through the conversion
into equity of the accumulated unpaid interests on the various loans
DBP was able to gain control of the outstanding shares of common
stocks of Pioneer Glass, and to get three regular seats in the
corporation's board of directors.
- When Pioneer Glass suffered serious liquidity problems such that it
could no longer meet its financial obligations with DBP, it entered into a
24
dacion en pago agreement with the latter, whereby all its assets
mortgaged to DBP were ceded to the latter in full satisfaction of the
corporation's obligations in the total amount of P59 million. Part of the
assets transferred to the DBP was the glass plant in Rosario, Cavite,
which DBP leased and subsequently sold to Union Glass and
Container Corporation.
- Hofilea filed a complaint before the SEC against the DBP, Union
Glass and Pioneer Glass. Hofilea prayed that the dacion en pago be
declared null and void and the assets of the Pioneer Glass taken over
by DBP particularly the glass plant be returned.
- Of the five causes of action pleaded, only the first cause of action
concerned Union Glass as transferee and possessor of the glass plant.
Union Glass moved for dismissal of the case on the ground that the
SEC had no jurisdiction over the subject matter or nature of the suit.
Respondent Hofilea filed her opposition to said motion, to which
Union Glass filed a rejoinder.
- SEC Hearing Officer Eugenio Reyes granted the MTD for lack of
jurisdiction. However, upon a MFR, he reversed his original order.
Unable to secure a reconsideration of the Order as well as to have the
same reviewed by the Commission En Banc, Union Glass filed this
petition in the SC.
ISSUE
1. WON the SEC has jurisdiction over the case and not the regular
courts
HELD
1. NO.
Ratio In order that the SEC can take cognizance of a case, the
controversy must pertain to any of the following relationships: [a]
between the corporation, partnership or association and the public; [b]
between the corporation, partnership or association and its
stockholders, partners, members, or officers; [c] between the
corporation, partnership or association and the state in so far as its
franchise, permit or license to operate is concerned; and [d] among the
stockholders, partners or associates themselves.
Reasoning While the Rules of Court, which applies suppletorily to
proceedings before the SEC, allows the joinder of causes of action in
one complaint, such procedure however is subject to the rules
regarding jurisdiction, venue and joinder of parties. Since Union Glass
has no intra-corporate relationship with Hofilea, it cannot be joined as
party-defendant in said case as to do so would violate the rule on
jurisdiction. Hofilea's complaint against Union Glass for cancellation
of the sale of the glass plant should therefore be brought separately
before the regular court.
- Such action, if instituted, shall be suspended to await the final
outcome of the SEC case, for the issue of the validity of the dacion en
pago posed in the SEC case is a prejudicial question, the resolution of
which is a logical antecedent of the issue involved in the action against
Union Glass. Thus, Hofilea's complaint against the latter can only
prosper if final judgment is rendered in SEC Case No. 2035, annulling
the dacion en Pago executed in favor of the DBP.
NOTE: The jurisdiction of the SEC is delineated, by Sec 5 of PD 902-
A:
SEC. 5. In addition to the regulatory and adjudicative function of the
Securities and Exchange Commission over corporations, partnerships
and other forms of associations registered with it as expressly granted
under existing laws and devices, it shall have original and exclusive
jurisdiction to hear and decide cases involving:
a) Devices and schemes employed by or any acts, of the board of
directors, business associates, its officers or partners, amounting to
fraud and misrepresentation which may be detrimental to the interest
of the public and/or the stockholders partners, members of
associations or organizations registered with the Commission;
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members or associates; between
any or all of them and the corporation, partnership or association of
which they are stockholders, members or associates, respectively; and
between such corporation, partnership or association and the state
insofar as it concerns their individual franchise or right to exist as such
entity;
c) Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnerships or
associations.
Disposition Petition GRANTED. Questioned orders of SEC, set aside.
 25

PARTIES
Who may be parties AQUINO [concurring]
- It should appear in the amended complaint (a copy which was not
attached to the petition) that the plaintiff is Ong Hua or Huat, doing
JUASING HARDWARE V MENDOZA business under the tradename, Juasing Hardware, and in the body of
115 SCRA 783 the complaint the personal circumstances of Ong Hua should be
GUERRERO; July 30, 1982 stated.

NATURE Parties in interest

Special Civil Action for certiorari

FACTS CARILLO, GUYOT, SENOY, RISONAR, GONZALES V.

- Juasing Hardware, alleging to be a single proprietorship duly CA (DABON AND DABON)
organized and existing under and by virtue of the laws of the GR No. 121165
Philippines and represented by its manager Ong Bon Yong, filed a
QUISUMBING; September 26, 2006
complaint for the collection of a sum of money against Pilar Dolla.
- In her Answer, defendant stated that she "has no knowledge about
NATURE
plaintiff's legal personality and capacity to sue as alleged in the
Review on certiorari of decision of Court of Appeals
complaint."
- After plaintiff had completed the presentation of its evidence and
FACTS
rested its case, defendant filed a Motion for Dismissal of Action
- Gonzales filed complaint (action for specific performance) against
(Demurrer to Evidence) based on plaintiff's lack of legal capacity to
Manio sps, seeking execution of deed of sale of property she bought fr
sue. Defendant contended that Juasing Hardware is a single
Priscilla Manio. Gonzales said she pd downpayment to Priscilla
proprietorship, not a corporation or a partnership duly registered in
because she had an SPA from her son Aristotle, the owner of the land.
accordance with law, and therefore is not a juridical person with legal
- TC ruled in favor of Gonzales. Gonzales deposited balance w/ the
capacity to bring an action in court. Plaintiff filed an Opposition and
court and filed motion for execution, w/c was w/drawn bec decision
moved for the admission of an Amended Complaint.
wasnt served on defendants. Sheriff finally served a copy at an
- Judge Mendoza dismissed the case and denied admission of the
ungodly hour of 12 mn.
Amended Complaint. MFR was likewise denied
- TCs decision became final and executory.
- The Dabons, claiming to have bought the land fr Aristotle, filed before
ISSUES
the CA a petition for annulment of judgment and orders of the TC.
WON the lower court committed grave abuse of discretion when it
They alleged that the decision was void for lack of jurisdiction over
dismissed the case and refused to admit the Amended Complaint
their persons as the real parties in interest. CA issued resolution
restraining TC from implementing its decision. Hence, this petition by
HELD
Gonzales.
YES
Ratio A defect in the designation of the parties may be summarily
ISSUE/S
corrected at any stage of the action provided no prejudice is caused
1. WON there was basis to annul the decision of the TC.
thereby to the adverse party. (Sec. 4, Rule 10, Revised Rules of Court)
2. WON the Dabons can seek annulment of the TC judgment
Reasoning
- The complaint in the court below should have been filed in the name
HELD
of the owner of Juasing Hardware. The allegations in the body of the
1. YES.
com. plaint would show that the suit is brought by such person AS
Ratio
proprietor or owner of the business conducted under the name and
An action should be brought against the real party in interest. The real
style Juasing Hardware". The descriptive words "doing business as
party in interest is the one who would be benefited or injured by the
Juasing Hardware' " may be added in the title of the case, as is
judgment or is the one entitled to the avails of the suit.
customarily done.
Reasoning
- Rule 3 of the Revised Rules of Court , Sec. 1. Who may be parties.-
- Named petitioners herein are Carillo (Presiding Judge), Guyot (Clerk
Only natural or juridical persons or entities authorized by law may be
of Court), Senoy (Deputy Sheriff), Risonar (Registrar of Deeds), and
parties in a civil action
Gonzales. Carillo, Guyot, Senoy and Risonar are not interested
- Petitioner is definitely not a natural person; nor is it a juridical person
parties because they would not benefit from the affirmative reliefs
as defined in the New Civil Code of the Philippines. 4 The law does not
sought. Only Gonzales remains as genuine party-petitioner in this
vest juridical or legal personality upon the sole proprietorship nor
case.
empower it to file or defend an action in court.
- Gonzales insists that the Dabons have no right to seek annulment of
- However, the defect of the complaint is merely formal, not
the TCs judgment bec theyre not parties to the specific performance
substantial. Substitution of the party plaintiff would not constitute a
case. But the Dabons insist that they are parties in interest bec they
change in the Identity of the parties.
are buyers, owners and possessors of the contested land.
- The courts should be liberal in allowing amendments to pleadings to
- The specific performance case brought by Gonzales to the TC
avoid multiplicity of suits and in order that t he real controversies
named Priscilla Manio and husband as defendants. However, the lot is
between the parties are presented and the case decided on the merits
owned by Aristotle, their son. Priscilla had no interest on the lot and
without unnecessary delay. This rule applies with more reason and
can have no interest in the judgment of the TC. Failure to implead
with greater force when the amendment sought to be made refers to a
Aristotle Manio renders the proceedings in the specific performance
mere matter of form and no substantial rights are prejudiced.
case null and void.
Dispositive Petition is GRANTED.
2. YES.
Ratio
SEPARATE OPINION A person need not be a party to the judgment sought to be annulled.
What is essential is that he can prove that the judgment was obtained
by fraud and he would be adversely affected thereby.
4 Art. 44. The following are juridical persons: Reasoning
(1) The State and its political subdivisions; Although the Dabons are not parties to the specific performance case,
(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have any finding of extrinsic fraud would adversely affect their ownership
been constituted according to law;
and could be basis of annulment of judgment. In this case, Gonzales
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and
knew of the sale of lot by Aristotle Manio to the Dabons yet Gonzales
distinct from that of each shareholder, partner or member.
did not include the Dabons in her petition. This is extrinsic fraud.

Disposition Petition is denied.
DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL,
ARMIDA SIGUION REYNA, et al. v. PCGG, EXEC.
SEC. CATALINO MACARAIG, JR. & PCGG
CHAIRMAN MATEO A.T. CAPARAS
225 SCRA 568
BELLOSILLO/ August 24, 1993
NATURE: Special Civil Action for Prohibition and Mandamus with
Prayer for Preliminary Injunction and/or Restraining Order seek to
enjoin the Presidential Commission on Good Government (PCGG)
from proceeding with the scheduled auction sale by Christies (of NY)
of the Old Masters Paintings and 18th and 19th century silverware
seized from Malacaang and the Metropolitan Museum of Manila and
placed in the custody of the Central Bank.
FACTS:
- Pres. Aquino, through Exec. Sec. Macaraig, Jr., authorized Chairman
Caparas to sign the Consignment Agreement allowing the auction sale
of 82 Old Masters Paintings and antique silverware seized from
Malacaang and the Metropolitan Museum of Manila alleged to be part
of the ill-gotten wealth of the late President Marcos, his relatives and
cronies.
- According to the agreement, PCGG shall consign to CHRISTIE'S for
sale at public auction the 82 Old Masters Paintings then found at the
Metropolitan Museum of Manila as well as the silverware contained in
71 cartons in the custody of the Central Bank of the Philippines, and
such other property as may subsequently be identified by PCGG and
accepted by CHRISTIE'S to be subject to the provisions of the
agreement.
- PCGG through its new Chairman David M. Castro, wrote Pres.
Aquino defending the Consignment Agreement and refuting the
allegations of COAudit Chairman Domingo (that the authority of former
PCGG Chairman Caparas to enter into the Consignment Agreement
was of doubtful legality;
the contract was highly disadvantageous to the government; PCGG
had a poor track record in asset disposal by auction in the U.S.; and,
the assets subject of auction were historical relics and had cultural
significance, hence, their disposal was prohibited by law.
- Director of National Museum Gabriel S. Casal issued a certification
that the items subject of the Consignment Agreement did not fall within
the classification of protected cultural properties and did not
specifically qualify as part of the Filipino cultural heritage. Hence, this
petition.
- After the oral arguments of the parties, the application for preliminary
injunction to restrain the scheduled sale of the artworks was DENIED
on the ground that petitioners had not presented a clear legal right to a
restraining order and that proper parties had not been impleaded.
- The sale at public auction proceeded as scheduled and the proceeds
of $13,302,604.86 were turned over to the Bureau of Treasury.
- On motion of petitioners, 12 more were joined as additional
petitioners and Catalino Macaraig, Jr., in his capacity as former
Executive Secretary, the incumbent Executive Secretary, and
Chairman Mateo A.T. Caparas were impleaded as additional
respondents.
ISSUE:
WON the instant petition complies with the legal requisites for this
Court to exercise its power of judicial review over this case.
HELD: NO. The paintings and silverware, which were taken from
Malacaang and the Metropolitan Museum of Manila and transferred to
the Central Bank Museum (the ownership of these paintings legally
belongs to the foundation or corporation or the members thereof.)
- The confiscation of these properties by the Aquino administration
however should not be understood to mean that the ownership of
these paintings has automatically passed on the government without
complying with constitutional and statutory requirements of due
process and just compensation. If these properties were already
acquired by the government, any constitutional or statutory defect in
their acquisition and their subsequent disposition must be raised only
by the proper parties - the true owners thereof -whose authority to
recover emanates from their proprietary rights which are protected by
statutes and the Constitution. Having failed to show that they are the
26
legal owners of the artworks or that the valued pieces have become
publicly owned, petitioners do not possess any clear legal right
whatsoever to question their alleged unauthorized disposition.
REASONING:
- Dumlao v. Comelec: The rule is settled that no question involving the
constitutionality or validity of a law or governmental act may be heard
and decided by the court unless there is compliance with the legal
requisites for judicial inquiry, namely: that the question must be raised
by the proper party; that there must be an actual case or controversy;
that the question must be raised at the earliest possible opportunity;
and, that the decision on the constitutional or legal question must be
necessary to the determination of the case itself. But the most
important are the first two (2) requisites.
- SC: we have held that one having no right or interest to protect
cannot invoke the jurisdiction of the court as party-plaintiff in an
action. (Sustiguer v. Tamayo, G.R. No. L-29341)
- This is premised on Sec. 2, Rule 3, of the Rules of Court, which
provides that every action must be prosecuted and defended in the
name of the real party-in-interest, and that all persons having
interest in the subject of the action and in obtaining the relief
demanded shall be joined as plaintiffs.
- The Court will exercise its power of judicial review only if the case is
brought before it by a party who has the legal standing to raise the
constitutional or legal question. "Legal standing" means a
personal and substantial interest in the case such that the party has
sustained or will sustain direct injury as a result of the governmental
act that is being challenged. The term "interest" is material
interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a mere
incidental interest (House International Building Tenants
Association, Inc. v. Intermediate Appellate Court, G.R. No. L-75287)
- Moreover, the interest of the party plaintiff must be personal and not
one based on a desire to vindicate the constitutional right of some
third and related party.
- Taada v. Tuvera : There are certain instances however when this
Court has allowed exceptions to the rule on legal standing, as when a
citizen brings a case for mandamus to procure the enforcement of a
public duty for the fulfillment of a public right recognized by the
Constitution, and (Pascual v. Secretary of Public Works) when a
taxpayer questions the validity of a governmental act authorizing the
disbursement of public funds.
-AS regards Mandamus: it does not fulfill the criteria for a mandamus
suit. Legaspi v. Civil Service Commission: a writ of mandamus may be
issued to a citizen only when the public right to be enforced and the
concomitant duty of the state are unequivocably set forth in the
Constitution.
-In the case at bar, petitioners are not after the fulfillment of a positive
duty required of respondent officials under the 1987 Constitution. What
they seek is the enjoining of an official act because it is constitutionally
infirmed. Moreover, petitioners' claim for the continued enjoyment and
appreciation by the public of the artworks is at most a privilege and is
unenforceable as a constitutional right in this action for mandamus.
-As regards Taxpayers Suit: Neither can this petition be allowed as a
taxpayer's suit. Not every action filed by a taxpayer can qualify to
challenge the legality of official acts done by the government.
- A taxpayer's suit can prosper only if the governmental acts being
questioned involve disbursement of public funds upon the theory
that the expenditure of public funds by an officer of the state for
the purpose of administering an unconstitutional act constitutes a
misapplication of such funds, which may be enjoined at the
request of a taxpayer.
- -Obviously, petitioners are not challenging any expenditure
involving public funds but the disposition of what they allege to be
public properties. It is worthy to note that petitioners admit that the
paintings and antique silverware were acquired from private
sources and not with public money.
DISPOSITIVE: The petition for prohibition and
mandamus is DISMISSED.
OPOSA V FACTORAN
224 SCRA 792
DAVIDE JR; JULY 30, 1993
 27

generations, file a class suit. Their personality to sue in behalf of the

NATURE succeeding generations can only be based on the concept of
Special civil action for certiorari of the dismissal order intergenerational responsibility insofar as the right to a balanced and
healthful ecology is concerned. Such a right, as hereinafter
FACTS expounded, considers the "rhythm and harmony of nature." Nature
The controversy has its genesis in Civil Case No. 90-777 which was means the created world in its entirety. Such rhythm and harmony
filed before Branch 66 (Makati, Metro Manila) of the Regional Trial indispensably include, inter alia, the judicious disposition, utilization,
Court (RTC), National Capital Judicial Region. The principal plaintiffs management, renewal and conservation of the country's forest,
therein, now the principal petitioners, are all minors duly represented mineral, land, waters, fisheries, wildlife, off-shore areas and other
and joined by their respective parents. Impleaded as an additional natural resources to the end that their exploration, development and
plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, utilization be equitably accessible to the present as well as future
non-stock and non-profit corporation organized for the purpose of, inter generations. Needless to say, every generation has a responsibility to
alia, engaging in concerted action geared for the protection of our the next to preserve that rhythm and harmony for the full enjoyment of
environment and natural resources. The original defendant was the a balanced and healthful ecology. Put a little differently, the minors'
Honorable Fulgencio S. Factoran, Jr., then Secretary of the assertion of their right to a sound environment constitutes, at the same
Department of Environment and Natural Resources (DENR). His time, the performance of their obligation to ensure the protection of that
substitution in this petition by the new Secretary, the Honorable Angel right for the generations to come.
C. Alcala, was subsequently ordered upon proper motion by the
petitioners. The complaint was instituted as a taxpayers' class suit Dispositive Petition granted. Challenged order set aside.
and alleges that the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's virgin KINDS OF PARTIES
tropical rainforests." The same was filed for themselves and others
Compulsory joinder of indispensable parties
who are equally concerned about the preservation of said resource but
are "so numerous that it is impracticable to bring them all before the
Court." The minors further asseverate that they "represent their ARCELONA V. CA (FARNACIO)
generation as well as generations yet unborn." Consequently, it is G.R. No. 102900
prayed for that judgment be rendered:
PANGANIBAN; Oct. 2, 1997
". . . ordering defendant, his agents, representatives and other persons
acting in his behalf to
NATURE
(1) Cancel all existing timber license agreements in the country;
Petition for review
(2) Cease and desist from receiving, accepting, processing,
renewing or approving new timber license agreements."
FACTS
and granting the plaintiffs ". . . such other reliefs just and equitable
-Olanday, et al. (petitioners) are co-owners pro-indiviso of a fishpond
under the premises."
which they inherited from their deceased parents.
-The original defendant, Secretary Factoran, Jr., filed a Motion to
-A contract of lease over the fishpond was executed between Cipriano
Dismiss the complaint based on two (2) grounds, namely: (1) the
Tandoc and Olanday, et al.
plaintiffs have no cause of action against him and (2) the issue raised
-Private Respondent Moises Farnacio was appointed in turn by Tandoc
by the plaintiffs is a political question which properly pertains to the
as caretaker-tenant of the same fishpond.
legislative or executive branches of Government. In their Opposition to
-After the termination of the lease contract, the lessee (Tandoc)
the Motion, the petitioners maintain that (1) the complaint shows a
surrendered possession of the leased premises to the lessors,
clear and unmistakable cause of action, (2) the motion is dilatory and
Olanday, et al.
(3) the action presents a justiciable question as it involves the
-Three days thereafter, Farnacio instituted Civil Case for "peaceful
defendant's abuse of discretion.
possession, maintenance of security of tenure plus damages, with
-Subsequently, respondent Judge issued an order granting the
motion for the issuance of an interlocutory order" against Olanday, et
aforementioned motion to dismiss. In the said order, not only was the
al., before Respondent Regional Trial Court. The case was intended to
defendant's claim that the complaint states no cause of action
maintain private respondent as tenant of the fishpond.
against him and that it raises a political question sustained, the
-RTC ruled in favor of Farnacio
respondent Judge further ruled that the granting of the reliefs prayed
-IAC affirmed with slight modification
for would result in the impairment of contracts which is prohibited by
-SC sustained IAC
the fundamental law of the land.
-Petitioners filed with CA a petition for annulment of the aforesaid
-Plaintiffs thus filed the instant special civil action for certiorari under
judgment. CA said to implead RTC
Rule 65 of the Revised Rules of Court and ask this Court to rescind
-Dissatisfied, petitioners lodged this petition for review
and set aside the dismissal order on the ground that the respondent
Judge gravely abused his discretion in dismissing the action. Again,
ISSUES
the parents of the plaintiffs-minors not only represent their children, but
1. WON a final judgment may be annulled on the ground of lack of
have also joined the latter in this case.
jurisdiction (over the subject matter and/or over the person of
indispensable parties) and denial of due process, aside from extrinsic
ISSUE
fraud?
WON Civil Case No. 90-777 is a class suit
2. WON all the co-owners pro-indiviso of a real property indispensable
parties?
HELD
YES. The subject matter of the complaint is of common and general
HELD
interest not just to several, but to all citizens of the Philippines.
1. YES.
Consequently, since the parties are so numerous, it becomes
Ratio. Under the present procedure, aside from the reliefs provided in
impracticable, if not totally impossible, to bring all of them before the
these two sections (Secs. 1 & 2, Rule 38), there is no other means
court. We likewise declare that the plaintiffs therein are numerous and
whereby the defeated party may procure final and executory judgment
representative enough to ensure the full protection of all concerned
to be set aside with a view to the renewal of the litigation, unless (a)
interests. Hence, all the requisites for the filing of a valid class suit
the judgment is void for want of jurisdiction or for lack of due process of
under Section 12, Rule 3 of the Revised Rules of Court are present
law, or (b) it has been obtained by fraud.' (I Moran's Rules of Court
both in the said civil case and in the instant petition, the latter being but
1950 Ed., p. 697, citing Anuran v. Aquino, 38 Phil. 29; Banco Espaol-
an incident to the former.
Filipino v. Palanca, 37 Phil. 921). Reason of public policy which favors
-This case, however, has a special and novel element. Petitioners
the stability of judicial decisions are (sic) mute in the presence of fraud
minors assert that they represent their generation as well as
which the law abhors (Garchitorena vs. Sotelo, 74 Phil. 25).
generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding

Reasoning Jurisdiction is conferred by law. Its exercise must strictly
comply with the legal requisites; otherwise, a challenge on the ground
of lack of jurisdiction may be brought up anytime. Such jurisdiction
normally refers to jurisdiction over the subject.
2. YES.
Ratio Co-owners in an action for the security of tenure of a tenant are
encompassed within the definition of indispensable parties; thus, all of
them must be impleaded.
Reasoning As held by the Supreme Court, were the courts to permit
an action in ejectment to be maintained by a person having merely an
undivided interest in any given tract of land, a judgment in favor of the
defendants would not be conclusive as against the other co-owners not
parties to the suit, and thus the defendant in possession of the property
might be harassed by as many succeeding actions of ejectment, as
there might be co-owners of the title asserted against him. The
purpose of this provision was to prevent multiplicity of suits by requiring
the person asserting a right against the defendant to include with him,
either as co-plaintiffs or as co-defendants, all persons standing in the
same position, so that the whole matter in dispute may be determined
once and for all in one litigation.
Disposition PETITION GRANTED.
CEREZO V. TUAZON
G.R. No. 141538
CARPIO; March 23, 2004
NATURE
Petition for review on certiorari
FACTS
-Country Bus Lines passenger bus with plate number NYA 241 collided
with a tricycle.
-tricycle driver Tuazon filed a complaint for damages against Mrs.
Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo
("Atty. Cerezo"), and bus driver Danilo A. Foronda ("Foronda").
-Mrs. Cerezo asserts that the trial court could not validly render
judgment since it failed to acquire jurisdiction over Foronda, an
indispensable party. Mrs. Cerezo points out that there was no service
of summons on Foronda.
ISSUE
1. WON Fronda is an indispensable party
HELD
1. NO.
Ratio COMPULSORY JOINDER OF INDISPENSABLE PARTIES. An
indispensable party is one whose interest is affected by the courts
action in the litigation, and without whom no final resolution of the case
is possible
Reasoning Mrs. Cerezos liability as an employer in an action for a
quasi-delict is not only solidary, it is also primary and direct. Foronda is
not an indispensable party to the final resolution of Tuazons action for
damages against Mrs. Cerezo. The responsibility of two or more
persons who are liable for a quasi-delict is solidary. Where there is a
solidary obligation on the part of debtors, as in this case, each debtor
is liable for the entire obligation. Hence, each debtor is liable to pay for
the entire obligation in full. There is no merger or renunciation of rights,
but only mutual representation. Where the obligation of the parties is
solidary, either of the parties is indispensable, and the other is not even
a necessary party because complete relief is available from either.
Therefore, jurisdiction over Foronda is not even necessary as Tuazon
may collect damages from Mrs. Cerezo alone.
Disposition PETITION DENIED.
Permissive Joinder
FLORES V MALLARE-PHILLIPS
144 SCRA 377
FERIA; September 24,1986
28
NATURE
Appeal by certiorari from the order of the RTC of Baguio
FACTS
-Petitioner Remedio Flores filed a complaint with the RTC of Baguio:
his first cause of action was against respondent Ignacio Binongcal for
refusing to pay the amount of P11,643.00 representing cost of truck
tires which he purchased on credit from petitioner on various occasions
from August to October, 1981; and the second cause of action was
against respondent Fernando Calion for allegedly refusing to pay the
amount of P10,212.00 representing cost of truck tires which he
purchased on credit from petitioner on several occasions from March,
1981 to January, 1982.
-On December 15, 1983, counsel for respondent Binongcal filed a
Motion to Dismiss on the ground of lack of jurisdiction since the
amount of the demand against said respondent was only P11,643.00,
and under Section 19(8) of BP129 the regional trial court shall exercise
exclusive original jurisdiction if the amount of the demand is more than
twenty thousand pesos (P20,000.00).
-It was further averred in said motion that although another person,
Fernando Calion, was allegedly indebted to petitioner in the amount of
P10,212.00, his obligation was separate and distinct from that of the
other respondent.
-At the hearing of said Motion to Dismiss, counsel for respondent
Calion joined in moving for the dismissal of the complaint on the
ground of lack of jurisdiction.
-RTC dismissed the complaint for lack of jurisdiction.
-Petitioner appealed by certiorari to the SC
ISSUE
WON the application of the totality rule in Sec 33(1) 5 of BP 129 and
Section 116 of the interim rules is subject to permissive joinder of
parties under Sec 67 of Rule 3
HELD
Petitioner maintains that the RTC has jurisdiction over the case
following the "novel" totality rule introduced in Section 33(l) of BP129
and Section 11 of the Interim Rules.
-Petitioner compares the above-quoted provisions with the former rule
under Section 88 of the Judiciary Act of 1948 as amended which reads
as follows: Where there are several claims or causes of action
between the same parties embodied in the same complaint, the
amount of the demand shall be the totality of the demand in all the
causes of action, irrespective of whether the causes of action arose out
of the same or different transactions; but where the claims or causes of
action joined in a single complaint are separately owned by or due to
different parties, each separate claim shall furnish the jurisdictional
test, and argues that with the deletion of the proviso in the former rule,
the totality rule was reduced to clarity and brevity and the jurisdictional
test is the totality of the claims in all, not in each, of the causes of
action, irrespective of whether the causes of action arose out of the
same or different transactions.
-This argument is partly correct. There is no difference between the
5
Provided,That where there are several claims or causes of action between the
same or different parties, embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the causes of action, irrespective
of whether the causes of action arose out of the same or different transactions. ...
6
Application of the totality rule.-In actions where the jurisdiction of the court is
dependent on the amount involved, the test of jurisdiction shall be the aggregate
sum of all the money demands, exclusive only of interest and costs, irrespective
of whether or not the separate claims are owned by or due to different parties. If
any demand is for damages in a civil action, the amount thereof must be
specifically alleged.
7
Permissive joinder of parties.-All persons in whom or against whom any right to
relief in respect to or arising out of the same transaction or series of transactions
is alleged to exist, whether jointly, severally, or in the alternative, may, except as
otherwise provided in these rules, join as plaintiffs or be joined as defendants in
one complaint, where any question of law or fact common to all such plaintiffs or
to all such defendants may arise in the action; but the court may make such
orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in aconnection with any proceedings in which he
may have no interest.

former and present rules in cases where a plaintiff sues a defendant on
two or more separate causes of action. In such cases, the amount of
the demand shall be the totality of the claims in all the causes of action
irrespective of whether the causes of action arose out of the same or
different transactions.
-There is a difference between the former and present rules in cases
where two or more plaintiffs having separate causes of action against a
defendant joined in a single complaint.
-Under the former rule, "where the claims or causes of action joined in
a single complaint are separately owned by or due to different parties,
each separate claim shall furnish the jurisdictional test. As worded, the
former rule applied only to cases of permissive joinder of parties
plaintiff. However, it was also applicable to cases of permissive joinder
of parties defendant.
-Under the present law, the totality rule is applied also to cases
where two or more plaintiffs having separate causes of action
against a defendant join in a single complaint, as well as to cases
where a plaintiff has separate causes of action against two or
more defendants joined in a single complaint. However, the
causes of action in favor of the two or more plaintiffs or against
the two or more defendants should arise out of the same
transaction or series of transactions and there should be a
common question of law or fact, as provided in Section 6 of Rule
3.
-In other words, in cases of permissive joinder of parties, whether
as plaintiffs or as defendants, under Section 6 of Rule 3, the total
of all the claims shall now furnish the jurisdictional test. Needless
to state also, if instead of joining or being joined in one complaint
separate actions are filed by or against the parties, the amount
demanded in each complaint shall furnish the jurisdictional test.
-In the case at bar, the lower court correctly held that the
jurisdictional test is subject to the rules on joinder of parties
pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the
Rules of Court and that, after a careful scrutiny of the complaint,
it appears that there is a misjoinder of parties for the reason that
the claims against respondents Binongcal and Calion are
separate and distinct and neither of which falls within its
jurisdiction.
Disposition
The order appealed from is affirmed.
Class suit
NEWSWEEK V IAC (NFSPI et. al.)
142 SCRA 171
FERIA; May 30, 1986
NATURE
Special action for certiorari, prohibition with preliminary injunction
FACTS
- Petitioner, NEWSWEEK, Inc. seeks to annul the decision of the IAC
sustaining the Order of the CFI Bacolod City. CFI denied Newsweeks
Motion to Dismiss complaint for libel. (Question as to whether the
printed article sued upon its actionable or not is a matter of evidence.)
- Initial complaint: Private respondents, incorporated associations of
sugarcane planters in Negros Occidental claiming to have 8,500
members and several individual sugar planters, filed in their own
behalf and/or as a class suit in behalf of all sugarcane planters in
the province of Negros Occidental, against petitioner and two of
petitioners' non-resident correspondents/reporters Fred Bruning and
Barry Came.
- It was alleged that they committed libel by the publication of the
article "An Island of Fear" in the Feb 23, 1981 issue of petitioner's
weekly news magazine Newsweek. It supposedly portrayed their island
as a place dominated by big landowners who not only exploited the
impoverished and underpaid sugarcane workers, but also brutalized
and killed them.
- Complainants therein alleged that said article, taken as a whole,
showed a deliberate and malicious use of falsehood, slanted
presentation and/or misrepresentation of facts.
- They prayed that defendants be ordered to pay them PlM as actual
and compensatory damages, and such amounts for moral, exemplary
and corrective damages as the court may determine.
- NEWSWEEK filed a motion to dismiss on the grounds that ---
29
(1) the printed article sued upon is not actionable in fact and in law;
and (2) the complaint is bereft of allegations that state, much less
support a cause of action. It pointed out the non-libelous nature of the
article and, consequently, the failure of the complaint to state a cause
of action.
- NO CAUSE OF ACTION because no allegation that anything
contained in the article regarding sugarcane planters referred
specifically to any one of the private respondents; that libel can be
committed only against individual reputation; and that in cases where
libel is claimed to have been directed at a group, there is actionable
defamation only if the libel can be said to reach beyond the mere
collectivity to do damage to a specific, individual group member's
reputation.
ISSUE
1. WON respondents failed to state a cause of action
2. WON this case is a class suit
HELD
1. YES
Ratio Defamatory matter which does not reveal the Identity of the
person upon whom the imputation is cast, affords no ground of action
unless it be shown that the readers of the libel could have identified the
personality of the individual defamed. It is evident that the larger the
collectivity, the more difficult it is for the individual member to prove that
the defamatory remarks apply to him.
2. NO
Ratio It is not a case where one or more may sue for the benefit of all
(Mathay vs. Consolidated Bank and Trust Co.) or where the
representation of class interest affected by the judgment or decree is
indispensable to make each member of the class an actual party
(Borlaza vs. Polistico). We have here a case where each of the
plaintiffs has a separate and distinct reputation in the community. They
do not have a common or general interest in the subject matter of the
controversy.
CLASS SUIT
- Where the defamation is alleged to have been directed at a group or
class, it is essential that the statement must be so sweeping or all-
embracing as to apply to every individual in that group or class,
or sufficiently specific so that each individual in the class or group
can prove that the defamatory statement specifically pointed to him, so
that he can bring the action separately, if need be.
Disposition The decision of the Intermediate Appellate Court is
reversed and the complaint in Civil Case No. 15812 of the CFI Negros
Occidental is dismissed, without pronouncement as to costs.
MANILA INTERNATIONAL AIRPORT AUTHORITY v
RIVERA VILLAGE LESSEE HOMEOWNERS
ASSOCIATION,INC.
00 SCRA 00
Tinga, September 30, 2005
NATURE
Petition for Review on Certiorari filed by the MIAA assailing the
Decision of the CA which directed the issuance of a writ of preliminary
injunction restraining petitioner from evicting the homeowners of Rivera
Village from their dwellings.
FACTS
-The then Civil Aeronautics Administration (CAA) was entrusted with
the administration, operation, management, control, maintenance and
development of the Manila International Airport (MIA), now the NAIA.
The CAA entered into individual lease contracts with its employees for
the lease of portions of a 4-hectare lot situated in Rivera Village,
Barangay 199 and 200 in Pasay City. The leases were for a 25-year
period to commence on May 25, 1965 up to May 24, 1990 at P20 per
annum as rental.
- Thereafter, EO 778 was issued (later amended by EO 903), creating
MIAA, transferring existing assets of the MIA to MIAA, and vesting the
latter with the power to administer and operate the MIA.
- MIAA stopped issuing accrued rental bills and refused to accept
rental payments from the lessees. As a result, respondent

homeowners association, purportedly representing the lessees,
requested MIAA to sell the subject property to its members, invoking
the provisions of PD 1517 or the Urban Land Reform Act and PD 2016.
The MIAA denied the request, claiming that the subject property is
included in its Conceptual Development Plan intended for airport-
related activities.
- Respondent filed a petition for mandamus and prohibition with prayer
for the issuance of a preliminary injunction against MIAA and the
National Housing Authority (NHA) with the RTC of Pasay. The petition
sought to restrain the MIAA from implementing its Conceptual
Development Plan insofar as Rivera Village is concerned and to
compel MIAA to segregate Rivera Village from the scope of the
Conceptual Development Plan and the NHA to take the necessary
steps for the disposition of the property in favor of the members of the
homeowners association.
- After the preliminary, the RTC denied the prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction and
dismissed the petition for lack of merit. The trial court held, among
others, that the petition failed to state a cause of action inasmuch as
respondent homeowners association is not the real party-in-interest,
the individual members of the association being the ones who have
possessory rights over their respective premises. Moreover, the lease
contracts have already expired.
- Upon appeal, the CA annulled and set aside the order of the trial
court and remanded the case for further proceedings. A writ of
preliminary injunction was issued restraining and preventing
respondent MIAA from evicting the members of Rivera Village
Association from their respective lots in the Rivera Village. The CA
ruled that the case can be construed as a class suit instituted by the
Rivera Village lessees. The homeowners association, considered as
the representative of the lessees, merely instituted the suit for the
benefit of its members. It does not claim to have any right or interest in
the lots occupied by the lessees, nor seek the registration of the titles
to the land in its name.
- MIAA argues that the petition filed by the homeowners association
with the trial court fails to state a cause of action because the
homeowners association is not the real party-in-interest in the suit.
Allegedly, the Board Resolution presented by respondent shows that it
was only the board of directors of the association, as distinguished
from the members thereof, which authorized respondent to act as its
representative in the suit.
ISSUE
WON the petition filed by respondent with the trial court states a cause
of action against petitioner/ WON respondent has personality to sue
HELD
YES
The 1997 Rules of Civil Procedure requires that every action must be
prosecuted or defended in the name of the real party-in-interest, i.e.,
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. A case is dismissible
for lack of personality to sue upon proof that the plaintiff is not the real
party-in-interest, hence grounded on failure to state a cause of action.
The petition before the trial court was filed by the homeowners
association, represented by its President, Panfilo R. Chiutena, Sr.,
upon authority of a Board Resolution empowering the latter to file "All
necessary action to the Court of Justice and other related acts
necessary to have our Housing Project number 4 land be titled to the
members of the Association."
Obviously, the petition cannot be considered a class suit under Sec.
12, Rule 3 of the Rules of Court, the requisites therefor not being
present in the case, notably because the petition does not allege the
existence and prove the requisites of a class suit, i.e., that the subject
matter of the controversy is one of common or general interest to many
persons and the parties are so numerous that it is impracticable to
bring them all before the court, and because it was brought only by one
party.
In Board of Optometry v. Colet, it was held that courts must exercise
utmost caution before allowing a class suit, which is the exception to
the requirement of joinder of all indispensable parties. For while no
difficulty may arise if the decision secured is favorable to the plaintiffs,
a quandary would result if the decision were otherwise as those who
were deemed impleaded by their self-appointed representatives would
certainly claim denial of due process.
30
There is, however, merit in the appellate courts pronouncement that
the petition should be construed as a suit brought by the homeowners
association as the representative of the members thereof under Sec. 3,
Rule 3 of the Rules of Court, which provides:
Sec. 3. Representatives as parties. Where the action is allowed to be
prosecuted or defended by a representative or someone acting in a
fiduciary capacity, the beneficiary shall be included in the title of the
case and shall be deemed to be the real party in interest. A
representative may be a trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by law or these Rules.
An agent acting in his own name and for the benefit of an undisclosed
principal may sue or be sued without joining the principal except when
the contract involves things belonging to the principal.
It is a settled rule that every action must be prosecuted or defended in
the name of the real party-in-interest. Where the action is allowed to
be prosecuted or defended by a representative acting in a fiduciary
capacity, the beneficiary must be included in the title of the case and
shall be deemed to be the real party-in-interest. The name of such
beneficiaries shall, likewise, be included in the complaint.
Moreover, Sec. 4, Rule 8 of the Rules of Court provides that facts
showing the capacity of a party to sue or be sued, or the authority of a
party to sue or be sued in a representative capacity must be averred in
the complaint. In order to maintain an action in a court of justice, the
plaintiff must have an actual legal existence, that is, he or she or it
must be a person in law and possessed of a legal entity as either a
natural or an artificial person. The party bringing suit has the burden of
proving the sufficiency of the representative character that he claims. If
a complaint is filed by one who claims to represent a party as plaintiff
but who, in fact, is not authorized to do so, such complaint is not
deemed filed and the court does not acquire jurisdiction over the
complaint. It must be stressed that an unauthorized complaint does not
produce any legal effect.
In this case, the petition filed with the trial court sufficiently avers that
the homeowners association, through its President, is suing in a
representative capacity as authorized under the Board Resolution
attached to the petition. Although the names of the individual members
of the homeowners association who are the beneficiaries and real
parties-in-interest in the suit were not indicated in the title of the
petition, this defect can be cured by the simple expedient of requiring
the association to disclose the names of the principals and to amend
the title and averments of the petition accordingly.
Essentially, the purpose of the rule that actions should be brought or
defended in the name of the real party-in-interest is to protect against
undue and unnecessary litigation and to ensure that the court will have
the benefit of having before it the real adverse parties in the
consideration of a case. This rule, however, is not to be narrowly and
restrictively construed, and its application should be neither dogmatic
nor rigid at all times but viewed in consonance with extant realities and
practicalities. As correctly noted by the CA, the dismissal of this case
based on the lack of personality to sue of petitioner-association will
only result in the filing of multiple suits by the individual members of
the association.
Disposition
The instant petition is GRANTED. The decision of the CA is
REVERSED and SET ASIDE. The civil case in the RTC of Pasay City
is ordered DISMISSED.
DEL CASTILLO VS. JAYMALIN, ET AL.
112 SCRA 629
MELENCIO-HERRERA, March 17, 1982
NATURE
Direct appeal from the decision of the CFI which dismiss the case for
Damages due to the death of plaintiff
FACTS
1960: Deaf-mute Mario del Castillo fell upon alighting the bus of the
respondents and died.
1962: Action for recovery of damages was filed by Severo del Castillo,
the father of the victim, against the driver, conductor, and the owner
companies.
1966: Severo died. Counsel for Motion for Annulment Proceedings
after having learned that plaintiff Severo already died without resting
his case. Court ordered plaintiffs counsel to verify existence of heirs
willing to be substituted as parties-plaintiffs. Allegedly, a Deed of

Assignment was executed by Severo in favor of his son-in-law
Wenceslao Haloc of all his rights in the proceedings in 1960 so plaintiff
filed a Motion to Admit Amended Complaint, substituting Wenceslao as
party-plaintiff. Amended Complaint was admitted by the court.
CFI: dismissed original and amended complaints due to the death of
Severo. Wenceslao had no personality to continue the case, not being
a heir of Severo.
ISSUE
1. WON the complaint should be dismissed due to the death of the
plaintiff, even if he had already assigned his rights before he died
2. WON damages should have been awarded
HELD
1. NO
Ratio. Where an assignable right has been transferred before action
brought, the proceeding ought to be instituted in the name of the
assignee; and where an assignment is effected pendente lite, it is
proper to have the assignee substituted for the original plaintiff. If such
substitution should not be effected and the transfer of the right of
action should not be brought to the attention of the court, the original
plaintiff, if successful in the litigation, would hold the fruits of the action
as a sort of trustee for the use and benefit of his assignee.
Reasoning. This is not a case where the provisions of Section 17,
Rule 3 of the Rules of Court on "death of a party" are applicable.
Rather, it is a situation where plaintiff, while alive, had assigned his
rights to another, in which case, the proper procedure would have been
for the transferee to have been substituted for the transferor as
plaintiff. The rights of Severo to claim damages for his son were
transferable. Severo had transferred his rights as plaintiff to Wenceslao
Haloc but after the assignment the case continued in Severo's name
and there was no immediate and formal substitution of party plaintiff.
This is but a formality, however, and the fact remains that, after the
assignment, the substantial plaintiff and real party in interest became
Haloc, with Severo as a sort of trustee of whatever fruits the litigation
would bring.
2. YES
Reasoning. Articles 1764 and 2206 of the Civil Code. Failure to
exercise extraordinary care for the safety of its passengers even after
being apprised of the fact that the victim was a deaf-mute. Should have
been remanded to CA for determination of amount of damages but due
to pendency of case for 13 years + put an end to controversy, Court
imposed P12,000 for death of victim, plus P2,000 attys fees
Disposition. WHEREFORE, the judgment appealed from is hereby
reversed, and defendants hereby ordered jointly and severally, to pay
Wenceslao Haloc, the amount of P12,000.00 as damages for death,
without interest, and P2,000.00 as attorney's fees. No costs. SO
ORDERED.
GOJO V GOYALA
35 SCRA 557
Barredo, J.: Oct. 30, 1970
NATURE
Appeal from a decision of the CFI of Sorsogon
FACTS
-Appellee Segundo Goyala, with his now deceased wife Antonina sold
to Gojo a 2.5 hectare parcel of agricultural land for P750 by a Deed of
Pacto de Retro Sale, the repurchase to be made within one year, as
stated in the deed. The deed also indicates that the vendee paid
another P100 in addition to the purchase price. 10 years after the
execution of said document, Gojo filed a case with the CFI against
Goyala by way of a petition for consolidation of ownership of said land.
Gojo alleged that the period for repurchasing had expired and
ownership had become consolidated in him and that for purposes of
recording the consolidation in the Registry of Property, it was
necessary that a judicial order be issued to that effect.
-Goyala filed an answer to the petition, alleging that they had obtained
a cash loan of P810 from Gojo payable w/in one year w/o interest and
that to guarantee payment, Goyala executed a mortgage in favor of the
petitioner on the parcel of land in question. Hence, although the deed
was executed in the form of a pacto de retro sale, the true intention of
31
the parties was for it to be a mere mortgage to secure payment.
Goyala further claimed that he and his wife attempted to pay the debt
but petitioner refused to receive the sum and cancel the mortgage. By
way of counterclaim, Goyala prayed that petitioner receive the P810
and that the document of mortgage be declared so, and not a pacto de
retro sale. He further prayed for P1800 per annum until the final
termination of the case for the fruits of said property and in the case
that the instrument be deemed a true pacto de retro sale, that
petitioner be ordered to execute a deed of resale in favor of
respondents in accordance with A1606CC.
-Counsel for Goyala filed a manifestation informing the TC that the
named defendant, Antonina, had died, prompting the TC to issue an
order requiring counsel for the plaintiff to submit an amended
Complaint substituting Antonina with one of her successors in interest
as party defendants. Goyala filed a motion to dismiss the petition on
the ground that notwithstanding the lapse of 43 days after appellants
receipt of a copy of the said TC order, said appellant failed and
neglected to submit the amended complaint required of him. Appellant
opposed the motion but the TC dismissed the complaint.
-Appellee filed a motion to declare appellant in default in respect of
said appellees counterclaim, which was granted by the TC, which
further required Goyala to submit his evidence before the Clerk of
Court. TC rendered favorable judgment on appellees counterclaim,
declaring the Deed of Pacto de Retro Sale an equitable mortgage and
ordering Gojo to receive the P810 and to restore possession to the
defendants and allowing them to redeem the same.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ISSUES
Parties: Re contractual money claims / Dismissal by claimant /
Compulsory counterclaim/ Answer: Defenses
WON TC erred in declaring plaintiff in default with respect to
defendants counterclaim
HELD
YES. The appellant contends that there is no occasion for the TC to
declare him in default in respect of appellees counterclaim as said
counterclaim falls within the category of compulsory counterclaim
which does not call for an independent answer as the complaint
already denies its material allegations. It is now settled that a plaintiff
who fails or chooses not to answer a compulsory counterclaim may
not be declared in default, principally because the issues raised in the
counterclaim are deemed automatically joined by the allegations of the
complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored
is a void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the
estate of a deceased person. In Barrameda vs Barbara, the SC held
that an order to amend the complaint, before the proper substitution of
parties as directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and
imposes upon the plaintiff no duty to comply therewith to the end that
an order dismissing the said complaint, for such non-compliance,
would similarly be void. It was further held in Ferriera vs Gonzales that
the continuance of a proceeding during the pendency of which a party
thereto dies, without such party having been validly substituted in
accordance with the rules, amounts to lack of jurisdiction.
WHEREFORE, the decision appealed from is set aside
VENUE
PEOPLE v. MAYOR PABLO SOLA
(page 8)
FACTS
-Bodies found in Mayor Solas hacienda. Information filed against
Mayor, Chief of Police and other accused. Accused were granted bail.
Witnesses fear for their lives because the trial was to be held near the

town where the accused were powerful. Also, the witnesses had been
receiving threats on their lives. Relevance: Change in venue
ON CHANGE OF VENUE: The constitution is quite explicit. The
Supreme Court could order "a change of venue or place of trial to
avoid a miscarriage of justice."
-People v. Gutierrez, J.B.L. Reyes: "TO COMPEL THE
PROSECUTION TO PROCEED TO TRIAL IN A LOCALITY WHERE
ITS WITNESSES WILL NOT BE AT LIBERTY TO REVEAL WHAT
THEY KNOW IS TO MAKE A MOCKERY OF THE JUDICIAL
PROCESS, AND TO BETRAY THE VERY PURPOSE FOR WHICH
COURTS HAVE BEEN ESTABLISHED."
-The exercise by this Honorable Court of its above constitutional power
in this case will be appropriate. The witnesses in the case are fearful
for their lives. They are afraid they would be killed on their way to or
from Himamaylan during any of the days of trial. Because of this fear,
they may either refuse to testify or testify falsely to save their lives.
-there may be cases where the fear, objectively viewed, may, to some
individuals, be less than terrifying, but the question must always be the
effect it has on the witnesses who will testify.
-The primordial aim and intent of the Constitution must ever be kept in
mind. In case of doubt, it should be resolved in favor of a change of
venue
TIME, INC. vs. REYES
39 SCRA 303
REYES, J.B.L.; May 31, 1971
NATURE
Petition for certiorari and prohibition, with preliminary injunction, to
annul certain orders of the respondent Court of First Instance of Rizal,
issued and to prohibit the said court from further proceeding with the
said civil case.
FACTS
- Antonio J. Villegas and Juan Ponce Enrile (Mayor of Manila and
Undersecretary of Finance and concurrently Acting Commissioner of
Customs, respectively, with offices in the City of Manila) filed a civil
action in the Court of First Instance of Rizal seeking to recover from
the herein petitioner damages upon an alleged libel arising from a
publication of Time (Asia Edition) magazine, in its issue of 18 August
1967, of an essay, entitled "Corruption in Asia", wherein the defendants
allegedly impute to plaintiffs the commission of the crimes of graft and
corruption and nepotism.
- Petitioner Time, Inc., is an American corporation with principal offices
at Rockefeller Center, New York City, N. Y., and is the publisher of
"Time", a weekly news magazine.
PROCEDURE
- Villegas and Enrile filed a Motion for leave to take the depositions "of
Mr. Anthony Gonzales, Time-life International", and "Mr. Cesar B.
Enriquez, Muller & Phipps (Manila) Ltd.", in connection with the
activities and operations in the Philippines of the petitioner. It was
granted by Judge Reyes and he also issued a writ of attachment on
the real and personal estate of Time, Inc.
- Time Inc. filed a motion to dismiss the complaint for lack of
jurisdiction and improper venue, relying upon the provisions of
Republic Act 4363 (According to this law, 'The criminal and civil action for
damages in cases of written defamations. . .where one of the offended parties is
a public officer whose office is in the City of Manila at the time of the commission
of the offense, the action shall be filed in the Court of First Instance of the City of
Manila or of the city or province where the libelous article is printed and first
published, and in case such public officer does not hold office in the City of
Manila, the action shall be filed in the Court of First Instance of the province or
city where he held office at the time of the commission of the offense or where
the libelous article is printed and first published).
- Respondent court deferred the determination of the motion to
dismiss until after trial of the case on the merits, the court having
considered that the grounds relied upon in the motion do not appear to
be indubitable.
- Petitioner moved for reconsideration of the deferment; The
respondent judge issued an order re affirming the previous order of
deferment for the reason that "the rule laid down under Republic Act
No. 4363, amending Article 360 of the Revised Penal Code, is not
applicable to actions against non-resident defendants, and because
32
questions involving harrasments and inconvenience, as well as
disruption of public service do not appear indubitable . . ."
- Petitioner filed the instant petition for certiorari and prohibition.
(Subject of the petition: The orders for the taking of the said
depositions, for deferring determination of the motion to dismiss, and
for re affirming the deferment, and the writ of attachment are sought to
be annulled in the petition.)
ISSUES
1. Whether or not, under the provisions of Republic Act No. 4363 the
respondent Court of First Instance of Rizal has jurisdiction to take
cognizance of the civil suit for damages arising from an allegedly
libelous publication, considering that the action was instituted by public
officers whose offices were in the City of Manila at the time of the
publication;
2. If it has no jurisdiction, whether or not its erroneous assumption of
jurisdiction may be challenged by a foreign corporation by writ of
certiorari or prohibition; and
HELD
1. No. The proper venue is the CFI of Manila.
Ratio: Under Article 360 of the Revised Penal Code, as amended by
Republic Act No. 4363, actions for damages by public officials for
libelous publications against them can only be filed in the courts of first
instance of the city or province where the offended functionary held
office at the time of the commission of the offense, in case the libelous
article was first printed or published outside the Philippines.
Reasoning:
a. (Intent of the law) The assertion that a foreign corporation or a non-
resident defendant is not inconvenienced by an out-of-town suit is
irrelevant and untenable, for venue and jurisdiction are not dependent
upon convenience or inconvenience to a party; and moreover, venue
was fixed under Republic Act No. 4363, pursuant to the basic policy of
the law that is, as previously stated, to protect the interest of the public
service when the offended party is a public officer, by minimizing as
much as possible any interference with the discharge of his duties.
b. (Textual and strict interpretation of the law) The rule is that where a
statute creates a right and provides a remedy for its enforcement, the
remedy is exclusive; and where it confers jurisdiction upon a particular
court, that jurisdiction is likewise exclusive, unless otherwise provided.
Hence, the venue provisions of Republic Act No 4363 should be
deemed mandatory for the party bringing the action, unless the
question of venue should be waived by the defendant, which was not
the case here.
2. Yes.
Ratio: The action of a court in refusing to rule, or deferring its ruling,
on a motion to dismiss for lack of jurisdiction over the subject matter, or
for improper venue, is in excess of jurisdiction and correctible by writ of
prohibition or certiorari sued out in the appellate Court, even before
trial on the merits is had.
Reasoning
It would be useless and futile to go ahead with the proceedings if the
court had no jurisdiction.
DISPOSITION
The writs applied for are granted: the respondent Court of First
Instance of Rizal is declared without jurisdiction to take cognizance of
its Civil Case No. 10403; and its orders issued in connection therewith
are hereby annulled and set aside. Respondent court is further
commanded to desist from further proceedings in Civil Case No. 10403
aforesaid.
The writ of preliminary injunction heretofore issued by this Supreme
Court is made permanent.
PILIPINO TELEPHONE V TECSON
00 SCRA 00
VITUGJ; May 7, 2004
NATURE
Special civil action of certiorari
FACTS
- On various dates in 1996, Delfino C. Tecson applied for six (6)
cellular phone subscriptions with petitioner Pilipino Telephone

Corporation (PILTEL), which applications were each approved and
covered, by six mobiline service agreements.
- On 05 April 2001, respondent filed with the RTC of Iligan City, Lanao
Del Norte, a complaint against petitioner for a "Sum of Money and
Damages." Petitioner moved for the dismissal of the complaint on the
ground of improper venue, citing a common provision in the mobiline
service agreements to the effect that -
"Venue of all suits arising from this Agreement or any other suit directly
or indirectly arising from the relationship between PILTEL and
subscriber shall be in the proper courts of Makati, Metro Manila.
Subscriber hereby expressly waives any other venues."
- In an order, the RTC denied petitioner's MTD and required it to file an
answer within 15 days from receipt thereof.
- PILTEL filed a MFR, through registered mail, of the order of the trial
court. In its subsequent order, TC denied the MFR.
- Petitioner filed a petition for certiorari under Rule 65 of the Revised
Rules of Civil Procedure before the CA.
- CA saw no merit in the petition and affirmed the assailed orders of the
TC. Petitioner moved for a reconsideration, but the appellate court
denied the motion.
ISSUE/S
WON parties may stipulate on the venue of any litigation between them
HELD
YES
Ratio Section 4, Rule 4, of the Revised Rules of Civil Procedure allows
the parties to agree and stipulate in writing, before the filing of an
action, on the exclusive venue of any litigation between them. Such an
agreement would be valid and binding provided that the stipulation on
the chosen venue is exclusive in nature or in intent, that it is expressed
in writing by the parties thereto, and that it is entered into before the
filing of the suit.
Reasoning. The provision contained in paragraph 22 of the "Mobile
Service Agreement," a standard contract made out by petitioner
PILTEL to its subscribers, apparently accepted and signed by
respondent. The added stipulation that the subscriber "expressly
waives any other venue" should indicate, clearly enough, the intent of
the parties to consider the venue stipulation as being preclusive in
character.
The appellate court, however, would appear to anchor its decision on
the thesis that the subscription agreement, being a mere contract of
adhesion, does not bind respondent on the venue stipulation. But such
an agreement is not per se inefficacious. The rule instead is that,
should there be ambiguities in a contract of adhesion, such ambiguities
are to be construed against the party that prepared it. If, however, the
stipulations are not obscure, but are clear and leave no doubt on the
intention of the parties, the literal meaning of its stipulations must be
held controlling.
A contract duly executed is the law between the parties, and they are
obliged to comply fully and not selectively with its terms. A contract of
adhesion is no exception.
Disposition WHEREFORE, the instant petition is GRANTED.
PLEADINGS
In General: Manner of making allegations in
pleadings
Actionable document
SANTIAGO VS DE LOS SANTOS
61 SCRA 146
FERNANDO; November 22, 1974
FACTS
Santiago applied for registration of a parcel of land located in San
Mateo, Rizal. The application is opposed by the Director of Lands,
Director of Forestry and by Mrs. Pacita V. de los Santos on the ground
that the property applied for is part of the public domain.
Subsequently, motions to dismiss the application were filed by the
oppositor Pacita V. de los Santos and the Director of Forestry which
motions are principally based on the allegation that the property
applied for is a portion of the public domain which was leased to Mrs.
Pacita de los Santos under Pasture Lease Agreement No. 1305.
33
The motion to dismiss was granted based on the documents attached
to their motion by Judge Cecilia Muoz Palma, now an Associate
Justice of this Court, dismissed the suit. In this appeal, Santiago seeks
for the decision to be reversed. His new counsel, the firm of Luna and
Manalo, is thorough and comprehensive.
ISSUE
WON the order of the lower court should be reversed.
HELD
NO.
Even the most cursory reading of the order of dismissal can lead to no
other conclusion except that it should be affirmed. Notwithstanding the
vigor with which the appeal is being prosecuted by new counsel, it
cannot suffice for a reversal. The infirmity of the case is incurable.
The pleading left no choice to the then Judge Muoz Palma except to
dismiss the case, which wrote: ... the portion of the said parcel of land
subject of this registration which was claimed as part of the public
forest has already been released by the Honorable Secretary of
Agriculture and Natural Resources for agricultural purposes as
evidenced by its order dated August 10, 1961. Attached to such
pleading were the documents, which, in the language of the then
Judge Palma, "show that the land object of this registration proceeding
is part of the public domain. Former counsel ought to have realized
the fatal effect on his client's case of such an admission. If it were his
intention to demolish entirely the pretension of plaintiff to the claim that
he had been in open, public, uninterrupted, peaceful and adverse
possession in the concept of owner from July 26, 1894 up to the
present, he could not have succeeded any better.
What was so categorically therein set forth as to such parcel
of land being a part of a public forest, although thereafter released by
the Secretary of Agriculture and Natural Resources for agricultural
purposes, is conclusive and binding. It would clearly appear that
Santiago could not in truth show that there was such an open,
uninterrupted, peaceful and adverse possession in the concept of
owner
It is a familiar doctrine," according to Justice J.B.L. Reyes in Joe's
Radio & Electrical Supply v. Alto Electronics Corp., 5 "that an
admission made in the pleadings cannot be controverted by the party
making such admission and are conclusive as to him, and that all
proofs submitted by him contrary thereto or inconsistent therewith,
should be ignored, whether objection is interposed by the party or
not ... ." 6 Even if there had been a full hearing on the case, therefore,
the result would not have been any different. There was no choice then
for the lower court except to dismiss the complaint.
The present counsel of Santiago tries to extricate himself
from a predicament of his own making by arguing that the motion to
dismiss of Pacita de los Santos is not entitled to recognition as there
was a general order of default except as to the Bureau of Lands and
the Bureau of Forestry, not lifted as to her and that she has no interest
to oppose the application although admittedly there was a claim on her
part under a pasture lease agreement in her favor. But in the motion to
dismiss of de los Santos, it was alleged that the son of Santiago,
Juanito was one time the lessee of the timber area sought to be
registered by Santiago. There was no denial of such allegation. It is
quite obvious then that the facts, no less than the law, call for precisely
the conclusion reached by the then Judge Muoz Palma.
"Rules of pleading are intended to secure a method by which the
issues may be properly laid before the court. When those issues are
already clear before the court, the deficiency in the observance of the
rules should not be given undue importance. What is important is that
the case be decided upon the merits and that it should not be allowed
to go off on procedural points. Technicalities, in the appropriate
language of Justice Makalintal, "should give way to the realities of the
situation." 13 Well could Justice Cardozo observe: "A system of
procedure is perverted from its proper function when it multiplies
impediments to justice without the warrant of clear
necessity."
Dispositive. WHEREFORE, the appealed order of November 17,
1961 of the then Judge Muoz Palma is affirmed. Costs against
appellant Luis R. Santiago
 34

The Claim as damages for improper issuance of a writ of attachment which writ,
evidently had been issued earlier by the court.
Counterclaim/cross-claim after answer - NAMARCO filed an answer to the FEDERATION'S counterclaim
specifically denying the material averments thereof and maintaining
NAMARCO v. FEDERACION that the present action is not barred by Civil Case No. 42684.
49 SCRA 238
ISSUE
ANTONIO; January 31, 1972 WON this action of NAMARCO for the collection of the payment of the
merchandise delivered to, but not yet paid by, the FEDERATION, is
NATURE
already barred as a consequence of the failure of NAMARCO to set it
Appeal by defendantfrom a decision of the Court of First Instance
up as a counterclaim in the previous case, (Civil Case No. 42684).
ordering said defendant to pay the plaintiff
HELD
FACTS
- A counterclaim has been held to be compulsory if there is a logical
- NAMARCO is a GOCC organized and existing under and by virtue of
relationship between it and the main claim.
RA 1345. FEDERATION is a non-stock corporation duly organized and
- But even assuming for the nonce that NAMARCO's present claim is
existing under and by virtue of the laws of the Philippines.
logically related to the claim of the FEDERATION in the previous case,
- They entered into a Contract of Sale which says that the
NAMARCO's claim having accrued or matured after the service of its
Management of NAMARCO was authorized to import items worth
answer in the earlier case is in the nature of an after-acquired
$2,001,031. FEDERATION deposited P200,000 as partial payment
counterclaim which under the rules is not barred even if it is not set up
and the balance shall be paid on cash basis upon delivery of the duly
in the previous case as a counterclaim. An after-acquired counterclaim,
indorsed negotiable shipping document covering the same and
is one of the recognized exceptions to the general rule that a
- To insure payment, the NAMARCO accepted three domestic letters of
counterclaim is compulsory and must be asserted if it arises out of the
credit for the account of the FEDERATION.
same transaction as the opposing party's claim.
- The FEDERATION and some of its members filed a complaint against
- The party need not assert a counterclaim that has not matured at the
the NAMARCO for specific performance and damages, alleging that
time he serves his pleading. This is derived from the language in the
after the NAMARCO had delivered a great portion of the goods listed
rule limiting its application to claims the pleader has 'at the time of
in the Contract of Sale, it refused to deliver the other goods mentioned
serving the pleading.' A counterclaim acquired by defendant after he
in the said contract.
has answered will not be considered compulsory, even if it arises out of
- CFI ordered the NAMARCO to specifically perform its obligation in
the same transaction as does plaintiff's claim. Similarly, a counterclaim
the Contract of Sale, by delivering to the FEDERATION the
acquired by plaintiff after he has replied to a counterclaim by defendant
undelivered goods.
is not compulsory under Rule 13(a). However, if a party should acquire
- SC: The Contract of Sale was valid."
a matured counterclaim after he has pleaded, Rule 13(e) provides that
- NAMARCO: FEDERATION'S act or omission in refusing to satisfy the
he may obtain the court's permission to include it in a supplemental
former's valid, just and demandable claim has compelled it to file the
pleading under Rule 15(d)."
instant action; and praying that the FEDERATION be ordered to pay
- A counterclaim may be asserted under Rule 13(e) only by leave of
the NAMARCO the costs of merchandise plus damages.
court, which usually will be granted in order to enable the parties to
- FEDERATION moved to dismiss the complaint on the ground that the
litigate all the claims that they have against each other at one time
cause of action alleged therein is barred forever, pursuant to section 6
thereby avoiding multiple actions. However, Rule 13,(e) is permissive
of Rule 10 of the Rules of Court. In support thereof, the FEDERATION
in character. An after-acquired counterclaim, even if it arises out of the
alleged it filed a case for specific performance to enforce compliance
transaction or occurrence that is the subject matter of the opposing
with the contract of sale; that said contract is also the basis
party's claim, need not be pleaded supplementally; the after-acquired
NAMARCO's present complaint; that when NAMARCO filed its answer
claim is not considered a compulsory counterclaim under Rule 13(a)
to the complaint, it did not set up any counterclaim therein; that the CFI
and a failure to interpose it will not bar its assertion a later suit.
promulgated the decision in said case ordering, among others, the
- The counterclaim must be existing at the time of filling the answer,
NAMARCO to specifically perform its obligation under the contract of
though not at the commencement of the action for under Section 3 of
sale by delivering to the FEDERATION the goods subject-matter of the
the former Rule 10, the counterclaim or cross-claim which a party may
contract as are involved in the complaint.
aver in his answer must be one which he may have "at the time"
- NAMARCO opposed the motion to dismiss contending that its claim
against the posing party. That phrase can only have reference to the
for the recovery of the cost of merchandise delivered to the
time of the answer. Certainly a premature counterclaim cannot be set
FEDERATION is not necessarily connected for specific performance
up in the answer. This construction is not only explicit from the
and, therefore, does not fall under the category of compulsory
language of the aforecited provisions but also serves to harmonize the
counterclaim; that NAMARCO's failure to set it up as a counterclaim in
aforecited sections of Rule 10, with section 4 of the same rule which
its answer does not constitute res judicata; that the deliveries of the
provides that "a counterclaim . . . which either matured or was acquired
merchandise were effected through the fault or negligence of one of its
by a party after serving his pleading may, with the permission of the
personnel, Juan T. Arive, who was administratively charged therefor,
court, be presented as a counterclaim . . . by supplemental pleading
found guilty and accordingly dismissed.; that the present claim is not
before judgment."
necessarily connected with the transaction or occurrence that is the
- Thus a party who fails to interpose a counterclaim although arising
subject matter of Civil Case No. 42684, as the same evidence would
out of or is necessarily connected with transaction or occurrence of the
not support or refute both.
plaintiff's suit but which did not exist or mature at the time said party
- The FEDERATION filed a rejoinder reiterating that the requirements
files his answer is not thereby barred from interposing such claim in a
on the rule of compulsory counterclaim are present; that the first
future litigation. However such claim may with the court's permission
requirement that the counterclaim arises out of or is necessarily
be included in the same case by way of supplemental pleading before
connected with the contract of sale subject-matter of NAMARCO's
judgment under Section 4 of former Rule 10 of the Rules (now Sec. 9
cause of action is evident from the face of the complaint itself.
Rule 6). And the same may be allowed unless the case has
- LC issued an order holding "in abeyance" action on the motion to
progressed so far that it may be inconvenient or confusing to allow the
dismiss till after the trial on the merits.
additional claim to be pleaded.
- FEDERATION filed its answer to the NAMARCO's complaint
- We therefore rule that NAMARCO's present action, is not barred by
admitting some material averments of the complaint, specifically
its failure to assert it as a counterclaim the previous case.
denying other allegations and consistently with its position averred as
affirmative defense that NAMARCO's failure to assert its claim against
BARREDO, dissenting:
the FEDERATION before judgment in Civil Case No. 42684 on October
- Namarco's present claim arise out of or was necessarily connected
15, 1960 constituted a bar to the institution of the present action. By
with the transaction or occurrence that was the subject matter of the
way of counterclaim, the FEDERATION sought P50,000.00 as
Federation's action in Civil Case No 42684 within the contemplation of
attorney's fees and other expenses of litigation, as well as P17,000.00
the rule on compulsory counterclaims.

- It was the element of time herein involved that somehow induced me
at the beginning to be inclined, albeit reluctantly, to sustain Namarco's
position in this appeal. At the precise time that Namarco filed its
answer in Civil Case No. 42684, it was not yet certain that the
Federation would not pay or that payment of its sight drafts would not
be effected by the bank. In other words, from that point of view,
Namarco's cause of action had not yet matured then. It is also clear,
however, that said cause of action accrued before judgment was
rendered by the trial court.
- Under Section 4 of Rule 10 of the old rules, now Section 9 of Rule 6,
a counterclaim which either matured or was acquired by a defendant
after serving his answer may be set up in a supplemental pleading
later before judgment. Since this may be done or not in the case of
counterclaims not arising out of the same transaction or occurrence,
the question that arises is, must it have to be done in the case of
counterclaims that do arise from the same transaction or occurrence,
such that if not interposed, they must be deemed barred?
- I agree that the Court rule for the present that for a counterclaim to be
considered as barred, under the above provisions, the cause of action
thereof must have already accrued at the time the answer is filed by
the defendant, although I, for one, would prefer supplemental
counterclaims, the defendant should just the same be compelled to
allege it in such a supplemental pleading in those cases where his
claim accrues before trial has began or at the latest, before the
defendant has started presenting his evidence. Otherwise stated, my
position is that the claim of Namarco in this case did arise out of the
same transaction or occurrence that was the subject matter of the
Federation's anterior action, but inasmuch as, on the hypothesis that
the contract were binding, the formers' cause of action could not have
been considered as already matured when it filed its answer, there
would have been no need for it to file this counterclaim.
- The whole trouble with Namarco's pose in this a appeal lies, however,
in the fact that in its answer to the Federation's complaint, it pleaded
the defense of illegality or nullity of the contract. From that point of
view, it was immaterial to Namarco's recovery of the purchase price of
goods it had already delivered under the contract that there was in said
contract any term for the payment thereof. As far as Namarco was
concerned, those goods had been delivered illegally and should have
been immediately returned unless their value had been paid for,
(Article 1412 (2), Civil Code) or Namarco was in pari delicto (Article
1411, id). Such being the case, it is quite evident that when Namarco
filed its answer to the Federation's action, its cause of action for the
recovery of the price of the delivered goods was already existing and
could have been the subject of a counterclaim. This means that as of
the time Namarco filed its answer contesting the legality or validity of
the contract, it was incumbent upon it to then and there seek recovery
of whatever it had delivered thereunder.
Amended and Supplemental pleadings
YOUNG VS SPOUSES SY
GR No. 157745
AUSTRIA- MARTINEZ, September 26, 2006
NATURE
Consolidated petitions for review on Certiorari
FACTS
- Petitioner filed a complaint for nullification of Second Supplemental
Extra-judicial settlement, mortgage, foreclosure sale, and tax
declaration against respondents on May 20, 2000. The complained
alleged that the questioned partition which was executed by her
mother was unenforceable since at the time of the execution the
petitioner was only 15 years old and that no court approval was
secured. Her mother obtained a loan from the spouses respondents
and used the property as security (mortgage). Due to non-payment the
property was foreclosed and sold to respondents as highest bidders.
The deed of sale has been filed with the Register of Deed and the
respondents obtained n their name a tax declaration over the property.
- Petitioner subsequently filed with the same RTC a Motion to Admit
Supplemental Complaint to invoke her right to exercise legal
redemption over the property. This supplemental motion was denied by
the RTC on December 28, 2000. Petitioner filed a Petition for Certiorari
and Mandamus under Rule 65 of the Rules of Court with the CA. The
CA dismissed the petition on the ground that the cause of action in the
35
Supplemental complaint is entirely different from the original complaint,
that the said complaint did not merely supply its deficiencies, and that,
at any rate, in the event the trial court issues an adverse ruling, the
petitioner can still the same. Petitioner filed this Petition for review on
certiorari under Rule 45 with the SC.
- With regard the original action, the RTC dismissed the case upon
motion of the respondents on the ground of failure to prosecute.
Apparently, the petitioner had asked for postponements opening the
door for a claim by the respondents of non-suit. (This is where it
becomes more interesting) Petitioner filed two appeals with the CA.
Both appeals raised essentially the same issues. One of the appeals
an ordinary appeal and the other is a Petition for Certiorari under Rule
65 filed four months after the first. The CA ruled in favor of the
petitioner under the ordinary appeal but a motion for reconsideration
was filed by the respondents and the CA has yet to rule on this
reconsideration motion. The other appeal was dismissed on the ground
that judgment of the RTC can only be appealed via an ordinary appeal
and not by certiorari. Hence this petition for review under Rule 45 with
the SC.
ISSUE/S
1. WON the denial of the Motion to admit supplemental Complaint is
valid
2. WON the dismissal of the petition for certiorari with regard the
original action is proper
HELD
1. No. As its very name denotes, a supplemental pleading only serves
to bolster or add something to the primary pleading. A supplement
exists side by side with the original. It does not replace that which it
supplement. Moreover, a supplemental pleading assumes that the
original pleading is to stand and that the issues jpined with the original
pleading remained an issue to be tried in the action. It is but a
continuation of the complaint. Its usual office is to set up new facts
which justify, enlarge or change the kind of relief with respect to the
same subject matter as the controversy referred to in the original
complaint. In this case, the consolidation of the title over the property in
the name of the respondent, Manuel Sy, and the issue as to whether it
precluded petitioner as alleged co-owner from exercising the right of
legal redemption, are new matters that occurred after the filing of the
original complaint. The relief prayd for in the Supplemental complaint,
which is the exercise of the right of legal redemption accorded to co-
owners of property, is germane to and intertwined with the cause of
action in the Complaint for the nullification. The right of legal
redemption as co-owner is conferred by law and is merely a natural
consequence of co-ownership. Hence petitioners cause of action for
legal redemption as embodied in the supplemental complaint stems
directly from and is an extension of her rights as co-owner of the
property subject of the complaint. Also as petitioner correctly pointed
out, even if the trial court decides in her favor, the redemption period
would have lapsed already and would not form part of the decision
since it is not prayed for, much less alleged in the original complaint. In
such a case, the respondents could oppose the exercise since it would
not have been included in the decision over the original complaint.
2. Yes. The petitioner is guilty of forum shopping. Forum shopping
consists of filling multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, the the purpose
of obtaining a favorably judgment. There is forum shopping where
there exist: (a) identity of parties, or at least such parties as represent
the same interests in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same facts; (c) the
identity of the two preceding particulars is such that any judgment
rendered in the pending case, regardless of which party is successful
would amount to res judicata. The decision of the RTC is dismissing
the case is a final order and the proper remedy against such final order
is appeal and not certiorari. As a general rule, a writ of certiorari sill not
issue where the remedy of appeal is available to the aggrieved party.
The remedies of appeal in the ordinary course of law and that of
certiorari under Rule 65 are mutually exclusive and not alternative or
cumulative. hence the special civil action of certiorari under Rule 65
cannot be a substitute for an appeal where the latter remedy is
available. This is a firm judicial policy.
Disposition
Petition for the non-suit is denied. Petition for the admission of the
supplemental order is granted. The trial court is directed to admit said

complaint.
Third Party Complaint, etc.
REPUBLIC V CENTRAL SURETY & INSURANCE
COMPANY
26 SCRA 741
CASTRO; October 26, 1968
NATURE
FACTS
- October 23, 1959 > Republic of the Philippines filed suit against the
Central Surety & Insurance Company and Mangoba, manager of the
bond department stating that Po Kee Kam who was the subject of
deportation proceedings in whom the bond was made in favor of, did
not appear in such proceedings despite notice to the Surety. This
constituted a violation of the conditions of the bond causing the
forfeiture of the bond made by the Surety in favor of the government.
Republic claims P5,000 (amount of bond) and P1,000 (attys fees)
- July 5, 1963 > Surety filed its answer: (1) that its bond cannot be
made liable beyond the amount of P5,000; (2) that it is not liable for
attorney's fees in the absence of any stipulation to that effect; (3) that
the court has no jurisdiction over the case as the amount involved is
only P5,000; and (4) that the Republic has no cause of action.
- July 30, 1963 > Surety filed a third-party complaint, with leave of
court, against Po Kee Kam and Tony Go alleging that for consideration
of the bond, the third-party defendants, executed an indemnity
agreement in favor of the Surety to indemnify it for damage, loss,
expenses etc and that in the event judgment is rendered against it, the
third party defendants be ordered to reimburse
- September 7, 1963 > the third-party defendants answer: defense that
the case is premature as the main case has not yet been terminated.
- December 2, 1963 > upon verbal motion of the third party
defendants, the trial court dismissed the third-party complaint for lack
of jurisdiction that the third-party complaint was filed after the passage
of RA 3828 conferring original jurisdiction on the Municipal Court in civil
cases involving not more than P10,000.00, and that the third-party
complaint refers to a claim of only P6,000.00
- December 3, 1963 > TC ordered surety to pay the Republic P5,000,
with interest
- CA: Surety interposed its appeal from the order dismissing its third-
party complaint and from the decision ordering it to pay the Republic
the amount of P5,000, contending that the trial court erred in (1) not
declaring itself without jurisdiction over the subject-matter of the action,
and (2) dismissing the third-party complaint. But it certified the case to
SC pursuant to Sec 2 Article VIII of the Constitution and Sec 17(3) of
RA 296 where jurisdiction of TC is in issue
ISSUES
1. WON the trial court had jurisdiction over the subject-matter of the
main action
2. WON the trial court had jurisdiction over the third-party complaint
HELD
1. YES
- Even though the total amount involved is only P6,000 (P5,000 under
the bond and P1,000 as attorney's fees) and a court of first instance is
vested with jurisdiction only over cases in which the demand, exclusive
of interest, or the value of the property in controversy, exceeds
P10,000, pursuant to section 44 of Republic Act 296, as amended by
Republic Act 3828 which took effect on June 22, 1963, the present
action having been filed on June 20, 1963 (two days before the
effectivity of Republic Act 3828 which broadened the jurisdiction of
municipal and city courts to include cases in which the demand,
exclusive of interest, or the value of the property in controversy, does
not exceed P10,000) it is cannot be argued that the court's jurisdiction
over the case was lost on June 22, 1963, when Republic Act 3828 took
effect, and therefore the case should have been remanded to the
municipal court.
- It is not disputed that the trial court acquired jurisdiction over the
subject-matter on June 20, 1963 when the complaint was filed with it. It
is of no moment that summons was served and that the case was
heard and decided after the effectivity of Republic Act 3828, because
36
the rule is firmly entrenched in our law that jurisdiction once acquired
continues until the case is finally terminated
2. YES
- It is true that the third-party complaint was filed after the effectivity
date of RA3828. It is likewise true that the demand therein made does
not exceed P10,000, and, therefore, is not within the jurisdiction of the
Court of First Instance if it were an independent action. But the third-
party complaint is an ancillary suit which depends on the jurisdiction of
the court over the main action. Since the trial court had acquired
jurisdiction over the complaint, it necessarily follows that it likewise had
jurisdiction over the third-party complaint which is but an incident
thereof. This must be so because jurisdiction over the main case
embraces all incidental matters arising therefrom and connected
therewith. A contrary rule would result in "split jurisdiction" which is not
favored, and in multiplicity of suits, a situation obnoxious to the orderly
administration of justice.
-
Talisay-Silay Milling Co., et al. vs. CIR, et al: The third-party
complaint is but a continuation of the main action, its purpose being
merely to seek "contribution, indemnity, subrogation or any other relief,
in respect of his opponent's claim." (Rule 6, See. 12.) The aim is to
avoid the actions which should be tried together to save the time and
cost of a reduplication of evidence, to obtain consistent results from
identical or similar evidence, and to do away with the serious handicap
to a defendant of a time difference between a judgment against him
and a judgment in his favor against the third party defendant.
Petitioners urge that a rule similar to the rule on counterclaim be
adopted. But a third-party complaint cannot be likened to a
counterclaim which must be within the jurisdiction of the court trying
the main case, because unlike a third-party complaint, a counterclaim
"need not diminish or defeat the recovery sought by the opposing
party, but may claim itself exceeding in amount or different in kind from
that sought in the opposing party's claim" (Rule 6, Sec. 6). A third-party
complaint may likewise be likened to a cross claim under Rule 9,
section 5. ... The principle is at once apparent, namely, that where an
action is ancillary to a main action over which a court has jurisdiction,
no independent jurisdiction is needed to enable the court to take
cognizance of the ancillary action.
Disposition the order dated December 2, 1963 dismissing the third-
party complaint is set aside; the decision dated December 3, 1963 is
modified in the sense that the third-party defendants are hereby
ordered to pay to the Surety whatever sums the latter will pay to the
Republic by virtue of the judgment appealed from.
ASIAN CONSTRUCTION V CA (MONARK
EQUIPMENT)
00 SCRA 00
CALLEJO; May 17, 2005
NATURE
Petition for review on certiorari decision of CA
FACTS
- Asian contruction leased from Monark Equipment several pieces of
equipment which it failed to pay for, despite demands. Monark then
filed in the RTC an action to recover a sum of money amounting to P5
million plus 12% interest. Asian filed a motion to file and admit answer
with 3rd party complaint against Becthel Overseas Corp. Asian,
although admitting the its indebtedness to Monark, claimed that it used
the leased equipment to perform services in favor of Becthel, which in
turn failed to pay Asian for the same. Asian claims that it needs to
implead Becthel for contribution, indemnity, subrogation, or other
reliefs to off-set or to pay the amount of money claimed by Monark.
Monark in turn filed a motion for summary judgment, contending that
there were no genuine issues raised.
- RTC: Motion of Asian for leave to file a 3 rd part complaint was denied,
but motion of Monark for summary judgment granted (RTC considered
this as motion for judgment on the pleadings). Judgment ordered Asian
to pay Monark P5 million plus interest
- Asian appealed to CA. CA affirmed, sustaining the disallowance of
the 3rd party complaint on the ground that the transaction between the
said parties did not arise out of the same transaction on which
Monarks claim was based. MFR was also denied.
ISSUE/S
1. WON a 3rd-party complaint is proper
 37

2. WON judgment on the pleadings is proper - Considering that the petitioner admitted its liability for the principal
claim of the respondent in its Answer with Third-Party Complaint, the
HELD trial court did not err in rendering judgment on the pleadings against it.
1. NO Disposition Petition is denied.
Ratio Section 11, Rule 6 provides: 3rd (fourth, etc.)-party complaint.
A 3rd (fourth, etc.) party complaint is a claim that a defending party
COMPULSORY COUNTERCLAIM/CROSS-CLAIM
may, with leave of court, file against a person not a party to the action,
called the 3rd (fourth, etc.) party defendant, for contribution,
indemnity, subrogation or any other relief, in respect of his opponents CALO appellant, vs.AJAX INTERNATIONAL, INC,
claim. defendant-appellee
Reasoning Purpose of the rule: permit a defendant to assert an 22 SCRA 996
independent claim against a 3rd-party which he, otherwise, would
BENGZON, March 13, 1968
assert in another action, thus preventing multiplicity of suits. This is a
rule of procedure and does not create a substantial right. Neither does
NATURE
it abridge, enlarge, or nullify the substantial rights of any litigant. This
Petition for certiorari, prohibition and mandamus on decision of CFI of
right to file a 3rd-party complaint against a 3rd-party rests in the
Agusan dismissing the complaint of Calo
discretion of the trial court. The 3rd-party complaint is actually
independent of, separate and distinct from the plaintiffs complaint,
FACTS
such that were it not for the rule, it would have to be filed separately
-Sometime on May 7, 1959, plaintiff-appellant Calo ordered from
from the original complaint.
defendant-appellee Ajax International, Inc., 1,200 ft. of John Shaw wire
- Prerequisite to the exercise of right: some substantive basis for a 3rd-
rope at P2.85 per foot. The transaction was evidenced by Charge
party claim is found to exist, whether the basis be one of indemnity,
Order No. 37071, for P3,420.00. According to plaintiff Calo, when the
subrogation, contribution or other substantive right. Bringing of a 3rd-
wire rope was delivered to Butuan City, the same was found short of
party defendant is proper if he would be liable to plaintiff, defendant or
300 ft. Plaintiff then wrote two letters to defendant asking for either
both for all or part of the plaintiffs claim against the original defendant,
completion of delivery or account adjustment of the alleged
although the 3rd-party defendants liability arises out of another
undelivered 300 ft. of wire rope.
transaction.
-On November 20, 1961, a complaint docketed as Civil Case No. IV-
- The defendant may implead another as 3rd-party defendant (a) on an
93062 was filed in the Municipal Court of Manila by one Adolfo
allegation of liability of the latter to the defendant for contribution,
Benavides who claimed to have acquired the outstanding credit
indemnity, subrogation or any other relief; (b) on the ground of direct
account of Calo from defendant Ajax International, Inc. Charge Order
liability of the 3rd-party defendant to the plaintiff; or (c) the liability of the
No. 37071 was among those included in the assigned account.
3rd-party defendant to both the plaintiff and the defendant.
Subsequently, a judgment by default was entered, and a writ of
- There must be a causal connection between the claim of the plaintiff
execution issued, against plaintiff Calo.
in his complaint and a claim for contribution, indemnity or other relief of
-On January 23, 1962, plaintiff Calo, assisted by her husband, Marcos
the defendant against the 3rd-party defendant.
Calo, filed in the Court of First Instance of Agusan a complaint against
- Capayas v. CFI: Court made out the ff tests: (1) whether it arises out
defendant asking (1) that the latter either effect complete delivery of
of the same transaction on which the plaintiffs claim is based; or
Charge Order No. 37071 or that she be relieved from paying P855.00
whether the 3rd-party claim, although arising out of another or different
and (2) that the latter indemnify her for P12,000 as attorney's fees,
contract or transaction, is connected with the plaintiffs claim; (2)
damages and expenses of litigation.2 The case was docketed as Civil
whether the 3rd-party defendant would be liable to the plaintiff or to the
Case No. 860.
defendant for all or part of the plaintiffs claim against the original
-Instead of filing an answer, defendant moved for the dismissal of Civil
defendant, although the 3rd-party defendants liability arises out of
Case 860 on the ground, inter alia, that the subject thereof was
another transaction; and (3) whether the 3rd-party defendant may
involved and intimately related to that in Civil Case No. IV-93062 of the
assert any defenses which the 3rd-party plaintiff has or may have to
Municipal Court of Manila. The court a quo sustained the motion and
the plaintiffs claim.
dismissed the case. Plaintiff-appellant moved for reconsideration and
- 3rd-party complaint does not have to show with certainty that there will
new trial. When this failed, she instituted the present appeal.
be recovery against the 3rd-party defendant; sufficient that pleadings
-The dismissal of Civil Case No. 860 by the court a quo because of the
show possibility of recovery. In determining the sufficiency of the 3rd-
pendency of Civil Case No. IV-93062 in the municipal court of Manila is
party complaint, the allegations in the original complaint and the 3rd-
predicated on the supposition that plaintiff's claim is a compulsory
party complaint must be examined. A 3rd-party complaint must allege
counter-claim that should be filed in the latter case. There is no
facts which prima facie show that the defendant is entitled to
question that it arises out of the same transaction which is the basis of
contribution, indemnity, subrogation or other relief from the 3rd-party
the complaint in Civil Case No. IV-93062 and does not require the
defendant.
presence of third parties over whom the municipal court of Manila
- In this case, the claims of Monark against Asian arose out of the
could not acquire jurisdiction.
contracts of lease and sale; such transactions are different and
separate from those between Becthel and Asian where the equipment
ISSUE
leased from Monark was used by the petitioner. There is no showing in
WON plaintiff's claim is a compulsory counter-claim that should be
the proposed 3rd-party complaint that Becthel knew or approved the
filed in the earlier case
use of the leased equipment by Asian for the said project
- fact that Asian used the equipment it leased from Monark in
HELD
connection with its project with Becthel does not provide a substantive
No. Plaintiff's claim is not a compulsory counterclaim in Civil Case No.
basis for the filing of a 3rd-party complaint against the latter. There is
IV-93062 for the simple reason that the amount thereof exceeds the
no causal connection between the claim of Monark, and the failure of
jurisdiction of the municipal court.
Becthel to pay the balance of its account to Asian after the completion
Reasoning The rule that a compulsory counterclaim not set up is
of the project.
barred, when applied to the municipal court, presupposes that the
amount involved is within the said court's jurisdiction. Otherwise, as
2. YES
this Court had already noted in Yu Lay v. Galmes we would come to
Ratio Section 1, Rule 34: Judgment on the pleadings. Where an
the absurd situation where a claim must be filed with the municipal
answer fails to tender an issue, or, otherwise, admits the material
court which it is prohibited from taking cognizance of, being beyond its
allegations of the adverse partys pleading, the court may, on motion of
jurisdiction. Besides, the reason underlying the rule, which is to settle
that party, direct judgment on such pleading. However, in actions for
all related controversies in one sitting only, does not obtain. For, even if
declaration of nullity or annulment of marriage or for legal separation,
the counterclaim in excess of the amount cognizable by the inferior
the material facts alleged in the complaint shall always be proved.
court is set up, the defendant cannot obtain positive relief. The Rules
Reasoning The denial of the petitioners motion with leave to file a
allow this only for the defendant to prevent plaintiff from recovering
third-party complaint against Becthel is without prejudice to its right to
from him. This means that should the court find both plaintiff's
file a separate complaint against the latter.

complaint and defendant's counterclaim (for an amount exceeding said
court's jurisdiction) meritorious, it will simply dismiss the complaint on
the ground that defendant has a bigger credit. Since defendant still has
to institute a separate action for the remaining balance of his
counterclaim, the previous litigation did not really settle all related
controversies.
Disposition Plaintiff Calo's claim of P12,000.00 not being a
compulsory counterclaim in Civil Case No. VI-93062, it need not be
filed there. The pendency then of said civil case could not be pleaded
in abatement of Civil Case No. 860. Consequently, the lower court
erred in dismissing plaintiff's complaint.
GOJO V GOYALA
Page 26
NATURE
Appeal from a decision of the CFI of Sorsogon
FACTS
-allegedly a pacto de retro sale (the other party alleged it was a
mortgage), Gojo the buyer alleged that the period for redemption has
already lapsed so he filed a petition for consolidation of ownership.
-Goyalas, the buyers who were alleging that they had obtained a cash
loan from Gojo and the land allegedly sold to Gojo was only a security
to the loan, and that they tried to pay their debt to Gojo but Gojo
refused. Goyalas filed a counterclaim for Gojo to receive the amount
due, for the document to be declared a mortgage and not a pacto de
retro sale, for P1800 per annum for the fruits of said property and that,
if ever the document be deemed a pacto de retro sale, for Gojo to be
ordered to execute a deed of resale in favor of the Goyalas.
-Goyalas spouse died, TC ordered Gojo to amend the Complaint to
substitute the spouse with one of her successors in interest as party.
Notwithstanding the lapse of 43 days after receipt of copy of TC order,
Gojo allegedly failed to submit the amended complaint so Goyala filed
a motion to dismiss the petition. TC dismissed complaint, Gojo was
also declared in default in re Goyalas counterclaim. TC ruled in favor
of Goyala.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ON COMPULSORY COUNTERCLAIM
The appellant contends that there is no occasion for the TC to declare
him in default in respect of appellees counterclaim as said
counterclaim falls within the category of compulsory counterclaim
which does not call for an independent answer as the complaint
already denies its material allegations. It is now settled that a plaintiff
who fails or chooses not to answer a compulsory counterclaim may
not be declared in default, principally because the issues raised in the
counterclaim are deemed automatically joined by the allegations of the
complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored
is a void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the
estate of a deceased person. In Barrameda vs Barbara, the SC held
that an order to amend the complaint, before the proper substitution of
parties as directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and
imposes upon the plaintiff no duty to comply therewith to the end that
an order dismissing the said complaint, for such non-compliance,
would similarly be void. It was further held in Ferriera vs Gonzales that
the continuance of a proceeding during the pendency of which a party
thereto dies, without such party having been validly substituted in
accordance with the rules, amounts to lack of jurisdiction.
Disposition WHEREFORE, the decision appealed from is set aside
Barred if not set up
CHAVEZ V SANDIGANBAYAN
G.R. No. 91391
GUTIERREZ, JR; January 24, 1991
38
FACTS
- July 31, 1987, the Republic of the Philippines, through the
Presidential Commission on Good Government (PCGG) with the
assistance of Solicitor General Francisco Chavez filed with the
respondent Sandiganbayan a complaint docketed as Civil Case No.
0033 against Eduardo Cojuangco, Jr. and Juan Ponce Enrile, among
others, for reconveyance, reversion and accounting, restitution and
damages.
-After the denial of his motion to dismiss, respondent Enrile filed his
answer with compulsory counterclaim and cross-claim with damages.
On January 30, 1989, respondent Sandiganbayan issued a resolution
which deferred The resolution of the Motion to Dismiss the
Counterclaim against the Plaintiff government until after
trialRespondent Enrile then requested leave from the Sandiganbayan
to implead the petitioner and the PCGG officials as party defendants
for lodging this alleged "harassment suit" against him.
The motion praying for leave to implead additional parties(Chavez et
al) to his counterclaim was granted in a resolution dated June 8, 1989,
without prejudice to the defenses which said defendants may put forth
individually or in common, in their personal capacities or otherwise.
In a later resolution dated November 2, 1989, respondent
Sandiganbayan denied a motion to reconsider the June 8, 1989
resolution.
Thereafter, all the PCGG officials filed their answer to the
counterclaims invoking their immunity from suits as provided in Section
4 of Executive Order No. 1.
Instead of filing an answer, the petitioner comes to this Court assailing
the resolutions as rendered with grave abuse of discretion amounting
to lack of jurisdiction.
Petitioners claim
-no counter-claim can be filed against him in his capacity as Solicitor
General since he is only acting as counsel for the Republic. He cites
the case of Borja v. Borja,8
- since he is simply the lawyer in the case, exercising his duty under
the law to assist the Government in the filing and prosecution of all
cases pursuant to Section 1, Executive Order No. 14, he cannot be
sued in a counterclaim in the same case.
ISSUES
1.WON Chavez (SolGEn)is immune from suit
2.WON it is proper to implead Chavez (as SolGen) petitioner as
additional party defendant in the counterclaim filed by respondent
Enrile
HELD
1.No.
The general rule is that public officials can be held personally
accountable for acts claimed to have been performed in connection
with official duties where they have acted ultra vires or where there is a
showing of bad faith.
Moreover, the petitioner's argument that the immunity proviso under
Section 4(a) of Executive Order No. 1 also extends to him is not well-
taken. A mere invocation of the immunity clause does not ipso facto
result in the charges being automatically dropped.
Immunity from suit cannot institutionalize irresponsibility and non-
accountability nor grant a privileged status not claimed by any other
official of the Republic. (id., at page 586)
Where the petitioner exceeds his authority as Solicitor General acts in
8
The appearance of a lawyer as counsel for a party and his participation in a
case as such counsel does not make him a party to the action. The fact that he
represents the interests of his client or that he acts in their behalf will not hold
him liable for or make him entitled to any award that the Court may adjudicate to
the parties, other than his professional fees. The principle that a counterclaim
cannot be filed against persons who are acting in representation of another ?
such as trustees ? in their individual capacities (Chambers v. Cameron, 2 Fed.
Rules Service, p. 155; 29 F. Supp. 742) could be applied with more force and
effect in the case of a counsel whose participation in the action is merely
confined to the preparation of the defense of his client. Appellant, however,
asserted that he filed the counterclaim against said lawyer not in his individual
capacity but as counsel for the heirs of Quintin de Borja. But as we have already
stated that the existence of a lawyer-client relationship does not make the former
a party to the action, even this allegation of appellant will not alter the result We
have arrived at (at pp. 924-925)

bad faith, or, as contended by the private respondent, "maliciously
conspir(es) with the PCGG commissioners in persecuting respondent
Enrile by filing against him an evidently baseless suit in derogation of
the latter's constitutional rights and liberties" (Rollo, p. 417), there can
be no question that a complaint for damages may be filed against him.
High position in government does not confer a license to persecute or
recklessly injure another. The actions governed by Articles 19, 20, 21,
and 32 of the Civil Code on Human Relations may be taken against
public officers or private citizens alike.
2. No. Senator Enrile has to file a separate and distinct civil action for
damages against the Solicitor General.
-The charges pressed by respondent Enrile for damages under Article
32 of the Civil Code arising from the filing of an alleged harassment
suit with malice and evident bad faith do not constitute a compulsory
counterclaim.
In the case of Tiu Po v. Bautista, (103 SCRA 388 [1981]), we ruled that
damages claimed to have been suffered as a consequence of an
action filed against the petitioner must be pleaded in the same action
as a compulsory counterclaim. We were referring, however, to a case
filed by the private respondent against the petitioners or parties in the
litigation. In the present case, the counterclaim was filed against the
lawyer, not against the party plaintiff itself.
-To allow a counterclaim against a lawyer who files a complaint for his
clients, who is merely their representative in court and not a plaintiff or
complainant in the case would lead to mischievous consequences.
-The problem is particularly perplexing for the Solicitor General. As
counsel of the Republic, the Solicitor General has to appear in
controversial and politically charged cases. It is not unusual for high
officials of the Government to unwittingly use shortcuts in the zealous
desire to expedite executive programs or reforms. The Solicitor
General cannot look at these cases with indifferent neutrality. His
perception of national interest and obedience to instructions from
above may compel him to take a stance which to a respondent may
appear too personal and biased. It is likewise unreasonable to require
Government Prosecutors to defend themselves against counterclaims
in the very same cases they are prosecuting.
LUALHATI A. COJUANGCO vs. PURIFICACION
VILLEGAS
184 SCRA 374
FERNAN,
NATURE
The instant petition for certiorari and prohibition raises the ultimate
issue of whether or not the execution of a final judgment in an
ejectment case may be stayed by a co-equal court in order that the
right of indemnification and retention of an alleged builder in good faith
may not be rendered meaningless or illusory in an independent civil
action for specific performance.
FACTS
Petitioner Lualhati Aldaba Cojuangco is the widow of Don Juan
Cojuangco, the registered owner of the disputed parcel of residential
land containing an area of 585 square meters and situated at San
Agustin, Malolos, Bulacan. Many years back (about sixty years,
according to the municipal trial court) the parents of private respondent
Purificacion Villegas, with the acquiescence of Don Juan Cojuangco,
constructed a residential house and later a structure housing a bakery
on the aforesaid lot. It was understood that they could remain on the
land with his blessings and without paying rentals on condition that
they would vacate the premises when needed by the owner.
After her parent's death, Villegas remained in the property, renovating
the same and spending P300,000.00 in the process. She also leased
out a portion of the land to Siapno Appliances at P600.00 a month
without the knowledge and consent of Don Juan Cojuangco. This latter
act apparently destroyed her congenial relations with the landowner
because soon thereafter, Don Juan Cojuangco, through his attorney in
fact, demanded that she leave the property. Despite his repeated
written demands for her to surrender possession of the property,
Villegas refused, prompting Cojuangco to institute ejectment
proceedings against her before the Municipal Trial Court (MTC) of
Malolos, Bulacan, Branch I on August 23, 1978.
39
On February 5, 1979, Don Juan Cojuangco died intestate. In the trial
court's order of October 22, 1979, his wife Lualhati, herein petitioner,
together with nephews and nieces, were substituted as parties-
plaintiffs.
In its decision dated June 30, 1983, the inferior court dismissed the
action for ejectment for lack of jurisdiction. It cited the unassailable fact
that Villegas and her predecessors-in-interest had been in actual
possession of the subject land for no less than sixty years and that in
addition, Villegas asserted an adverse claim of ownership, thus
transforming the suit into an "accion publiciana" which is properly
cognizable by courts of first instance (now regional trial courts).
On appeal to the then Court of First Instance (CFI) of Malolos, Branch
XV, the inferior court was reversed insofar as it had erroneously denied
jurisdiction over the ejectment case. The trial court then ordered
Villegas to vacate the premises and to surrender possession thereof to
herein petitioner Cojuangco.
The case was elevated to the appellate court and to the Supreme
Court and in both instances, herein petitioner Cojuangco's right of
possession over the land was upheld. After entry of judgment was
made on November 20, 1985, herein petitioner went to the Regional
Trial Court of Malolos, Branch XV, where she filed a motion for
execution of the judgment, which the court granted on June 30, 1986.
On July 29, 1986, a writ of demolition was issued against Villegas, who
did not oppose the ordered demolition but instead asked the lower
court to give her more time (forty days from August 7, 1986) to effect
the transfer of her personal properties and to remove the
improvements on the subject lot to which motion the court acceded.
On September 16, 1986, before the lapse of the grace period, Villegas
filed a separate civil action docketed as Civil Case No. 9094-M against
petitioner Cojuangco and the provincial sheriff "for specific
performance with urgent prayer for issuance of a temporary restraining
order and preliminary injunction." This case, instead of being referred
to Branch XV which had earlier issued the writ of demolition, was
raffled to another Malolos branch of the Bulacan Trial Court,
specifically Branch XVII which issued on the same day, September 16,
1986, a temporary restraining order enjoining Cojuangco and
particularly the sheriff "from enforcing or implementing the Order of
Demolition issued in Civil Case No. 7042-M . . ." This was followed by
another order dated October 6, 1986 granting a writ of preliminary
injunction. The twin orders are now the subject of the instant petition
for certiorari on the ground that they have been issued with grave
abuse of discretion amounting to lack of jurisdiction.
ISSUES
1. Whether or not the respondent court validly issued an injunction
2. Whether or not Villegas can successfully raise an independent
action to assert that she and her predecessors are builders in good
faith and that they are entitled to recover the value of improvements on
the lot.
HELD
1. NO.
Ratio. As early as 1922 in the case of Cabigao v. Del Rosario, this
Court laid down the doctrine that "no court has power to interfere by
injunction with the judgments or decrees of a court of concurrent or
coordinate jurisdiction having power to grant the relief sought by
injunction."
Reasoning. The various branches of the court of first instance of a
province or city, having as they have the same or equal authority and
exercising as they do concurrent and coordinate jurisdiction, should
not, cannot and are not permitted to interfere with their respective
cases, much less with their orders or judgments. A contrary rule would
obviously lead to confusion and seriously hamper the administration of
justice.
2. NO
Ratio. Rule 9, Section 4 of the Revised Rules of Court on compulsory
counterclaim provides the answer. It states:
"A counterclaim or cross-claim not set up shall be barred if it arises out
of or is necessarily connected with, the transaction or occurrence that
is the subject-matter of the opposing party's or co-party's claim and

does not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction.
Reasoning. Villegas' claim to recover compensation for improvements
made on the land is essentially in the nature of a counterclaim since it
is interwoven with the fact of possession. Said claim for compensation
should have been presented as a counterclaim in the ejectment suit. It
is deemed barred if not raised on time and the party in error is
precluded from setting it up in a subsequent litigation.
-The rule on compulsory counter-claim is designed to enable the
disposition of the entire conflict at one time and in one action. The
philosophy of the rule is to DISCOURAGE MULTIPLICITY OF SUITS.
-According to Villegas, the reason why the counterclaim for
indemnification was not made in the original action was because it
became a "ripe issue" only after the ejectment proceedings. Villegas
contended that the estoppel of judgment could only extend to those
facts and conditions existing at the time the judgment was rendered
and not to those which supervened before the second suit.
-The argument is untenable. In her pleadings, Villegas repeatedly
stressed that the residential house which her parents had constructed
was already there on the questioned lot for as long as she could
remember, that she herself has lived there all her life and that in the
honest belief that the land had been "donated" to her parents by her
"Aunt Tecla", she made various improvements and renovation thereon.
Obviously, such declarations on the part of Villegas completely negate
her absurd claim that the factual basis for her subsequent action arose
after the ejectment suit became final.
-Thus, Villegas should have set forth, simultaneously with the assertion
that she was entitled to the parcel of land by right of inheritance, the
alternative claim that assuming she was not legally entitled to the
disputed lot, at least as a builder in good faith, she has the right to the
value of the buildings and improvements which she and her parents
had introduced on the land.
-And while it may be argued that the defense of being a builder in good
faith would have been inconsistent with her claim of ownership, in the
case of Castle Bros., Wolf and Sons v. Go-Juno, the Court held that a
party may set forth as many defenses and counterclaims as he may
have, whatever be their nature. These may even be inconsistent with
each other because what is sufficient is that each is consistent with
itself.
-Since Villegas failed to set up such alternative defense (i.e. a builder
in good faith is entitled to recover the value of improvements) and
instead relied on the sole defense that she inherited the land from her
parents, the rejection thereof was a complete resolution of the
controversy between the parties which bars a later case based upon
the unpleaded defense. The adjudication of the issue joined by the
parties in the earlier case constitutes res judicata, the theory being that
what is barred by prior judgment are not only the matters actually
raised and litigated upon, but also such other matters as could have
been raised but were not. 13
-It bears emphasizing that in ejectment cases, the rule is explicit that
the judgment must be executed immediately when it is in favor of the
plaintiff to prevent further damages to him arising from the loss of
possession. The sense of urgency is more pronounced in the case at
bar where the ejectment case in favor of Cojuangco was decided in
1978 and subsequently appealed all the way to the Supreme Court.
But the final victory continues to elude Cojuangco to this day due to a
large extent to the legal maneuvers utilized by Villegas to forestall the
inevitable.
-For its part, respondent trial court has attempted to justify its writ of
injunction by stating that the impending demolition of Villegas' house
and other buildings on the disputed property would render inutile her
right as a builder in good faith. We cannot agree. The loss to Villegas is
not sufficient to warrant a blatant disregard of established precedents
especially when it is borne in mind that for more than half a century,
Villegas and her family have enjoyed the fruits of the land without
paying a single centavo in return. Surely, the equities are more in favor
of Cojuangco, the landowner.
Dispositive WHEREFORE, the petition is granted. The respondent
court is hereby ordered to DISMISS Civil Case No. 9094-M and all
proceedings held therein are declared null and void. The Regional Trial
Court of Malolos, Bulacan, Branch XV is ordered to immediately
execute the decision in the ejectment case. Civil Case No. 7042-M.
Costs against private respondent Villegas. This decision is immediately
executory.
40
CARPENA VS MANALO
GR No. 74262
PARAS; October 29, 1987
NATURE
Action to recover possession
FACTS
Lot 74 of the Calamba Cadastre was co-owned Beatriz Manalo and her
common-law husband, Luciano Manalo. On November 5, 1947 Beatriz
sold her one-half interest therein to the spouses Demetrio Carpena
and Salud Catindig for the sum of P5,000.00. To keep the transaction
from Luciano, the sale was made in the neighboring town of Sta. Rosa,
Laguna, and the parties agreed that Beatriz would remain in
possession of the property but with the obligation of paying the land
taxes due thereon. On May 22, 1948 Beatriz and Luciano were
married, but she died three months thereafter.
On August 30, 1948 the deed of the sale was registered and, as a
result, TCT No. 16833 was cancelled and TCT No. 2004 was issued in
the name of the Carpena spouses for the portion purchased by them,
which was identified as Lot No. 74-B of subdivision plan Psd-23230.
Upon the death of their vendor, the Carpenas notified Luciano of the
sale and besides demanded of him the possession of lot 74-B, but the
latter, instead of acquiescing thereto, filed an action against them to
annul the sale made in their favor by Beatriz and to have himself
declared owner of the property subject matter thereof (Civil Case No.
9194). Defendant's answer in said case alleged, as defense, that the
sale in their favor was valid and that by virtue of the same they became
owners of the property subject matter thereof. Consequently, they
prayed for the dismissal of the case and for damages. The case was
dismissed by the lower court after a trial on the merits and on appeal,
the Court of Appeals affirmed the dismissal.
It appears that in 1945 a barong-barong was erected on Lot 74-B by a
tenant occupying the same. Two years thereafter the building was sold
to Beatriz Manalo for P200.00, and thereafter said improvement, with
an assessed value of P150.00, was declared in her name for taxation
purposes. After her death, Luciano Manalo and their children continued
to occupy said house, making considerable improvements thereon in
the years 1952 and 1953, but in December 1954 Luciano Manalo sold
it to Pelagia Cailles Vda. de Unson and Beronica Capareda who began
occupying the same on April 2, 1955.
The present action was commenced on April 11, 1955 in the Court of
First Instance of Laguna by the Carpena spouses against Luciano
Manalo, Pelagia Cailles Vda. de Unson and Beronica Capareda to
recover the possession of Lot 74-B and the house erected thereon as
well as reasonable rental for its use and occupancy from August 1,
1948. Appellees herein alleged in their answer that the sale executed
by Beatriz Manalo in favor of appellants covered only Lot 74-B and not
the house erected thereon.
While the case was pending in the lower court, or more specifically on
April 17, 1955, appellees, without the consent of appellants, moved the
house in question to the adjoining lot, which compelled the latter to file
a supplemental complaint to recover from the former the sum of
P2,500.00 representing the value of the house, plus attorney's fees.
As appellees had already vacated Lot 74-B, the lower court, after trial
on the merits, rendered judgment declaring appellant the owners of the
house in question and sentencing appellees to pay appellants the sum
of P1,000.00 representing the fair market value thereof. Appellants'
claim for damages for the use and occupancy of the premises was,
however, dismissed for not having been set up in Civil Case No. 9194,
the same being compulsory counterclaim. The present is their appeal
from this portion of the decision of the lower court
ISSUE
WON the action filed by Luciano Manalo is a compulsory counterclaim
HELD
Yes. As stated above, the purpose of the action filed by Luciano
Manalo (Civil Case No. 9194 of the Court of First Instance of Laguna)
was to annul the sale made by his wife, Beatriz Manalo, in favor of the
Carpena spouses and to recover ownership of the property subject
matter thereof. The rents which appellants now seek to collect from
appellees were for the occupancy of said property and of the house
constructed thereon. Had the sale been annulled, it would have meant
that the Carpenas, appellants herein, had no right to collect rents from

the occupants of the lot and of the house aforesaid, while if the court
sustained the validity of the sale, they would have had such right. It is
thus obvious that the claim which they seek to enforce now as, to say
the least, a matter necessarily connected with the transaction or
occurrence subject matter of the complaint filed against them in Civil
Case No. 9194. It follows that the same constituted a compulsory
counterclaim which they should have pleaded in their answer filed in
the aforesaid case.
In Berses vs. Villanueva, 25 Phil. 473, it was held that in an action for
the recovery of a parcel of land, the defendant must set up a
counterclaim for the value of improvements made or introduced by him
on the property, otherwise his claim would be barred. That this ruling
applies to the present case can not be disputed because the only
difference between both cases is that in the one before us the
counterclaim is for rents for the occupancy of the land sought to be
recovered and of the house constructed thereon, instead of being ? as
in the Berses case ? for the recovery of the value of improvements
made on the property
Appellants, however, argue that even assuming that their claim
constituted a mandatory counterclaim in relation to Civil Case No.
9194, still they could not have pleaded it as such in said case because
it was not within the jurisdiction of the Court of First Instance of Laguna
where the case was pending. In this connection they contend that their
counterclaim against Luciano Manalo and his co-plaintiffs would have
been for unlawful detainer and the collection of one month rent only,
because when the action was commenced Manalo had been in
possession of the lot and house involved therein only for one month.
This is not entirely correct. The record on appeal filed by Manalo in the
aforesaid ease shows that the defendants (appellants herein) filed an
answer in which they alleged that they were "the true and lawful
owners of the parcel of land" subject matter of the action by virtue of
the deed of sale executed in their favor by Beatriz Manalo, upon the
registration of which a transfer certificate of title was issued in their
name. Their answer also interposed a counterclaim which they
incorporated all the allegations made in their answer and further
alleged that the plaintiffs had filed the action against them maliciously,
thus causing them damages in the sum of P2,000.00. Said answer
prayed not only for the dismissal of the complaint but also for judgment
declaring said defendants as true and lawful owners of the property in
question" (Exhibit C, pp. 18-23). It is obvious therefore that, for all legal
purposes, appellants had, by way of counterclaim, filed an accion
reivindicatoria which, of course, necessarily included the question of
possession. This notwithstanding, they failed to claim rents or
compensation for the use and occupancy of the lot and house subject
matter of the complaint filed against them. The right to collect these
rents or reasonable compensation being merely incidental to the
counterclaim, it seems clear that the fact that the amount thereof was
less than the jurisdictional amount for the Court of First Instance of
Laguna did not deprive said court of authority to take cognizance of the
same.
Lastly, appellants contend that there was absolutely no mutuality of
claims because the plaintiffs in Civil Case No. 9194 were Luciano
Manalo and the heirs of his deceased wife, whereas the claim for rents
in the present case is directed, jointly and severally, against Luciano
Manalo, Pelagia Cailles Vda. de Unson and Beronica Capareda. This
is likewise untenable because a party may not evade the effect of the
doctrine of res judicata by simply including additional parties, in the
subsequent litigation or by not including as parties in the latter persons
who were parties in the previous suit
Disposition. Decision affirmed
CABAERO VS CANTOS
G.R. No. 102942
PANGANIBAN; April 18, 1997
NATURE
Petition filed under Rule 65 assailing the Orders of respondent Judge
for being contrary to law and for having been issued in excess of his
jurisdiction and with grave abuse of discretion tantamount to lack of
jurisdiction.
The Order of July 1, 1991, reads:
"THE Answer with Counterclaim filed by the accused through counsel,
dated February 12, 1991, as well as the Opposition thereto; the
Memorandum filed by the Private Prosecutor, in Support of Motion to
Expunge from the Records And/Or to Dismiss Answer with
41
Counterclaim; the Supplement; and Comment on Supplement, are all
ordered expunged from the Records, considering that this is a criminal
case wherein the civil liability of the acused (sic) is impliedly instituted
therein."
Petitioners pleaded for reconsideration of said Order but respondent
judge, in the Order of August 21, 1991, denied their motion, thus:
"ACTING on the Motion for Reconsideration dated July 17, 1991, of the
accused through counsel, this Court finds no merit therein, such that
said motion is hereby denied."
FACTS
- This petition emanated from a criminal case in the RTC of Manila.
Said case commenced on October 18, 1990, with the filing of an
Information against petitioners charging them with estafa for allegedly
defrauding private respondent Epifanio Ceralde of the sum of
P1,550,000.00. The accusatory portion of the Information reads as
follows:
"... the said accused induced and succeeded in inducing the said
EPIFANIO CERALDE to advance the total amount of P1,550,000.00 to
be paid to M.C. Castro Construction, Co. representing the purchase
price of 6 parcels of land located in Pangasinan which the Aqualand
Ventures & Management Corporation, a joint business venture
organized by accused AMADO F. CABAERO and the said EPIFANIO
CERALDE, purchased from the said company, with the understanding
that the said amount would be returned to the said EPIFANIO
CERALDE as soon as the loan for P1,500,000.00 applied for by the
said Aqualand Ventures & Management Corporation with Solid Bank,
of which said accused AMADO F. CABAERO is the Senior Vice-
President, is released, but both accused, once the said loan had been
approved by the bank, in furtherance of their conspiracy and falsely
pretending that accused CARMEN C. PEREZ had been authorized by
the said Aqualand Ventures & Management Corporation to receive the
check for P1,500,000.00 for and in its own behalf, succeeded in
inducing the cashier of said Solid Bank to release the same to accused
CARMEN C. PEREZ, thereby enabling her to encash the aforesaid
check, and instead of turning over the said amount to the said
EPIFANIO CERALDE; accused failed and refused, and still fail and
refuse, to do so despite repeated demands made to that effect, and
with intent to defraud, misappropriated, misapplied and converted the
said amount to their own personal use and benefit...
- petitioners entered a plea of not guilty.
- Atty. Ambrosio Blanco entered his appearance as private prosecutor.
- The Presiding Judge of the RTC of Manila, Hon. Elisa R. Israel,
inhibited herself "out of delicadeza" from further hearing the case
"considering that the complainant is a relative by affinity of a nephew of
her husband." Thereafter, the case was re-raffled to Branch VII
presided over by respondent Judge Alfredo Cantos.
- On April 2, 1991, petitioners filed an Answer with Counterclaim
alleging that the money loaned from Solidbank mentioned in the
Information was duly applied to the purchase of the 6 parcels of land in
Pangasinan, and that the filing of said Information was unjustified and
malicious. Petitioners included the following prayer:
"WHEREFORE, it is respectfully prayed that after trial judgment be
rendered:
1. Dismissing, or quashing the information, and the civil action
impliedly instituted in the criminal action;
2. Ordering the complaining witness Ceralde to pay to the accused
the following amounts:
(a) P1,500,000.00 as moral damages;
(b) P500,000.00 as exemplary damages;
(c) P100,000.00 as attorney's fees; and
(d) P20,000.00, as litigation expenses.
Accused pray for such other reliefs, legal and equitable in the
premises."
- During the initial hearing on April 15, 1991, the prosecution verbally
moved that the answer with counterclaim be expunged from the
records and/or be dismissed. The respondent judge gave the
contending parties time to submit a Memorandum and Comment or
Opposition, respectively.
- The Memorandum of the private prosecutor justified his Motion to
Expunge the answer with counterclaim for two reasons: (1) the trial
court had no jurisdiction over the answer with counterclaim for non-
payment of the prescribed docket fees and (2) the "compulsory
counterclaim against complainant is barred for failure to file it
before arraignment."

- In their Opposition, petitioners argued that this Court in Javier vs. IAC
laid down, for "procedural soundness," the rule that a counterclaim
should be permitted in a criminal action where the civil aspect is not
reserved. Further, inasmuch as petitioners' counterclaim was
compulsory in nature, they were not required to pay docket fees
therefor. Additionally, the Rules do not specifically provide for the
period for filing of counterclaims in criminal cases, whereas Section 3
of Rule 9 and Section 9 of Rule 6 allow the filing, with leave of court, of
a counterclaim at any time before judgment. Thus, petitioners
contended that their filing was within the proper period.
- respondent Judge Cantos granted the prosecution's motion to
expunge and denied the petitioners' motion for reconsideration.
- - Petitioners invoke Section 1, Rule 111 of the Rules on Criminal
Procedure. They contend that it is not only a right but an "outright duty"
of the accused to file an answer with counterclaim since failure to do
so shall result in the counterclaim being forever barred.
- Petitioners argue that under Rule 136 of the Rules of Court,
particularly Section 8 thereof, clerks of court are instructed to "keep a
general docket, each page of which shall be numbered and prepared
for receiving all the entries in a single case, and shall enter therein all
cases x x x." Thus, respondent Judge Cantos allegedly erred in
expunging all records with respect to the Answer with Counterclaim for,
on appeal, "if the records elevated x x x are incomplete and inaccurate,
there arises a grave danger that the ends of justice and due process
shall not be served and instead frustrated."
- Petitioners further allege that the Order failed to resolve the legal
issues raised by the parties as it neglected to state the legal basis
therefor
ISSUE
WON the respondent judge committed grave abuse of discretion,
amounting to lack or excess of jurisdiction in ordering that the answer
with counterclaim of the petitioners in the criminal case, together with
all pleadings filed in relation thereto, be expunged from the records.
(WON the accused-petitioners who were charged with estafa may file
an answer with counterclaim for moral and exemplary damages plus
attorney's fees and litigation expenses against the private complainant
in the same criminal action.)
Preliminary Matters
Litis Pendentia as a Defense
- Private respondent belatedly interposes litis pendentia to defeat the
petition alleges that the present petition is barred by the cross-claim of
the petitioners against Aqualand Ventures and Management
Corporation, of which petitioners are stockholders and officers, in Civil
Case No. 90-53035 (filed against both petitioners and the private
respondent by Solidbank).
- SC said: Considerations of due process prevent us from taking
up the merits of this argument in favor of private respondent. This
cross-claim was never raised in the trial court -- certainly not in
the Memorandum dated April 19, 1991, submitted to the court a
quo in support of respondent Ceralde's motion to expunge the
answer with counterclaim. The Rules require that "(a) motion
attacking a pleading or a proceeding shall include all objections
then available, and all objections not so included shall be deemed
waived." Consequently and ineluctably, the ground of litis
pendentia which was not argued in the court a quo is deemed
waived.
The Payment of Filing Fees
- The Court agrees with petitioners that inasmuch as the counterclaim
is compulsory, there is no necessity to pay such fees, as the Rules do
not require them (as clarified in Sun Insurance Office, Ltd. vs.
Asuncion).
Main Issue
HELD NO. (NO)
As held in Javier, counterclaim is compulsory and is considered barred
if not set up where the following circumstances are present: (1) that it
arises out of, or is necessarily connected with the transaction or
occurrence that is the subject matter of the opposing party's claim; (2)
that it does not require for its adjudication the presence of third parties
of whom the court cannot acquire jurisdiction, and (3) that the court
has jurisdiction to entertain the claim.
As categorically recognized in the case of Javier, a claim for malicious
prosecution or "grossly unfounded suit" as a compulsory counterclaim
42
has no appropriate venue other than the same criminal case which is
alleged to be a malicious suit. The counterclaim stands on the same
footing and is to be tested by the same rules as if it were an
independent action. A counterclaim is defined as any claim for money
or other relief which a defending party may have against an opposing
party. Compulsory counterclaim is one which at the time of suit arises
out of, or is necessarily connected with, the same transaction or
occurrence that is the subject matter of plaintiff's complaint. It is
compulsory in the sense that if it is within the jurisdiction of the court,
and does not require for its adjudication the presence of third parties
over whom the court cannot acquire jurisdiction, it must be set up
therein, and will be barred in the future if not set up.
- In justifying his Order, Judge Cantos ruled that "this is a criminal
case wherein the civil liability of the accused is impliedly instituted
therein." This justification begs the question. Basically, that is the
reason why petitioners herein filed their answer with counterclaim for,
apparently, in hiring a private prosecutor, Ceralde intended to
prosecute his civil claim together with the criminal action. Hence, as a
protective measure, petitioners filed their counterclaim in the same
case. Since under Section 1 Rule 111, the civil action which is deemed
impliedly instituted with the criminal action, if not waived or reserved,
includes recovery of indemnity under the RPC, and damages under
Art.32, 33, 34 and 2176 of the Civil Code arising from the same act or
omission of the accused, should not the accused have the right to file a
counterclaim in the criminal case? Obviously, the answer is in the
affirmative, as was held in Javier.
Some Reservations in the Application of Javier
- The logic and cogency of Javier notwithstanding, some reservations
and concerns were voiced out by members of the Court during the
deliberations on the present case. These were engendered by the
obvious lacuna in the Rules of Court, which contains no express
provision for the adjudication of a counterclaim in a civil action
impliedly instituted in a criminal case. The following problems were
noted:
1) While the rules on civil procedure expressly recognize a defendant's
entitlement to plead his counterclaim and offer evidence in support
thereof, the rules on criminal procedure which authorize the implied
institution of a civil action in a criminal case are, in contrast, silent on
this point and do not provide specific guidelines on how such
counterclaim shall be pursued.
2) A judgment in a criminal action is not required to provide for the
award of a counterclaim.
3) Allowing and hearing counterclaims (and possibly cross-claims and
third-party complaints) in a criminal action will surely delay the said
action. The primary issue in a criminal prosecution that is under the
control of state prosecutors is the guilt of the accused and his civil
liability arising from the same act or omission. Extending the civil action
arising from the same act or omission to counterclaims, cross-claims
and third-party complaints, and allowing the accused and other parties
to submit evidence of their respective claims will complicate the
disposition of the criminal case.
4) Adjudication of compulsory counterclaims and/or related claims or
pleadings logically includes the application of other rules which, by
their very nature, apply only to civil actions. The following matters may
be invoked in connection with the filing of an answer with a
counterclaim: the genuineness and due execution of an actionable
document which are deemed admitted unless specifically denied under
oath; affirmative defenses like res judicata, prescription and statute of
frauds which are deemed waived by failure to interpose them as
affirmative defenses in an answer; and the failure of a defendant to file
an answer seasonably may result in his default in the civil aspect but
not in the criminal. As a consequence of these matters, the entry of
plea during arraignment will no longer signal joinder of issues in a
criminal action.
5) In an impliedly instituted civil action, an accused is not sufficiently
apprised of the specific basis of the claims against him. An accused
learns of the implied institution of a civil action from the contents of an
information. An information, however, is filed in behalf of the People of
the Philippines. Hence, it does not contain the ultimate facts relating to
the civil liability of the accused.
6) Because an accused is not sufficiently apprised of the specific basis
of the civil action against him, he may file a motion for bill of particulars
or take advantage of discovery procedures. The end result, in any
case, will be delay and complication in the criminal action and even
confusion among the parties.

7) The Rules of Court does not specify the reckoning date for the filing
of an answer in an impliedly instituted civil action.
8) An accused can file his answer with counterclaim only after the initial
hearing, because the private complainant may still reserve his civil
action at any time before the prosecution commences to present
evidence. On the other hand, an answer in an ordinary civil action
should be filed before the start of hearing, because hearing
commences only after the issues have been joined, i.e., after the
responsive pleadings have been filed.
9) Confusion in the application of the rules on civil procedure will
certainly encourage litigants to challenge before appellate courts
interlocutory incidents of the impliedly instituted civil action.
10) Some members of the Court believe that a cause of action for
malicious prosecution may be premature because there is as yet no
finding of such wrongful prosecution. This fact is precisely what the trial
court still has to determine.
--By the foregoing discussion, we do not imply any fault in Javier.
The real problem lies in the absence of clear-cut rules governing
the prosecution of impliedly instituted civil actions and the
necessary consequences and implications thereof. For this
reason, the counter-claim of the accused cannot be tried together
with the criminal case because, as already discussed, it will
unnecessarily complicate and confuse the criminal proceedings.
Thus, the trial court should confine itself to the criminal aspect
and the possible civil liability of the accused arising out of the
crime. The counter-claim (and cross-claim or third party
complaint, if any) should be set aside or refused cognizance
without prejudice to their filing in separate proceedings at the
proper time. At balance, until there are definitive rules of
procedure to govern the institution, prosecution and resolution of
the civil aspect (and the consequences and implications thereof)
impliedly instituted in a criminal case, trial courts should limit
their jurisdiction to the civil liability of the accused arising from
the criminal case.
Disposition WHEREFORE, premises considered, the questioned
Orders are hereby MODIFIED. The counterclaim of the accused is
hereby set aside without prejudice. The Respondent RTC of Manila is
DIRECTED to proceed with the trial of the criminal action and the civil
action arising from the criminal offense that is impliedly instituted
therein, with all judicious dispatch.
CHAN V CA (CU)
G.R. 109020
DAVIDE; MARCH 3, 1994
NATURE
Review on certiorari
FACTS
- On Feb.1, 1983, petitioner Felisa Chan and private respondent Grace
Cu, entered into a contract of lease, the terms of which were:
>>Cu will occupy Room 401 and rooftop of Room 442 of a bldg in
Urbiztondo owned by Chan.
>>Term of lease is 1 year at a monthly rental of P2,400.
>>The premises shall be used as a learning center.
- The contract was renewed for the succeeding 2 years or up to Feb.1,
1986, after which date, no written contract of lease was executed
although Cu continued to occupy the premises. Increasing every year,
the monthly eventually came to P3, 484.80 in Jan. 1989.
- Nov. 1989: Chan locked the way to the rooftop. In the ensuing
exchange of communication, Cu insisted that she be allowed to use
the rooftop of Rm.442, while Chan maintained that only Rm.401 was
leased and that the use of the rooftop was merely tolerated, adding
that the use of the rooftop posed danger to the students. Chan
eventually terminated the lease, refused to collect the rental for
Dec.1989 (turned down a check tendered by Cu) and gave Cu only
until Jan.1990 to vacate the premises.
- Cus lawyer tendered the payment in cash with notice to Chan that in
case of non-acceptance, the same will be deposited in court by way of
consignation. At this point, Chan gave Cu up to March, 1990
- Jan.15, 1990: Cu filed a civil case for consignation with the MTC.
Chan answered with a counterclaim for ejectment. The MTCs
decision:
>>declared that the rooftop is included in the lease
>>fixed the term of the lease until June 30, 1992
43
>>held valid and legal the consignation by Cu
- Both parties appealed to the RTC. Cu maintained that the MTC
should have fixed a longer period while Chan contended that the MTC
erred in extending the term of the lease and in upholding the validity of
the consignation. RTC later affirmed the MTC. Cu then went to the CA
on petition for review, with the same allegation that that the RTC erred
in not fixing a longer period of extension of the lease. The CA reversed
and set aside the decisions of the MTC and RTC and dismissed, for
lack of merit, the complaint for consignation. The CA held that Chan
had justifiable cause (Cus overstay) to refuse to accept the payment. It
ruled that the MTC and RTC erred in passing upon the issue of
ejectment raised in Chans counterclaim since an action for ejectment
can only be initiated through a verified complaint, not a counterclaim.
Chans MFR was denied by the CA and so she filed this instant
petition.
ISSUE
WON Chans action for ejectment set up in a counterclaim was proper
HELD
YES.
Reasoning Sec.7, Rule 6 of the Rules of Court provides that the
answer may contain any counterclaim which a party may have against
the opposing party provided that the court has jurisdiction to entertain
the claim and can, if the presence of third parties is essential for its
adjudication, acquire jurisdiction of such parties. Under Sec. 2 of Rule
9, a counterclaim not set up shall be barred if it arises out of or is
necessarily connected with the transaction or occurrence that is the
subject matter of the opposing party's claim and does not require for its
adjudication the presence of third parties of whom the court cannot
acquire jurisdiction. A counterclaim may be compulsory or permissive.
- Chan's counterclaim for ejectment is a compulsory counterclaim
because it is necessarily connected with the transaction or occurrence
which is the subject matter of Cu's complaint, viz., the lease contract
between them. Consequently, the CA erred when it held that Chan's
cause of action for ejectment could not be set up in a counterclaim.
- The case of Ching Pue vs. Gonzales is inapplicable because in Ching
Pue the consignation cases were filed with the CFI which did not have
jurisdiction over ejectment cases; necessarily, no counterclaim for
ejectment could have been interposed therein. The ratio of the said
case is that consignation is not proper where the refusal of the creditor
to accept tender of payment is with just cause. In the instant case, the
ejectment was set up as a counterclaim in the MTC which has
jurisdiction over it and Cu joined that issue and the incidents thereto by
her answer to the counterclaim, and the counterclaim to the
counterclaim.
- The CA therefore should have confined itself to the principal error
raised in Cu's petition in (the duration of the extended term of the lease
fixed in the decision of the MTC and affirmed by the RTC). As fixed, the
term of the lease was extended to June 30, 1992. That period had
expired six months before the CA promulgated its challenged decision.
Considering that Chan did not file any petition for the review of the
RTC decision and was, therefore, deemed to have agreed to the
extension; and considering further that Cu did not come to us on a
petition for review to seek reversal of the decision therein and should
thus be considered to have agreed to the dismissal of her consignation
case, the parties must be deemed bound by the extended term, which
has, nevertheless, already lapsed.
**On Counterclaims
- A counterclaim is any claim for money or other relief which a
defending party may have against an opposing party. It need not
diminish or defeat the recovery sought by the opposing party, but may
claim relief exceeding in amount or different in kind from that sought by
the opposing party's claim. Counterclaims are designed to enable the
disposition of a whole controversy of interested parties conflicling
claims, at one time and in one action, provided all the parties can be
brought before the court and the matter decided without prejudicing the
rights of any party. A counterclaim "is in itself a distinct and
independent cause of action, so that when properly stated as such, the
defendant becomes, in respect to the matter stated by him, an actor,
and there are two simultaneous actions pending between the same
parties, wherein each is at the same time both a plaintiff and a
defendant . . . . A counterclaim stands on the same footing and is to be
tested by the same rules, as if it were an independent action. In short,
the defendant is a plaintiff with respect to his counterclaim.
Disposition petition GRANTED. CA decision SET ASIDE.

The Answer
Defenses
GOJO V GOYALA
Page 26
FACTS
-allegedly a pacto de retro sale (the other party alleged it was a
mortgage), Gojo the buyer alleged that the period for redemption has
already lapsed so he filed a petition for consolidation of ownership.
-Goyalas, the buyers who were alleging that they had obtained a cash
loan from Gojo and the land allegedly sold to Gojo was only a security
to the loan, and that they tried to pay their debt to Gojo but Gojo
refused. Goyalas filed a counterclaim for Gojo to receive the amount
due, for the document to be declared a mortgage and not a pacto de
retro sale, for P1800 per annum for the fruits of said property and that,
if ever the document be deemed a pacto de retro sale, for Gojo to be
ordered to execute a deed of resale in favor of the Goyalas.
-Goyalas spouse died, TC ordered Gojo to amend the Complaint to
substitute the spouse with one of her successors in interest as party.
Notwithstanding the lapse of 43 days after receipt of copy of TC order,
Gojo allegedly failed to submit the amended complaint so Goyala filed
a motion to dismiss the petition. TC dismissed complaint, Gojo was
also declared in default in re Goyalas counterclaim. TC ruled in favor
of Goyala.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ON DEFENSES
Rule 8, allegations deemed admitted
TEC BI & CO v CHARTERED BANK OF INDIA,
AUSTRALIA AND CHINA
41 Phil 596
CARSON; Feb 5, 1916
FACTS:
- on the 7th of November 1912, the plaintiff sold to the "La Urania Cigar
Factory (Ltd.)," a quantity of leaf tobacco.
- on 16th January, 1913, the "La Urania Cigar Factory (Ltd.)," pledged
to the defendant corporation as security for the payment of an
indebtedness of P25,000 the bales of tobacco. The bales of tobacco
thus pledged were stored in the bodega of a third person, Messrs.
Sprungli & Co., situated at No. 42 (now No. 214) of Calle David,
Manila.
- on or about the 1st day of February, 1913, the defendant corporation
demanded and obtained from Messrs. Sprungli & Co. the keys to the
said bodega, and discovered that of the 436 bales of tobacco there
remained only those set forth in paragraph 4 of the answer. (I have no
idea how many. Sorry.)
- the defendant bank did not know and had been unable to ascertain
whether "La Urania Cigar Factory (Ltd.)," misrepresented the quantity
of the tobacco in the said warehouse at the time of the execution of
said document of pledge, or whether the difference between the
amount described in the document of pledge and that found on hand
on the 1st of February, 1913, and in the meantime been disposed of by
"La Urania Cigar Factory (Ltd.)," in collusion with Messrs. Sprungli &
Co., but that if such disposition was made it was without the knowledge
or consent of the defendant bank.
- from said 1st day of February, 1913, the defendant corporation had
been in the absolute and exclusive possession of the tobacco, until the
15th of May, 1913, when same was sold under and by virtue of the
document of pledge by the defendant bank for the sum of P12,722.36
which was applied on account of said loan, the entire amount of which
was then past due and unpaid, leaving a large balance thereof still due
and unpaid.
- on the 22nd day of April, 1913, the plaintiff Tec Bi & Co., filed a
complaint in the Court of First Instance of Manila against "La Urania
44
Cigar Factory (Ltd.)," claiming the payment of the sum of P11,572.96
as the balance of the unpaid purchase price of the tobacco
- on the 5th day of May, 1913, Tec Bi & Co. asked for and obtained
from the Court of First Instance an attachment against the said bales of
tobacco, but inasmuch as the bodega was locked and the sheriff was
informed that the keys were in the possession of the bank, he
demanded the delivery thereof from the latter, which demand was
refused by the bank, alleging that it held possession of the tobacco
under a pledge.
- the sheriff notified it that the bales of tobacco were attached subject
to the results of the complaint filed by Tec Bi & Co. against "La Urania
Cigar Factory (Ltd.),
- on 8th day of May, 1913, the bank answered the notification of the
sheriff, confirming the fact that it had in its possession the bales of
tobacco specified in the notification, as security for the payment of a
loan and that it intended to sell the same; that the sheriff
communicated the answer of the bank to the attorneys to Tec Bi & Co.,
who replied insisting upon the levy of the attachment.
- on the 19th day of May, 1913, the Court of First Instance rendered
judgment in said case against "La Urania Cigar Factory (Ltd.)," in favor
of Tec Bi & Co., for the sum of P11,572.96, with legal interest from April
22, 1913, and costs.
- on the 22d day of May, 1913, the sheriff attempted to execute the
judgment upon the bales of tobacco attached and in the possession of
the defendant corporation, but was unable to do so due to the
statement of the agent of said corporation, that the tobacco had been
sold and that the proceeds of the sale had been applied upon the
payment of the amount due to from "La Urania Cigar Factory (Ltd.),"
- Court of First Instance found that the plaintiff's claim was a preferred
credit under the provisions of paragraph 1 of article 1922 of the Civil
Code; that the pledge executed by "La Urania Cigar Factory (Ltd.)," in
favor of the defendant corporation was not binding upon the plaintiff
for the reason that it was not set forth in a public instrument as
required by article 1865 of the Civil Code in order to be effective
against, third person, and rendered judgment in favor of the plaintiff
and against the defendant for the amount of the former's judgment
against "La Urania Cigar Factory (Ltd.)," with interest and costs.
ISSUE:
WON the court erred in holding that the plaintiff did not waive any
defect in the private instrument of pledge by expressly admitting its
genuineness and the correctness of its date by stipulation, and by
failure to object to its introduction in evidence.
NOTE: the case dealt with a pledgor-pledgee [credit] relationship. The
discussion here is limited to that pertaining to civil provision. Please
see case re issues on credit.
HELD:
A general admission of the truth of the allegations set forth in a
pleading is not an admission of the truth of an impossible conclusion of
fact drawn from other facts set out in the pleading, nor of a wrong
conclusion of law based on the allegations of fact well pleaded, nor of
the truth of a general averment of facts contradicted by more specific
averments. Thus, if a pleader alleges that two pesos were borrowed on
one day and two more borrowed on another making five Pin all, a
stipulation of the truth of the allegations in the pleading does not
amount to an admission by the opposing party that twice two make
five. Again if a pleader alleges that one hundred pesos were loaned
without interest for one year and had not been paid, and that the
borrower is indebted to the lender in the sum of one hundred and ten
pesos, that being the amount of the capital together with interest for
the year for which the money was loaned, a stipulation as to the truth
of the allegation set forth in the pleadings is not an admission of the
truth of the conclusion of law as to the interest due by the borrower.
These elementary principles have been quite fully developed in a great
variety of cases arising on demurrers, and sufficiently dispose of the
attempt of counsel to fix the attention of the court upon this single
averment of the answer, apart from the context and to the exclusion of
the specific allegations of fact, the truth of which, as stipulated by the
parties, cannot be questioned.
DISPOSITION: Judgment affirmed
PHIL ADVERTISING COUNSELORS V. CA, HON.
PEDRO REVILLA, SOUTHERN INDUSTRIAL

PROJECTS
GRN L 31869
ANTONIO; AUG 8 1973
NATURE
Appeal from the decision of the CA
FACTS
-Southern Industrial Projects (SIP) hired Philippine Advertising
Counselors (PAC) to promote SIPs products. SIP accumulated unpaid
accounts.
-PAC filed complaint. Attached w/ the complaint were two letters
(Annexed A&B) from SIPs lawyer, saying that it would not be possible
for SIP to settle in full its account of P97,952 08 in one payment and
suggested that it (SIP) be allowed to settle its account by "periodic
amortization"; and that SIP had included PAC in its list of creditors "to
whom payments are regularly scheduled."
- SIP filed answer stating:
1. That it admits the allegations in paragraph 1 insofar as
its personality is concerned but is w/o sufficient information to
form a belief as to the truth of the rest of the allegations.
2. That defendant is w/o sufficient knowledge or
information to form a belief as to the truth, correctness or
accuracy of the allegations set forth in paragraphs 2 to 6 of
plaintiffs complaint."
- PAC filed a motion for judgment on the pleadings as the answer
failed to tender an issue or "otherwise admits the material
allegations of the complaint. SIP did not oppose to this motion.
Judge Revilla denied the motion and set the case for pre-trial. Then
the case was set for trial on the merits.
- PAC presented its case and filed memoranda saying that SIPs
answer failed to tender an issue as said party "could not have
denied knowledge of the account in the face of its written
admissions," hence, judgment on the pleadings was proper.
- SIP presented its case and filed memoranda saying that under
Section 10, Rule 8 of the Rules of Court, its answer had sufficiently
denied the allegations of the complaint and placed them in issue, so
that it became incumbent upon petitioner to prove its allegations ;
and that a denial for "lack of sufficient knowledge or information to
form a belief as to the truth" of the averments of the complaint is a
specific denial and as such places in issue the allegations of the
complaint so denied.
- TC declared that said answer really failed to tender any issue and
that the claims alleged in the complaint are, therefore, deemed
admitted. TC ordered SIP to pay PAC the sum of P89,100.03 with
legal interest, attorney's fees, and the costs of suit.
- SIP filed motion for reconsideration. PAC filed an opposition to the
MFR on the grounds that the decision was in accordance with law
and the evidence. Judge Revilla granted MFR "in the interest of
justice and set the case for hearing on the merits.
- PAC filed an omnibus motion for reconsideration and for
execution, contending that the MFR being pro forma, did not
interrupt the running of the period for appeal, and since SIP received
notice of the decision, the judgment became final and executory,
and consequently it could no longer be modified, or set aside. Judge
Revilla denied the omnibus motion.
-PAC filed petition for certiorari, prohibition and mandamus, w/
prayer for preliminary injunction w/ the CA, which gave due course
to the petition and issued a writ of preliminary injunction. CA later
dismissed the petition and dissolved the writ of preliminary
injunction. CA said that private respondent could do no more than
claim in its motion for reconsideration that the judgment of the trial
court was contrary to Rule 8, Section 10, of the Rules of Court
ISSUE (for this topic)
1. WON respondents answer constitute denial (allegation not deemed
45
admitted)
HELD
1 NO
-The rule authorizing an answer to the effect that the defendant has no
knowledge or information sufficient to form a belief as to the truth of an
averment and giving such answer the effect of a denial, does not
apply where the fact as to which want of knowledge is asserted is
so plainly and necessarily within the defendant's knowledge that
his averment of ignorance must be palpably untrue (as held in
Capitol Motors Corporation v. Yabut)
- "an unexplained denial of information and belief of a matter of
records, the means of information concerning which are within the
control of the pleader, or are readily accessible to him, is evasive and
is insufficient to constitute an effective denial."
Reasoning: The rule that a mere allegation of ignorance of the facts
alleged in the complaint is insufficient to raise an issue, for the
defendant must aver positively or state how it is that he is ignorant of
the facts so alleged, must be applied in this case, for petitioner's
complaint explicitly averred that the letters (AnnexA&B) were written by
private respondent, albeit thru its lawyer. Whether or not the said
averments in the complaint were true, could not conceivably be
unknown to private respondent. As a matter of fact it has never been
denied by private respondent that it was indebted to petitione. It has
not been asserted that the letters attached as Annexes "A" and "B" to
the complaint which were sent to petitioner by the counsel of private
respondent were not authorized by the latter. There was thus a failure
on private respondent's part to deny the material averments of the
complaint. Consequently, the same, including the contents of Annexes
"A" and "B", which formed part of the complaint, and in which the
existence and validity of petitioner's claim were unequivocally
conceded, must be deemed to have been admitted. Although
sanctioned by the rules, the form of denial adopted by private
respondent must be availed of in good faith and with sincerity and not
resorted to merely for the purpose of delay or to confuse the adverse
party as to what averments in the complaint are actually put in issue.
Disposition Appealed judgment reversed and set aside, and
Southern Industrial Projects, Inc. to pay Philippine Advertising
Counselors, Inc. the amount of P89,100.03, with legal interest until fully
paid, plus 10% of the principal amount due by way of attorney's fees,
and costs.
LIAM LAW V OLYMPIC SAWMILL
129 SCRA 439
MELENCIO-HERRERA; May 28, 1984
NATURE
Appeal from a Decision rendered by the Court of First Instance of
Bulacan
FACTS
- Law loaned P10,000 to Olympic Sawmill without interest. The loan
became due on January 31, 1960 but was not paid on that date. The
debtors asked for an extension of 3 months (April 30, 1960).
- March 17, 1960 Another loan document was drawn up wherein the
obligation was increased by P6,000 (to answer or attorneys fees, legal
interest and other costs). Defendants failed to pay their dues by April
and when a action was instituted against them by Law in September,
they claimed that the additional interest as usurious.
- A writ of attachment was then executed on real and personal
properties of the defendant.
- TC: ordered Olympic Sawmill to pay Liam Law P10,000 plus the
P6,000 interest.
ISSUE
WON the decision of the trial court was correct
HELD
YES
Ratio Sec. 9 of the Usury Law envisages a complaint filed
against an entity which has committed usury, for the recovery of
the usurious interest paid. In that case, if the entity sued shall

not file its answer under oath denying the allegation of usury, the
defendant shall be deemed to have admitted the usury. The
provision does not apply to a case, as in the present, where it is
the defendant, not the plaintiff, who is alleging usury.
Reasoning
- Sec. 9 of the Usury Law states: The person or corporation sued shall
file its answer in writing under oath to any complaint brought or filed
against said person or corporation before a competent court to recover
the money or other personal or real property, seeds or agricultural
products, charged or received in violation of the provisions of this Act.
The lack of taking an oath to an answer to a complaint will mean the
admission of the facts contained in the latter.
- For sometime, usury has been legally nonexistent. Interest can now
be charged as tender and borrower may agree upon.4 The Rules of
Court in regards to allegations of usury, procedural in nature, should be
considered repealed with retroactive effect.
Disposition Judgment affirmed
How to contest document
PHILIPPINE BANKING CORPORATION V CA
(AMALIO L. SARMIENTO)
SCRA
CORONA; January 13, 2004
NATURE
Petition for review
FACTS
- Amalio L. Sarmiento, registered owner of A.L. Sarmiento
Construction, applied for a loan from Philippine Banking Corporation in
the sum of P4,126,000, evidenced by promissory note no. 626-84.
- Pursuant thereto, Sarmiento obligated himself to pay the amount with
interest at the rate of 29% per annum. Additionally, it was stipulated
that if payment was not made upon maturity of the loan, penalty
charges of 1% per month and 25% of the total amount due would be
charged against him.
- Sarmiento signed the aforesaid promissory note together with the
disclosure statement on loan/credit transaction provided by the bank.
- Sarmiento failed to pay the obligation on maturity, prompting PBC to
send him a letter of demand. Despite the demand, however,
Sarmiento still failed to settle his indebtedness.
- PBC filed a complaint for a sum of money against him. In his answer,
Sarmiento denied that he received the proceeds of the loan transaction
and prayed that the case against him be dismissed.
- The trial court rendered its decision finding that plaintiff miserably
failed to prove its case by preponderance of evidence. The case was
dismissed.
- PBC filed a motion for new trial which the trial court subsequently
granted despite the opposition of Sarmiento.
- The trial court rendered a decision finding the evidence adduced by
the bank to be insufficient to substantiate its claim. The trial court
reinstated its earlier dismissal of the case against Sarmiento and
denied Philippine Banking Corporations subsequent motion for
reconsideration.
- PBC appealed to the CA
- CA affirmed with modification the trial courts by deleting the trial
courts award of attorneys fees.
- Hence, the instant petition
ISSUE
WON no proof was required of petitioner to establish the contents of
the said documents because such judicial admissions of respondent
created a prima facie case in petitioners favor
HELD
NO.
- It is undisputed that respondent Sarmiento signed the promissory
note and the accompanying disclosure statement on loan/credit
transaction. But said pieces of evidence proved only the existence of
such documents. There was even no question as to that because
respondent Sarmiento himself admitted the due execution thereof.
46
- The important issue was whether or not respondent Sarmiento
actually received the proceeds of the subject loan so as to make him
liable therefor, a matter which should have been ventilated before the
trial court.
- The trial court did in fact make a finding that the documentary
evidence of petitioner failed to prove anything showing that respondent
indeed received the proceeds of the loan. The Court of Appeals
affirmed the conclusions of the trial court and declared:
A pre-existing obligation, it may be conceded, constitutes value and may, of and by
itself, serve as valuable and sufficient consideration for a contract such as the loan sued
upon. As an essential element of a contract, however, the same should have been
satisfactorily proved by the appellant particularly when, as in the instant case, the
absence of consideration was precisely put in issue by the pleadings and was
buttressed by both oral and documentary evidence. Having failed in this material
respect, the appellants withdrawal of the amount supposedly credited to the appellees
account was understandably interpreted by the court a quo as a termination/cancellation
of the loan the latter applied for. Considering further that contracts without
consideration do not exist in contemplation of law and produce no effect whatsoever
(Article 1352, Civil Code of the Philippines), the trial, likewise, correctly dismissed the
appellants case.
- A statement in a written instrument regarding the payment of
consideration is merely in the nature of a receipt and may be
contradicted. Respondent Sarmiento denied having received the
proceeds of the loan and in fact presented evidence showing that on
the day petitioner claimed to have credited the subject amount, it was
again debited or withdrawn by petitioner, admittedly upon the
instruction of the officials from petitioners head office.
- Petitioner attempted to controvert this fact by claiming that the
proceeds of the loan were applied to respondents previous obligations
to the bank. But there is nothing in the records showing that
respondent had other obligations to which the proceeds of the loan
could or should have been applied. Moreover, petitioner failed to
explain just exactly what said obligations were or to what extent the
purported proceeds were applied in satisfaction thereof. What
appeared clearly was that the proceeds of the loan were deposited
then withdrawn the same day by petitioner itself, thus negating its
claim that respondent actually received it. Petitioner therefore failed to
establish its case against respondent Sarmiento.
- Be that as it may, the general rule is that only questions of law may
be raised in a petition for review on certiorari. Barring a showing that
the findings of fact complained of are totally devoid of support in the
records, such determination must stand for the Court is neither
expected nor required to examine or refute the oral and documentary
evidence submitted by the parties.
Disposition Petition DENIED.
Defense/objection waived
9
KATON V PALANCA
G.R. No. 151149
PANGANIBAN; September 7, 2004
NATURE
Petition for Review under Rule 45 of the Rules of Court, assailing CA
decision, and resolution denying MFR.
FACTS
-August 2, 1963: George Katon filed a request with the District Office of
the Bureau of Forestry in Puerto Princesa, Palawan, for the re-
classification (forestagricultural land) of a piece of real property
known as Sombrero Island (~18has).
-BFDO Puerto Princesa ordered the inspection, investigation and
survey of the land, and thereafter for George Katon to apply for a
homestead patent.
-Gabriel Mandocdoc (now retired Land Classification Investigator)
undertook the investigation, inspection and survey of the area in the
presence of George, his brother Rodolfo (deceased) and his cousin,
Manuel Palanca, Jr., (respondent). During said survey, there were no
actual occupants on the island but there were some coconut trees
9 For other footnotes in this case:
[14] The said section provides that [t]hese rules shall apply in all courts, except as otherwise provided by the Supreme Court.
[35] 1(g) of Rule 16 of the Rules of Court.
[37] 2 of Rule 3 of the Rules of Court reads:
SEC. 2. Parties in interest.- 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. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the
name of the real party in interest.

claimed to have been planted by George and Palanca (alleged
overseer of George) who went to the island from time to time to
undertake development work, like planting of additional coconut trees.
-The application for conversion of the whole Sombrero Island was
favorably endorsed by BFDO Puerto Princesa to its main office in
Manila for appropriate action. The names of Felicisimo Corpuz,
Clemente Magdayao and Jesus Gapilango and Juan Fresnillo were
included in the endorsement as co-applicants of George. Authorities
noted that since the subject land was no longer needed for forest
purposes, the same is therefore certified and released as agricultural
land for disposition under the Public Land Act.
-George Katon says: the whole Sombrero Island had been classified
from forest land to agricultural land and certified available for
disposition upon his request and at his instance.
-However land investigators of the Puerto Princesa District Land
Office, later favorably endorsed the request of respondents Manuel
Palanca Jr. and Lorenzo Agustin, for authority to survey vacant
portions of Sombrero Island consisting of 5hectares each.
-Subsequently, respondents filed their own homestead patent
applications: Lorenzo Agustin (4.3has), Juan Fresnillo (8.5has), and
Jesus Gapilango (??has). Manuel Palanca, Jr. was issued a
Homestead Patent No. and OCT for 6.84 hectares of Sombrero Island.
-Katon filed Complaint for Nullification of Applications for Homestead
and Original Certificate of Title No. G-7089 and for Reconveyance of
Title and prayed for reconveyance of the whole island in his favor,
arguing that the homestead patents and original certificates of title
covering certain portions of Sombrero Island issued in favor of
respondents were invalid for having been obtained through fraud.
Respondents arguments:
-Manuel Palanca asserts that he himself requested for the
reclassification of the island in dispute; that about the time of such
request, Fresnillo, Gapilango and himself already occupied their
respective areas and introduced numerous improvements; that Katon
never filed any homestead application for the island; that Gabriel
Mandocdoc never undertook the inspection and survey of the island;
that he is not a mere overseer of Katon because he was acting for
himself in developing his own area and not as anybodys caretaker.
-Respondents aver that they are all bona fide and lawful possessors of
their respective portions, have declared such for taxation purposes and
have been faithfully paying taxes thereon for twenty years. They
contend that Katon has no legal capacity to sue insofar as the island is
concerned (an action for reconveyance can only be brought by the
owner and not a mere homestead applicant) and that petitioner is guilty
of estoppel by laches for his failure to assert his right over the land for
an unreasonable and unexplained period of time.
-After filing their Answer with Special and/or Affirmative Defenses and
Counterclaim, respondents also filed a Motion to Dismiss on the
ground of the alleged defiance by Katon of the RTCs order to amend
his Complaint (substitution by the legal heirs of the deceased
Gapilango). MTD was granted. Katons MFR was denied.
-Katon filed petition for certiorari before CA. Instead of limiting itself to
the allegation of grave abuse of discretion, CA ruled on the merits &
held that while Katon had caused the reclassification of Sombrero
Island from forest to agricultural land, he never applied for a
homestead patent under the Public Land Act. Hence, he never
acquired title to that land. Also, granting arguendo that Katon had the
exclusive right to apply for a patent to the land in question, he was
already barred by laches for having slept on his right for almost 23
years from the time Palancas title had been issued
-On MR, CA acknowledged that it had erred when it ruled on the merits
of the case. It agreed with Katon that the TC had acted without
jurisdiction in perfunctorily dismissing his Sept10, 1999 MFR, on the
erroneous ground that it was a third and prohibited motion when it was
actually only his first motion. Nonetheless, the complaint was
dismissed motu proprio by the CA with two justices dissenting
pursuant to its residual prerogative under Sec. 1 of Rule 9 of the
Rules of Court. CA said that from the allegations of the complaint,
Katon clearly had no standing to seek reconveyance of the disputed
land, because he neither held title to it nor even applied for a
homestead patent. It reiterated that only the State could sue for
cancellation of the title issued upon a homestead patent, and for
reversion of the land to the public domain. It also ruled that prescription
had already barred the action for reconveyance.
ISSUES
47
1. WON CA was correct in resolving the petition for certiorari based on
an issue not raised in the petition (WON CA was correct in ruling on
the merits)
2. WON CA was correct in invoking its alleged residual prerogative
under Section 1, Rule 9 of the 1997 Rules of Civil Procedure in
resolving the Petition on an issue not raised in the Petition (and
eventually dismissing the case for prescription and lack of jurisdiction)
HELD
Where prescription, lack of jurisdiction or failure to state a cause of
action clearly appear from the complaint filed with the TC, the action
may be dismissed motu proprio by the CA, even if the case has been
elevated for review on different grounds. Verily, the dismissal of such
cases appropriately ends useless litigations.
1. This is not the first time that petitioner has taken issue with the
propriety of the CAs ruling on the merits. He raised it with the CA
when he moved for reconsideration of CAs Dec8, 2000 Decision. The
CA even corrected itself in its Nov20, 2001 Resolution.
-That should have been enough to settle the issue. The CAs
Resolution on this point has rendered petitioners issue moot. There is
no need to discuss it further. Suffice it to say that the appellate court
indeed acted ultra jurisdictio in ruling on the merits of the case when
the only issue that could have been, and was in fact, raised was the
alleged grave abuse of discretion committed by the trial court in
denying Katons MFR.
-Settled is the doctrine that the sole office of a writ of certiorari is the
correction of errors of jurisdiction. Such writ does not include a review
of the evidence,[10] more so when no determination of the merits has
yet been made by the trial court, as in this case.
2. NO
-CAs residual prerogatives under Sec1 of Rule9 of the Rules of Court
is different from the residual jurisdiction of TC over cases appealed to
CA.
-RESIDUAL PREROGATIVES: Sec 1 of Rule 9 of the Rules of
Court:
defenses and objections not pleaded either in a motion to dismiss or in
the answer are deemed waived, except when
(1) lack of jurisdiction over the subject matter,
(2) litis pendentia,
(3) res judicata and
(4) prescription
are evident from the pleadings or the evidence on record. In the four
excepted instances, the court shall motu proprio dismiss the claim or
action.
-RESIDUAL JURISDICTION: Sec 9 of Rule 41 of the Rules of
Court10:
The residual jurisdiction of trial courts is available at a stage in which
the court is normally deemed to have lost jurisdiction over the case or
the subject matter involved in the appeal. This stage is reached upon
the perfection of the appeals by the parties or upon the approval of the
records on appeal, but prior to the transmittal of the original records or
the records on appeal. In either instance, the TC still retains its so-
called residual jurisdiction to issue protective orders, approve
compromises, permit appeals of indigent litigants, order execution
pending appeal, and allow the withdrawal of the appeal.
-CAs motu proprio dismissal of petitioners Complaint could not have
been based on residual jurisdiction under Rule 41. Such order of
dismissal was not one for the protection and preservation of the rights
of the parties, pending the disposition of the case on appeal. What the
CA referred to as residual prerogatives were the general residual
powers of the courts to dismiss an action motu proprio upon the
grounds mentioned in Section 1 of Rule 9 of the Rules of Court and
under authority of Section 2 of Rule 1 of the same rules.
10Rule41.SEC. 9. Perfection of appeal; effect thereof. A partys appeal by notice of appeal is deemed perfected as to him upon the filing
of the notice of appeal in due time.
A partys appeal by record on appeal is deemed perfected as to him with respect to the subject matter thereof upon the approval of the
record on appeal filed in due time.
In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the
expiration of the time to appeal of the other parties.
In appeals by record on appeal, the court loses jurisdiction only over the subject matter thereof upon the approval of the records on appeal
filed in due time and the expiration of the time to appeal of the other parties.
In either case, prior to the transmittal of the original record or the record on appeal, the court may issue orders for the protection and
preservation of the rights of the parties which do not involve any matter litigated by the appeal, approve compromises, permit appeals of
indigent litigants, order execution pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the appeal.

-Jurisdiction over the subject matter is conferred by law and is
determined by the allegations in the complaint and the character of the
relief sought. Katon prayed, among others, for a judgment (1) nullifying
the homestead patent applications of Respondents Agustin, Fresnillo
and Gapilango as well as Homestead Patent No. 145927 and OCT No.
G-7089 in the name of Respondent Palanca; and (2) ordering the
director of the Land Management Bureau to reconvey the Sombrero
Island to petitioner.
-Q: did the Complaint sufficiently allege an action for declaration of
nullity of the free patent and certificate of title or, alternatively, for
reconveyance? Or did it plead merely for reversion?
-Ans: The complaint did not sufficiently make a case for any of such
actions, over which the TC could have exercised jurisdiction.
-In an action for nullification of title or declaration of its nullity, the
complaint must contain the following allegations:
1) that the contested land was privately owned by the plaintiff prior to
the issuance of the assailed certificate of title to the defendant; and
2) that the defendant perpetuated a fraud or committed a mistake in
obtaining a document of title over the parcel of land claimed by the
plaintiff.
-In these cases, the nullity arises not from fraud or deceit, but from the
fact that the director of the Land Management Bureau had no
jurisdiction to bestow title; hence, the issued patent or certificate of title
was void ab initio.
-In an alternative action for reconveyance, the certificate of title is also
respected as incontrovertible, but the transfer of the property or title
thereto is sought to be nullified on the ground that it was wrongfully or
erroneously registered in the defendants name. The complaint must
allege two facts that, if admitted, would entitle the plaintiff to recover
title to the disputed land:
(1) that the plaintiff was the owner of the land, and
(2) that the defendant illegally dispossessed the plaintiff of the property.
-In the present case, nowhere in the Complaint did petitioner allege
that he had previously held title to the land in question. On the
contrary, he acknowledged that the disputed island was public land,
that it had never been privately titled in his name, and that he had not
applied for a homestead under the provisions of the Public Land Act.
-Reversion? No. Section 101 of the Public Land Act categorically
declares that only the solicitor general or the officer in his stead may
institute such an action. A private person may not bring an action for
reversion or any other action that would have the effect of canceling a
free patent and its derivative title, with the result that the land thereby
covered would again form part of the public domain.
-The dismissal of the Complaint is proper not only because of
lack of jurisdiction, but also because of the utter absence of a
cause of action, a defense raised by respondents in their Answer.
-Assuming that petitioner is the proper party to bring the action for
annulment of title or its reconveyance, the case should still be
dismissed for being time-barred.
A. 1977, Feb21: a homestead patent and an OCT was issued to
Palanca
1988, Oct6: filing of the complaint, way past ten years from the date
of the issuance of the Certificate, the prescriptive period for
reconveyance of fraudulently registered real property.
B. Palancas title attained the status of indefeasibility one year from the
issuance of the patent and the Certificate of Title in February 1977. It is
no longer open to review on the ground of actual fraud.
Trial courts have authority and discretion to dismiss an action on the
ground of prescription when the parties' pleadings or other facts on
record show it to be indeed time-barred; and it may do so
-on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court),
or
-an answer which sets up such ground as an affirmative defense (Sec.
5, Rule 16), or
-even if the ground is alleged after judgment on the merits, as in a
motion for reconsideration; or
-even if the defense has not been asserted at all, as where no
statement thereof is found in the pleadings; or
-where a defendant has been declared in default.
What is essential only is that the facts demonstrating the lapse of the
prescriptive period be otherwise sufficiently and satisfactorily apparent
on the record; either in the averments of the plaintiff's complaint, or
otherwise established by the evidence.
Disposition Petition denied. CA resolution affirmed. Complaint
dismissed on the grounds of lack of jurisdiction, failure to state a cause
of action and prescription. Costs against petitioner.
48
COMMON PROVISIONS
Re parts of pleading
FIL-ESTATE GOLF AND DEVELOPMENT, INC. V CA
(CABUCO-ANDRES)
265 SCRA 614
KAPUNAN; December 16, 1996
NATURE
Petition for review on certiorari of a decision of the CA.
FACTS
- Petitioner Fil-Estate Golf and Development, Inc. (FEGDI) is the
developer of the Manila Southwoods golf course and residential
subdivision project which partly covers lands located in Bian, Laguna.
- December 29, 1992: Felipe Layos filed a Complaint for Injunction and
Damages with Application for Preliminary Injunction against Fil-Estate
Realty Corporation (FERC) with the RTC of Bian. It alleged that
Felipe Layos is the legal owner and possessor of thwo parcels of land
having a total area of 837,695 sq. m. located in Bian, Laguna known
as Lots 1 & 2 of Plan Psu-201. Layos claimed that the Southwoods
project encroached upon the aforecited lands and thus his rights of
ownership and possession were violated when FERC brought in men
and equipment to begin development of the said properties.
- February 2, 1993: FERC filed an Opposition to Application for Writ of
Preliminary Injunction and explicitly stated therein that the developer is
its sister company, FEGDI.
- March 29, 1993: Judge Sultan of RTC Bian issued an order denying
the prayer for preliminary injunction in view of Layos inability to
substantiate his right.
- June 25, 1993: Layos along with his wife and other individuals filed
another case for Injunction and Damage with Prayer for Preliminary
Injunction with the RTC of San Pedro, this time against FEGDI. The
complaint is basically identical to that filed in the Bian case, except for
changes in the number of party-plaintiffs and party-defendants and in
the area size of the claimed landholdings.
- FEGDI moved to dismiss the San Pedro case on grounds of litis
pendentia, forum-shopping, lack of cause of action and lack of
jurisdiction. FEGDI argues that a similar complaint was previously filed
with the RTC Bian court. FEGDI also averred that the documents
relied upon by the private respondents are of doubtful veracity and that
they failed to pay the correct filing fees.
- Judge Cabuco-Andres of San Pedro RTC denied FEGDIs motion to
dismiss, as well as the Motion for Reconsideration. FEGDI filed a
Petition for Certiorari and Prohibition with Application for Preliminary
Injunction with the CA. CA ordered an RTO enjoining Cabuco-Andres.
- January 25, 1994: RTC Bian case was dismissed without prejudice
on grounds of forum-shopping.
ISSUES
1. WON Layos is guilty of forum-shopping.
2. WON the San Pedro case has cause of action.
HELD
1. YES
Ratio
Reasoning Private respondents have indeed resorted to forum-
shopping in order to obtain a favorable decision. The pattern is
undisputably revealed by the fact that after Felipe Layos instituted in
1992 a case for injunction and damages with application for preliminary
injunction in the RTC of Bian, and after his prayer was denied in
March 1993, he (and other individuals) filed an identical complaint for
injunction and damages with preliminary injunction in June 1993, this
time with RTC San Pedro. An examination would show that the San
Pedro complains is simply an improved version of the Bian complaint.
- Respondents content that there is no identity of part-defendants since
it was FERC in the Bian case and FEGDI in the San Pedro case. This
is unmeritorious, because FEGDI voluntarily submitted to the courts
jurisdiction by filing its answer and expressly stating that it is the
developer of Southwoods, and not FERC. The Bian court expressly
recognized FEGDI as the defendant in the said case.

- The willful attempt by private respondent to obtain a preliminary
injunction in another court after it failed to acquire the same from the
original court constitutes grave abuse of the judicial process.
SC-Administrative Circular 04-94:
Revised Circular 29-91 applies to and governs the filing of
petitions in the Supreme Court and the Court of Appeals and is
intended to prevent the multiple filing of the petitions or
complaints involving the same issues in other tribunals.
The following requirements xxx shall be strictly complied with
in the filing of the complaints, petitions, applications or other
initiatory pleadings in all courts and agencies other than the SC
xxx.
The complaint and other initiatory pleadings referred to and
subject of this Circular are the original civil complaint, counter-
claim, cross-claim, third (fourth, etc) party complaint, or complaint-
in-intervention, petition, or application wherein a party asserts his
claim for relief.
2. NO
Ratio In the determination of WON the complaint states a cause of
action, the annexes attached to the complaint may be considered, they
being parts of the complaint.
Reasoning The San Pedro case also did not state a cause of action.
In determining WON a complaint states a cause of action, only the
allegations in the complaint must be considered. The test if sufficiency
of the facts is WON admitting the facts alleged the court can render a
valid judgment upon the same in accordance with the prayer thereof.
- There is no cause of action because Layos claim on the land in
question is based on a fabricated document. The affidavit of self-
adjudication is a vital part of the complaint that should be considered in
the determination of whether or not a cause of action exists.
- The land Psu-201 is an original survey for J. Reed located in Malate,
Manila, and Si-14769 is a survey number for the plan of a land parcel
situated in Bo. Bessang, Cagayan in the name of Gregorio Blanco
- However the CA and RTC limited itself to the allegations in the
complaint proper of the San Pedro case in concluding that said
complaint stated a cause of action. This is erroneous.
- In the case of Marcopper Mining v Garcia, the RTC had the
opportunity to examine the merits of the complaint, the answer with
counterclaim, the petitioners answer to the counterclaim and its
answer to the request for admission. It was but logical for said court to
consider all of these pleadings in determining WON there was a
sufficient cause of action in the petitioners complaint.
- Regalado: The exception is provided in Sec. 2 Rule 9. It as also been
held that under this ground the trial court can consider all the pleadings
filed, including annexes, motions and the evidence on record.
DISPOSITION
The petition for review on certiorari is granted. Respondents complaint
is dismissed.
DBP v CA
G.R. No. 147217
October 7, 2004
NATURE
petition for review on certiorari assailing the Resolution of the CA
dismissing the petition for certiorari filed by the DBP and Atty. Nilo
Galorport
FACTS
- Bibiana Guerra de Azarcon, herein private respondent, and her late
husband Inocentes Azarcon, obtained a loan from PNB. As collateral,
they mortgaged 2 lots with the bank. But they could not pay their loan.
Asuncion Calceta told Bibiana that she is willing to pay their loan if
Bibiana would mortgage the lots to her. Private respondents agreed.
Asuncion Calceta then made an initial payment of P273,000.00 to the
PNB. The bank extended the redemption period to allow Asuncion to
apply with the DBP a loan of P3.5M to be paid to the PNB. Private
respondents executed a simulated deed of sale of their lots in her favor
to enable her to mortgage the same with the DBP.
- When the proceeds of the loan were released, Asuncion paid the
PNB P900,000.00 representing the unpaid balance of respondents
loan. However, she failed to pay her loan with the DBP, prompting the
bank to foreclose the mortgage covering the 2 lots. After hearing
49
private respondents application for preliminary injunction, the RTC
issued an Order enjoining the DBP and Atty. Nilo Galorport, the banks
deputized special sheriff, from proceeding with the auction sale of the
lots pending the final determination of the civil case wherein private
respondents prayed for annulment of the contract and the TCTs
transferring title over the lots to Asuncion Calceta.
- DBP and Atty. Galorport filed an MFR but were denied by the RTC.
Hence, they filed with the CA a petition for certiorari alleging that in
granting the injunctive relief in favor of private respondents, the RTC
acted with grave abuse of discretion. The CA dismissed the petition for
certiorari for failure of one of the petitioners, Atty. Nilo Galorport to sign
the certification against forum shopping. The CA denied petitioners
MFR, holding that Atty. Demosthenes Demecillo, Branch Manager of
the DBP at Tagbilaran City, failed to show that he is the banks
authorized representative to file the petition for certiorari.
ISSUE
WON the CA acted with grave abuse of discretion in dismissing the
petition for certiorari
HELD
NO
Ratio
The certification against forum shopping is fatally defective, not having
been duly signed by both petitioners. This procedural flaw warrants the
dismissal of the petition for certiorari. The certification against forum
shopping must be signed by the principal parties.
Reasoning
The petitioners before the CA were the DBP, represented by Atty.
Demosthenes Demecillo, the banks Branch Manager at Tagbilaran
City, and Atty. Nilo Galorport, DBPs deputized special sheriff. The
certification against forum shopping was signed by Atty. Demecillo only.
Petitioners explained in their MFR that in the verification of the petition
for certiorari, Atty. Demecillo stated under oath that he is the DBPs
incumbent Branch Head and its duly authorized officer. They submitted
a copy of a resolution passed by the DBP Board of Governors,
authorizing Branch Heads of the DBP to sign the verification and
certification against forum shopping of all initiatory pleadings of the
bank. What petitioners failed to explain, however, is their failure to
attach a certified true copy of the resolution to their petition. Their
omission is fatal to their case. Courts are not expected to take judicial
notice of corporate board resolutions or a corporate officers authority
to represent a corporation. Petitioners failure to submit proof that Atty.
Demecillo has been authorized by the DBP to file the petition is a
"sufficient ground for the dismissal thereof." Atty. Galorport contends
that the signature of Atty. Demecillo, representing the DBP, is sufficient
since he and DBP are being sued jointly, they having a common
interest in the lots under litigation. His contention lacks merit. DBP is
being sued as a mortgagee, while he is impleaded as the banks
deputized special sheriff who conducted the extra-judicial foreclosure
of the mortgage. Their interests are not the same. The certification
against forum shopping should be signed by all the petitioners in a
case, and the signing by only one of them is insufficient.
Disposition
Petition is DENIED
WEE V GALVEZ
436 SCRA 96
QUISUMBING; August 11, 2004
NATURE
Petition for review on certiorari
FACTS
- Petitioner Rosemarie Wee and respondent Rosario D. Galvez are
sisters. Rosemarie lives with husband Manuel in Bataan. Rosario lives
in New York, USA
- They entered into an agreement whereby Rosario would send
Rosemarie US$20,000, half of said amount to be deposited in a
savings account while the balance could be invested in the money
market. The interest to be earned therefrom would be given to
Rosario's son, Manolito Galvez, as his allowance
- In accordance with her agreement with Rosario, Rosemarie gave
Manolito his monthly allowance ranging from P2,000 to P4,000 a
month from 1993 to January 1999. However, sometime in 1995,

Rosario asked for the return of the US$20,000 and for an accounting.
Rosemarie promised to comply with the demand but failed to do so. A
written demand was sent to her. When Rosemarie did not comply,
Rosario filed a suit against her.
- The Wees moved to dismiss the case based on the following
grounds: (1) the lack of allegation in the complaint that earnest efforts
toward a compromise had been made in accordance with Article 1515
of the Family Code; (2) failure to state a valid cause of action, the
action being premature in the absence of previous earnest efforts
toward a compromise; and (3) the certification against forum shopping
was defective, having been executed by an attorney-in-fact and not the
plaintiff.
- Rosario amended her complaint to add that Earnest efforts towards
have been made but the same have failed (mali talaga yung sinulat
nila). The trial court accepted the amended complaint and dismissed
the Wees motion to dismiss. Wee moved for an MFR. It was also
denied.
- The Wee couple brought the matter to the Court of Appeals via a
special civil action for certiorari, prohibition, and mandamus. It was
also denied. The Court of Appeals held that the complaint, as
amended, sufficiently stated a cause of action. It likewise held that the
questioned certification against forum shopping appended thereto was
not so defective as to warrant the dismissal of the complaint. An MFR
was filed but was likewise denied.
ISSUE/S
1. WON the certification of non-forum shopping executed by the
plaintiffs atty-in-fact is defective
2. WON the amended complaint before the RTC states a cause of
action
HELD
1. No
Reasoning The Special Power of Attorney executed by her in favor of
Grace Galvez, if subjected to careful scrutiny would clearly show that
the authority given to the latter is not only broad but also all
encompassing that it includes the power and authority to institute both
civil and criminal actions. Corollary with this power is the authority to
sign all papers, documents, and pleadings necessary for the
accomplishment of the said purpose.
The SPA includes:
1. To ask, demand and claim any sum of money that is duly [due] from
any person natural, juridical and/or corporation in the Philippines;
2. To file criminal and/or civil complaints before the courts of justice in
the Philippines to enforce my rights and interest[s];
3. To attend hearings and/or Preliminary Conference[s], to make
stipulations, adjust claims, to settle and/or enter into Compromise
Agreement[s], to litigate and to terminate such proceedings; [and]
4. To sign all papers, documents and pleadings necessary for the
accomplishment of the above purposes.
2. YES
Ratio It is true that the lead sentence of paragraph 9-A, may be
incomplete or even grammatically incorrect as there might be a
missing word or phrase, but to our mind, a lacking word like
"compromise" could be supplied by the rest of the paragraph.
Reasoning Petitioners submit that the amended complaint violates
Rule 8, Section 133 of the 1997 Rules of Civil Procedure, as there is
no plain and direct statement of the ultimate facts on which the plaintiff
relies for her claim. Specifically, petitioners contend that the allegation
in paragraph 9-A of the amended complaint that "Earnest efforts
towards have been made but the same have failed" is clearly
insufficient. The sentence is incomplete, thus requires the reader of the
pleading to engage in deductions or inferences in order to get a
complete sense of the cause of action, according to petitioners.
-Respondent rebuts by stating that the amended complaint as well as
the annexes attached to the pleadings should be taken in their entirety.
Thus taken together, in their entirety, the amended complaint and the
attachments to the original complaint, clearly show that a sufficient
cause of action as it is shown and stated that earnest efforts towards a
compromise have been made, according to respondent.
-A paragraph is "a distinct section or subdivision of a written or printed
composition that consists of from one to many sentences, forms a
rhetorical unit. As a "short composition consisting of a group of
sentences dealing with a single topic," a paragraph must necessarily
50
be construed in its entirety in order to properly derive the message
sought to be conveyed. In the instant case, paragraph 9-A of the
Amended Complaint deals with the topic of efforts made by the
respondent to reach a compromise between the parties. Hence, it is in
this light that the defective lead sentence must be understood or
construed.
-Having examined the Amended Complaint in its entirety as well as the
documents attached thereto, following the rule that documents
attached to a pleading are considered both as evidence and as part of
the pleading, we find that the respondent has properly set out her
cause of action.
Disposition Petition is denied.
BAGUIARO V. BARRIOS
00SCRA 00
FERIA, 30 Aug. 1946
FACTS
-Complaint filed on January 7, 1945, in the Court of First Instance of
Iloilo by Emiliana Tupas Vda. de Atas against Baguiaro.
-De Atas is the exclusive and absolute and registered owner of the
following described property, situated in the City of Iloilo. The above lot,
without the improvements which were burned during the war, is
assessed at P4,680.
-That sometime in the month of July, 1946, Baguiaro verbally solicited
the permission of herein de Atas to construct a house of light materials
on the lot of some three brazas wide and three brazas long just
enough for them to sleep, at a monthly rental of twenty pesos (P20),
payable in advance, and de Atas told Baguiaro that she would think the
matter; she found out that defendant had already begun the
construction of a nipa and bamboo house with no approval from her;
-Instead of constructing a house of three brazas by three brazas as
above Baguiaro has built additions after additions to the house such
that the present house constructed is twenty-eight and one-half feet on
the front and forty-two and one-half feet on the side, and has rented a
part thereof to other persons, and that when plaintiff discovered this
anomaly and violations of their verbal and initial agreement, defendant
was told sometime on October, 1945, to pay a monthly rental of fifty
pesos (P50) a month, or vacate the lot in question. For the month of
October, Baguiaro paid only the sum of P25, leaving a balance of P25,
and for subsequent months Baguiaro has refused and still refuses to
pay the said rentals of fifty pesos (P50), or vacate the premises, in
spite of repeated demands.
-Prayer: defendant to pay to plaintiff the sum of fifty pesos (P50) as
monthly rentals for the lot occupied by him of the property of herein
plaintiff, beginning with the month of October, 1945, or to vacate the lot
in question, with costs against the defendant, and for such other and
for such other and further relief as this Honorable Court shall deem just
and equitable.
-Baguiaro filed motion to dismiss on the ground that the Court has no
jurisdiction over the subject matter of the complaint or suit, the action
being either for the collection of rentals of a real estate which do not
reach to two hundred pesos (P200) or for ejectment from the premises
in jurisdiction over the subject of the litigation.
-CFI motion to dismiss denied and sentencing Baguiaro either to pay
two hundred fifty pesos (P250) or to vacate the lot in question.
-Petition for Certiorari on the ground the respondent judge acted
without jurisdiction over the subject matter in trying and deciding the
case, and at the same time asked this Court to enjoin the respondent
judge from taking further action in the case during the pendency of this
petition.
ISSUE
WON the court acted without jurisdiction
HELD
Yes, court acted without jurisdiction. It is an axiom, in civil procedure
that if the relief demanded is not the proper one which may be granted
under the law, it does not characterize or determine the nature of the
plaintiff's action, and that the relief to which the plaintiff is entitled
based on the facts alleged by him in his complaint, although it is not
the relief demanded, is what determines the nature of the action. And
that is the reason why it is generally added to prayers for relief, though
not necessary, the words "and for such other relief as the law

warrants," or others to the same effect. So if a plaintiff alleges, for
instance, that the defendant owes the former a certain amount of
money and did not pay it at the time stipulated, and prays that the
defendant be sentenced to return a certain personal property to the
plaintiff, such prayer will not make or convert the action of recovery, of
debt into one of recovery of personal property, and the court shall grant
the proper relief, or sentence the defendant to pay his debt to the
plaintiff.
The attorney of the plaintiff, in his opposition to the defendant's motion
to dismiss filed in the court below, and in his answer to the petition for
certiorari in this Court, contends that the plaintiff's principal action is for
breach of contract, and therefore within the jurisdiction of the Court of
First Instance, because it is not capable of pecuniary estimation. There
is no such kind of action. Breach of contract may be the cause of
action, but not the action or relief itself. According to our Civil Code, a
breach of contract is accuse of action, either for specific performance,
or performance, or rescission of the contract. As the plaintiff is entitled
is entitled only to one of the two reliefs, if he prays that the defendants
be sentenced to perform the obligations imposed upon him by the
contract the action is specific performance, and if he prays that the
contract be rescind the plaintiff's action is rescission. In contracts of
lease of a real estate, if the lessee violates the terms of the contract by
his failure to pay the rent due or to comply with the conditions of the
lease, and refuses to vacate or return the possession of the property
leased to the lessor notwithstanding demand to do so, the action is
illegal detainer if filed within one year, and recovery or restoration of
possession if filed after one year, from the demand.
That the prayer of relief in the complaint seems to convey the idea that
the plaintiff would agree to let the defendant continue in possession if
he pays the rents or damages demanded by the plaintiff, does not
change the nature of the action, since the court may only grant the
proper relief according to law, that is, the ejectment of the defendant
and the payment by the latter of the damages due for the occupation of
the land, though the plaintiff is free to condone said payment. It is
evident that the court can not authorize the defendant petitioner to
continue in possession the land as lessee if he pays the rents or
damages demanded by the plaintiff since such continuation depends
not only upon the plaintiff's will but also upon that of the defendant. A
judgment authorizing the defendant to continue as lessee for a certain
and definite period of time after the judgment, will not bind the plaintiff
to grant such lease nor the defendant to continue as lessee paying the
monthly rental fixed by the court. A court cannot make and impose a
contract upon the parties.
Even assuming, arguendo, that the complaint may contain two
alternatives or independent actions, one of forcible entry and another
for recovery of rents or damages, the Court of First Instance of Iloilo
has no jurisdiction to entertain either one or both. It has no jurisdiction
over the action of forcible entry, for it is within the exclusive jurisdiction
of the justice of the peace; nor over that of recovery of rents or
damages, because the amount claimed by the plaintiff in his complaint,
which determines the court jurisdiction, is less than two hundred pesos
(P200). According to the complaint, the petitioner had occupied the lot
in question during the months of October, November, December and
January when the complaint was filed, and the total amount of rents or
damages claimed as due for that occupation at the rate of fifty pesos
(P50) a month, minus the sum of twenty-five pesos (P25) which was
paid on account of the rent for October, aggregate only one hundred
and seventy-five pesos (P175).
The fact that, in its judgment, the lower court has awarded the plaintiff
the sum of P250, including the rent for February, and not the P25 paid
on account by the petitioner for the month of October as alleged in the
same complaint, did not confer upon the court jurisdiction over the
case. If the court has no jurisdiction over the subject matter according
to the allegations in the complaint, it can not acquire it just because the
rents claimed and those that may accrue during the pendency of the
suit may amount to a sum within its jurisdiction. To hold otherwise
would lead to the absurdity that the jurisdiction of the court depends
not upon the allegations in the complaint, but upon a contingency
which may or may not arise or occur. As the damages claimed in the
complaint amounted to one hundred and seventy-five pesos (P175),
could the lower court have sentenced the defendant to pay the amount
claimed had the latter made a confession of judgment?
Disposition
The respondent judge's decision in this case is set aside; with costs
against the respondent Emiliana Tupas Vda. de Atas. So ordered.
51
PARAS, J., dissenting:
- The willingness of the plaintiff to let the defendant, herein petitioner
Manuel Baguioro, retain possession of the land upon payment of the
rent (which, plaintiff alleges, should be P50) is plainly repugnant to the
theory that the principal purpose of the action is ejectment of the
defendant or, in the language of section 1 of Rule 72, "the restitution of
possession."
Upon the other hand, giving such reasonable intendments to the
allegations of the complaint as are consistent with and implied by the
relief sought, the action may be one for the enforcement of a lease
contract implied or otherwise in which the court is asked to fix the
amount of the rent for want of corresponding stipulation. The claim that
the rent ought to be P50, when considered with the prayer "for such
other and further relief as this Honorable Court shall deem just and
equitable," merely invokes the discretion and judgment of the court
regarding the righteousness of said claim.
-While the complaint may be treated ;as one for simple ejectment, in
the light of some of its averments, the circumstance nevertheless does
not prevent it from being an action its denomination immaterial
that may be filed originally in the Court of First Instance, in view of the
other allegations and the prayer. In the latter situation, matters
contained in the pleading which are not necessary to, or are
incompatible with, the jurisdiction of the Court of First Instance may be
considered surplusage. The complaint might have been awkwardly
drafted, but unless the defendant was actually misled to his surprise or
injury, it should be held sufficient. (Lizarraga Hermanos vs. Yap Tico,
24 Phil., 504.) It is needless to state that the nature of an action is
determined by its allegations and prayer. As long as the complaint
makes out a case cognizable by the Court of First Instance, the latter's
jurisdiction will not be altered or taken away simply because the action
cannot prosper. The judgment in this case was rendered after the
defendant had been declared in default.
HILADO, J., dissenting:
-Liberally construed, as it should be (Rule 15, section 17), the plaintiff's
complaint is susceptible of two constructions: as a complaint in
ejectment, and as one aimed at invoking the general jurisdiction of the
Court of First Instance in actions for possession of real property, as
regards the plaintiff's land under section 56, paragraph 2, of Act No.
136. In choosing between these two constructions in justice to the
learning and intelligence of counsel for the plaintiff, it seems to me that
the court should have had no difficulty in concluding that he meant and
intended to resort to the latter procedure, as he should be presumed to
know such an elemental rule as that which confers upon the municipal
or justice of the peace court exclusive original jurisdiction of forcible
entry and unlawful detainer cases within the first year following the
accrual of the cause of action.
-Even where the defendant employs, e. g., violence in taking
possession of the plaintiff's land, the law does not compel the latter to
resort to the summary remedy y furnished by Rule 72, section 1, just
as it does not compel the plaintiff to file a criminal complaint for any
criminal offense which the defendant may have committed with the use
of such violence. The law grants the plaintiff of remedies, as well as a
choice of courts, so long as he lays before the court of his choice the
facts calling for a proper exercise of its jurisdiction. So that an
undisputed owner of land who, as such, is by law entitled to its
possession, and who is deprived thereof, e.. g., by force, while entitled
to the summary remedy afforded by Rule 72, section 1, which
according to said section he may resort to, is neither compelled to
bring his case thereunder, alleging the characteristic circumstance of
violence, lodging his action in the proper inferior court, nor forbidden to
seek redress from the proper Court of First Instance by bringing his
case under its general jurisdiction "in all civil actions which involve . . .
the possession of real property . . .", waiving the effects of the violence
committed by the defendant as well as the summary remedy to which
such characteristic circumstance may entitled, had simply alleging, as
his cause of action, his ownership of the land, his right to its
possession and the fact that he has been deprived of such possession
by the defendant, regardless of the manner employed in such
deprivation. The same law which does not compel the owner to bring a
criminal action by reason of such violence does not compel him to
bring a forcible entry suit by reason thereof. And it would be to my mind
scandalous to affirm in a government of laws that in such
circumstances the owner will be prevented from bringing his case
under the general jurisdiction of the Court of First Instance of the
province without invoking the characteristic circumstance of violence.

Of course, in an ordinary action commenced in the Court of First
Instance, he will not be entitled to the summary proceedings, such as
the immediate execution of the judgment, etc., provided for in Rule 72.
So long as the plaintiff does not rely on any of the specific
circumstances characterizing the action as one of forcible entry or
unlawful detainer, it cannot be said to be within the exclusive original
jurisdiction of the municipal or justice of the peace court, even within
the first year following the accrual of the cause of action.
CHINA BANKING CORP V MONDRAGON
INTERNATIONAL
G.R. No. 164798
PUNO; November 17, 2005
NATURE
Petition for certiorari
FACTS
- In 1994, respondent Mondragon International Philippines,
Incorporated (MIPI), entered into a Lease Agreement with Clark
Development Corporation (Clark)to develop the 232-hectare Mimosa
Leisure Estate. They also entered into supplemental lease agreements
to develop other additional areas. Part of the funds used for these
projects was generated from loans obtained from petitioner China
Banking Corporation (CBC). To secure these loans, MIPI executed
promissory notes in favor of CBC. In addition, respondent Antonio U.
Gonzales executed a Surety Agreement in favor of CBC in the amount
of P100M. In 1997, the Asian financial crisis transpired. The ensuing
shock to the Philippine economy affected MIPIs ability to pay its
obligations to CBC.
- In 2000, CBC filed a complaint for a sum of money with RTC Makati
City against MIPI and Mr. Gonzales. The certification of forum
shopping was attached to the complaint. It was to the effect that:
MERCEDES E. GERMAN, the Manager of Loans & Discounts Dept of
the China Banking Corp certified that the defendant China Bank has
not commenced any other action or proceeding involving the same
issues in the SC, CA or before any other tribunal or agency, and that to
the best of her knowledge, no such action or proceeding is pending,
and that if a similar action or proceeding has been filed or is pending
before SC, CA or any other tribunal or agency, she undertakes to
report that fact within five (5) days.
- In 2001, MIPI and Gonzales filed MTD on the ff. grounds: [1] the
complaint failed to comply with the requirements set forth under SC
Administrative Circular No. 04-94 and Section 5, Rule 7 of the 1997
Rules of Civil Procedure as regards certifications against forum
shopping; and [2] there was noncompliance with a condition precedent
for the filing of the case and/or the same failed to state a cause of
action or was premature
- RTC denied MTD and MFR of MIPI and Gonzales. CA granted the
petition for certiorari and reversed RTC. CA ruled that CBC failed to
comply with the requirements of Section 5, Rule 7 of the 1997 Rules of
Civil Procedure as there was nothing in the records showing that the
signatory of the certification against forum shopping was authorized by
CBC. It referred to the Corporation Code and jurisprudence which state
that corporations exercise their corporate powers through their board
of directors and no person can bind the corporation without authority
from the latter. CA denied CBCs MFR. Hence, the present petition.
ISSUE
WON CBCs failure to attach the requisite board resolution making Ms.
German an authorized signatory of certifications against forum
shopping was a fatal error and cannot be rectified by subsequent
submission thereof.
HELD
NO
Ratio The Court has relaxed, under justifiable circumstances, the rule
requiring the submission of these certifications and has applied the rule
of substantial compliance under justifiable circumstances with respect
to the contents of the certification. If the belated filing of the certification
against forum shopping for compelling reasons in previous rulings is
allowed, with more reason should the Court sanction the timely
submission of such certification though the proof of the signatorys
authority was submitted thereafter.
52
Reasoning The court has used the doctrine of stare decisis to
enunciate this principle. The ff. cases were cited as authority: Shipside
Incorporated v. CA, Ateneo De Naga University v. Manalo, and,
Pascual & Santos Inc v. Tramo Wakas Neighborhood Association. At
the meeting of CBCs Board of Directors, the Board, in a resolution,
approved, confirmed and ratified Ms. Germans authority. Though the
wording of the board resolution leaves much to be desired, it remains
equally susceptible of interpretation in favor of Ms. Germans
preexisting status as an authorized signatory.
Disposition Petition is GRANTED.
CRUZ-AGANA V LAGMAN
G.R. No. 139018
CARPIO; April 11, 2005
NATURE
Petition for certiorari
FACTS
- On 18 March 1996, petitioner filed a Complaint for annulment of title
with prayer for preliminary mandatory injunction against respondent.
Petitioner claims that as the sole heir of one Teodorico Cruz, she is the
sole owner of a lot covered by Transfer Certificate of Title No. T-3907.
Petitioner further claims that the lot was fraudulently sold to Eugenio
Lopez, Jr. who later on transferred the lot to respondent.
- Respondent seasonably filed its Answer with compulsory
counterclaim. Petitioner moved to dismiss respondents counterclaim
for lack of a certificate of non-forum shopping.
- In an Order dated 11 March 1999, the trial court denied petitioners
motion to dismiss respondents counterclaim. The trial court reasoned
that respondents counterclaim is compulsory and therefore excluded
from the coverage of Section 5, Rule 7 of the Rules of Court.
Petitioner moved that the trial court reconsider its Order invoking the
mandatory nature of a certificate of non-forum shopping under
Supreme Court Administrative Circular No. 04-94. On 25 May 1999,
the trial court reversed its 11 March 1999 Order and dismissed
respondents counterclaim for lack of a certificate of non-forum
shopping.
- Respondent seasonably filed a motion for reconsideration arguing
that Administrative Circular No. 04-94 does not apply to compulsory
counterclaims following the ruling in Santo Tomas University Hospital v.
Surla. On 4 June 1999, the trial court again reversed itself and
recalled its Order dismissing respondents counterclaim. The trial court
ruled that the filing of a compulsory counterclaim does not require a
certificate of non-forum shopping.
ISSUE
WON a compulsory counterclaim pleaded in an Answer can be
dismissed on the ground of a failure to accompany it with a certificate
of non-forum shopping
HELD
NO
- Santo Tomas clarified the scope of Administrative Circular No. 04-94
with respect to counterclaims. The Court pointed out that this circular
is intended primarily to cover an initiatory pleading or an incipient
application of a party asserting a claim for relief. The distinction
between a compulsory and a permissive counterclaim is vital in the
application of the circular. The Court explained:
It should not be too difficult, the foregoing rationale of the
circular aptly taken, to sustain the view that the circular in
question has not, in fact, been contemplated to include a kind of
claim which, by its very nature as being auxiliary to the
proceedings in the suit and as deriving its substantive and
jurisdictional support therefrom, can only be appropriately pleaded
in the answer and not remain outstanding for independent
resolution except by the court where the main case pends.
Prescinding from the foregoing, the proviso in the second
paragraph of Section 5, Rule 8 of the 1997 Rules of Civil
Procedure, i.e., that the violation of the anti-forum shopping rule
shall not be curable by mere amendment xxx but shall be cause
for the dismissal of the case without prejudice, being predicated
on the applicability of the need for a certification against forum-
shopping, obviously does not include a claim which cannot be
independently set up.

- The Court reiterated this ruling in Ponciano v. Judge Parentela, Jr.
- Administrative Circular No. 04-94 does not apply to compulsory
counterclaims. The circular applies to initiatory and similar pleadings.
A compulsory counterclaim set up in the answer is not an initiatory or
similar pleading. The initiatory pleading is the plaintiffs complaint. A
respondent has no choice but to raise a compulsory counterclaim the
moment the plaintiff files the complaint. Otherwise, respondent waives
the compulsory counterclaim. In short, the compulsory counterclaim is
a reaction or response, mandatory upon pain of waiver, to an initiatory
pleading which is the complaint.
- Petitioners counsel fails or simply refuses to accept the distinction
between a permissive counterclaim and a compulsory counterclaim.
This distinction was the basis for the ruling in Santo Tomas and
Ponciano. The sole issue for resolution in the present case is
whether respondents counterclaim is compulsory or permissive. If it is
a permissive counterclaim, the lack of a certificate of non-forum
shopping is fatal. If it is a compulsory counterclaim, the lack of a
certificate of non-forum shopping is immaterial.
- A compulsory counterclaim is any claim for money or other relief,
which a defending party may have against an opposing party, which at
the time of suit arises out of, or is necessarily connected with, the
same transaction or occurrence that is the subject matter of plaintiffs
complaint.[9] It is compulsory in the sense that it is within the
jurisdiction of the court, does not require for its adjudication the
presence of third parties over whom the court cannot acquire
jurisdiction, and will be barred in the future if not set up in the answer
to the complaint in the same case. Any other counterclaim is
permissive.
- Respondents counterclaim as set up in its answer states:
3. That because of the unwarranted, baseless, and unjustified
acts of the plaintiff, herein defendant has suffered and continue to
suffer actual damages in the sum of at least P400,000,000.00
which the law, equity, and justice require that to be paid by the
plaintiff and further to reimburse the attorneys fees of
P2,000,000.00;
- It is clear that the counterclaim set up by respondent arises from the
filing of plaintiffs complaint. The counterclaim is so intertwined with
the main case that it is incapable of proceeding independently. The
counterclaim will require a re-litigation of the same evidence if the
counterclaim is allowed to proceed in a separate action. Even
petitioner recognizes that respondents counterclaim is compulsory. A
compulsory counterclaim does not require a certificate of non-forum
shopping because a compulsory counterclaim is not an initiatory
pleading.
Disposition The decision petition is denied.
Re manner of making allegations
PERPETUAL SAVINGS V FAJARDO
223 SCRA 720
FELICIANO; June28,1993
FACTS:
-J.J. Mining and Exploration Corporation ("J.J. Mining") executed and
delivered to petitioner Perpetual Savings ("Bank") a promisory note in
the amount of P750.000.00 payable in one lump sum upon maturity
with interest at 23% per annum. The note also contained, inter alia, a
clause providing for penalty interest at the rate of 3% , nor month on
the amount due, compounded monthly. The promisory note was
executed for J.J. Mining by respondents Jose Oro B. Fajardo and
Emmanuel F. Del Mande. Messrs. Fajardo and Del Mundo are said to
be officers of J.J. Mining.
Upon maturity of the promissory note, neither J.J. Mining nor anyone
else paid the amount of the indebtedness, notwithstanding petitioner's
repeated written demands for payment.
-petitioner Bank filed a complaint with the Regional Trial Court, Makati,
against J.J; Mining, Jose Emmanuel Jalandoni and herein respondents
Fajardo and Del Mundo, for collection of the amounts due under the
promissory note
-Defendant's Fajardo and Del Mundo were impleaded as agents/or
representatives of Defendant Corporation who were signatories in the
Promissory Note or alternatively, in their personal capacities if it be
shown that they contracted the loan fully knowing that the Defendant
53
Corporation would be unable to pay the same upon maturity, and/or
that they used the proceeds of the loan foe their own personal benefit
-Respondent Fajardo and Del Mundo filed a Motion to Dismiss on the
ground that the complaint had failed to stated cause of action against
them. RTC denied motion to dismiss. Fajardo and Del Mundo raised
the case to the SC but SC referred case to CA. Respondents Fajardo
and Del Mundo, basically alleged that petitioner Bank's complaint did
not set forth any cause of action as against them personally, and that
Section 13, Rule 3 of the Rules of Court on alternative defendants was
not applicable to the case at bar. CA granted motion of Fajardo and Del
Mundo
ISSUE
WON complaint of Perpetual Savings stated a cause of action against
respondents Fajardo and Del Mundo, as distinguished from J.J.
Mining, on whose behalf they had purported to act.
HELD
YES.
Reasoning. In Rava Development Corporation v. Court of Appeals,
the Court elaborated on this established standard in the following
manner:
'The rule is that a defendant moving to dismiss a complaint on the
ground of lack of cause of action is regarded as having hypothetically
admitted all the averments thereof. The test of the sufficiency of the
facts found in a petition as constituting a cause of action is whether or
not, admitting the facts alleged, the court can render a valid Judgment
upon the same in accordance with the prayer thereof.
- In its Decision, CA said, among other the that petitioner Bank's
complaint did not state a cause of action against respondents Fajardo
and Del Mundo in their personal and individual capacities for the
reason that. no evidence had been presented to support such alleged
liability on the "so called alternative cause of action."
-The SC held that the CA was in reversible error. It was quite
premature for the Court of Appeals to consider evidence (or lack of
evidence) outside the complaint since the trial had not yet started. The
allegations made by the bank could be proven on trial.
WEE V GALVEZ
(supra)
FACTS
-this is regards the sisters, one in US and one in RP who is taking care
of the son of the sister in US. Allowance issues
ON MANNER OF MAKING ALLEGATIONS
etitioners submit that the amended complaint violates Rule 8, Section
133 of the 1997 Rules of Civil Procedure, as there is no plain and
direct statement of the ultimate facts on which the plaintiff relies for her
claim. Specifically, petitioners contend that the allegation in paragraph
9-A of the amended complaint that "Earnest efforts towards have been
made but the same have failed" is clearly insufficient. The sentence is
incomplete, thus requires the reader of the pleading to engage in
deductions or inferences in order to get a complete sense of the cause
of action, according to petitioners.
-Respondent rebuts by stating that the amended complaint as well as
the annexes attached to the pleadings should be taken in their entirety.
Thus taken together, in their entirety, the amended complaint and the
attachments to the original complaint, clearly show that a sufficient
cause of action as it is shown and stated that earnest efforts towards a
compromise have been made, according to respondent.
-A paragraph is "a distinct section or subdivision of a written or printed
composition that consists of from one to many sentences, forms a
rhetorical unit. As a "short composition consisting of a group of
sentences dealing with a single topic," a paragraph must necessarily
be construed in its entirety in order to properly derive the message
sought to be conveyed. In the instant case, paragraph 9-A of the
Amended Complaint deals with the topic of efforts made by the
respondent to reach a compromise between the parties. Hence, it is in
this light that the defective lead sentence must be understood or
construed.
-Having examined the Amended Complaint in its entirety as well as the
documents attached thereto, following the rule that documents
attached to a pleading are considered both as evidence and as part of
the pleading, we find that the respondent has properly set out her

cause of action.
Re Effect of Failure to Plead
CEREZO V. TUAZON
(supra)
NATURE
Petition for review on certiorari
FACTS
-Bus collided with tricycle
EFFECT OF FAILURE TO PLEAD
When a party has another remedy available to him, which may either
be a motion for new trial or appeal from an adverse decision of the trial
court, and he was not prevented by fraud, accident, mistake or
excusable negligence from filing such motion or taking such appeal, he
cannot avail himself of this petition. Indeed, relief will not be granted to
a party who seeks avoidance from the effects of the judgment when
the loss of the remedy at law was due to his own negligence; otherwise
the petition for relief can be used to revive the right to appeal which
has been lost thru inexcusable negligence.
Reasoning there was no fraud, accident, mistake, or excusable
negligence that prevented Mrs. Cerezo from filing an appeal, a motion
for new trial or a petition for certiorari. It was error for her to avail of a
petition for relief from judgment.After the SCs resolution denying Mrs.
Cerezos petition for relief became final and executory, Mrs. Cerezo, in
her last ditch attempt to evade liability, filed before the Court of Appeals
a petition for annulment of the judgment of the trial court. Annulment is
available only on the grounds of extrinsic fraud and lack of jurisdiction.
If based on extrinsic fraud, a party must file the petition within four
years from its discovery, and if based on lack of jurisdiction, before
laches or estoppel bars the petition. Extrinsic fraud is not a valid
ground if such fraud was used as a ground, or could have been used
as a ground, in a motion for new trial or petition for relief from
judgment. Mrs. Cerezo insists that lack of jurisdiction, not extrinsic
fraud, was her ground for filing the petition for annulment of judgment.
However, a party may avail of the remedy of annulment of judgment
under Rule only if the ordinary remedies of new trial, appeal, petition
for relief from judgment, or other appropriate remedies are no longer
available through no fault of the party. Mrs. Cerezo could have availed
of a new trial or appeal but through her own fault she erroneously
availed of the remedy of a petition for relief, which was denied with
finality. Thus, Mrs. Cerezo may no longer avail of the remedy of
annulment.
Disposition PETITION DENIED.
SPOUSES DELOS SANTOS VS RTC (HON.
EMMANUEL C. CARPIO)
G.R. NO. 153696
AUSTRIA-MARTINEZ: September 11, 2006
NATURE:
Petition for review on certiorari under Rule 45 of the Rules of Court
FACTS:
- On January 3, 2001, Metropolitan Bank and Trust Company (or
"Metrobank") filed a complaint for sum of money against spouses
Humberto and Carmencita delos Santos (or "petitioners") before the
Regional Trial Court of Davao City.
- On January 22, 2001, petitioners were served with the summons,
together with a copy of the complaint. As petitioners failed to file an
answer within the reglementary period, Metrobank, on February 8,
2001, filed a motion to declare them in default. The motion was set for
hearing on February 16, 2001.
- Acting on the motion, the lower court, presided over by Hon.
Emmanuel C. Carpio (or "respondent judge"), issued an order dated
February 12, 2001 declaring petitioners in default and setting the ex-
parte presentation of Metrobank?s evidence on March 7, 2001.
- On February 15, 2001, petitioners filed an opposition to Metrobanks
motion to declare them in default, claiming that upon receipt of the
summons, they immediately sought the services of Atty. Philip
54
Pantojan but it was only on February 12, 2001 that they were able to
meet with Atty. Pantojan. Petitioners alleged that not being "learned in
law", they were unaware "of the consequences of delay in the filing of
their answer."
- On the same date, February 15, 2001, petitioners filed a motion to
admit answer, as well as the answer. In an order dated February 16,
2001, respondent judge disregarded petitioners opposition to
Metrobanks motion for default
- On February 19, 2001, Metrobank filed an opposition to petitioners
motion to admit answer, arguing that said motion was rendered moot
and academic by the February 12, 2001 order. Metrobank also chided
petitioners for violating the three-day notice rule under Sec. 4, Rule 15
of the 1997 Rules of Civil Procedure. In an order dated February 20,
2001, the motion to admit answer was denied.
- On February 27, 2001, petitioners filed a motion to lift the order of
default; Metrobank opposed the motion.
- On March 2, 2001, respondent judge issued an order holding in
abeyance the ex-parte reception of evidence pending resolution of
petitioners motion to lift the order of default.
- On March 5, 2001, respondent judge issued an order denying
petitioners motion to lift the order of default and setting the reception of
Metrobanks evidence on March 7, 2001, as previously scheduled. On
that date (March 7, 2001), Metrobank presented its evidence and the
case was submitted for decision. Petitioners moved for reconsideration
of the March 5, 2001 order but their motion was denied.
- Petitioners filed a Petition for Certiorari with the CA ascribing grave
abuse of discretion committed by the trial court amounting to lack of
jurisdiction in issuing the Orders, declaring them in default and denying
their Opposition to Metropolitan Bank and Trust Companys
(Metrobank) Motion to Declare them in Default; and the Orders
denying their Motion to Lift the Order of Default and their Motion for
Reconsideration.
- CA denied the petition for lack of merit and accordingly dismissed
the same. The CA did not find the excuse proffered by petitioners. It
also ruled that for an order of default to be set aside, petitioners must
have a meritorious defense or that something could be gained by
having the order of default set aside
- The CA further found unmeritorious the contention of petitioners that
they were declared in default without giving them ample time to file an
opposition to Metrobanks Motion to Declare them in Default; that
under Section 3, Rule 9 of the Rules of Court, it is provided that the
court shall, upon motion of the claiming party with notice to the
defending party in default, and proof of such failure, declare the
defending party in default; and that since it is clear from the records
that the reglementary period for filing an answer had expired with no
responsive pleading filed by petitioners, the trial court had properly
declared them in default. The CA further declared that even assuming
that the trial court committed a procedural lapse in declaring petitioners
in default before the scheduled hearing of Metrobanks motion, such
error is not so serious as to constitute grave abuse of discretion.
ISSUE:
1. WON LITIS PENDENTIA raised by petitioners as an affirmative
defense is a meritorious defense.
HELD:
1. YES
ReasoningSection 3, Rule 9 of the Rules of Court provides:
Sec. 3. Default; declaration of If the defending party fails to answer
within the time allowed therefor, the court shall, upon motion of the
claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court
shall proceed to render judgment granting the claimant such relief as
his pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be
delegated to the clerk of court.
- Clearly, there are three requirements which must be complied with
by the claiming party before the court may declare the defending party
in default, to wit: (1) the claiming party must file a motion asking the
court to declare the defending party in default; (2) the defending party
must be notified of the motion to declare him in default; (3) the claiming
party must prove that the defending party has failed to answer within
the period provided by the Rule.
- In filing motions, Section 4, Rule 15 of the Rules of Court,
specifically provides:

Sec. 4. Hearing of motion. Except for motions which the court may act
upon without prejudicing the rights of the adverse party, every written
motion shall be set for hearing by the applicant.
- Prior to the present rule on default introduced by the 1997 Rules of
Civil Procedure, as amended, Section 1 of the former Rule 18 on
default is silent on whether or not there is need for a notice of a motion
to declare defendant in default. The Court then ruled that there is no
need. However, the present rule expressly requires that the motion of
the claiming party should be with notice to the defending party. The
purpose of a notice of a motion is to avoid surprises on the opposite
party and to give him time to study and meet the arguments. The
notice of a motion is required when the party has the right to resist the
relief sought by the motion and principles of natural justice demand
that his right be not affected without an opportunity to be heard.
- Therefore, as the present rule on default requires the filing of a
motion and notice of such motion to the defending party, it is not
enough that the defendant failed to answer the complaint within the
reglementary period to be a sufficient ground for declaration in default.
Disposition. Petition for review is GRANTED. The Decision of the
Court of Appealsis REVERSED and SET ASIDE. The Order of Default
of the Regional Trial Court is SET ASIDE and the Answer filed by
petitioners is deemed ADMITTED. The trial court is DIRECTED to
continue with deliberate speed with the proceedings in the case below.
SPOUSES DELOS SANTOS VS RTC (HON. EMMANUEL C.
CARPIO)
G.R. NO. 153696
AUSTRIA-MARTINEZ: September 11, 2006
NATURE:
Petition for review on certiorari under Rule 45 of the Rules of Court
FACTS:
- On January 3, 2001, Metropolitan Bank and Trust Company (or
"Metrobank") filed a complaint for sum of money against spouses
Humberto and Carmencita delos Santos (or "petitioners") before the
Regional Trial Court of Davao City.
- On January 22, 2001, petitioners were served with the summons,
together with a copy of the complaint. As petitioners failed to file an
answer within the reglementary period, Metrobank, on February 8,
2001, filed a motion to declare them in default. The motion was set for
hearing on February 16, 2001.
- Acting on the motion, the lower court, presided over by Hon.
Emmanuel C. Carpio (or "respondent judge"), issued an order dated
February 12, 2001 declaring petitioners in default and setting the ex-
parte presentation of Metrobank?s evidence on March 7, 2001.
- On February 15, 2001, petitioners filed an opposition to Metrobanks
motion to declare them in default, claiming that upon receipt of the
summons, they immediately sought the services of Atty. Philip
Pantojan but it was only on February 12, 2001 that they were able to
meet with Atty. Pantojan. Petitioners alleged that not being "learned in
law", they were unaware "of the consequences of delay in the filing of
their answer."
- On the same date, February 15, 2001, petitioners filed a motion to
admit answer, as well as the answer. In an order dated February 16,
2001, respondent judge disregarded petitioners opposition to
Metrobanks motion for default
- On February 19, 2001, Metrobank filed an opposition to petitioners
motion to admit answer, arguing that said motion was rendered moot
and academic by the February 12, 2001 order. Metrobank also chided
petitioners for violating the three-day notice rule under Sec. 4, Rule 15
of the 1997 Rules of Civil Procedure. In an order dated February 20,
2001, the motion to admit answer was denied.
- On February 27, 2001, petitioners filed a motion to lift the order of
default; Metrobank opposed the motion.
- On March 2, 2001, respondent judge issued an order holding in
abeyance the ex-parte reception of evidence pending resolution of
petitioners motion to lift the order of default.
- On March 5, 2001, respondent judge issued an order denying
petitioners motion to lift the order of default and setting the reception of
Metrobanks evidence on March 7, 2001, as previously scheduled. On
that date (March 7, 2001), Metrobank presented its evidence and the
case was submitted for decision. Petitioners moved for reconsideration
of the March 5, 2001 order but their motion was denied.
55
- Petitioners filed a Petition for Certiorari with the CA ascribing grave
abuse of discretion committed by the trial court amounting to lack of
jurisdiction in issuing the Orders, declaring them in default and denying
their Opposition to Metropolitan Bank and Trust Companys
(Metrobank) Motion to Declare them in Default; and the Orders
denying their Motion to Lift the Order of Default and their Motion for
Reconsideration.
- CA denied the petition for lack of merit and accordingly dismissed
the same. The CA did not find the excuse proffered by petitioners. It
also ruled that for an order of default to be set aside, petitioners must
have a meritorious defense or that something could be gained by
having the order of default set aside
- The CA further found unmeritorious the contention of petitioners that
they were declared in default without giving them ample time to file an
opposition to Metrobanks Motion to Declare them in Default; that
under Section 3, Rule 9 of the Rules of Court, it is provided that the
court shall, upon motion of the claiming party with notice to the
defending party in default, and proof of such failure, declare the
defending party in default; and that since it is clear from the records
that the reglementary period for filing an answer had expired with no
responsive pleading filed by petitioners, the trial court had properly
declared them in default. The CA further declared that even assuming
that the trial court committed a procedural lapse in declaring petitioners
in default before the scheduled hearing of Metrobanks motion, such
error is not so serious as to constitute grave abuse of discretion.
ISSUE:
1. WON LITIS PENDENTIA raised by petitioners as an affirmative
defense is a meritorious defense.
HELD:
1. YES
ReasoningSection 3, Rule 9 of the Rules of Court provides:
Sec. 3. Default; declaration of If the defending party fails to answer
within the time allowed therefor, the court shall, upon motion of the
claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court
shall proceed to render judgment granting the claimant such relief as
his pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be
delegated to the clerk of court.
- Clearly, there are three requirements which must be complied with
by the claiming party before the court may declare the defending party
in default, to wit: (1) the claiming party must file a motion asking the
court to declare the defending party in default; (2) the defending party
must be notified of the motion to declare him in default; (3) the claiming
party must prove that the defending party has failed to answer within
the period provided by the Rule.
- In filing motions, Section 4, Rule 15 of the Rules of Court,
specifically provides:
Sec. 4. Hearing of motion. Except for motions which the court may act
upon without prejudicing the rights of the adverse party, every written
motion shall be set for hearing by the applicant.
- Prior to the present rule on default introduced by the 1997 Rules of
Civil Procedure, as amended, Section 1 of the former Rule 18 on
default is silent on whether or not there is need for a notice of a motion
to declare defendant in default. The Court then ruled that there is no
need. However, the present rule expressly requires that the motion of
the claiming party should be with notice to the defending party. The
purpose of a notice of a motion is to avoid surprises on the opposite
party and to give him time to study and meet the arguments. The
notice of a motion is required when the party has the right to resist the
relief sought by the motion and principles of natural justice demand
that his right be not affected without an opportunity to be heard.
- Therefore, as the present rule on default requires the filing of a
motion and notice of such motion to the defending party, it is not
enough that the defendant failed to answer the complaint within the
reglementary period to be a sufficient ground for declaration in default.
Disposition. Petition for review is GRANTED. The Decision of the
Court of Appealsis REVERSED and SET ASIDE. The Order of Default
of the Regional Trial Court is SET ASIDE and the Answer filed by
petitioners is deemed ADMITTED. The trial court is DIRECTED to
continue with deliberate speed with the proceedings in the case below.
 56

STRIKING OUT PLEADINGS dismissed complaint. Paeste v Jaurigue:

Amendments to pleadings are favored and should be liberally
DAUDEN-HERNAEZ V ANGELES, HOLLYWOOD FAR allowed in the furtherance of justice. (Torres vs. Tomacruz, 49 Phil.
EAST PRODUCTIONS, INC., and VALENZUELA 913). Moreover, under section 1 of Rule 17, Rules of Court, a party
may amend his pleading once as a matter of course, that is, without
27 SCRA 1276 leave of court, at any time before a responsive pleading is served. A
REYES, J.B.L.; April 30, 1969 motion to dismiss is not a "responsive pleading". (Moran on the Rules
of Court, vol. 1, 1952, ed., p. 376). As plaintiffs amended their
NATURE complaint before it was answered, the motion to admit the amendment
Petition for a writ of certiorari to set aside certain orders of the CFI should not have been denied.
dismissing a complaint for breach of contract and damages, denying Disposition The order dismissing the complaint is set aside, and the
reconsideration, refusing to admit an amended complaint, and case is ordered remanded to the court of origin for further proceedings
declaring the dismissal final and unappealable. not at variance with this decision.

FACTS
PHILIPPINE EXPORT vs. PHILIPPINE
- Petitioner, actress Dauden-Hernaez, files a complaint to recover
P14,700 (the balance allegedly due to her for her services as leading INFRASTRUCTURES, INC.
actress), plus damages, against private respondents Hollywood Far G.R. No. 120384
East Productions (HFEP) and its President Valenzuela AUSTRIA-MARTINEZ; January 13, 2004
- Upon motion of defendants, respondent court dismissed the
complaint because claim of plaintiff was not evidenced by any written
NATURE: Petition for review on certiorari (Rule 45)
document, either public or private, and the complaint was Defective
on its face for violating CC A 1356 and 135811, as well as for
FACTS: Petitioner filed a complaint for collection of sum of money
containing defective allege, petitions.
against respondents Philippine Infrastructures, Inc. (PII), Philippine
- Plaintiff sought reconsideration of the dismissal, and for admission of
British Assurance Co., Inc. (PBAC), The Solid Guaranty, Inc. (Solid),
an amended complaint, attached to the motion
B.F. Homes, Inc. (BF Homes), Pilar Development Corporation (PDC)
- court denied the reconsideration and the leave to amend.
and Tomas B. Aguirre (Aguirre). The complaint alleged, among others,
- a second reconsideration was filed
that: (i) petitioner issued 5 Letters of Guarantee in favor of the
- court denied it as its allegations were more or less the same as the
Philippine National Bank (PNB) as security for credit accommodations
first motion, and not accompanied by an affidavit of merits. The court
extended by PNB to PII; (ii) PII, BF Homes, PDC and Aguirre executed
further declared the dismissal final and unappealable.
a Deed of Undertaking binding themselves, jointly and severally, to pay
- hence this petition
or reimburse petitioner upon demand such amount of money or to
- the respondent courts defense: The proposed amendment suffers
repair the damages, losses or penalties which petitioner may pay or
from the same vital defect of the original complaint, which is violation of
suffer on account of its guarantees; (iii) on April 24, 1985, PNB called
A 1356 because the contract sued upon was not alleged to be in
on the guarantees of petitioner; (iv) thereafter, petitioner demanded
writing, and A 1358 in because the writing was absolute and
from PII the immediate settlement of P20,959,529.36, representing the
indispensable because the amount exceeds P500; and that the second
aggregate amount of the guarantees of petitioner called by PNB and
motion for reconsideration did not interrupt the period for appeal
the further sum of P351,517.57 representing various fees and charges;
because it was not served on 3 days notice.
(v) PII refused to settle said obligations; (vi) respondents Solid and
PBAC also refused to pay petitioner despite demand.
Respondent BF Homes filed a Motion to Dismiss on the
ISSUES
ground that it is undergoing rehabilitation receivership in the SEC and
1. WON the plaintiff-petitioner was entitled as of right to amend the
pursuant to P.D. 902-A, the trial court has no jurisdiction to try the
original dismissed complaint
case. Respondent PII also filed a Motion to Dismiss on the ground that
2. WON xxx
the complaint states no cause of action. The other respondents filed
their respective responsive pleadings.
HELD
The trial court, through Judge Roberto M. Lagman, issued
1.YES
an Order suspending the case only as against respondent BF Homes
Reasoning Twhen a court sustains a demurrer or motion to dismiss,
and denying respondent PII's motion to dismiss. Thereafter, hearing on
the court must give the party plaintiff an opportunity to amend his
the merits ensued.
complaint if he so chooses. The first order of dismissal did not provide
During trial, petitioner presented Rosauro Termulo, its
that the same was without prejudice to amendment of the complaint, or
treasury department manager, who testified that the amount of
reserve to the plaintiff the right to amend his complaint, so the order
P19,035,256.57 was paid by petitioner to the PNB through the account
was erroneous.
of the National Treasury to cover the principal loan and interests
Hence, petitioner was within her rights in filing her so-called second
incurred by PII. Consequently, petitioner filed a Motion to Amend
motion for reconsideration, which was actually a first motion against
Complaint to Conform to Evidence pursuant to Section 5, Rule 10 of
the refusal to admit the amended complaint.
the Revised Rules of Court, seeking to amend the pertinent portions of
Also, since a motion to dismiss is not a responsive pleading, the
the complaint insofar as it refers to the fact of payment and the amount
plaintiff-petitioner was entitled as of right to amend the original
paid by petitioner to PNB.
Acting on the motion to amend, the trial court, at that time
11 Article 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for
presided by Judge Joselito J. Dela Rosa, issued the assailed Order,
their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that
a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the
dismissing the case without prejudice on the ground of failure of the
following article cannot be exercised.
complaint to state a cause of action, thus in effect, reversing the Order
issued by Judge Lagman five years earlier. Petitioner's motion for
reconsideration of the order of dismissal was denied by Judge de la
Article 1358. The following must appear in a public document: (1) Acts and contracts which have for their object the creation, transmission,
Rosa. Subsequently, petitioner filed with the Supreme Court a petition
modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by articles
for certiorari against the trial court. The SC issued referred the case to
1403, No. 2, and 1405; (2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3)
The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document,
the Court of Appeals for disposition. The Court of Appeals dismissed
or should prejudice a third person; (4) The cession of actions or rights proceeding from an act appearing in a public document. the petition and denied petitioners motion for reconsideration. Hence,
this petition.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods,
ISSUES: (1) WON an order dismissing a petition without prejudice
chattels or things in action are governed by articles, 1403, No. 2 and 1405. (1280a)
should be appealed by way of ordinary appeal; (2) WON the Court of
Appeals erred in affirming the dismissal of the complaint on the ground
that petitioner failed to state a cause of action for not alleging loss or

actual payment made by it to PNB under its guarantees; (3) WON the
complaint stated a cause of action.
HELD:
(1) NO (under the 1997 Rules of Civil Procedure). Prior to the 1997
Rules of Civil Procedure, an order dismissing an action may be
appealed by ordinary appeal. However, under Section 1(h), Rule 41 of
the 1997 Rules of Civil Procedure, no appeal may be taken from an
order dismissing an action without prejudice. It may be subject of a
special civil action for certiorari under Rule 65 of the 1997 Rules of
Civil Procedure. Considering that the assailed decision of the Court of
Appeals was promulgated in 1994, respondent appellate court could
not have committed any grave abuse of discretion in dismissing CA-
G.R. SP No. 31483. Nevertheless, in the higher interest of
substantial justice and pursuant to the hornbook doctrine that
procedural laws may be applied retroactively, 16 the Court gives
due course to the present petition.
(2) YES. It should be stressed that the amendment of the complaint
was sought after petitioner had already presented evidence, more
specifically, the testimony of petitioner's Treasury Department Manager
and a debit memo from the PNB proving that petitioner had paid the
PNB in the amount of P19,035,256.57 pursuant to the guarantees it
accorded to respondent PII.
The record shows that respondents did not raise any objection when it
presented evidence to prove payment to PNB. Hence, as provided for
in Section 5, Rule 10 of the Revised Rules of Court, when issues not
raised by the pleadings are tried by express or implied consent of the
parties, they shall be treated in all respects, as if they had been raised
in the pleadings. A scrutiny of the pleadings filed by respondents reveal
that none of them denied petitioner's claim that said evidence was
presented before the trial court without objections having been raised
by respondents. None of them claimed that they raised any objections
at the time when petitioner presented its evidence to prove its payment
to PNB. Respondents Pilar and Aguirre admitted the presentation of
the said evidence.
Respondents contend that since they had already alleged the failure of
the complaint to state a cause of action as an affirmative defense in
their answer, there was no further need for them to raise an objection
at the time the evidence was introduced. This is not plausible. It is
settled that even if the complaint be defective, but the parties go to
trial thereon, and the plaintiff, without objection, introduces
sufficient evidence to constitute the particular cause of action
which it intended to allege in the original complaint, and the
defendant voluntarily produces witnesses to meet the cause of
action thus established, an issue is joined as fully and as
effectively as if it had been previously joined by the most perfect
pleadings. Likewise, when issues not raised by the pleadings are tried
by express or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings.
Respondents' failure to object to the evidence at the time it is
presented in court is fatal to their cause inasmuch as whatever
perceived defect the complaint had was cured by the introduction of
petitioner's evidence proving actual loss sustained by petitioner due to
payment made by it to PNB.
(3) YES. Petitioner's cause of action against respondents stemmed
from the obligation of respondents under their Deed of Undertaking, a
copy of which was attached to the complaint. In the present petition,
petitioner had become liable to pay the amounts covered by said
guarantees when, as the original complaint alleges, the PNB called
upon said guarantees. Respondents' obligation under the Deed of
Undertaking to keep petitioner free and harmless from any damage or
liability then became operative as soon as the liability of petitioner
arose and there was no need for petitioner to first sustain actual loss
before it could have a cause of action against respondents. The mere
inclusion in petitioner's original complaint of the allegation that the PNB
had already called on the guarantees of petitioner is sufficient to
constitute a cause of action against respondents. Clearly therefore, the
original complaint, by itself, stated a valid cause of action.
57
DISPOSITIVE: The petition is GRANTED. Let the original records of
Civil Case No. 86-38169 be REMANDED to the Regional Trial Court
(Branch 29), Manila, for continuation of the trial on the merits.
SURIGAO MINING V HARRIS
68 PHIL 113
LAUREL; May 17, 1939
NATURE
Appeal from the order of the CFI of Surigao dismissing the complaint
filed by Surigao Mining against Harris, et al.
FACTS
- On October 24, 1935, Surigao Mining filed a complaint claiming that it
is the owner by purchase of 14 placer claims and that lode claims were
staked by the defendants Harris, Surigao-Mainit Mining Syndicate.
Surigao Consolidated Mining Co., Inc., and Otto Weber on plaintiff's
placer claims after the latter had been validly and duly staked and
located by the plaintiff or its grantors and predecessors in interest.
- On November 23, 1935, the defendants demurred to the complaint on
the ground that the complaint was ambiguous and unintelligible. On
January 9, 1936 the CFI entered an order requiring Surigao Mining to
amend its complaint so as to contain a detailed description of its placer
claims.
- On January 13, 1936 an amended complaint was filed to which
another demurrer was interposed but was overruled. On June 11,
1936, a third amended complaint in which thirty-two other individuals
were included as parties-defendant. In this third amended complaint
the placer claims were reduced, to eleven, and the relief prayed for
was about the same as that asked in the original complaint, although
the amount sought as damages was increased to P49,000.
- Exhibits O and O-1 to 0-9 were presented. With the exception of
Exhibit O-7, all are deeds of sale in favor of Surigao Mining covering
the placer claims and bear dates posterior to (AFTER) October 24,
1935, the date of the filing of the original complaint. Exhibit O-7 is a
deed of sale executed by Pablo Atillo in favor of Maximo Borromeo on
January 23, 1935. The mining claims conveyed by Maximo Borromeo,
to Surigao Mining under Exhibit O-9 were the same claims acquired by
Maximo Borromeo, under Exhibit O-7.
- Before Surigao Mining could close its evidence, the defendants
moved for the dismissal of the complaint on the ground that, when the
action was commenced, plaintiff's right of action had not yet accrued,
since the plaintiff did not become the owner of the claims until after the
original complaint was filed on October 24, 1935. The CFI granted the
MTD.
ISSUE
1. WON the lower court erred in dismissing the complaint
HELD
1. NO.
Ratio 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 later accrued cause of action is not permissible.
Reasoning 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, provided, an
objection on this ground is properly and seasonably interposed. The
fact that the cause of action accrues after the action is commenced
and while it is pending is of no moment.
- In this case, timely objection was made by counsel for the appellees
upon discovery of the immaturity of the action. The date when a civil
action is deemed commenced is determined by section 389 of the
Code of Civil Procedure. Under section 389, which was taken from
section 405 of the Code of Civil Procedure of California, the action is
deemed commenced upon the "filing of a complaint in the office of the
clerk of the court in which the action is to be instituted." The original
complaint was filed on October 24, 1935.
- The right to amend a pleading is not an absolute and unconditional
right. It is to be allowed in furtherance of justice under a sound judicial
discretion. This judicial discretion, upon the other hand, is of course not
without any restriction. The cause of action must exist at the time the
action was begun, and the plaintiff will not be allowed by an
 58

amendment to introduce a cause of action which had no existence - As to petitioners contention that MMCI is barred from acquiring the
when the action was commenced. As soon as an action is brought and subject lot, suffice it to say that this is a matter of defense which can
the complaint is filed, the proceedings thus initiated are not subject to only be properly determined during the full-blown trial of the instant
the arbitrary control of the parties or of the court, but must be dealt with case.
in accordance with recognized rules of pleading and practice. Dispositive Petition DENIED. CA decision affirmed in toto.
Amendments must be such, and only such, as are necessary to
promote the completion of the action begun.
GCP-MANNY TRANSPORT SERVICES INC. V.
- It is true, that an amended complaint and the answer thereto take the
place of the originals which are thereby regarded as abandoned. That, PRINCIPE
however, which is no cause of action whatsoever cannot by GR No. 141484
amendment or supplemental pleading be converted into a cause of AUSTRIA-MARTINEZ; Nov 11, 2005
action: Nihil do re accrescit ei qui nihil in re quando jua accresceret
habet. NATURE
Disposition Order appealed from is AFFIRMED. Petition for review on certiorari

Filing/ Service of pleadings, judgments and other FACTS

papers - This petition is filed by GCP, seeking reversal of CA decision.
- The case started when Recolizado filed complaint for damages for
physical injuries sustained by him as passenger of GCPs bus. RTC
BAUTISTA V MAYA-MAYA COTTAGES INC rendered decision in favor of Recolizado.
G.R. No. 148361 - Copy of decision sent to petitioner was returned because it had
SANDOVAL-GUTIERREZ; Nov. 29, 2005 moved (residence), while copy sent to Atty. Aquino, then petitioners
counsel, was returned unserved being unclaimed. Petitioner states
that copy of decision was personally delivered by Civil Docket Clerk of
NATURE
TC on Atty. Aquino who refused to receive the same saying he was no
Petition for review on certiorari assailing decision and resolution of the
longer counsel for petitioner, although no notice of withdrawal as
CA
counsel was filed by him.
- Private respondent filed a motion for execution of the judgment, copy
FACTS
furnished to Atty. Arnold M. Aquino and petitioner which the court
- Spouses Bautista are the registered owners of a lot in Batangas.
granted. Writ of execution was issued, which petitioner received.
- MMCI. filed with the RTC a complaint for cancellation of petitioners
- Atty. Jose de Luna entered his appearance as new counsel for the
title and damages, with application for a preliminary injunction, alleging
petitioner with motion for reconsideration of the order granting the
that without any color of right and through dubious means, petitioners
motion for execution or the quashal of the writ of execution on the
were able to obtain original title in their names.
ground that petitioner had not been duly notified.
- Spouses filed a motion to dismiss on the ground that it does not state
- Petitioner received a Notice of Demand for Payment from the
a cause of action. They averred that respondent is a private
deputies of the Ex-officio Sheriff of the RTC attaching thereto copies of
corporation, hence, disqualified under the Constitution from acquiring
the writ of execution and the decision. petitioner filed a Notice of
public alienable lands except by lease, and cannot be considered a
Appeal. 2 mos later, respondent court issued assailed resolution
real party in interest.
denying petitioners motion for reconsideration or to quash writ of
- RTC granted motion to dismiss.
execution.
- MMCI filed a motion for reconsideration with motion for leave to file
- Petitioner went to CA on petition for certiorari. CA found no abuse of
an amended complaint for quieting of title. Respondent alleged that
discretion and dismissed the petition. Reconsideration was also
the technical description in petitioners title does not cover the disputed
denied. Hence, the present petition for review on certiorari.
lot.
- Petitioner argues that: when a copy of the decision which the court
- Spouses filed their opposition, contending that the amended
sent to Atty. Aquino was returned to sender, respondent Judge resorted
complaint does not also state a cause of action and if admitted,
in causing the service of the decision to said counsel in open court, as
respondents theory of the case is substantially modified.
petitioners counsel on record, when said lawyer appeared in the sala
- RTC issued an Order denying petitioners motion to dismiss.
of respondent Judge for another case; petitioner should be deemed as
- Petitioners filed with the CA a special civil action for certiorari and
having no notice of the trial court decision since its counsel, who had
prohibition, alleging that the amended complaint does not cure the
not withdrawn as such, refused to receive a copy of the same. What
defect in the original complaint which does not state a cause of action.
the civil docket clerk of the trial court should have done was to resort to
- CA dismissed the petition for certiorari and prohibition. Petitioners
substituted service.
filed a motion for reconsideration but it was denied.
- Respondent in his Comment contends that since Atty. Aquino is
counsel of petitioner and there is nothing to show that he withdrew as
ISSUE
counsel of petitioner, the copy of the decision mailed to him by
WON the CA erred in holding that the trial court did not commit grave
registered mail although returned unserved is sufficient to serve as
abuse of discretion amounting to lack or excess of jurisdiction in
notice to him and to his client following Sec. 5 of Rule 13 of RoC; it
admitting respondents amended complaint
was the duty of petitioner to notify the court that Atty. Aquino was no
longer its lawyer; if a lawyer is going to withdraw as counsel for his
HELD
client, he should file a motion to withdraw as such with the conformity
NO
of the client.
- Section 2, Rule 10 of the 1997 Rules of Civil Procedure12 shows that
before the filing of any responsive pleading, a party has the
ISSUE/S
absolute right to amend his pleading, regardless of whether a new
WON CA decision should be reversed
cause of action or change in theory is introduced.
- Petitioners had not yet filed a responsive pleading to the original
HELD
complaint. What they filed was a motion to dismiss, which is not a
NO
responsive pleading as contemplated by the Rule. Thus respondent,
- Clients are bound by the actions of their counsel in the conduct of
as a plaintiff, may file an amended complaint even after the original
their case. If it were otherwise, and a lawyers mistake or negligence
complaint was ordered dismissed, provided that the order of dismissal
was admitted as a reason for the opening of a case, there would be no
is not yet final, as in this case.
end to litigation so long as counsel had not been sufficiently diligent or
experienced. The only exception to the general rule is when the
12 SEC. 2. Amendments as a matter of right. A party may amend his pleading once as a matter of right at any time before a responsive counsels actuations are gross or palpable, resulting in serious injustice
to client. In this case, while Atty. Aquino, counsel of petitioner, was far
pleading is served or, in the case of a reply, at any time within ten (10) days after it is served.
from being vigilant in protecting the interest of his client, his infractions
cannot be said to have deprived petitioner of due process.

- Petitioner was able to actively participate in the proceedings a quo.
While it may have lost its right to appeal, it was not denied its day in
court. Right to appeal is not a natural right or a part of due process but
only a statutory privilege and may be exercised only in the manner and
in accordance with the provisions of law.
- When petitioner is at fault or not entirely blameless, there is no
reason to overturn well-settled jurisprudence.
- Petitioner was wanting in all these areas. Not only did it fail to
regularly check on the status of the case, it also failed to ensure that it
could be notified of the decision as soon as it was promulgated.
Petitioner did not inform the court that it has severed its relationship
with Atty. Aquino. Neither did it hire a new lawyer soon after Atty.
Aquino allegedly ceased to be its counsel.
- That Atty. Aquino refused to receive a copy of the decision and no
substituted service was effected does not erase the fact that a copy of
the trial court decision had earlier been sent by registered mail to Atty.
Aquino This is sufficient service of the decision on petitioner since
service upon counsel of record at his given address is service to
petitioner.
- In cases where service was made on the counsel of record at his
given address, notice sent to petitioner itself is not even necessary.
Even then, in the present case, the trial court had sent a copy of the
decision to petitioners known address.
Obiter
Court reiterates the distinction between petition for review on certiorari
under Rule 45 and petition for certiorari under Rule 65. It should be
recalled that a petition under Rule 45 brings up for review errors of
judgment while a petition under Rule 65 concerns errors of jurisdiction
or grave abuse of discretion amounting to lack or excess of
jurisdiction. Grave abuse of discretion is not an allowable ground
under Rule 45. However, a petition for review on certiorari under
Rule 45 may be considered as a petition for certiorari under Rule 65
where it is alleged that the respondents abused their discretion.
Disposition Petition is dismissed.
COMPUTATION OF TIME
SPS. CONRADO and MA. CORONA ROMERO vs. CA,
SATURNINO S. ORDEN
G.R. No. 142406
AUSTRIA-MARTINEZ; May 16, 2005
NATURE
Petition for certiorari filed [R65]
FACTS
- Ma. Corona Romero and her siblings executed a letter-contract to sell
with private respondent Saturnino Orden.
- In said contract, Orden proposed to purchase from Romero and her
siblings a property located at Denver cor. New York Sts., Cubao, QC
for the total amount of P17M.
- The contract stipulated that private respondent shall pay petitioner
the amount of P7M upon the execution of the deed of absolute sale,
the balance of P10M not later than December 19, 1996 and that Orden
shall shoulder the expenses to evict the squatters on the property.
- When Orden failed to pay the down payment, petitioner Corona told
him that she was rescinding the contract to sell.
- Orden then filed a complaint for specific performance and damages
against petitioners before the QC RTC alleging that he has complied
with his obligation to evict the squatters on the property and is entitled
to demand from petitioners the performance of their obligation under
the contract.
- Simultaneous with the filing of the complaint, Orden caused the
annotation of a notice of lis pendens on the TCT.
- August 11, 1997, Manuel Y. Limsico, Jr. and Aloysius R. Santos,
subsequent buyers of the subject property sold by Corona and her
siblings, filed a motion for leave to intervene with the RTC and were
admitted as defendants-intervenors. - They filed a motion for the
cancellation of lis pendens which the RTC granted in its Resolution
saying that the evidence presented by Orden does not bear out the
main allegations in the complaint and that he does not have any
actionable right over the subject property there being no deed of sale
59
executed between him and the defendants over the subject real
properties as offered in the alleged agreement.
- RTC: denied Ordens MR.
- Nov. 16, 1998, Orden filed a petition for certiorari before the CA
seeking the nullification of the resolutions of the RTC and asked for the
re-annotation of the notice of lis pendens on the TCT.
- The CA granted the petition on 4 grounds: First, they said that the
general rule is a notice of lis pendens cannot be cancelled while the
action is pending and undetermined except in cases expressly
provided by statute. Second, CA cited Sec.77 of PD 1529-Property
Registration Decree which provided for two grounds for the court to
order the cancellation of a notice of lis pendens during the pendency of
an action which are: (1) if the annotation was for the purpose of
molesting the title of the adverse party, or (2) when the annotation is
not necessary to protect the title of the party who caused it to be
recorded (NOW SEC 14, R13 ROC). Third, the Doctrine of Lis
Pendens would be rendered meaningless if the private respondents
are allowed to file a bond regardless of the amount, in substitution of
said notice and that the law does not authorize a judge to cancel a
notice of lis pendens pending litigation, upon the mere filing of a
sufficient bond by the party on whose title said notice is annotated.
Fourth, if there was indeed an agreement to sell between the petitioner
and the private respondents-owners (which question of fact is not for
this court to determine in this petition), then the said parties are bound
by the provisions of A1475 of the Civil Code (The contract of sale is
perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.From that
moment, the parties may reciprocally demand performance, subject to
the provisions of the law governing the form of contract.)
-CA denied Romeros MR on January 26, 2000.
Petitioners contention. by ordering the re-annotation of the notice of
lis pendens, when private respondent did not even assert a claim of
possession or title over the subject property, the CA went against the
doctrine in Villanueva vs. Court of Appeals where this Court held that
the applicant must, in the complaint or answer filed in the subject
litigation, assert a claim of possession or title over the subject property
in order to give due course to his application; the CA, in concluding
that there was no hearing before the annotation was cancelled,
overlooked the fact that the motion for cancellation was set for hearing
on November 12, 1997, that private respondent was duly notified but
failed to appear, and that he was able to file his opposition to the
motion to cancel lis pendens which the RTC considered before
promulgating its Resolution dated November 26, 1997.
Ordens contention. the court a quo cancelled the notice of lis
pendens even before it has been apprised of all the relevant facts of
the case; the CA was correct in ruling that while the parties are locked
in legal battle and until it becomes manifest that the grounds set forth
in Sec. 77, P.D. No. 1529 exist, the trial court should not allow the
cancellation of the lis pendens;
In their Reply, petitioners reiterate their arguments and cited AFP
Mutual Benefit Association, Inc. vs. Court of Appeals where it was held
that a notice of lis pendens may be annotated only where there is an
action or proceeding in court which affects title to or possession of real
property. They further maintain that the requirement of prior hearing
was sufficiently complied with in this case and petitioners did not act in
bad faith when she sold the subject property pending the outcome of
this case since there was no outstanding injunction or restraining order
which would have prevented her from doing so.
ISSUE
WON the CA committed grave abuse of discretion in ordering the re-
annotation of the lis pendens.
HELD
NO. Petitioners have failed to show that the CA committed GAD.
Reasoning. Heirs of Eugenio Lopez, Sr. vs. Enriquez: Lis pendens,
which literally means pending suit, refers to the jurisdiction, power or
control which a court acquires over property involved in a suit, pending
the continuance of the action, and until final judgment.
-Lim v. Vera Cruz: Founded upon public policy and necessity, lis
pendens is intended to keep the properties in litigation within the power
of the court until the litigation is terminated, and to prevent the defeat
of the judgment or decree by subsequent alienation.
- Yared vs. Ilarde: Its notice is an announcement to the whole world
that a particular property is in litigation and serves as a warning that
one who acquires an interest over said property does so at his own risk
or that he gambles on the result of the litigation over said property.

- The filing of a notice of lis pendens has a two-fold effect: (1) to keep
the subject matter of the litigation within the power of the court until the
entry of the final judgment to prevent the defeat of the final judgment
by successive alienations; and (2) to bind a purchaser, bona fide or
not, of the land subject of the litigation to the judgment or decree that
the court will promulgate subsequently.
- Magdalena Homeowners Association, Inc. vs. CA: a notice of lis
pendens is appropriate in the following:
(a) an action to recover possession of real estate;
(b) an action to quiet title thereto;
(c) an action to remove clouds thereon;
(d) an action for partition; and
(e) any other proceedings of any kind in Court directly affecting the
title to the land or the use or occupation thereof or the buildings
thereon.
-Atlantic Erectors, Inc. vs. Herbal Cove Realty Corp.: Resorting to lis
pendens is not necessarily confined to cases that involve title to or
possession of real property but also applies to suits seeking to
establish a right to, or an equitable estate or interest in, a specific real
property; or to enforce a lien, a charge or an encumbrance against it.
- The doctrine of lis pendens has no application to a proceeding in
which the only object sought is the recovery of a money judgment,
though the title or right of possession to property be incidentally
affected. It is essential that the property be directly affected such as
when the relief sought in the action or suit includes the recovery of
possession, or the enforcement of a lien, or an adjudication between
conflicting claims of title, possession, or the right of possession to
specific property, or requiring its transfer or sale. Even if a party
initially avails of a notice of lis pendens upon the filing of a case in
court, such notice is rendered nugatory if the case turns out to be a
purely personal action. In such event, the notice of lis pendens
becomes functus officio.
-To put the property under the coverage of the rule on lis pendens, all a
party has to do is to assert a claim of possession or title over the
subject property. It is not necessary that ownership or interest over the
property is proved.
-By praying for the Romeros to be bound by the terms of their contract
(ie. Specific performance and damages), Orden in effect asks the court
to order petitioners to fulfill their promise to sell the property for the
amount of P17M.
-While Orden did not explicitly state that he was running after the
ownership of the property, a simple reading of the complaint would
show that such was his intent. This is sufficient for purposes of
annotating lis pendens.
- There is no requirement that the party applying for the annotation
must prove his right or interest over the property sought to be
annotated. Thus, even on the basis of an unregistered deed of sale, a
notice of lis pendens may be annotated on the title.
-Said annotation cannot be considered as a collateral attack against
the certificate of title based on the principle that the registration of a
notice of lis pendens does not produce a legal effect similar to a lien.
- The rules merely require that an affirmative relief be claimed since a
notation of lis pendens neither affects the merits of a case nor creates
a right or a lien. It only protects the applicants rights which will be
determined during trial.
Dispositive the petition for certiorari is DISMISSED for lack of merit.
LUZ V NATIONAL AMNESTY COMMISSION
00 SCRA 00
CALLEJO, SR; SEP 24, 2004
NATURE
Petition for review of the Resolution of the CA
FACTS
-On July 18, 1988, the petitioner was charged with violation of
Presidential Decree No. 1866 (illegal possession of firearms) in the
Regional Trial Court of Makati City, docketed as Criminal Case No.
427. On March 22, 2000, the petitioner filed an application for amnesty
with the Local Amnesty Board for Metro Manila. In due course, the
board denied the said application. On August 26, 2002, the National
Amnesty Commission (NAC) issued a Resolution affirming that of the
Local Amnesty Board. The motion for reconsideration thereof was
60
denied by the NAC, per its Resolution dated November 13, 2002, a
copy of which was received by the petitioner on November 22, 2002.
-Under Rule III, Section 4 of NAC Administrative Order No. 2, Series of
1999, the petitioner had until December 7, 2002, a Saturday, within
which to file a petition for review of the said resolution with the Court of
Appeals. On December 9, 2002, the petitioner filed a motion in the
appellate court for an extension of fifteen (15) days from December 9,
2002, or until December 24, 2002 within which to file his petition. The
petitioner alleged therein that he had just engaged the services of
counsel who needed additional time to study the case and draft the
petition. However, the petitioner failed to file his petition for review.
-December 24, 2002 was declared a national holiday; December 25,
2002 was also a holiday. On December 26, 2002, the petitioner filed a
second motion for extension of fifteen (15) days from December 26,
2002 or until January 10, 2002, within which to file his petition. The
petitioner filed his petition for review with the Court of Appeals on
January 10, 2003.
-On January 13, 2003, the CA issued a Resolution granting the
petitioners first motion for a fifteen-day extension counted from
December 7, 2002 or until December 22, 2002, within which to file said
petition. On February 20, 2003, the CA issued a Resolution denying
petitioners second motion for having been filed out of time. The
petitioner filed a motion for reconsideration of the February 20, 2003
Resolution claiming that, since the last day to file his petition was a
Saturday, December 7, 2002, and the next day, December 8, 2002 was
a Sunday, the last day for filing the petition was December 9, 2002. He
reasoned that since he filed his motion for extension of time to file his
petition for review on the said date, the said motion was timely filed.
-On August 19, 2003, the CA issued a Resolution denying the
petitioners motion, relying on A.M. No. 00-2-14-SC issued on February
29, 2000, which provides that any extension of time to file the required
pleading should be counted from the expiration of the period
regardless of the fact that the said due date is a Saturday, Sunday, or
legal holiday.
ISSUE
WON the petitioner timely filed his second motion for extension of time
to file his petition for review.
HELD
NO. Petitioners motion for a second extension of time to file his
petition for review was filed out of time.
Reasoning. Section 1, Rule 22, of the 1997 Rules of Civil Procedure
provides:
Section 1. How to compute time. In computing any period of time
prescribed or allowed by these Rules, or by order of the court, or by
any applicable statute, the day of the act or event from which the
designated period of time begins to run is to be excluded and the date
of performance included. If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal holiday in the place
where the court sits, the time shall not run until the next working day.3
-The Court clarified the provision when it issued A.M. No. 00-2-14-SC,
which reads:
Whereas, the aforecited provision applies in the matter of filing of
pleadings in courts when the due date falls on a Saturday, Sunday, or
legal holiday, in which case, the filing of the said pleading on the next
working day is deemed on time;
Whereas, the question has been raised if the period is extended ipso
jure to the next working day immediately following where the last day
of the period is a Saturday, Sunday or legal holiday so that when a
motion for extension of time is filed, the period of extension is to be
reckoned from the next working day and not from the original
expiration of the period;
NOW THEREFORE, the Court Resolves, for the guidance of the
Bench and the Bar, to declare that Section 1, Rule 22 speaks only of
"the last day of the period" so that when a party seeks an extension
and the same is granted, the due date ceases to be the last day and
hence, the provision no longer applies. Any extension of time to file the
required pleading should therefore be counted from the expiration of
the period regardless of the fact that said due date is a Saturday,
Sunday or legal holiday.
-The extension granted by the Court of Appeals should be tacked to
the original period and commences immediately after the expiration of
such period. Under the Resolution of this Court in A.M. No. 00-2-14-
SC, the CA has no discretion to reckon the commencement of the
extension it granted from a date later than the expiration of such

period, regardless of the fact that said due date is a Saturday, Sunday,
or a legal holiday.
-The Court of Appeals cannot be faulted for granting the petitioners
first motion for extension of fifteen (15) days within which to file his
petition for review, reckoned from December 7, 2002, and not from
December 9, 2002 as prayed for by the petitioner. In so doing, it merely
applied, with fealty, Section 1, Rule 22 of the Revised Rules of Court,
as amended, as clarified by the Court via its Resolution in A.M. No. 00-
2-14-SC. Had the CA granted the petitioners first motion for
extension and reckoned the fifteen-day period from December 9, 2002,
instead of from December 7, 2002, the appellate court would have
acted with grave abuse of its discretion.
Dispositive Petition granted
SUMMONS
modes of service
1. voluntary appearance
2. Voluntary submission
RODRIGUEZ VS ALIKPALA
(supra)
FACTS
-Spouses Tolentino were co-movants in the motion for a judgment on a
compromise with Spouses Rebollado
VOLUNTARY SUBMISSION
the Tolentinos freely and voluntarily entered into the compromise
agreement which became the basis of judgment of the City Court.
Under the circumstances, the Tolentinos are estopped the very
authority they invoked. And even assuming that estoppel lies, we
cannot set aside the principle of equity that jurisdiction over a
person not originally a party to a case may be acquired, upon
proper conditions, thru the voluntary appearance of the person
before the court. By coming forward with the original litigants in
moving for a judgment on compromise and by assuming such interest
in the final adjudication of the case together with the Robellados, the
Tolentinos effectively submitted themselves to the jurisdiction of the
City Court.
-Jurisdiction over the plaintiff can be acquired by the court upon
filing of the complaint. On the other hand, jurisdiction over the
defendants can be acquired by the court upon service of valid
summons and upon voluntary appearance/submission of a person in
court.
3. service in person
TOYOTA CUBAO V. CA (GUEVARRA)
G.R. No. 126321
VITUG; October 23, 1997
NATURE
Petition for review
FACTS
-Petitioner Toyota Cubao, Inc., undertook repairs on the car owned by
private respondent Guevarra. The repair costwas paid by means of
BPI Check drawn by Guevarra in favor of Toyota.
-The check was dishonored.
-Guevarra failed to make good the check
-Toyota a civil case for collection of the unpaid account.
-trial court issued the summons to Guevarra at his address in 29
Burgos Street, Calamba, Laguna.
-Process Server Antonio Rimas of the Regional Trial Court of Calamba,
Laguna, submitted to the trial court a return on the service; it read in
full:
"Respectfully returned to the Branch Clerk of Court, Regional Trial
Court, National Capital Judicial Region, Branch 92, Quezon City, the
herein attached original summon in the above entitled case with the
information that it was duly served to the defendant DANILO A.
GUEVARRA, thru her sister-in-law, GLORIA CABALLES, by
61
leaving a copy of the summons and complaint but refused to
sign.
-Toyota claims that Guevarra had failed to file an ANSWER within the
reglementary period, moved to declare Guevarra in default. A copy of
the motion was furnished Guevarra, through registered mail with return
card, at 29 Burgos Street, Calamba, Laguna.
-petitioner filed the registry return card indicating receipt of the motion
-trial court granted petitioner's Motion To Declare Defendant In Default
and allowed an ex-parte presentation of petitioner's evidence.
-TC in favor of Toyota
- a writ of execution was issued to implement the decision. The Deputy
Sheriff, implementing the writ, levied on Guevarra's Toyota Corolla. The
notice of levy was served on Guevarra personally but he refused to
sign the receipt thereof, expressed surprise over it, and stated that he
was not aware of any case instituted against him. Guevarra turned
over the vehicle but filed a certiorari petition before the CA claiming
that the trial court did not acquire jurisdiction over his person because
of a defective service of summons on him.
-CA in favor of Guevarra-annulled and set aside the default judgment,
the writ of execution, the levy upon execution and the sale at public
auction of the vehicle-saying that substituted service of summons was
not valid
-Toyota went to SC
ISSUE
2. WON service of summons is defective
HELD
2. YES.
Reasoning
It is not here disputed that substituted service of summons has been
resorted to by the process server but that, unfortunately, the server's
return did not state the facts or the needed particulars that could justify
the substituted service. The constitutional requirement of due process,
this Court has held in Boticano vs. Chu, Jr., exacts that the service (of
summons) be such as may reasonably be expected to give the notice
desired. Once the service provided by the rules accomplishes that end,
"the requirement of justice is answered; the traditional notions of fair
play are satisfied; due process is served." Although Moran, on the
Rules of Court, has said that "Irregularities of this kind (substituted
service) (might) be cured by proof that the copies (have) actually been
delivered to the defendant," in the case at bar, however, private
respondent appears to have been notified of the case for the first time
only at the time the levy on execution of judgment was effected by the
sheriff.
The fact of the matter was that Guevarra evidently had been unaware
of the proceedings before the RTC. Upon learning of the adverse
decision, but already too late in the day for him to get relief from that
court, he filed, instead, a certiorari petition before the Court of Appeals.
The appellate court neither abused its discretion nor was in error when
it refused to consider the affidavit of the process server (declaring the
concomitant facts required to be incorporated in the return) which was
presented to it for the first time only as an annex to its Reply filed with
the tribunal. For the appellate court to have accepted the affidavit
favorably on its face value, without hearing, would have again been a
denial to the defendant (herein private respondent) of his right to due
process.
Disposition PETITION DENIED.
4. Substituted service
QUELNAN V. VHF PHIL.
G.R. No. 138500
GARCIA; September 16, 2005
NATURE
Petition for review on certiorari
FACTS
-VHF Phils filed an ejectment suit in the MeTC against Quelnan
involving a condominium unit
-MeTC in favor of VHF Phils.
-on its finding that "summons together with a copy of the complaint was
served [on petitioner] thru his wife on August 25, 1992 by substituted

service" and that petitioner "failed to file his answer within the
reglementary period", came out with a decision dated November 23,
1992
-Copy of the aforementioned decision was served on petitioner by
registered mail but the same was returned unclaimed on account of
petitioner's failure to claim the same despite the postmaster's three
(3) successive notices on November 25, 1992, December 7, 1992
and December 11, 1992.
-No appeal having been taken by the petitioner, the MeTC decision
became final and executory.
-a writ of execution, a notice of levy and a notice to vacate were served
on petitioner's wife who acknowledged receipt thereof.
-petitioner filed with the RTC a Petition for Relief from Judgment With
Prayer for Preliminary Injunction and/or temporary restraining order,
thereunder alleging, that he was never served with summons and was
completely unaware of the proceedings in the ejectment suit, adding
that he learned of the judgment rendered thereon only on May 18,
1993 when a notice of levy on execution came to his knowledge.
He thus prayed the RTC to annul and set aside the MeTC decision and
the writs issued in connection therewith.
-In a decision dated June 3, 1996, the RTC granted petitioner's petition
for relief and set aside the MeTC decision. The RTC explained that
petitioner had been unduly deprived of a hearing and had been
prevented from taking an appeal for the reason that petitioner's wife, in
a fit of anger, tore the summons and complaint in the ejectment suit in
the heat of a marital squabble.
-VHF went to SC but SC remanded to CA
-CA-in a decision dated September 17, 1997, upon a finding that
petitioner's petition for relief was filed with the RTC beyond the 60-day
mandatory period therefor under Section 3, Rule 38 of the Rules of
Court, reversed and set aside the RTC decision and reinstated that
of the MeTC,
ISSUE
3. WON THE METROPOLITAN TRIAL COURT OF MANILA NEVER
ACQUIRED JURISDICTION OVER THE PETITIONER, HENCE ITS
DECISION CANNOT BECOME FINAL AND EXECUTORY.
HELD
3. NO.
Reasoning The records clearly reveal that a copy of the MeTC
decision was sent to petitioner through registered mail at his given
address on November 25, 1992. It should be noted that petitioner was
not represented by counsel during the proceedings before the MeTC.
The first notice to him by the postmaster to check his mail was on
November 25, 1992. Thereafter, subsequent notices were sent by the
postmaster on December 7, 1992 and December 11, 1992. For sure, a
certification that the registered mail was unclaimed by the petitioner
and thus returned to the sender after three successive notices was
issued by the postmaster. Hence, service of said MeTC decision
became effective five (5) days after November 25, 1992, or on
November 30, 1992, conformably with Rule 13, Section 10 of the 1997
Rules of Civil Procedure, which reads:
SEC. 10. Completeness of Service. Personal service is complete
upon actual delivery. Service by ordinary mail is complete upon the
expiration of ten (10) days after mailing, unless the court otherwise
provides. Service by registered mail is complete upon actual receipt by
the addressee, or after five (5) days from the date he received the first
notice of the postmaster, whichever date is earlier. (Emphasis
supplied)
There is no doubt that under the Rules, service by registered mail is
complete upon actual receipt by the addressee. However, if the
addressee fails to claim his mail from the post office within five (5) days
from the date of the first notice, service becomes effective upon the
expiration of five (5) days therefrom. In such a case, there arises a
presumption that the service was complete at the end of the said five-
day period. This means that the period to appeal or to file the
necessary pleading begins to run after five days from the first notice
given by the postmaster. This is because a party is deemed to have
received and to have been notified of the judgment at that point.
With the reality that petitioner was first notified by the postmaster on
November 25, 1992, it follows that service of a copy of the MeTC
decision was deemed complete and effective five (5) days therefrom or
on November 30, 1992. Necessarily, the 60-day period for filing a
petition for relief must be reckoned from such date (November 30,
1992) as this was the day when actual receipt by petitioner is
62
presumed. In short, petitioner was deemed to have knowledge of
the MeTC decision on November 30, 1992. The 60-day period for
filing a petition for relief thus expired on January 29, 1993.
Unfortunately, it was only on May 24, 1993, or 175 days after
petitioner was deemed to have learned of the judgment that he
filed his petition for relief with the RTC. Indubitably, the petition was
filed way beyond the 60-day period provided by law.
Disposition PETITION DENIED. CA AFFIRMED
SUMMONS RULE 14
Contents, when issued, by whom issued
Modes of Service
1. Voluntary Appearance
2. Voluntary Submission
3. Service in Person
4. Substituted Service
5. Extra-territorial Service
GUIGUINTO CREDIT COOPERATIVE, INC V TORRES
G. R. No. 170926
YNARES-SANTIAGO; September 15, 2006
NATURE
Petition for review on certiorari under Rule 45 of the Rules of Court of
the decision and resolution of the Court of Appeals
FACTS
-Respondents Aida Torres, Nonilo Torres, and Sheryl Ann Torres-
Holgado, are members of Guiguinto Credit Cooperative, Inc. (GUCCI).
They availed of loans from the cooperative but were unable to pay on
the due dates despite demands.
-On March 24, 2003, petitioner filed a complaint before the RTC of
Bulacan for collection of sum of money and damages
-Summons against respondents were served through their
Secretary, a certain Benita S. Pagtalunan, who received the same
on April 22, 2003. The Return of Summons was filed on April 24, 2003
by Process Server Valeriano P. Badato
-On November 18, 2003, petitioner filed a motion to declare
respondents in default
-TC granted said petition, thereby allowing petitioner to present its
evidence ex-parte
-After presenting petitioners evidence ex-parte, the trial court rendered
judgment on September 15, 2004, ordering respondents to pay
petitioner the ff: 1. For Aida Torres, the amount of P163,516.80 from
April, 2004 plus legal interest until the said amount is fully paid; 2. For
Nonilo Torres the amount of P278,151.58 from April, 2004 plus legal
interest until the said amount is fully paid; 3. For Sheryl Ann Torres the
amount of P15,903.93 from April, 2004 plus legal interest until the said
amount is fully paid; 4. To pay P10,000.00, jointly and severally, as
attorneys fees 5. Costs of suit.
-Petitioner thereafter moved for the issuance of a writ of execution,
which was granted and accordingly, the writ of execution was issued
on even date.
-On May 4, 2005, Sheriff Felixberto L. Samonte levied respondents
house and lot and the same was scheduled to be sold at public auction
on June 7, 2005 when the Court of Appeals issued a temporary
restraining order.
-On August 24, 2005, the Court of Appeals annulled the judgment of
the trial court on the ground that it did not acquire jurisdiction over the
persons of respondents since they were not validly served with
summons and neither did they voluntarily appear in court.
-According to the appellate court, the service of summons to
Pagtalunan was in violation of Section 6, Rule 14 of the Rules of Court
because there was no explanation why resort to substituted service of
summons was made. Thus, the appellate court held that respondents
were deprived of their right to due process.
-The Court of Appeals denied petitioners motion for reconsideration,
hence, this petition
ISSUE
WON summons was not validly served on the respondents, and
therefore the CA correctly annulled the judgment of the RTC

HELD
Yes.
-Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the
court acquires jurisdiction over his person. Jurisdiction over the person
of the defendant is acquired through coercive process, generally by the
service of summons issued by the court, or through the defendants
voluntary appearance or submission to the court.
-Where the defendant is a natural person, service may be personal,
substituted, by publication and such other mode of service as the court
may deem sufficient.
-In an action in personam, jurisdiction over the person of the defendant
is necessary for the court to validly try and decide the case.
Jurisdiction over the person of a resident defendant who does not
voluntarily appear in court can be acquired by personal service of
summons as provided under Section 7, Rule 14 of the Rules of Court.
-If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance
with Section 8 of the said Rule. If he is temporarily out of the
country, any of the following modes of service may be resorted
to: (1) substituted service set forth in Section 8; (2) personal
service outside the country, with leave of court; (3) service by
publication, also with leave of court; or (4) any other manner the
court may deem sufficient.
-In these types of civil actions (in personam), summons on the
defendant must be served by handing a copy thereof to the defendant
in person, or in case of refusal, by tendering it to him. If efforts to find
defendant personally makes prompt service impossible, service may
be effected by leaving copies of the summons at the defendants
dwelling house or residence with some person of suitable age and
discretion residing therein, or by leaving the copies at the defendants
office or regular place of business with some competent person in
charge thereof.
-The proper service of summons is a critical step in litigation because
upon such service rests the courts acquisition of jurisdiction over the
person of the defendant.
-In the absence of a valid waiver, trial and judgment without such
service are null and void.
-In the instant case, the Court of Appeals correctly ruled that since
substituted service was availed of in lieu of personal service, there
should be a report stating that Pagtalunan was one with whom
respondents had a relationship of trust and confidence that would
ensure that the latter will receive or be notified of the summons issued
in their names.
-This is because substituted service may only be availed of when the
respondents could not be served personally within a reasonable period
of time, and such impossibility of prompt service must be shown by
stating that earnest efforts have been made to find the respondents
personally and that such efforts have failed.
-Such requirements under Sections 6 and 7 of Rule 14 must be
followed strictly, faithfully and fully in order not to deprive any person of
his property by violating his constitutional right to due process. The
statutory requirements of substituted service must be strictly construed
since it is an extraordinary method of service in derogation of personal
service of summons, availed of only under certain conditions imposed
by the Rules of Court. Any substituted service other than that
authorized under Section 7 is deemed ineffective and contrary to law.
-Granting that Pagtalunan is the personal secretary of Aida Torres, as
appearing in the Affidavit of Merit of Sheryl Ann Torres and attached to
the Petition of Annulment filed before the Court of Appeals, there is no
showing that the former had indeed a relationship of trust and
confidence with the three respondents. It appears that the process
server hastily and capriciously resorted to substituted service of
summons without ascertaining the whereabouts of the
respondents. Such service of summons is not binding upon
respondents Nonilo and Sheryl Ann Torres whose relationship
with Pagtalunan was neither readily ascertained nor adequately
explained in the Return of Summons. Also, no earnest efforts
were made to locate respondent Aida Torres who was allegedly
working abroad at the time summons was served on her person.
No explanation was stated in the Return why substituted service
was resorted to through Pagtalunan.
-Without specifying the details of the attendant circumstances or of the
efforts exerted to serve the summons, a general statement that such
efforts were made will not suffice for purposes of complying with the
63
rules of substituted service of summons.
-In the instant case, there was an undue, if not indecent, haste to serve
the summons at the first attempt without making sure that personal
service was an impossibility because either the respondents had left
for a foreign country or an unknown destination with no definite date of
returning within a reasonable period, or had gone into hiding to avoid
service of any process from the courts. Since the substituted service
was not validly effected, the trial court did not acquire jurisdiction over
the persons of the respondents. The order of default, the judgment by
default, the writ of execution issued by it, as well as the auction sale of
the respondents properties levied on execution are, therefore, null and
void.
Disposition. Petition is denied.
BONNEVIE V CA (Phil Bank of Commerce)
G.R. NO. L-49101
GUERRERO; October 24, 1983
NATURE
Petition for review on certiorari seeking the reversal of the CA decision
FACTS
- Honesto Bonnevie filed with the CFI Rizal a complaint against
Philippine Bank of Commerce seeking the annulment of the Deed of
Mortgage dated Dec 6, 1966 executed in favor of the PBC by spouses
Lozano, as well as the extrajudicial foreclosure made on Sept 4,
1968.
They assail validity and legality of the extrajudicial foreclosure on the
following grounds: a) petitioners were never notified of the foreclosure
sale. b) The notice of auction sale was not posted for the period
required by law. c) publication of the notice of auction sale in the Luzon
Weekly Courier was not in accordance with law.
- History: Lozano spouses were the owners of the property which they
mortgaged to secure the payment of the loan in the principal amount of
P75T they were about to obtain from PBC.
- They then executed in favor of Bonnevie the Deed of Sale with
Mortgage for P100T, P25T of which amount being payable to the
Lozano spouses upon the execution of the document, and the P75T to
PBC.
- When the mortgage was executed by the Lozano spouses in favor of
PBC, the loan of P75T was not yet received them.
- From April 28, 1967 to July 12, 1968, Bonnevie made payments to
PBC on the mortgage in the total amount of P18,944.22. Bonnevie
then assigned all his rights under the Deed of Sale with Assumption of
Mortgage to his brother, intervenor Raoul.
- PBC then applied for the foreclosure of the mortgage, and notice of
sale was published in the Luzon Weekly Courier on June 30, July 7,
and July 14, 1968; auction sale was conducted a month after, and the
property was sold to PBC for P84,387.00.
- PBC specifically denied most of the allegations: (a) that the defendant
has not given its consent to the sale of the mortgaged property; (b) that
the demand letters and notice of foreclosure were sent to Jose Lozano
at his address; (c) that it was notified for the first time about the alleged
sale after it had foreclosed the Lozano mortgage; that the property in
question remained registered in the name of Lozano in the land
records of Rizal and there was no entry, notation or indication of the
alleged sale.
- After petitioner Honesto Bonnevie had rested his case, petitioner
Raoul SV Bonnevie filed a motion for intervention, which was granted.
- CFI dismissed the complaint. MFR was also denied. CA affirmed.
ISSUE/S
1. WON the mortgage executed by the Lozanos in favor of PBC is valid
2. WON extrajudicial foreclosure is valid
HELD
1. YES
Reasoning A mortgage follows the property whoever the possessor
may be and subjects the fulfillment of the obligation for whose security
it was constituted. Petitioners voluntarily assumed it and are, therefore,
estopped from impugning its validity. They did not secure the consent
of respondent Bank to the sale with assumption of mortgage.

2. YES
Reasoning Act No. 3135 does not require personal notice on the
mortgagor.13 Honesto Bonnevie was not entitled to any notice
because as of May 14, 1968, he had transferred and assigned all his
rights and interests in favor of intervenor Raoul without informing the
Bank.
- Also, petitioners were placed on constructive notice. The notice of
sale was published in the Luzon Courier on June 30, July 7 and July
14, 1968 and notices of the sale were posted for not less than twenty
days in at least three (3) public places in the Municipality where the
property is located. Act No. 3135 merely requires that such notice shall
be published once a week for at least three consecutive weeks. Such
phrase, as interpreted by this Court in Basa vs. Mercado does not
mean that notice should be published for three full weeks.
- To be a newspaper of general circulation, it is enough that "it is
published for the dissemination of local news and general information;
that it has a bona fide subscription list of paying subscribers; that it is
published at regular intervals." The newspaper need not have the
largest circulation so long as it is of general circulation.
- Whether or not the notice of auction sale was posted for the
period required by law is a question of fact. It can no longer be
entertained by this Court. Nevertheless, the records show that copies
of said notice were posted in three conspicuous places in the
municipality of Pasig, Rizal namely: the Hall of Justice, the Pasig
Municipal Market and Pasig Municipal Hall.
- A single act of posting (which may even extend beyond the period
required by law) satisfies the requirement of law. The burden of
proving that the posting requirement was not complied with is now
shifted to the one who alleges non-compliance.
Disposition The appeal being devoid of merit, the decision of the
Court of Appeals is hereby AFFIRMED. Costs against petitioners.
DIAL CORPORATION v SORIANO (RTC Judge)
00 SCRA 00
GRINO-AQUINO; May 31, 1988
NATURE
Petition for certiorari with a prayer for the issuance of a temporary
restraining order
FACTS
- The petitioners ( Dial Corp., C & T Refinery Inc., Nalin sdn. bhb.
Berisford Commodities, Ltd., and Pacific Molasses Co.) are foreign
corporations (US, UK and Malaysia). They are not domiciled in the
Philippines, nor do they have officers or agents, place of business, or
property in the Philippines; they are not licensed to engage, and are
not engaged, in business here. The respondent Imperial Vegetable Oil
Co., Inc. (IVO) is a Philippine corporation which through its president,
Dominador Monteverde, had entered into several contracts for the
delivery of coconut oil to the petitioners. Those contracts stipulate that
any dispute between the parties will be settled through arbitration
under the rules of either the Federation of Oils Seeds and Fats
Association (FOSFA) or the National Institute of Oil Seed Products
(NIOP). Because IVO defaulted under the contracts, the petitioners
and 15 others, initiated arbitration proceedings abroad, and some have
already obtained arbitration awards against IVO.
- On April 8, 1987, IVO filed a complaint for injunction and damages
(RTC Manila) against 19 foreign coconut oil buyers including the
petitioners, with whom Dominador had entered into contracts for the
delivery of coconut oil. IVO repudiated Dominador's contracts on the
grounds that they were mere "paper trading in futures" as no actual
delivery of the coconut oil was allegedly intended by the parties; that
the Board of Directors of IVO removed Monteverde from his position
as president of the corporation, named in his place, Rodrigo
Monteverde, and disowned Dominador's allegedly illegal and
unauthorized acts; that the defendants have allegedly "harassed" IVO
to comply with Dominador's contracts and to come to a settlement with
them. IVO prayed for the issuance of a temporary restraining order or
13
Section 3. Notice shall be given by posting notices of the sale for not less than
twenty days in at least three public places of the municipality or city where the
property is situated, and if such property is worth more than four hundred pesos,
such notice shall also be published once a week for at least three consecutive
weeks in a newspaper of general circulation in the municipality or city.
64
writ of preliminary injunction to stop the defendants from harassing IVO
with their insistent demands to recognize the contracts entered into by
Dominador and from portraying the IVO as one that defaults on its
contracts and obligations and has fallen into bad times and from
interfering with IVO's normal conduct of business. IVO also prayed that
the defendants pay it damages worth more than P21M.
- Respondent Judge Soriano authorized IVO to effect extraterritorial
service of summons to all the defendants through DHL Philippines
Corp. Pursuant to that order, the petitioners were served with
summons and copy of the complaint by DHL courier service.
- On April 25, 1987, without submitting to the court's jurisdiction and
only for the purpose of objecting to said jurisdiction over their persons,
the petitioners filed motions to dismiss the complaint against them on
the ground that the extraterritorial service of summons to them was
improper and that hence the court did not acquire jurisdiction over
them. The court denied their motions to dismiss and upheld the validity
of the extraterritorial service of summons to them on the ground that
"the present action relates to property rights which lie in contracts
within the Philippines, or which defendants claim liens or interests,
actual or inchoate, legal or equitable. And one of the reliefs demanded
consists, wholly or in part, in excluding the defendants from any
interest in such property for the reason that their transactions with
plaintiff's former president are ultra vires." Furthermore, "as foreign
corporations doing business in the Philippines without a license, they
opened themselves to suit before Philippine courts, pursuant to Sec.
133 of the Corporation Code of the Philippines." The petitioners'
motions for reconsideration of that order were also denied by the court.
Hence this petition for certiorari with a prayer for the issuance of a
temporary restraining order.
ISSUE
WON the extra territorial service of summons was proper
HELD
NO.
Section 17, Rule 14 of the Rules of Court provides only 4 instances in
which extraterritorial service of summons is proper, namely: "(1) when
the action affects the personal status of the plaintiffs; (2) when
the action relates to, or the subject of which is, property within
the Philippines, in which the defendant has or claims a lien or
interest, actual or contingent; (3) when the relief demanded in
such action consists, wholly or in part, in excluding the defendant
from any interest in property located in the Philippines; and (4)
when the defendant non-resident's property has been attached
within the Philippines"
The complaint in this case does not involve the personal status of the
plaintiff, nor any property in the Philippines in which the defendants
have or claim an interest, or which the plaintiff has attached. The action
is purely an action for injunction to restrain the defendants from
enforcing against IVO ("abusing and harassing") its contracts for the
delivery of coconut oil to the defendants, and to recover from the
defendants P21 million in damages for such "harassment." It is clearly
a personal action as well as an action in personam, not an action
in rem or quasi in rem. "An action in personam is an action against a
person on the basis of his personal liability, while an action in remedies
is an action against the thing itself, instead of against the person." A
personal action is one brought for the recovery of personal property,
for the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an injury
to the person or property.
As the civil case filed is a personal action, personal or substituted
service of summons on the defendants, not extraterritorial
service, is necessary to confer jurisdiction on the court.
Moran's Comments on the Rules of Court:
As a general rule, when the defendant is not residing and is not found
in the Philippines, the Philippine courts cannot try any case against him
because of the impossibility of acquiring jurisdiction over his person
unless he voluntarily appears in court. But, when the action affects the
personal status of the plaintiff residing in the Philippines, or is intended
to seize or dispose of any property, real or personal, of the defendant
located in the Philippines, it may be validly tried by the Philippine
courts, for then, they have jurisdiction over the res, i.e., the personal
status of the plaintiff or the property of the defendant and their
jurisdiction over the person of the non-resident defendant is not
essential. Venue in such cases may be laid in the province where the

property of the defendant or a part thereof involved in the litigation is
located.
In an action for injunction, extraterritorial service of summons and
complaint upon the non-resident defendants cannot subject them to
the processes of the regional trial courts which are powerless to reach
them outside the region over which they exercise their authority (Sec.
3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P. Blg. 129).
Extraterritorial service of summons will not confer on the court
jurisdiction or power to compel them to obey its orders.
Neither may the court by extraterritorial service of summons acquire
jurisdiction to render and enforce a money judgment against a non-
resident defendant who has no property in the Philippines for "the
fundamental rule is that jurisdiction in personam over non-residents, so
as to sustain a money judgment, must be based upon personal service
within the state which renders the judgment ."
Respondents' contention that "the action below is related to property
within the Philippines, specifically contractual rights that petitioners are
enforcing against IVO" is specious for the "contractual rights" of the
petitioners are not property found in the Philippines for the petitioners
have not filed an action in the local courts to enforce said rights. They
have not submitted to the jurisdiction of our courts.
The lower court invoked Section 33 of the Corporation Code which
provides that a "foreign corporation transacting business in the
Philippines without a license may be sued or proceeded against before
Philippine courts or administrative tribunal on any valid cause of action
recognized under Philippine laws." It assumed that the petitioners are
doing business in the Philippines, which allegation the latter denied.
Even if they can be considered as such, the Corporation Code did not
repeal the rules requiring proper service of summons to such
corporations as provided in Rule 14 of the ROC and Section 128 of the
Corporation Code.
The respondent court's finding that, by filing motions to dismiss, the
petitioners hypothetically admitted the allegations of the complaint that
they are doing business in the Philippines without any license, and that
they may be served with summons and other court processes through
their agents or representatives enumerated in paragraph 2 of the
complaint, is contradicted by its order authorizing IVO to summon them
by extraterritorial service, a mode of service which is resorted to when
the defendant is not found in the Philippines, does not transact
business here, and has no resident agent on whom the summons may
be served.
Disposition. The extraterritorial service of summons on the petitioners
is held to be improper, hence null and void. The petition for certiorari is
granted. The orders of Judge Soriano are set aside. The complaint is
dismissed as against the petitioners for failure of the court to acquire
jurisdiction over them.
MONTALBAN V. MAXIMO
22 SCRA 1070
SANCHEZ, March 15, 1968
NATURE
Appeal from the orders of CFI Manila
FACTS
-Fr. Gerardo Maximo was involved in a motor vehicle accident where
the son of the petitioners suffered injuries. Petitioners filed suit against
Fr. Maximo for damages. Summons were served at the Malabon
Parish where Fr. Maximo was allegedly residing. However, Fr. Maximo
was in Europe when the summons were served, Fr. Bautista was the
one who received the summons. Fr. Bautista wrote to the Clerk of
Court of CFI Manila informing him that Fr. Maximo was in Europe.
-On Plaintiffs motion, lower court declared Fr. Maximo in default,
sentenced Fr. Maximo to pay for damages. The Montalbans even
wrote to Fr. Maximo at the Malabon Catholic Church informing him of
the lower courts decision and requesting hi to comply with the
decision. Fr. Maximo replied that he was not aware of the civil case
against him and that he was acquitted in the criminal case.
-Deputy Sheriff of Rizal notified Fr. Maximo of the issuance of writ of
execution and demanded payment. Return to writ expressed that Fr.
Maximo is financially hard up and had no property. Alias writ of
execution issued. Copy received by Fr. Maximo. Deputy Sheriff
attached and levied on a residential house in Caloocan allegedly
belonging to Fr. Maximo.
65
-After 2 years, 2 months, Fr. Maximo admittedly learned of lower
courts decision and filed for ANNULMENT OF ENTIRE
PROCEEDINGS on verified motion on the grounds that the summons
were not duly served (based on then Sec.7, Rule 7 and Sec18, Rule
14 of ROC) therefore, the court did not acquire jurisdiction over his
person so the trial and the decision were null and void. His verified
motion was denied, MFR was rejected.
ISSUE
WON the summons in a suit in personam against a resident of the
Philippines temporarily absent may be validly effected by substituted
service under Sec. 8 Rule 14 (on residents temporarily out of the
Philippines)
HELD
*ON argument that Sec18 (in relation to sec17) is the sole
provision that governs summons upon a defendant temporarily
absent in an action in personam: substituted service out of the
Philippines - is but one of the modes of effective service to bring a
defendant in court. The normal method of service of summons on one
temporarily absent is by substituted service. Personal service outside
the country and service by publication are not ordinary means of
summoning defendants.
-in suits in personam, the more circuitous procedure delineated in
Sections 17 and 18 is resorted to by a plaintiff if defendants dwelling
house or residence or place of business in this country is not known;
or, if known, service upon him cannot be had thereat upon the terms of
Sec8. Since personal service is impossible, resort to substituted
service becomes a necessity.
*ON fact that judgment has been long final: the judgment enjoys the
presumption of regularity. It is, unless striken down, entitled to respect.
Non quieta movere. Because public policy and sound practice
demand that, at the risk of occasional errors, judgments of courts
should become final at some definite date fixed by law.
Disposition. Orders affirmed.
DE MIDGELY VS FERANDOS
64 SCRA 23
AQUINO, May 13, 1975
NATURE
Original Actions. Certiorari and contempt.
FACTS
- Quemada, allegedly the illegitimate son of Alvaro Pastor, Sr., was
appointed as special administrator of the latters estate by the CFI of
Cebu. As such, he filed a complaint against his half siblings, the
spouses Alvaro Pastor, Jr. and Maria Elena Achaval, and Sofia
Midgely, who were all at that time citizens of Spain and residing in that
country. The suit also named Atlas Mining as co-respondent. The suit
was to settle the question of ownership over certain properties and
rights in some mining claims as Quemada believed that those
properties belong to the estate of Alvaro Pastor, Sr.
- Quemada, on his own, caused extraterritorial service of summons to
be made through the Department of Foreign Affairs and the Philippine
Embassy in Madrid, Spain, which effected the service of the summons
through registered mail upon De Midgely and Pastor, Jr. at their
respective addresses in Alicante and Barcelona.
- Both De Midgely and Pastor entered a special appearance and filed a
motion to dismiss on the ground of lack of jurisdiction as they are non-
residents. They further alleged that earnest efforts toward a
compromise have not been made as required in the Civil Code in suits
between members of the same family, The motion was denied by
Judge Ferandos and he ruled that the respondents were properly
summoned.
- The subsequent motion for reconsideration was denied by Ferandos
indicating in the order that the action of Quemada was for the recovery
of real property and real rights. The respondents were instructed to file
their answer.
- De Midgely filed this action with the Supreme Court.
ISSUE/S
WON Judge Ferandos gravely abused his discretion in denying De
Midgelys motion to dismissed based on the lack of jurisdiction over her

person.
HELD
No. The fact that she alleged as a ground for dismissal the lack of
earnest effort to compromise is deemed as abandonment of her
special appearance and as voluntary submission to the courts
jurisdiction. When the appearance is by motion for the purpose of
objecting to the jurisdiction of the court over the person, it must be for
the sole and separate purpose of objecting to the jurisdiction of the
court. If the motion is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby submits himself to
the jurisdiction of the court,
- Even if the lower court did not acquire jurisdiction over De Midgely,
her motion to dismiss was properly denied because Quemadas action
against her maybe regarded as a quasi in rem where jurisdiction over
the person of a non-resident defendant is not necessary and where the
service of summons is required only for the purpose of complying with
the requirement of due process. Quasi in rem is an action between
parties where the direct object is to reach and dispose of property
owed by the parties or of some interest therein.
- The SC cited the Perkins case as a precedent. In that case, it ruled
that in a quasi in rem action jurisdiction over a non resident defendant
is not essential. The service of summons by publication is required
merely to satisfy the constitutional requirement of due process. The
judgment of the court would settle the title to the properties and to that
extent it partakes of the nature of judgment in rem. The judgment is
confined to the res (properties) and no personal judgment could be
rendered against the non resident. It should be noted that the civil case
filed by Quemada is related to a testamentary proceeding as it was
filed for the purpose of recovering the properties which in the
understanding of Quemada, belonged to the estate of the Late Pastor,
Sr. and which were held by De Midgely and her brother.
Disposition
Petition is dismissed
SAHAGUN V CA (MADAYAG/FILINVEST CREDIT
CORP.)
G.R. NO. 78328
REGALADO; June 3 1991
NATURE
Petition for certiorari
FACTS
- It was alleged that petitioner's spouse, Abel Sahagun (Alias
Abelardo), manager of Rallye Motor Co., Inc. (Rallye), made it
appear that his company had sold a motor vehicle to Salazar
who issued a promissory note for the price and executed as
security a chattel mortgage on said vehicle in favor of Rallye.
Rallye, through Abel, assigned the note and chattel to Filinvest
for valuable consideration. When the note matured, Salazar
failed to pay, compelling Filinvest to sue. However, Filinvest
found that the mortgaged car had not been delivered to Salazar
by Abel. A writ of attachment was issued and levied on a house
and lot in Las Pinas, registered in Abel's name. Petitioner had
been continuously residing in said house and claims ownership,
having allegedly paid for it with her own earnings.
-The TC denied the respondent's motion to declare Abel in
default but directed it to "take steps to effect service of summons
and complaint upon defendant, whose whereabouts in the US
was unknown. The TC later dismissed the complaint of Filinvest
for failure to serve summons extra-territorially upon Abel despite
said order. Filinvest filed an MFR praying that said order be
reconsidered and set aside and that Abel be declared in default
and to deny petitioner's motion for leave. TC granted petitioner
time to file intervention and denied the motion to declare Abel in
default. Petitioner intervened, questioning the jurisdiction of the
TC. Petitioner was declared in default for failure to appear, as
was Abel for failing to answer the complaint. The court rendered
judgment against Abel, ordering him to pay P97,066.59
(equivalent to 25% of the principal obligation due as liquidated
damages + 25% as attorney's fees).
-petitioner elevated the case to the IAC (Feb. 27, 1985) which
granted her petition for certiorari with prohibition and set aside
66
the TC's aforesaid decision, ruling that petitioner was deprived of
opportunity to present evidence (including evidence she and
Abel had been living separately since 1970). Filinvest filed a
petition for review with the SC which was denied. Filinvest filed a
motion for leave to serve summons by publicatio on Abel, which
the court granted, stating that pursuant to Sec. 17, Rule 14, "the
summons be effected out of the Phils. by publication in a
newspaper of general circulation in the Phils., to which this
matter may be assigned after due raffle, for 3 successive days.
Said defendant was ordered to file his answer in Court within a
reasonable time (not less than 60 days after notice); that the
CoC send copies of the summons and tills Order by registered
mail to last known address of said defendant in Las Pinas.
Plaintiff is ordered to implead Rallye as co-defendant within 1
month from notice."
-Filinvest filed an amended complaint, this time impleading
petitioner and Rallye as additional defendants. Respondent court
admitted the amended complaint and directed service of
summons and the complaint upon Abel at a different last known
address in Antipolo. Summons was supposedly served on Abel
through publication in the Manila Evening Post according to the
affidavit of publication of its president, with a confusing entry in
the notice of order which stated the Las Pinas address,
contradicting the Antipolo address stated by the TC. Petitioner
filed her answer to the amended complaint. Abel and Rallye filed
no answer, so Filinvest filed a motion to declare them in default
which respondent Judge Madayag of the RTC of Makati granted,
but not as to Rallye since summons had not been served upon
it. Petitoner went on certiorari to the CA (Feb. 6, 1987), assailing
as grave abuse of discretion the declaration of default of Abel;
CA dismissed the petition and a subsequent MFR, hence this
petiton.
ISSUE
1. WON respondent court acquired jurisdiction over Abel by the
publication of summons in the Manila Evening Post
HELD
1. YES
Ratio As a nonresident defendant, and since the suit involves real
property wherein the defendant ostensibly has an interest and which
the property has in fact been attached at the instance of private
respondent, the court correctly ordered the service of summons by
publication in a newspaper of general circulation in such places and for
such time as the court may order. Although it would appear that
publication should have been made in a newspaper in the US as it
would most likely give notice to Abel, such a sweeping doctrine would
virtually unsettle a long standing interpretation of the aforesaid rule on
extraterritorial service of summons by publication, as well as its
implementation sanctioned by the practice followed in this jurisdiction.
Reasoning The instant case is based on the attachment of
defendant's property, and as such is an action quasi in rem, wherein
summons by publication is allowed. Such is called constructive or
substituted service, which does not constitute a service of process in
any true sense but serves as a means whereby the owner may be
admonished that his property is subject to judicial proceedings and that
he should take steps as he sees fit to protect it. Such is required to
physically acquire jurisdiction over the person of the defendant and for
purposes of fair play by informing him of the pendency of the action
against him. Even then, there is no guarantee that the absent owner
shall receive the actual notice; as such, under law, actual notice is not
considered to be absolutely necessary (as held in Banco Espanol).
Considering this, publication in the US would be all the more difficult as
Abel's exact location is unknown; to have at hand the available
newspapers, research the laws governing judicial processes in each
state would be too taxing for the TC. Still, it was held in De Midgely
that in actions quasi in rem, jurisdiction over the person of the
nonresident alien is not essential and service of summons is only
required to satisfy due process. Relief in an action against a
nonresident defendant who chooses not to submit himself to Phil.
courts is limited to the res.
-There is no specific proscription against resorting to foreign
publication in the place where the defendant resides, but publication in
a local newspaper should not altogether be interdicted since the rule
specifically authorizes service of summons "in such places and for
such time as the court concerned may order". The matter should be left

to the sound discretion of the TC in each particular case since it has
the facts before it. Still, the publication in the Manila Evening Post was
defective as there was no showing that copies of the summons and the
amended complaint were duly served at the defendant's last know
correct address.
-The Court is not inclined to dismiss the case for non-compliance of
private respondent to serve the amended complaint to Abel at his
Antipolo address as there is prima facie justification for extraterritorial
service of summons, and transmission of copies of the summons to the
wrong address is a matter which the TC can more readily remedy.
Even if Abel is declared in default, his interest can be duly represented
by the non-defaulting defendant since a common cause of action is
involved.
Disposition Petition is granted
SEPARATE OPINIONS
Sarmiento, J. [concurring and dissenting]
-service of summons to the wrong last known address is a defect
which cannot justify an order of default. Assuming default were proper,
it will not preclude petitioner from presenting her own evidence.
-However, as to extrajudicial service of summons to a nonresident
alien, it is only valid when effected in the territory in which the absent
defendant may be found. Sec. 17 was in part, taken from Sections 398
and 399 of Act. 190, which in turn were an adoption of the Code of Civil
Procedure of California which states that personal service outside the
state must be named and designated in the publication as most likely
to give notice to the person to be served. Publication in the Phils. is not
likely to provide notice to a US resident.
-As to Banco Espanol and De Midgely: although the court acquired
jurisdiction over the res, the res belongs to the defendant, and as such
he reserves the right to be heard when his possessions are in peril.
Although the court cannot award money by way of relief, judgment
condemning the res would yield the same result, that is, liability against
the defendant. This would lead to the fundamental injustice of trial in
absentia, especially considering the increase in immigrant Filipinos.
6. By Publication
-MODE OF SERVICE UPON CERTAIN DEFENDANTS
1. Upon domestic private juridical entity
PALUWAGAN NG BAYAN SAVINGS BANK vs. KING
172 SCRA 131
GANCAYCO; April 12, 1989
NATURE
Petition for certiorari
FACTS
- Petitioner sued Mercantile Financing Corporation (MFC) and private
respondents, as directors and officers of MFC, for the recovery of
money market placements through certain promissory notes. They
were charged jointly and solidarily in accordance with Section 31 of the
Corporation Code 5.
- Summons and copies of the complaints were served upon MFC and
private respondents at the 4th Floor, LTA Building, No. 118 Perea
Street, Makati, Metro Manila, which is the stated office address of MFC
in the complaint, through its Assistant Manager Mr. Nasario S.
Najomot, Jr. who acknowledged receipt thereof for and in behalf of
MFC and the private respondents. This is so recited in the certification
of deputy sheriff Bernardo San Juan dated May 11, 1983.
- The parties, assisted by their counsel, submitted a Compromise
Agreement for the approval of the court which was approved.
- Counsel for defendants filed a "Motion To Correct Compromise
Agreement" on the ground that he erroneously filed the Compromise
Agreement in behalf of all the defendants when in fact he was the
counsel for MFC only. (denied)
- Syquia Law Offices, in behalf of private respondents Angelo King,
Keng Suy Wat, Quintin Calderon and Jose J. Ferrer, Jr., filed a motion
to set aside decision on the following grounds:
a. there was no service of summons upon each of them as the
corporate address of the corporation was not their address they were
no longer connected therewith;
67
b. that Atty. Aragones had no authority to represent them in the action
and compromise agreement;
c. that they were not served copies of the decision of the court;
d. that they learned about the same only when it was being executed;
and
e. that they did not participate as directors or officers of MFC in the
subject transaction. (denied)
- CA reversed
- Motion for reconsideration (denied)
ISSUE
WON private respondents were properly served with summons
HELD
NO.
Ratio Although private respondents were sued in their capacity as
directors and officers of MFC, they are, nevertheless, being held
personally liable for the obligation subject of the litigation under the
complaint filed by petitioner. Hence, the rule on personal service of
summons must be observed in that summons must be served
personally on private respondents or, if they refuse to receive the
same, by tendering it to them.
It is only when the defendant cannot be served personally within a
reasonable time that substituted service may be resorted to. The
impossibility of prompt service should be shown by stating the efforts
made to find the defendant personally and the fact that such efforts
failed. This statement should be made in the proof of service. This is
necessary because substituted service is in derogation of the usual
method of service. It has been held that this method of service is in
derogation of the common law; it is a method extraordinary in
character, and hence may be used only as prescribed and in the
circumstances authorized by statute." Thus, under the controlling
decisions, the statutory requirements of substituted service must be
followed strictly, faithfully and fully, and any substituted service other
than that authorized by the statute is considered ineffective.
Reasoning The proof of service prepared by the sheriff does not show
that such personal service of summons was effected. The office
address of the corporation as indicated in the complaint does not
appear to be the office address of private respondents as they were no
longer connected with the corporation then. Personal service of
summons should have been made on them at their residences as
shown in the records of the Securities and Exchange Commission and
the Central Bank. Instead, the sheriff effected substituted service by
leaving copies of the summons with the Assistant Manager of MFC at
the place of business of said corporation with which as above stated
private respondents were no longer connected. Such substituted
service is not valid. There was no compliance with the requirements of
the rule that there must be a previous personal service and a failure to
effect the same before substituted service could be resorted to. As the
private respondents have not been duly served with summons, the trial
court never acquired jurisdiction over their persons.
Disposition. Petition is DENIED
2. Upon Foreign Private Juridical Entity
FACILITIES MANAGEMENT V DELA OSA
89 SCRA 131
MAKASIAR; March 26, 1979
NATURE
Petition for review on certiorari of the decision of the CIR
FACTS
-On July 1, 1967, Leonardo dela Osa sought his reinstatement. with full
backwages, as well as the recovery of his overtime compensation,
swing shift and graveyard shift differentials. Petitioner alleged that he
was employed by respondents as (1) painter with an hourly rate of
$1.25 from March, 1964 to November, 1964, inclusive; (2) houseboy
with an hourly rate of $1.26 from December, 1964 to November, 1965,
inclusive; (3) houseboy with an hourly rate of $1.33 from December,
1965 to August, 1966, inclusive; and (4) cashier with an hourly rate of

$1.40 from August, 1966 to March 27, 1967, inclusive.
- Respondents filed on August 7, 1967 their letter- answer without
substantially denying the material allegations of the basic petition but
interposed the following special defenses that respondents Facilities
Management Corporation and J. S. Dreyer are domiciled in Wake
Island which is beyond the territorial jurisdiction of the Philippine
Government; that respondent J. V. Catuira, though an employee of
respondent corporation presently stationed in Manila, is without power
and authority of legal representation; and that the employment contract
between petitioner and respondent corporation carries -the approval of
the DOL.
- On May 3, 1968. respondents filed MTD the subject petition on the
ground that this Court has no Jurisdiction over the instant case, and on
May 24, 1968, petitioner interposed an opposition thereto. Said motion
was denied.
ISSUE/S
1. WON Court can acquire jurisdiction over the persons of the accused
provided that they are domiciled beyond the territorial jurisdiction of the
Philippine Government
2. WON petitioner has been 'doing business in the Philippines' so that
the service of summons upon its agent in the Philippines vested the
CFI of Manila with jurisdiction.
HELD
1. Yes. While it is true the site of work is Identified as Wake Island, it is
equally true the place of hire is established in Manila. Moreover, what
is important is the fact that the contract of employment between the
parties litigant was shown to have been originally executed and
subsequently renewed in Manila, as asserted by petitioner and not
denied by respondents. Hence, any dispute arising therefrom should
necessarily be determined in the place or venue where it was
contracted.
2.
the petitioner may be considered as doing busuness un the Philippines
within the the scope of Section 14, Rule 14 of the ROC
in compliance with law, the petitioner had to appoint Jaime V. Catuira,
as agent for FMC with authority to execute Employment Contracts and
receive, in behalf of that corporation, legal services from and be bound
by processes of the Philippine Courts of Justice, for as long as he
remains an employee of FMC. It is a fact that when the summons for
the petitioner was served on Jaime V. Catuira he was still in the employ
of the FMC. Mr. Catuira was a on officer representing petitioner in the
Philippines.
Aetna Casualty & Curety Company v Pacific Star Line WON the
plaintiff appellant has been doing business in the Philippines,
considering the fact that it has no license to transact business in the
Philippines as a foreign corporation. The object of Sections 68 and 69
of the Corporation Law was not to prevent the foreign corporation from
performing single acts, but to prevent it from acquiring a domicile for
the purpose of business without taking the steps necessary to render it
amenable to suit in the local courts. It was never the purpose of the
Legislature to exclude a foreign corporation which happens to obtain
an isolated order for business from the Philippines, from securing
redress in the Philippine courts (Marshall Co. vs. Elser & Co., 46 Phil
70,75).
if a foreign corporation, not engaged in business in the Philippines, is
not banned from seeking redress from courts in the Philippines, a
fortiori, that same corporation cannot claim exemption from being sued
in Philippine courts for acts done against a person or persons in the
Philippines.
Disposition WHEREFORE, THE PETITION IS HEREBY DENIED
WITH COSTS AGAINST THE PETITIONER
3. Upon Resident Temporarily Abroad
MONTALBAN V. MAXIMO
(SUPRA)
FACTS
-Fr. Maximo was sued by the parents of the child he injured during a
motor vehicle accident. He was in Europe when the summons were
68
served upon Fr. Bautista in the Malabon Church where Fr. Maximo was
known to reside. Since was away when trial was being held, he was
declared in default and a decision was made in favor of the Sps. After
2y, 2m Fr. Maximo questioned the validity of the judgment against him,
questioning the service of summons made
ISSUE
WON the summons in a suit in personam against a resident of the
Philippines temporarily absent may be validly effected by substituted
service under Sec. 8 Rule 14 (on residents temporarily out of the
Philippines)
HELD
YES. In suits in personam, courts have jurisdiction over residents
temporarily out of the country.
Reasoning. HISTORY. Common Law (Power Concept of
Jurisdiction): Jurisdiction of Courts to render judgments in personam
was granted on their de facto power over defendants person.
Jurisdiction was based on the power to seize and imprison defendant.
-Continental Law: Principles of Roman Origin: (1) Suits in
personam and those relating to MOVABLES courts of the domicile of
the defendant have general jurisdiction [Actor Rei Forum Sequitur]; (2)
actions concerning IMMOVABLES: Courts of the situs have exclusive
jurisdiction
-FORGED DOCTRINE: Domiciliaries of a state, though temporarily out
of its territorial jurisdiction, are ALWAYS amenable to suits in personam
so substituted service is binding on absent residents.
-MILLIKEN V MEYER: The attendant duties, like the rights and
privileges incident to domicile, are not dependent on continuous
presence in the state. One such incident of domicile is amenability to
suit within the state even during sojourns without the state, where the
state was provided and employed a REASONABLE METHOD for
apprising such an absent party of the proceeding against him.
*ON SERVICE OF SUMMONS & DUE PROCESS: the constitutional
requirement of due process exacts that the service be such as may be
reasonably expected to give reasonably calculated to give the notice
desired
-MILLIKEN V MEYER, supra: its adequacy so far as due process is
concerned is dependent on WON the form of substituted service
provided for such cases and employed is REASONABLY
CALCULATED TO GIVE HIM ACTUAL NOTICE of the proceedings
and an opportunity to be heard.
*interpretation of then Sec8 on substituted service: Same meaning
shaped out by the jurisprudence of the jurisdiction where it was
patterned (American Legal System); the defendant means any
resident of the country without distinction as to whether he is physically
present or not.
-on Sec18, Rule 14, according to CJ MORAN: Since resident of RP,
jurisdiction may be acquired over his person under Sec8;
Extraterritorial Service also allowed. Plaintiff is not duty bound to see to
it that the person upon when service was actually made delivers the
summons to defendant or informs him about it. The law presumes that
for him. It is immaterial that defendant does not in fact receive actual
notice. This will not affect the validity of the service.
-A man temporarily absent from this country leaves a definite place of
residence, a dwelling where he lives, a local base to which any inquiry
about him may be directed and where he is bound to return.
Disposition. Orders affirmed.
4. Upon Defendant whose identity/whereabouts
unknown
BALTAZAR VS CA (GOOD EARTH ENTERPRISES)
G.R. No. 78728
FELICIANO; December 8, 1988
Nature
Petition for review on certiorari to annul CA decision
FACTS
- Two parcels of land located in Barrio San Isidro, Paranaque were
adjudicated to Lorenzo Molera pursuant to the decree in a land
registration case by the CFI of Rizal acting as a cadastral court.
They were titled in the name of Lorenzo Molera, under Original

Certificate of Title (OCT) No. 1866. On 15 August 1965, the parcels
of land were acquired by Good Earth from successors-in-interest of
Lorenzo Molera. A transfer of Certificate title was issued in the
name of Good Earth.
- On 22 March 1977, Artemio Baltazar instituted Civil Case No. 5552-
P against Good Earth for declaration of ownership and
reconveyance of the parcels of land before the CFI, Rizal.
Baltazar traced his claimed rights from an alleged vast Spanish land
grant to one Don Hermogenes Rodriguez, Governor General of
Intramuros, down to a deed of sale over the subject lots allegedly
executed by one Pedro Asedillo (for whose mother, Baltazar had
been a tenant sharing in the rice harvest from the lots)
- The Deputy Sheriff of the trial court, Mr. Ernesto Pre, received a
copy of the summons and complaint for service on Good Earth at its
address set forth in the complaint 666 Muelle de Binondo, Manila.
- On 1 April 1977, the Deputy Sheriff pre-certified in his Sheriffs
Return that: notwithstanding three attempts made by the
undersigned Deputy Sheriff, particularly on March 25, 27 and 30,
1977, to serve the summons and copy of the complaint upon the
defendant Good Earth Enterprises, Inc. at the given address, the
same has failed as according to information defendant Corporation
has never held office thereat and its present office address is
unknown.
- On the same date, Baltazar filed a motion for leave to serve the
summons and a copy of the complaint upon therein defendant Good
Earth by publication. The trial court granted Baltazar's motion.
Publication of the summons and the complaint in the "Times
Journal," a newspaper of general circulation, for 3 consecutive
weeks was effected on 6, 13 and 20 August 1977.
- Subsequently the trial court, on motion of Baltazar and upon finding
that Good Earth had failed to file its answer within the sixty (60) day
period counted from the day following the last day of the publication,
declared Good Earth "as if in default" and allowed Baltazar to
present his evidence ex parte 10 days later
- the trial court then issued the questioned judgment by default
against Good Earth which: 1) declared Baltazar true and owner of
the property covered by TCT No. 191048, 2) ordered Good Earth to
reconvey that property to Baltazar and, should Good Earth fail so to
reconvey, 3) decreed the cancellation of TCT No. 191048; and 4)
required the Register of Deeds of Rizal to issue a new TCT in the
name of Baltazar. These were done accordingly all without the
knowledge of Good Earth.
- Baltazar lost no time at all in selling the land so titled in his name to
Aurora Galvez, Rizaliana Garments, Inc. and to BGB Development
CorporationOn 9 August 1979, Good Earth instituted a complaint for
annulment of the judgment in Civil Case No. 5552-P and for
reconveyance, against Artemio Baltazar and his vendees Aurora
Galvez and BGB Development Corporation, which complaint was
docketed as Civil Case No. PQ-7410-P, in the Court of First Instance
of Rizal, Branch 28, the same court which had issued the judgment
by default against Good Earth. Good Earth later impleaded
Baltazar's third vendee, Rizaliana Garments, Inc. as an additional
defendant.
- Good Earth assailed the judgment as null and void, upon the ground
that the trial court had not acquired jurisdiction over the person of
Good Earth. It was urged by Good Earth that the suit commenced
by Baltazar was an action in personam which required personal
service of summons; hence, service of summons by publication was
improper and unwarranted in this case. It was also urged by Good
Earth that Land Registration Decree No. N-70457, by virtue of which
OCT No. 1866 was issued to Lorenzo Molera, predecessor-in-
interest of Good Earth, became incontrovertible one year after its
registration on 5 February 1959.
- The trial court rendered judgment against Good Earth. It held that
the trial court which issued the judgment by default had acquired
jurisdiction over the person of defendant Good Earth through service
of summons by publication; that the suit brought by Baltazar against
Good Earth was an action quasi in rem such that service of
summons by publication was appropriate; that Lorenzo Molera, the
original registered owner of the subject lands, was not an
indispensable party to the suit brought against Good Earth; that the
action instituted by Good Earth was barred by res judicata; and that
defendants Galvez, BGB Development Corporation and Rizaliana
Garments, Inc. were purchasers in good faith and for value.
- CA reversed TCs decision and directed the defendants to reconvey
the parcels of land in question to Good Earth free from all liens and
69
encumbrances. Hence this Petition for Review instituted by Baltazar
and Galvez.
ISSUE
WON the service of summons by publication upon respondent Good
Earth was proper.
HELD
The regular mode of serving summons upon a private domestic
corporation (i.e., a private corporation organized under Philippine
law and hence registered with the Securities and Exchange
Commission) is governed by Section 13 of Rule 14 of the Revised
Rules of Court. The regular mode, in other words, of serving
summons upon a private Philippine corporation is by personal
service upon one of the officers of such corporation identified in
Section 13.
For the purpose of receiving service of summons and being bound
by it, a corporation is Identified with its agent or officer who under
the rule is designated to accept service of process. "The corporate
power to receive and act on such service, so far as to make it known
to the corporation, is thus vested in such officer or agent." A strict
compliance with the mode of service is necessary to confer
jurisdiction of the court over a corporation. The purpose is to render
it reasonably certain that the corporation will receive prompt and
proper notice in an action against it or to insure that the summons
be served on a representative so integrated with the corporation that
such person will know what to do with the legal papers served on
him.
It is not disputed that Deputy Sheriff Pre did not comply and did not
attempt to comply with the requirement of Section 13 of Rule 14.
Since personal service of summons was clearly not effected upon
Good Earth, we come to the question of whether the substituted
service by publication purported to have been effected by the trial
court in Civil Case No. 5552-P was proper and effective to vest
jurisdiction upon such court over the person of Good Earth. The
first point that must be made in this connection is that the
propriety of service of summons by publication is not
dependent upon the technical characterization of the action
being initiated as an action in rem or quasi in rem. The
propriety of service by publication is dependent, rather, upon
compliance with the requirements of the applicable provisions
of the Rules of Court. We note secondly, that service of summons
of publication may be allowed under Rule 14 of the Revised Rules of
Court in three 3 different situations. The first is the situation of an
"unknown defendant" addressed by Section 16 of Rule 14. The
second refers to situations where "extra-territorial service" is proper,
governed by Section 17 of Rule 14. The third situation is that of a
resident of the Philippines who is temporarily out of the Philippines
and who may be served with summons by publication under Section
18.
Even a cursory examination of Sections 16,17 and 18 of Rule 14
above will at once reveal that, if at all, service of summons by
publication upon Good Earth could only be done under Section 16.
Section 17 can find application only where the defendant is both a
non-resident and not actually found in the Philippines. Since Good
Earth is a corporation organized under the Philippine law, it cannot
be regarded as a non-resident corporation. Section 18, upon the
other hand, appears to contemplate a defendant who is a natural
person. In any case, petitioner did not pretend that Good Earth was
at any time temporarily out of the Philippines, assuming such a
condition were possible. Section 16 itself covers two (2)
distinguishable situations: where the identity of the defendant is
unknown; and where the address of the defendant is unknown.
Under Section 16, therefore, petitioner must show that the address
of Good Earth was "unknown" and that such address "could not be
ascertained by diligent inquiry."
In the case at bar, petitioner acted as if the address of Good Earth
was "unknown." Petitioner claimed that Good Earth could not be
found at the address appearing in the TCT issued in the name of
Good Earth. The sum total of what the Sheriff actually did, was to
ask a security guard he found at 666 Muelle de Binondo and this
security guard apparently pointed to the building directory where the
name of Good Earth did not appear. It is argued by Good Earth that
had the Sheriff inquired at any of the offices actually found in the
building at 666 Muelle de Binondo, he would have found Good Earth

which is a corporation owned or controlled by the Ching family,
considering that all the corporations quartered at 666 Muelle de
Binondo are Ching family corporations. Good Earth, in other words,
did not dispute that 666 Muelle de Binondo, Manila was its correct
corporate address. The court does not believe, therefore, that the
address of Good Earth could be regarded as "unknown" within the
meaning of Section 16 of Rule 14. More importantly, it does not
believe that the acts of Deputy Sheriff Pre satisfied the standard of
diligent inquiry' established by Section 16 of Rule 14. Deputy Sheriff
Pre should have known what every law school student knows, that
Good Earth being a domestic corporation must have been registered
with the Securities and Exchange Commission and that the SEC
records would, therefore, reveal not just the correct address of the
corporate headquarters of Good Earth but also the addresses of its
directors and other officers. We believe and so hold that a litigant or
process server who has not gone through the records of the SEC
cannot claim to have carried out the "diligent inquiry" required under
Section 16 of Rule 14 of the Revised Rules of Court for valid service
of summons by publication upon a domestic corporation.
It may be noted, finally, that the record does not show that Baltazar
sent a copy of the summons and the order for publication to Good
Earth by registered mail to its last known address which was 666
Muelle de Binondo, Manila, as required by Section 21 of Rule 14,
Revised Rules of Court. We hold that the purported service of
summons by publication upon Good Earth in Civil Case No. 5552-P
was legally and constitutionally vitiated and hence invalid and
ineffective to vest jurisdiction over the person of Good Earth upon
the trial court, and that the judgment there rendered by that court
was null and void. It vested no rights upon Baltazar and imposed no
liabilities or burdens upon Good Earth. We agree with the
respondent Court of Appeals that the trial court in Civil Case No.
PQ-7410-P fell into profound error in not setting aside and annulling
the judgment of the trial court in Civil Case No. 5552-P.
Disposition. WHEREFORE, the Petition for Review is DENIED and
the Decision dated 14 January 1987 of the Court of Appeals in C.A.
G.R. CV No. 00104 is AFFIRMED. Costs against petitioners.
5. Upon others
MOTIONS IN GENERAL
MOTION TO DISMISS UNDER RULE 16
US v. RUIZ
136 SCRA 487
ABAD SANTOS; May 22, 1985
NATURE
Petition to review to set aside certain orders and restrain the
respondent judge from trying Civil Case No. 779-M of the defunct CFI
of Rizal.
FACTS
- US had a naval base in Subic, Zambales. The base was one of those
provided in the Military Bases Agreement between the Philippines and
the US.
- US invited the submission of bids for the following projects:
1. Repair fender system, Alava Wharf at the U.S. Naval Station
Subic Bay, Philippines.
2. Repair typhoon damage to NAS Cubi shoreline; repair typhoon
damage to shoreline revetment, NAVBASE Subic; and repair to Leyte
Wharf approach, NAVBASE Subic Bay, Philippines.
- Eligio de Guzman & Co., Inc. responded to the invitation and
submitted bids. US requested it to confirm its price proposals and for
the name of its bonding company. The company complied with the
requests.
- The company received a letter which was signed by Dir. Collins,
Contracts Division, Naval Facilities Engineering Command, Southwest
Pacific, Department of the Navy of the United States, who is one of the
petitioners herein. The letter said that the company did not qualify to
receive an award for the projects because of its previous unsatisfactory
performance rating on a repair contract for the sea wall at the boat
70
landings of the U.S. Naval Station in Subic Bay. The letter further said
that the projects had been awarded to third parties.
- The company sued the US and Messrs. James E. Galloway, William
I. Collins and Robert Gohier all members of the Engineering Command
of the U.S. Navy. The complaint is to order the defendants to allow the
plaintiff to perform the work on the projects and, in the event that
specific performance was no longer possible, to order the defendants
to pay damages. The company also asked for the issuance of a writ of
preliminary injunction to restrain the defendants from entering into
contracts with third parties for work on the projects.
- The defendants entered their special appearance "for the purpose
only of questioning the jurisdiction of this court over the subject matter
of the complaint and the persons of defendants, the subject matter of
the complaint being acts and omissions of the individual defendants as
agents of defendant United States of America, a foreign sovereign
which has not given her consent to this suit or any other suit for the
causes of action asserted in the complaint."
- Defendants filed a motion to dismiss the complaint which included an
opposition to the issuance of the writ of preliminary injunction. The
company opposed the motion. The trial court denied the motion and
issued the writ. The defendants moved twice to reconsider but to no
avail. Hence the instant petition which seeks to restrain perpetually the
proceedings in Civil Case No. 779-M for lack of jurisdiction on the part
of the trial court.
ISSUE
WON trial court has jurisdiction
HELD
NO. The traditional rule of State immunity exempts a State from being
sued in the courts of another State without its consent or waiver. This
rule is a necessary consequence of the principles of independence and
equality of States. But State immunity now extends only to acts jure
imperii.
- The respondent judge recognized the restrictive doctrine of State
immunity when he said in his Order denying the defendants' (now
petitioners) motion: "A distinction should be made between a strictly
governmental function of the sovereign state from its private,
proprietary or non-governmental acts." However, the respondent judge
also said: "It is the Court's considered opinion that entering into a
contract for the repair of wharves or shoreline is certainly not a
governmental function altho it may partake of a public nature or
character.
- The restrictive application of State immunity is proper only when the
proceedings arise out of commercial transactions of the foreign
sovereign, its commercial activities or economic affairs. Stated
differently, a State may be said to have descended to the level of an
individual and can thus be deemed to have tacitly given its consent to
be sued only when it enters into business contracts. It does not apply
where the contract relates to the exercise of its sovereign functions. In
this case the projects are an integral part of the naval base which is
devoted to the defense of both the United States and the Philippines,
indisputably a function of the government of the highest order; they are
not utilized for nor dedicated to commercial or business purposes.
- That the correct test for the application of State immunity is not the
conclusion of a contract by a State but the legal nature of the act is
shown in Syquia vs. Lopez, 84 Phil. 312 (1949). In that case the
plaintiffs leased three apartment buildings to the United States of
America for the use of its military officials. The plaintiffs sued to recover
possession of the premises on the ground that the term of the leases
had expired, They also asked for increased rentals until the apartments
shall have been vacated. It held:
"On the basis of the foregoing considerations we are of the belief and
we hold that the real party defendant in interest is the Government of
the United States of America; that any judgment for back or increased
rentals or damages will have to be paid not by defendants Moore and
Tillman and their 64 co-defendants but by the said U.S. Government.
On the basis of the ruling in the case of Land vs. Dollar already cited,
and on what we have already stated, the present action must be
considered as one against the U.S. Government. It is clear that the
courts of the Philippines including the Municipal Court of Manila have
no jurisdiction over the present case for unlawful detainer. The
question of lack of jurisdiction was raised and interposed at the very
beginning of the action. The U.S. Government has not given its
consent to the filing of this suit which is essentially against her, though
not in name. Moreover, this is not only a case of a citizen filing a suit

against his own Government without the latter's consent but it is of a
citizen filing an action against a foreign government without said
government's consent, which renders more obvious the lack of
jurisdiction of the courts of his country. The principles of law behind this
rule are so elementary and of such general acceptance that we deem it
unnecessary to cite authorities in support thereof." (At p. 323.)
- In Syquia, the United States concluded contracts with private
individuals but the contracts notwithstanding the United States was not
deemed to have given or waived its consent to be sued for the reason
that the contracts were for jure imperii and not for jure gestionis.
Disposition WHEREFORE, the petition is granted; the questioned
orders of the respondent judge are set aside and Civil Case No. 779-M
is dismissed. Costs against the private respondent.
SEPARATE OPINION
MAKASIAR, dissents:
- The petition should be dismissed and the proceedings in Civil Case
No. 779-M in the defunct CFI (now RTC) of Rizal be allowed to
continue therein.
- When the U.S. Government, through its agency at Subic Bay,
confirmed the acceptance of a bid of a private company for the repair
of wharves or shoreline in the Subic Bay area, it is deemed to have
entered into a contract and thus waived the mantle of sovereign
immunity from suit and descended to the level of the ordinary citizen.
Its consent to be sued, therefore, is implied from its act of entering into
a contract.
- Justice and fairness dictate that a foreign government that commits a
breach of its contractual obligation - in the case at bar by the unilateral
cancellation of the award for the project by the United States
government, through its agency at Subic Bay - should not be allowed
to take undue advantage of a party who may have legitimate claims
against it by seeking refuge behind the shield of non-suability. A
contrary view would render a Filipino citizen, as in the instant case,
helpless and without redress in his own country for violation of his
rights committed by the agents of the foreign government professing to
act in its name.
- Constant resort by a foreign state or its agents to the doctrine of State
immunity in this jurisdiction impinges unduly upon our sovereignty and
dignity as a nation. Its application will particularly discourage Filipino or
domestic contractors from transacting business and entering into
contracts with United States authorities or facilities in the Philippines -
whether naval, air or ground forces - because the difficulty, if not
impossibility, of enforcing a validly executed contract and of seeking
judicial remedy in our own courts for breaches of contractual obligation
committed by agents of the United States government, always looms
large, thereby hampering the growth of Filipino enterprises and
creating a virtual monopoly in our own country by United States
contractors of contracts for services or supplies with the various U.S.
offices and agencies operating in the Philippines.
- In the case at bar, the efficacy of the contract between the U.S. Naval
authorities at Subic Bay on one hand, and herein private respondent
on the other, was honored more in the breach than in the compliance.
The opinion of the majority will certainly open the floodgates of more
violations of contractual obligations. American authorities or any
foreign government in the Philippines for that matter, dealing with the
citizens of this country, can conveniently seek protective cover under
the majority opinion. The result is disastrous to the Philippines.
SEAFDEC V NLRC (LAZAGA)
(supra)
NATURE
Petition for certiorari to review the decision of the NLRC
FACTS
-SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries Development Center. Private Respondent
Lazaga was hired as a Research Associate and eventually became the
Head of External Affairs Office of SEAFDEC-AQD. However, he was
terminated allegedly due to financial constraints being experienced by
SEAFEC-AQD. He was supposed to receive separation benefits but
SEAFDEC-AQD failed to pay private respondent his separation pay so
Lazaga filed a complaint for non-payment of separation benefits, plus
moral damages and attorneys fees with the NLRC.
71
-In their ANSWER WITH COUNTERCLAIM (NOT MOTION TO
DISMISS), SEAFDEC alleged that NLRC has no jurisdiction over the
case because: (1) It is an international organization; (2) Lazaga must
first secure clearances from the proper departments for property or
money accountability before any claim for separation pay will be paid
(and clearances has not been paid)
COUNTERCLAIM: Lazaga had property accountability and outstanding
obligation to SEAFDEC-AQD amounting to P27, 532.11 and that
Lazaga was not entitled to the accrued sick leave benefits due to his
failure to avail of the same during his employment
-LA: for Lazaga
-NLRC: affirmed LA, deleted attorneys fees and actual damages
-SEAFDEC-AQD filed MFR, denied
ISSUES
WON SEAFDEC-AQD is estopped from claiming that the court had no
jurisdiction
HELD
NO
Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that
has none over a cause of action. Jurisdiction is conferred by law.
Where there is none, no agreement of the parties can provide one.
Settled is the rule that the decision of a tribunal not vested with
appropriate jurisdiction is null and void.
-The lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal.
-The issue of jurisdiction is not lost by waiver or by estoppel
NATIONAL UNION VS STOLT-NIELSEN
184 SCRA 682
MELENCIO-HERRERA, J.; April 26, 1990
NATURE
Petition to review. Certiorari
FACTS
- United Coconut Chemicals shipped on board MT Stolt Sceptre, a
tanker owned by Stolt-Nielsen Philippines 404 tons of distilled C6-C18
fatty acid from Batangas to Rotterdam Netherlands.The cargo was
insured with National Union Fire Insurance, an American insurance
company, thru its Philippine Agent, American International
Underwriters.
- Upon arrival and after inspection, the shipment was found to be
totally contaminated and discolored. The Carrier denied the claim but
the Insurer indemnified said shipper. As subrogee, the insurer filed suit
against Carrier before the RTC to recovery the sum of P1,619,469.21,
the amount paid to the Shipper.
- Carrier filed a motion to dismiss on the ground that the RTC had no
jurisdiction over the claim the same being arbitrable as provided by
the terms of the Charter Party dated 21 December 1984 between
Shipper and Parcel Tankers.
- Insurer opposed the motion on the ground that it was not
legally bound to submit the claim for arbitration as the arbitration
clause in the Charter Party was not incorporated into the Bill of
Lading. RTC denied the motion to dismiss but issued a
resolution on the Motion to Dismiss until trial on the merits since
the ground alleged in said motion does not appear indubitable.
- Carrier filed motion for Certiorari and Prohibition with the CA
seeking to nullify the RTC order which it set aside.
- Hence the appeal to the SC
ISSUE/S
1. WON the CA order setting aside the RTC order, which was
interlocutory, is valid
2. WON the terms of the Charter Party, particularly the provision on
arbitration, binding on the Insurer.
HELD
1. Yes. Generally, an interlocutory order cannot be the subject of a
special civil action on certiorari and prohibition. . However, the case
before us falls under the exception. While a Court Order deferring
action on a motion to dismiss until the trial is interlocutory and cannot
be challenged until final judgment, still, where it clearly appears that
the trial Judge or Court is proceeding in excess or outside of its

jurisdiction, the remedy of prohibition would lie since it would be
useless and a waste of time to go ahead with the proceedings.
2. Yes. A reading of the charter Party and the Bill of Lading shows that
the Insurer is in fact bound to arbitration. Clearly, the Bill of Lading
incorporates by reference the terms of the Charter Party. It is settled
law that the charter may be made part of the contract under which the
goods are carried by an appropriate reference in the Bill of Lading
(Wharton Poor, Charter Parties and Ocean Bills of Lading (5th ed., p.
71). This should include the provision on arbitration even without a
specific stipulation to that effect. The entire contract must be read
together and its clauses interpreted in relation to one another and not
by parts. Moreover, in cases where a Bill of Lading has been issued by
a carrier covering goods shipped aboard a vessel under a charter
party, and the charterer is also the holder of the bill of lading, "the bill of
lading operates as the receipt for the goods, and as document of title
passing-the property of the goods, but not as varying the contract
between the charterer and the shipowner" (In re Marine Sulphur
Queen, 460 F 2d 89, 103 [2d Cir. 1972]; Ministry of Commerce vs.
Marine Tankers Corp. 194 F, Supp 161, 163 [S.D.N.Y. 1960];
Greenstone Shipping Co., S.A. vs. Transworld Oil, Ltd., 588 F Supp
[D.El. 1984]). The Bill of Lading becomes, therefore, only a receipt and
not the contract of carriage in a charter of the entire vessel, for the
contract is the Charter Party (Shell Oil Co. vs. MIT Gilds, 790 F 2d
1209, 1212 [5th Cir. 1986]; Home Insurance Co. vs. American
Steamship Agencies, Inc., G.R. No. L-25599, 4 April 1968, 23 SCRA
24), and is the law between the parties who are bound by its terms and
condition provided that these are not contrary to law, morals, good
customs, public order and public policy (Article 1306, Civil Code).
Disposition
Petition for certiorari is denied and the judgment of the CA is affirmed.
BALO V CA (JUDGE ASIS, GARRIDO)
GR No. 129704
CHICO-NAZARIO; September 30, 2005
NATURE
Petition for review of CA Resolution under Rule 45 of the Rules of
Court
FACTS
- complaint for Judicial Partition of Real Properties and Accounting with
Damages was filed by Josefina Garrido against Ulpiano Balo, Lydia
Balo-Lumpas, Eugenio Balo, Ulpiano Balo, Jr., Nida Balo-Moraleta,
Nora Balo-Catano, Zaida Balo, Judith Balo-Mandreza, Danilo Balo and
Ronilo Balo, before RTC Abuyog, Leyte alleging that Garrido and
Balos are the co-owners of undivided parcels of land located at
Mayorga, Leyte. According to her, these lands were originally owned
by the spouses Eugenio Balo, Sr. and Ma. Pasagui-Balo, who, at the
time of the filing of the complaint, were already deceased. The Balo
spouses were survived by their two (2) children, Ulpiano, Sr. and
Maximino, the latter likewise deceased. Garrido is the daughter of
Maximino Balo and Salvacion Sabulao. Ulpiano Balo is the son of
Eugenio Balo, Sr. and the other petitioners, the children of Ulpiano, are
Eugenios grandchildren.
- Garrido alleged in her complaint that immediately upon the death of
her grandfather, Eugenio Sr., the Balos took possession of the said
real properties without her knowledge and consent. Her uncle and
cousins were earnestly requested by Garrido that they come up with a
fair and equal partition of the properties left by her grandparents. The
Balos outrightly refused her proposal.
- Garrido filed a complaint. In lieu of an Answer, Balos filed a Motion
to Dismiss on the following grounds:
(1) Failure to state a cause of action - plaintiff, though daughter of
Maximino, failed to allege WON she is a legitimate child thus fatal
considering A992 CC and to allow Garrido to inherit from the estate of
the spouses Eugenio and Maria Balo in representation of her father
Maximino Balo would be to permit intestate succession by an
illegitimate child from the legitimate parent of his father, assuming that
she is the child of Maximino Balo
(2) complaint does not show that estate have been settled and its
obligations have been paid.
(3) properties enumerated in the complaint were proceeded against by
way of execution to satisfy a judgment against Eugenio and Maria
72
Balo. Subsequently, Ulpiano repurchased the properties and has been
openly, exclusively and adversely in possession of the properties
- RTC denied the motion to dismiss for lack of merit and said that the
complaint clearly states that the late Eugenio Balo, Sr., and Maria
Pasagui Balo had two (2) children, namely: Ulpiano, Sr. and
Maximino. The plaintiff is the daughter of the late Maximino Balo and
Salvacion Sabulao; while the defendants are children of the late
Ulpiano Balo, Sr. and Felicidad Superio. The complaint
enumerates/annexes 13 tax declarations in the name of Eugenio Balo,
Sr. The plaintiff as an heir prays that these parcels of land be
partitioned in accordance with Article 982 of the Civil Code which
states: The grandchildren and other descendants shall inherit by right
of representation, and if any one of them should have died, leaving
several heirs, the portion pertaining to him shall be divided among the
latter in equal portions. No evidence may be alleged or considered to
test the sufficiency of the complaint except the very facts pleaded
therein. It would be improper to inject into the allegation, facts not
alleged and use them as basis for the decision on the motion. The
Court is not permitted to go beyond and outside of the allegations in
the complaint for data or facts. Therefore, the allegation of illegitimacy
and claim of absolute ownership are modifications and unreasonable
inferences. If there is doubt to the truth of the facts averred in the
complaint, the Court does not dismiss the complaint but requires an
answer and proceeds to hear the case on the merit.
- Balos filed an MFR which the RTC denied
- Balos filed a Petition for Certiorari before the CA. After the filing of
Comment and other pleadings, the case was deemed submitted for
decision. In a resolution, the CA denied due course to the petition and
accordingly dismissed the same and justified the dismissal in the
following manner: It is an established rule that an order denying a
motion to dismiss is basically interlocutory in character and cannot be
the proper subject of a petition for certiorari. When a motion to dismiss
is denied, the proper procedure is to proceed with the trial and if the
decision be adverse to the movant, the remedy is to take an appeal
from said decision, assigning as one of the errors therefore the denial
of the motion to dismiss.
- Balos filed an MFR which the CA denied
ISSUES
1. WON CAs dismissal of the petition for certiorari filed by the Balos
is valid
2. WON the failure to allege the nature and extent of plaintiffs title in a
petition for partition is fatal to its cause of action
3. WON the action for judicial partition and accounting has prescribed,
was waived, or was otherwise abandoned
HELD
1. NO, CA should not have dismissed the petition outright as the same
alleges grave abuse of discretion. Instead, it should have proceeded
to determine WON the trial court did commit grave abuse of discretion
as alleged by the Balos. CA having failed in this regard, it behooves
upon this Court to discuss the merits of the petition to put to rest the
issues raised by the petitioners.
Reasoning
- The general rule regarding denial of a motion to dismiss as a basis of
a resort to the extraordinary writ of certiorari is that an order denying a
motion to dismiss is an interlocutory order which neither terminates nor
finally disposes of a case as it leaves something to be done by the
court before the case is finally decided on the merits. As such, the
general rule is that the denial of a motion to dismiss cannot be
questioned in a special civil action for certiorari which is a remedy
designed to correct errors of jurisdiction and not errors of judgment. To
justify the grant of the extraordinary remedy of certiorari, therefore, the
denial of the motion to dismiss must have been tainted with grave
abuse of discretion. By grave abuse of discretion is meant, such
capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction. The abuse of discretion must be grave as where the
power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility and must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform
the duty enjoined by or to act all in contemplation of law.
- Specific instances whereby the rule admits certain exceptions are
provided as follows: Under certain situations, recourse to certiorari or
mandamus is considered appropriate, i.e., (a) when the trial court
issued the order without or in excess of jurisdiction; (b) where there is
patent grave abuse of discretion by the trial court; or (c) appeal would

not prove to be a speedy and adequate remedy as when an appeal
would not promptly relieve a defendant from the injurious effects of the
patently mistaken order maintaining the plaintiffs baseless action and
compelling the defendant needlessly to go through a protracted trial
and clogging the court dockets by another futile case
- Contrary to petitioners contention, allegations sufficient to support a
cause of action for partition may be found in private respondents
complaint. Nothing is more settled than the rule that in a motion to
dismiss for failure to state a cause of action, the inquiry is into the
sufficiency, not the veracity, of the material allegations. Moreover, the
inquiry is confined to the four corners of the complaint, and no other.
- Section 1, Rule 8 of the 1997 Rules of Civil Procedure provides that
the complaint needs only to allege the ultimate facts upon which
private respondent bases her claim. The rules of procedure require
that the complaint must make a concise statement of the ultimate facts
or the essential facts constituting the plaintiffs cause of action. A fact
is essential if it cannot be stricken out without leaving the statement of
the cause of action inadequate.
- In her Complaint, the private respondent made the following
assertions: That the afore-described parcels of lands were originally
owned by Eugenio Balo, Sr. and Ma. Pasagui-Balo, who are now both
deceased and after their death, were inherited into two (2) equal
shares by their two (2) children, namely: Ulpiano, Sr. and Maximino,
both surnamed Balo, the later (sic) being already dead; That plaintiff is
the daughter of the late Maximino Balo and Salvacion Sabulao, who
after her fathers death, had inherited her fathers share of the
inheritance; That defendant Ulpiano Balo, Sr. aside from being the son
of Eugenio Balo, Sr., is married to Felicidad Superio, and is the father
of all the other defendants in this case; The defendants took
possession of the above-described real properties immediately after
the death of plaintiffs grandfather Eugenio Balo, Sr. without her
knowledge and consent; That plaintiff is desirous that the above-
described real properties be partitioned between her and defendants;
That plaintiff has proposed to the defendants that the above-described
real properties be amicably partitioned between them by mutual
agreement in a very fair and practical division of the same, but said
defendants refused and continue to do so without any justifiable cause
or reason to accede to the partition of the said properties. The
foregoing allegations show substantial compliance with the formal and
substantial requirements of a Complaint for Partition as required under
Section 1, Rule 69 of the 1997 Rules of Civil Procedure.
2. NO
- Briz v. Briz: proof of legal acknowledgment is not a prerequisite
before an action for partition may be filed. There is no absolute
necessity requiring that the action to compel acknowledgment should
have been instituted and prosecuted to a successful conclusion prior to
the action in which that same plaintiff seeks additional relief in the
character of heir.
- In a complaint for partition, the plaintiff seeks, first, a declaration that
he is a co-owner of the subject properties; and second, the
conveyance of his lawful shares. As the Court of Appeals correctly
held, an action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determine portion
of the properties involved. If the defendant asserts exclusive title over
the property, the action for partition should not be dismissed. Rather,
the court should resolve the case and if the plaintiff is unable to sustain
his claimed status as a co-owner, the court should dismiss the action,
not because the wrong remedy was availed of, but because no basis
exists for requiring the defendant to submit to partition. If, on the other
hand, the court after trial should find the existence of co-ownership
among the parties, the court may and should order the partition of the
properties in the same action.
3. NO
- On the matter of prescription cited by the petitioners as a ground for
the dismissal of the complaint, it is noteworthy that the motion to
dismiss filed by the Balos did not ipso facto establish prescription. An
allegation of prescription can effectively be used in a motion to dismiss
only when the complaint on its face shows that indeed the action has
already prescribed; otherwise, the issue of prescription is one involving
evidentiary matters requiring a full-blown trial on the merits and cannot
be determined in a mere motion to dismiss.
Disposition instant Petition is DENIED and the decision of CA
affirming the Order of the RTC is affirmed
SEA-LAND SERVICE INC V CA (A.P. MOLLER/
73
MAERSK LINE)
00 SCRA 00
YNARES-SANTIAGO; March 2, 2000
NATURE
Petition for review on certiorari decision of CA
FACTS
- Sea-land Service Inc and AP Moller/Maersk Line (AMML) are both
carriers of cargo and common carriers. They entered into a contract
entitled Cooperation in the Pacific, which is essentially a vessel
sharing agreement whereby they mutually agreed to purchase, share,
and exchange needed space for cargo in their respective
containerships. Under the Agreement, they could be, depending on the
occasion, either a principal carrier (with a negotiable bill of lading or
other contract of carriage with respect to cargo) or a containership
operator (owner, operator or charterer of containership on which the
cargo is carried).
- During the lifetime of the contract, Florex delivered to AMML cargo of
various foodstuffs. A corresponding Bill of Lading was issued by AMML
to Florex. Pursuant to the agreement, AMML loaded the cargo to a
vessel of Sea-land. Thus, under this arrangement, AMML was the
principal carrier while Sea-land was the containership operator.
- However, the consignee (not named in the case) refused pay for the
cargo, alleging that delivery was delayed. Florex then filed a complaint
against AMML for reimbursement of the value of the cargo
- AMMLs answer: even on the assumption that Florex was entitled to
reimbursement, it was Sea-land who should be liable. Thus, AMML
filed a 3rd Party Complaint against Sea-Land, averring that whatever
damages sustained by Florex were caused by Sea-Land, which
actually received and transported Florex's cargo on its vessels and
unloaded them.
- Sea-land filed a motion to dismiss the 3 rd party complaint on the
ground of failure to state a cause of action and lack of jurisdiction, the
amount of damages not having been specified therein. Also, Sea-Land
prayed for either dismissal or suspension of the 3 rd party complaint on
the ground that there exists an arbitration agreement between it and
AMML
- RTC denied motion to dismiss. Sea-Land filed petition for certiorari
with CA: dismissed. Hence, this appeal.
WON the 3rd party complaint should have been dismissed
HELD
YES
Ratio AMML is barred from taking judicial action against Sea-Land by
the clear terms of their Agreement.
Reasoning To allow AMML's 3rd Party Claim against Sea-Land to
proceed would be in violation of Clause 16.2 of the Agreement. As
summarized, the clause provides that whatever dispute there may be
between the Principal Carrier and the Containership Operator arising
from contracts of carriage shall be governed by the provisions of the
bills of lading deemed issued to the Principal Carrier by the
Containership Operator. On the other hand, to sustain the 3rd Party
Complaint would be to allow AMML to hold Sea-Land liable under the
provisions of the bill of lading issued by the Principal Carrier to Florex,
under which the latter is suing in its Complaint, not under the bill of
lading petitioner, as containership operator, issued to AMML, as
Principal Carrier, contrary to what is contemplated in Clause 16.2.
- As the Principal Carrier with which Florex directly dealt with, AMML
can and should be held accountable by Florex in the event that it has a
valid claim against the former. Pursuant to Clause 16.3 of the
Agreement, AMML, when faced with such a suit shall use all
reasonable endeavours to defend itself or settle such suits for as low
a figure as reasonably possible. In turn, AMML can seek damages
and/or indemnity from Sea-Land as Containership Operator for
whatever final judgment may be adjudged against it under the
Complaint of Florex. The crucial point is that collection of said
damages and/or indemnity from Sea-Land should be by arbitration. In
the light of the Agreement, it is clear that arbitration is the mode
provided by which AMML as Principal Carrier can seek damages
and/or indemnity from Sea-Land, as Containership Operator.
- Arbitration being the mode of settlement between the parties
expressly provided for by the Agreement, the 3 rd Party Complaint
should have been dismissed. This Court has previously held that

arbitration is one of the alternative methods of dispute resolution that is
now rightfully vaunted as the wave of the future in international
relations, and is recognized worldwide. To brush aside a contractual
agreement calling for arbitration in case of disagreement between the
parties would therefore be a step backward.
(bottomline, the court considered the existence of the arbitration clause
as binding between the parties, thus a ground for dismissal of the 3 rd
party complaint)
Obiter: CA did not err in reading the Complaint of Florex and AMML's
Answer together with the 3rd Party Complaint to determine whether a
cause of action is properly alleged. In Fil-Estate Golf and
Development, Inc. vs. CA, this Court ruled that in the determination of
whether or not the complaint states a cause of action, the annexes
attached to the complaint may be considered, they being parts of the
complaint.
Disposition Petition is granted.
SWAGMAN HOTELS V. CA
G.R. 161135
Davide, Jr., C.J.: April 8, 2005
FACTS:
- Sometime in 1996 and 1997, petitioner Swagman Hotels and Travel,
Inc., through Atty. Leonor L. Infante and Rodney David Hegerty, its
president and vice-president, respectively, obtained from private
respondent Neal B. Christian loans evidenced by three promissory
notes dated 7 August 1996, 14 March 1997, and 14 July 1997. Each
of the promissory notes is in the amount of US$50,000 payable after
three years from its date with an interest of 15% per annum payable
every three months. In a letter dated 16 December 1998, Christian
informed the petitioner corporation that he was terminating the loans
and demanded from the latter payment in the total amount of
US$150,000 plus unpaid interests in the total amount of US$13,500.
- On 2 February 1999, private respondent Christian filed with the
Regional Trial Court of Baguio City, Branch 59, a complaint for a sum
of money and damages against the petitioner corporation, Hegerty,
and Atty. Infante.
- The petitioner corporation, together with its president and vice-
president, filed an Answer raising as defenses lack of cause of action
and novation of the principal obligations. According to them, Christian
had no cause of action because the three promissory notes were not
yet due and demandable.
- In due course and after hearing, the trial court rendered a decision on
5 May 2000 declaring the first two promissory notes dated 7 August
1996 and 14 March 1997 as already due and demandable and that the
interest on the loans had been reduced by the parties from 15% to 6%
per annum. The TC reasoned: When the instant case was filed on
February 2, 1999, none of the promissory notes was due and
demandable. As of this date however, the first and the second
promissory notes have already matured. Hence, payment is already
due. Under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure,
a complaint which states no cause of action may be cured by evidence
presented without objection. Thus, even if the plaintiff had no cause of
action at the time he filed the instant complaint, as defendants
obligation are not yet due and demandable then, he may nevertheless
recover on the first two promissory notes in view of the introduction of
evidence showing that the obligations covered by the two promissory
notes are now due and demandable.
- In its decision of 5 September 2003, the Court of Appeals denied
petitioners appeal and affirmed in toto the decision of the trial court.
- The petitioner came to this Court harping on the absence of a cause
of action at the time the private respondents complaint was filed with
the trial court.
74
ISSUE: May a complaint that lacks a cause of action at the time it was
filed be cured by the accrual of a cause of action during the pendency
of the case?
HELD: No, it cannot be cured. The curing effect under Section 5 is
applicable only if a cause of action in fact exists at the time the
complaint is filed, but the complaint is defective for failure to
allege the essential facts. The interpretation of Section 5, Rule 10 of
the 1997 Rules of Civil Procedure by the TC and CA is erroneous.
RATIO:
- It is undisputed that the three promissory notes were for the amount
of P50,000 each and uniformly provided for (1) a term of three years;
(2) an interest of 15 % per annum, payable quarterly; and (3) the
repayment of the principal loans after three years from their respective
dates. However, both the Court of Appeals and the trial court found
that a renegotiation of the three promissory notes indeed happened in
December 1997 between the private respondent and the petitioner
resulting in the reduction not waiver of the interest from 15% to 6%
per annum, which from then on was payable monthly, instead of
quarterly. The term of the principal loans remained unchanged in that
they were still due three years from the respective dates of the
promissory notes. Thus, at the time the complaint was filed with the
trial court on 2 February 1999, none of the three promissory notes was
due yet; although, two of the promissory notes with the due dates of 7
August 1999 and 14 March 2000 matured during the pendency of the
case with the trial court. Both courts also found that the petitioner had
been religiously paying the private respondent US$750 per month from
January 1998 and even during the pendency of the case before the
trial court and that the private respondent had accepted all these
monthly payments.
- With these findings of facts, it has become glaringly obvious that
when the complaint for a sum of money and damages was filed with
the trial court on 2 February 1999, no cause of action has as yet
existed because the petitioner had not committed any act in violation of
the terms of the three promissory notes as modified by the
renegotiation in December 1997. Without a cause of action, the
private respondent had no right to maintain an action in court, and the
trial court should have therefore dismissed his complaint.
- Despite its finding that the petitioner corporation did not violate the
modified terms of the three promissory notes and that the payment of
the principal loans were not yet due when the complaint was filed, the
trial court did not dismiss the complaint, citing Section 5, Rule 10 of the
1997 Rules of Civil Procedure, which reads:
Section 5. Amendment to conform to or authorize presentation of
evidence. When issues not raised by the pleadings are tried with the
express or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings. Such amendment
of the pleadings as may be necessary to cause them to conform to the
evidence and to raise these issues may be made upon motion of any
party at any time, even after judgment; but failure to amend does not
affect the result of the trial of these issues. If evidence is objected to at
the trial on the ground that it is not within the issues made 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. The court
may grant a continuance to enable the amendment to be made.
According to the trial court, and sustained by the Court of Appeals, this
Section allows a complaint that does not state a cause of action to be
cured by evidence presented without objection during the trial. Thus, it
ruled that even if the private respondent had no cause of action when
he filed the complaint for a sum of money and damages because none
of the three promissory notes was due yet, he could nevertheless
recover on the first two promissory notes dated 7 August 1996 and 14
March 1997, which became due during the pendency of the case in
view of the introduction of evidence of their maturity during the trial.

- Such interpretation of Section 5, Rule 10 of the 1997 Rules of Civil
Procedure is erroneous.
- Amendments of pleadings are allowed under Rule 10 of the 1997
Rules of Civil Procedure in order that the actual merits of a case may
be determined in the most expeditious and inexpensive manner
without regard to technicalities, and that all other matters included in
the case may be determined in a single proceeding, thereby avoiding
multiplicity of suits. Section 5 thereof applies to situations wherein
evidence not within the issues raised in the pleadings is presented by
the parties during the trial, and to conform to such evidence the
pleadings are subsequently amended on motion of a party. Thus, a
complaint which fails to state a cause of action may be cured by
evidence presented during the trial.
- However, the curing effect under Section 5 is applicable only if a
cause of action in fact exists at the time the complaint is filed, but the
complaint is defective for failure to allege the essential facts.
- A complaint whose cause of action has not yet accrued cannot be
cured or remedied by an amended or supplemental pleading alleging
the existence or accrual of a cause of action while the case is pending.
Such an action is prematurely brought and is, therefore, a groundless
suit, which should be dismissed by the court upon proper motion
seasonably filed by the defendant. The underlying reason for this rule
is that a person should not be summoned before the public tribunals to
answer for complaints which are immature.
DISPOSITION: The petition is hereby GRANTED
GOODYEAR V. SY
G.R. 154554
PANGANIBAN;Nov 9, 2005
Nature
Petition for Review under Rule 45
Facts
In 1983 Goodyear Philippines purchased from Industrial and Transport
Equipment, Inc. an Isuzo JCR 6-Wheeler. the truck was hijacked on
April 30, 1986. This hijacking was reported to the Philippine National
Police (PNP) which issued out an alert alarm on the said vehicle as a
stolen one.It was later on recovered also in 1986. Goodyear sold it to
Anthony Sy on September 12, 1996.Sy, in turn, sold it to Jose L. Lee
on January 29, 1997.
Lee filed an action for rescission of contract with damages against Sy
on December 4, 1997 because he could not register the vehicle in his
name due to the certification from the PNP Regional Traffic
Management Office in Legazpi City that it was a stolen vehicle and the
alarm covering the same was not lifted. Instead, the PNP in Legazpi
City impounded the vehicle and charged Lee criminally.Sy informed
Goodyear.Goodyear requested on July 10, 1997 the PNP to lift the
stolen vehicle alarm status. This notwithstanding, Goodyear was
impleaded as third-party defendant in the third-party complaint filed by
Sy on January 9, 1998.Goodyear filed a motion to dismiss on March
24, 1998 on the twin grounds that the third-party complaint failed to
state a cause of action and even if it did, such cause of action was
already extinguished. The Regional Trial Court [(RTC)] resolved to
dismiss the third-party complaint because it does not expressly show
any act or omission committed by the third party defendant which
violates a right of the third party complainant. CA granted the appeal,
holding that that the Third-Party Complaint had stated a cause of
action. First, petitioner did not make good its warranty in the Deed of
Sale: to convey the vehicle to Respondent Anthony Sy free from all
liens, encumbrances and legal impediments. The reported hijacking of
the vehicle was a legal impediment that prevented its subsequent
sale. Second, Respondent Sy had a right to protect and a warranty to
enforce, while petitioner had the corresponding obligation to honor that
warranty. Goodyear moved for reconsideration, which CA denied.
Issues
WON the third-party complaint states a cause of action against
Goodyear
75
Held
No. The Third-Party Complaint filed by Sy is inadequate, because it did
not allege any act or omission that petitioner had committed in violation
of his right to the subject vehicle.
Reasoning:
A cause of action is a formal statement of the operative facts that give
rise to a remedial right. The question of whether the complaint states a
cause of action is determined by its averments regarding the acts
committed by the defendant. Thus, it must contain a concise
statement of the ultimate or essential facts constituting the plaintiffs
cause of action. Failure to make a sufficient allegation of a cause of
action in the complaint warrants its dismissal.
Elements of a Cause of Action
A cause of action, which is an act or omission by which a party violates
the right of another, has these elements:
1) the legal right of the plaintiff;
2) the correlative obligation of the defendant to respect that legal right;
and
3) an act or omission of the defendant that violates such right.
TEST In determining whether an initiatory pleading states a cause of
action admitting the truth of the facts alleged, can the court render a
valid judgment in accordance with the prayer? To be taken into
account are only the material allegations in the complaint; extraneous
facts and circumstances or other matters aliunde are not considered.
The court may consider -- in addition to the complaint -- the appended
annexes or documents, other pleadings of the plaintiff, or admissions
in the records.
In the present case, the third element is missing. The Third-Party
Complaint filed by Sy is inadequate, because it did not allege any act or
omission that petitioner had committed in violation of his right to the
subject vehicle. The Complaint capitalized merely on the fact that the
vehicle -- according to the records of the PNP, which was a stranger to
the case -- was a stolen vehicle. The pleading did not contain
sufficient notice of the cause of action against petitioner.
without even going into the veracity of its material allegations, the
Complaint is insufficient on its face. No connection was laid out
between the owners sale of the vehicle and its impounding by the
PNP. That the police did not lift the alert status did not make petitioner
less of an owner.
The Deed of Sale between petitioner and Respondent Sy was attached
as Annex A to the Third-Party Complaint filed by the latter against the
former. The Deed stated that petitioner was the absolute owner of the
subject vehicle. No contrary assertion was made in the Complaint.
Hence, the trial court correctly observed that the Complaint had failed
to show that, at the time of its sale to Respondent Sy, the vehicle
belonged to a person other than petitioner.
ANGELITA MORCAL VS. ANTONIO LAVIA ET. AL.
476 SCRA 508 (2005)
QUISUMBING, J.
NATURE
For review on certiorari are the Decision and Resolution of the Court
of Appeals in CA-G.R. CV No. 75402, which affirmed the Decision of
the Regional Trial Court of Mauban, Quezon, Branch 64. The trial court
Decision sustained the Orders issued by Regional Office No. IV of the
Department of Environment and Natural Resources in DENR IV Case
No. 5441 CENRO Case No. 91-02.
FACTS
-The case involves a parcel of unregistered land with an area of 4,840
square meters, situated at Barangay Cagsiay, Mauban Quezon,
identified only as Lot No. 2056-Cad-245.
-Petitioner Angelita Morcal, with her sister Ildefonsa Morcal and other
members of their family occupied, cleared and planted seasonal crops
on the land up to the time it was declared as public land on May 14,
1941. Thereafter, their family declared the land for taxation purposes
and began planting coconut and other fruit bearing trees. Having been
in possession of the said land for almost forty (40) years, petitioner
filed Free Patent Application No. (IV-3) 14661 in 1976. However, on

September 11, 1990, private respondents Antonio Lavia (now
deceased) and Teresita Lavia protested the free patent application.
-On August 10, 1993, Regional Office No. IV of the DENR decreed the
reduction of the area covered by the FPA. The Spouses Antonio and
Teresita Lavia were directed to file the appropriate public land
application covering the other half of the lot in question particularly the
northern portion thereof. Morcals motion for reconsideration was
denied. Petitioner then filed with the Regional Trial Court a civil action
to nullify the two Orders of the DENR Regional Office. The trial court,
however, dismissed petitioners civil action and sustained DENR.
Petitioner appealed to the Court of Appeals but the latter eventually
affirmed the TC.
-Petitioner contends the trial court is vested with the power to rule on
the substantial rights of the parties in this case. She insists the issue of
jurisdiction has been settled when the trial court issued an Order
denying the Motion to Dismiss filed by respondents. Petitioner alleges
the principle of exhaustion of administrative remedies does not apply
because there is urgent need for judicial intervention and because
what is involved is a small piece of agricultural land, all of 2,420 square
meters. She adds she has lost trust in the DENR as a body, which she
believes would not reverse itself.
-However, private respondent Teresita Lavia counters that petitioners
failure to pursue and exhaust the proper administrative remedies was
fatal to her cause. She maintains that the Regional Executive Director
of the DENR did not commit any palpable error or grave abuse of
discretion. Likewise, private respondent contests petitioners claim that
the disputed land is very small; she alleges that the same is valued at
a considerable amount, over a million pesos.
ISSUE
WON the petition should be given due course
HELD
NO, for failure to comply with the doctrine of exhaustion of
administrative remedies
Ratio. The doctrine of exhaustion of administrative remedies requires
that resort be first made to the administrative authorities in cases
falling under their jurisdiction to allow them to carry out their functions
and discharge their responsibilities within the specialized areas of their
competence. This is because the administrative agency concerned is
in the best position to correct any previous error committed in its forum.
[9]
-There are exceptions, however, to the applicability of the doctrine.
Among the established exceptions are:
1) when the question raised is purely legal;
2) when the administrative body is in estoppel;
3) when the act complained of is patently illegal;
4) when there is urgent need for judicial intervention;
5) when the claim involved is small;
6) when irreparable damage will be suffered;
7) when there is no other plain, speedy and adequate remedy;
8) when strong public interest is involved;
9) when the subject of the controversy is private land; and
10) in quo warranto proceedings.
-In this case, however, none of the foregoing exceptions may be
availed of. Contrary to petitioners assertion, we see no urgent need for
judicial intervention. Note that the case arose from the protest filed by
respondents against petitioners free patent application for the subject
unregistered agricultural land. Clearly, the matter comes within the
exclusive primary jurisdiction of the DENR in the exercise of its quasi-
judicial powers. The impugned Orders of the DENR Regional Office
are subject to review by the DENR Head Office. Petitioner cannot
circumvent this procedure by simply invoking a supposed loss of faith
in the said agency.
-Neither are we prepared to sustain petitioners claim that exhaustion
of administrative remedies need not be complied with on the ground
that the value of the disputed parcel of land is allegedly insignificant.
Records show that the land in question consists of 2,420 square
meters, no doubt a sizable parcel of land, regardless of its agricultural
nature and the fact that it is located in a remote area; and its value of
over a million pesos is certainly substantial and not insignificant.
Dispositive. In sum, we are convinced that no reversible error was
committed by the Court of Appeals when it sustained the trial courts
dismissal of petitioners complaint seeking to nullify the questioned
76
DENR Orders for petitioners failure to exhaust the proper
administrative remedies.
PASCUAL VS PASCUAL
G.R. No 157830
CARPIO-MORALES; November 17, 2005
NATURE
Petition for Review on Certiorari challenging the February 10, 2003
Order of the Regional Trial Court (RTC) of Isabela on motion of herein
respondent Marilou M. Pascual, the complaint filed against her by her
brother-herein petitioner Dante M. Pascual for non-compliance with the
conciliation provision-pre condition to filing of complaint in court under
R.A. 7160 (the Local Government Code)
FACTS
- Petitioner, a permanent resident of the United States of America,
appointed Sagario as his attorney-in-fact by a Special Power of
Attorney (SPA) dated April 10, 2002: (1.) To file a case for the
cancellation of Transfer Certificate of Title No. T-271656 issued in the
name of Marilou M. Pascual as well as the Deed of Sale of Registered
Land and/or Reconveyance at the appropriate court; ( 2.) To collect
the monthly rentals from the tenant; (3). To enter into amicable
settlement with Marilou M. Pascual or any other mode of
payment/and/or dispute resolution; (4). To execute and sign any and
all papers, contracts/documents which may be necessary relative to
the above acts.
- Sagario filed on October 14, 2002 (pursuant to the SPA) before the
Isabela RTC at Roxas a complaint for Annulment of Transfer Certificate
of Title No. T-271657 of Isabela and Deed of Absolute Sale of
Registered Land and/or Reconveyance with Damages
- Defendant-herein respondent Marilou M. Pascual filed a Motion to
Dismiss on two grounds one of which was non-compliance with the
requirement under Section 412 of the Local Government Code. She
contends that there is no showing that the dispute was referred to the
barangay court before the case was filed in court. By the assailed
Order of February 10, 2003, Branch 23 of the Isabela RTC at Roxas
granted respondents Motion to Dismiss. It stated that :
-RA 7160 repealing P.D. 1508 otherwise known as the Revised
Katarungang Pambarangay provides under Section 409 All disputes
involving real property or any interest therein shall be brought in the
barangay where the real property or the larger portion thereof is
situated. Hence, the reliance of the plaintiff on Section 408 of R.A.
7160 is incorrect. When real property or any interest therein is
involved, the dispute shall be filed before the barangay where the
property is located, regardless of the residence of the parties.
Besides, it is incorrect to say that the parties are not residents of the
same place, Vira, Roxas, Isabela. The Attorney-in-fact of the
plaintiff in the person of Reymel R. Sagario is a resident of Vira,
Roxas, Isabela, and he substitute (sic) Dante Pascual by virtue of
said Special Power of Attorney. Hence, said Attorney-in-fact should
have brought the dispute before barangay Vira, Roxas, Isabela, where
the property is located. In the case of Royales vs. Intermediate
Appellate Court, Ordinarily, non-compliance with the condition
precedent prescribed by P.D. 1508 could affect the sufficiency of the
plaintiffs cause of action and make his complaint vulnerable to
dismissal on ground of lack of cause of action or prematurity.
-Petitioners Motion for Reconsideration of the above-said order was
denied. This order stated that Consequently, the Court is [of] the
opinion that the said Attorney-in-fact shall be deemed to be the real
party in interest, reading from the tenor of the provisions of the
Special Power of Attorney. Being a real party in interest, the Attorney-
in-fact is therefore obliged to bring this case first before the Barangay
Court. Sec. 3, Rule 3 of the Rules of Court provides that Where the
action is allowed to be prosecuted or defended by a representative or
someone acting in a fiduciary capacity, the beneficiary shall be
included in the title of the case and shall be deemed to be the real
party in interest.
ISSUE/S
WON the dismissal of the case by the RTC is valid
HELD
NO
Ratio. Petitioner argues that since he, not his attorney-in-fact Sagario,

is the real party in interest, and since he actually resides abroad, the
lupon would have no jurisdiction to pass upon the dispute involving real
property, he citing Agbayani v. Belen
The pertinent provisions of the Local Government Code read: SEC.
408. Subject Matter for Amicable Settlement; Exception Thereto.
The lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable
settlement of all disputes except: xxxxx
-In the 1982 case of Tavora v. Veloso the Court held that where the
parties are not actual residents in the same city or municipality or
adjoining barangays, there is no requirement for them to submit their
dispute to the lupon as provided for in Section 6 vis a vis Sections 2
and 3 of P.D. 1508 (Katarungang Pambarangay Law).
-[B]y express statutory inclusion and exclusion, the Lupon shall have
no jurisdiction over disputes where the parties are not actual residents
of the same city or municipality, except where the barangays in which
they actually reside adjoin each other.
Reasoning. To construe the express statutory requirement of actual
residency as applicable to the attorney-in-fact of the party-plaintiff, as
contended by respondent, would abrogate the meaning of a real party
in interest as defined in Section 2 of Rule 3 of the 1997 Rules of Court
vis a vis Section 3 of the same Rule which was earlier quoted but
misread and misunderstood by respondent.
-In fine, since the plaintiff-herein petitioner, the real party in interest,
is not an actual resident of the barangay where the defendant-herein
respondent resides, the local lupon has no jurisdiction over their
dispute, hence, prior referral to it for conciliation is not a pre-condition
to its filing in court.
Dispositive. The petition is granted.
PHILVILLE VS JAVIER
00 SCRA 00
SANDOVAL-GUTIERREZ; Dec. 13, 2007
NATURE
Instant petition for review on certiorari
FACTS
- This case traces its antecedents to a verified complaint filed by
Mercedes Javier, herein respondent with the RTC for damages and
injunction. Impleaded as defendant was PHILVILLE Development and
Housing Corporation (PHILVILLE).
- The complaint alleges that spouses Crisanto (now deceased) and
Javier have been tenant-cultivators of a 5.5 hectare parcel of rice land
owned by Felimon Emperado, a holder of a free patent.
- Sometime in 1977, PHILVILLE proposed to buy the land for
conversion into a housing subdivision. Spouses Javier, PHILVILLE
and Emperado then entered into a Kasulatan ng Pagsasalin at Kusang
Loob na Pagsusuko. Among the terms agreed upon by the parties was
that the Javiers would be given a 2,000 square meter lot as a
disturbance compensation. However, instead of giving them a single
lot measuring 2,000 square meters, what they received were 2
separate lots of 1,000 square meters each located far apart. This
prompted Mercedes to sue PHILVILLE for damages.
- In its answer, PHILVILLE specifically denied the allegations in the
complaint and raised the following affirmative and special defenses: (1)
the complaint fails to state a cause of action; (2) it does not allege that
the parties resorted to conciliation proceedings before the barangay;
and (3) plaintiff is estopped from filing the complaint.
- Mercedes filed a motion for leave of court to amend her complaint.
In her attached amended complaint, she alleged that the Kasulatan did
not express the true agreement of the parties and that the sale is void
as it was executed within the 5-year prohibitive period from the
issuance of the free patent.
- The trial court denied the motion, holding that the proposed
amendment is inconsistent with the cause of action in the original
complaint; and that the proposed amendment is the subject of another
civil case between the same parties pending before another branch of
the trial court.
- PHILVILLE moved to dismiss the original complaint alleging that the
plaintiff had filed a protest with the Land Management Bureau seeking
77
the revocation of the free patent issued to Emperado and the reversion
of the land to the public domain.
- the trial court granted PHILVILLEs motion to dismiss
- Mercedes filed a motion for reconsideration of the said Order but it
was denied. This prompted her to interpose an appeal to the CA which
reversed the order and remanded the cast to the trial court.
- PHILVILLE filed a motion for reconsideration but it was denied by the
Appellate Court. Hence, the instant petition for review on certiorari.
ISSUE
WON the CA erred in reversing the challenged Orders of the trial court
dismissing the complaint of Mercedes.
HELD
NO.
Ratio Section 1, Rule 16 of the Revised Rules of Court then
applicable provides:
SEC. 1. Grounds. Within the time for pleading a motion to
dismiss the action may be made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the defendant
or over the subject of the action or suit; (b) That the court has no
jurisdiction over the nature of the action or suit; (c) That venue is
improperly laid; (d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for
the same cause; (f) That the cause of action is barred by a prior
judgment or by statute of limitations; (g) That the complaint states no
cause of action; (h) That the claim or demand set forth in the plaintiffs
pleading has been paid, waived, abandoned, or otherwise
extinguished; (i) That the claim on which the action or suit is founded is
unenforceable under the provisions of the statute of frauds; (j) The suit
is between members of the same family and no earnest efforts towards
a compromise have been made.
In J.M. Tuason & Co., Inc. v. Rafor, this Court interpreted within the
time for pleading to mean within the time to answer.
Reasoning Under Section 1, Rule 11, the time to answer is 15 days
after service of summons upon the defendant. In the instant case, we
note that PHILVILLEs motion to dismiss the complaint was filed after it
had filed its answer.
- The only exceptions to the rule, as correctly pointed out by the CA,
are: (1) where the ground raised is lack of jurisdiction of the court over
the subject matter; (2) where the complaint does not state a cause of
action; (3) prescription; and (4) where the evidence that would
constitute a ground for the dismissal of the complaint was discovered
only during the trial. None of the foregoing grounds is present in
PHILVILLEs motion to dismiss.
Dispostition WHEREFORE, the petition is DENIED.
DIU V CA (BUSHNELL AND PAGBA)
G.R. NO. 115213
REGALADO; DEC.19, 1995
NATURE
Appeal by certiorari from judgment of CA which set aside the RTCs
FACTS
- Private respondent Pagba purchased on credit various merchandise
from petitioners (Wilson and Dorcita Diu) store in Naval, Biliran all
valued at P7, 862.55.
- Respondents failed to pay despite repeated demands. Petitioners
then brought the matter to the Barangay Chairman of Naval and so the
case was set for hearing but private respondents failed to appear.
When the case was again set for hearing, the parties appeared but
they failed to reach an amicable settlement. Accordingly, the barangay
chairman issued a Certification to File Action.
- Petitioners then filed their complaint for a sum of money before the
MTC of Naval to which private respondents interposed the
counterclaim that petitioners also had existing obligations to them: one
for alleged maintenance and repair of petitioners boat and another for
the cost of 2 tires that petitioners allegedly misappropriated. Private
respondents likewise alleged that despite the confrontations before the
barangay chairman, petitioners refused to pay their just and valid
obligations to private respondent and her husband
- The MTC dismissed the complaint for non-compliance with the
provisions of P.D. 1508 on conciliation. Petitioners appealed to the
RTC, which did not pass upon the issue of the alleged non-compliance

with P.D. 1508 but instead, decided the appeal on the merits and
rendered judgment in favor of petitioners.
- Private respondents then went to the CA and said appellate court set
aside the judgment of the RTC on the ground that there had been no
compliance with P.D. 1508. The CA said thus:
It is, therefore, clear that if efforts of the barangay captain to
settle the dispute fails, the Pangkat ng Tagapagkasundo shall be
constituted with the end in view of exploring all possibilities of
amicable settlement. If no conciliation or settlement has been
reached pursuant to the aforesaid rules, the matter may then be
brought to the regular courts.
In the case at bar, it has been established that there was no valid
conciliation proceeding between the parties. The efforts of the
barangay captain of Naval, Biliran to mediate the dispute between
the parties having failed, the Pangkat ng Tagapamayapa should
have been constituted for purposes of settling the matter. However,
the Pangkat was not constituted, and instead, a Certification to File
Action was issued by the barangay captain in favor of respondent
spouses Diu. In Bejer vs. Court of Appeals, 169 SCRA 5 66, it was
held that failure to avail of conciliation process under P.D. 1508, x x
x renders the complaint vulnerable to a timely motion to dismiss.
ISSUE
WON the confrontations before the Barangay Chairman of Naval
satisfied the requirement in P.D. 1508, there was substantial
compliance with the pre-condition (for filing the claim)
HELD
YES.
Ratio Under Sec.412 of the Local Government Code, confrontation
before the Lupon Chairman OR the Pangkat is sufficient compliance
with the pre-condition for filing the case in court.
Reasoning P.D. 1508 has been repealed by codification in the Local
Government Code, which took effect on Jan.1, 1992.
Sec.410 (B)14 of the Local Govt. Code which mandates that the
barangay chairman shall constitute a pangkat if he fails in his
mediation efforts, should be construed together with Sec.412 15, as well
as the circumstances obtaining and peculiar to the case. On this score,
the barangay chairman or punong barangays is himself the chairman
of the lupon under the Local Govt. Code.
- While no pangkat was constituted, it is not denied that the parties met
at the office of the barangay chairman for possible settlement.
Although no pangkat was formed, there was substantial compliance
with the law.
- From the facts, it is undeniable that there was substantial compliance
with P.D.1508 which does not require strict technical compliance with
its procedural requirements. Under the factual antecedents, it cannot
be said that the failure of the parties to appear before the pangkat
caused any prejudice to the case for private respondents considering
that they already refused conciliation before the barangay chairman
and, their sham insistence for a meeting before the pangkat is merely a
ploy for further delay. Technicalities should not be made to desert their
true role in our justice system, and should not be used as obstructions
therein.
- The Court noted that although the basic complaint was filed by
petitioners on July 10, 1991, before the effectivity of the Local Govt.
Code, or when P.D. 1508 was still in force, the procedural provisions of
the Local Govt. Code are also applicable to this case. Statutes
regulating procedure in courts are applicable to actions pending and
undetermined at the time of their passage. Procedural laws are
retrospective in that sense.
- The Court further reasoned that the failure of Pagba to specifically
allege in their Answer that there was no compliance with the barangay
conciliation procedure constituted a waiver of that defense. Since
private respondents failed to duly raise that issue, their defense
14
SEC. 410. PROCEDURE FOR AMICABLE SETTLEMENT. (b) x x x. If he
(lupon chairman) fails in his mediation effort within fifteen (15) days from the first
meeting of the parties before him, he shall forthwith set a date for the constitution
of the pangkat in accordance with the provisions of this chapter.
15
SEC. 412. CONCILIATION. - (a) Precondition to filing of Complaint in Court. -
No complaint x x x shall be filed or instituted in court x x x unless there has been
a confrontation of the parties before the lupon chairman OR the pangkat, and
that no conciliation or settlement has been reached as certified by the lupon
secretary or pangkat secretary as attested to by the lupon or pangkat chairman x
x x.
78
founded thereon is deemed waived, especially since they did not
pursue the issue before the case was set for hearing. Also, the
conciliation procedure under P.D. 1508 is not a jurisdictional
requirement and noncompliance therewith cannot affect the jurisdiction
which the lower courts had already acquired over the subject matter
and private respondents as defendants therein.
Disposition petition GRANTED. The CA judgment is SET ASIDE. RTC
judgment is REINSTATED.
BERBA V. PABLO
474 SCRA 686
CALLEJO, November 11, 2005
Nature
Petition for review on certiorari
Facts
- Estela Berba was the owner of a parcel of land located at M. Roxas
St, Sta. Ana, Manila. A house was constructed on the lot, which she
leased to Josephine Pablo and the Heirs of Carlos Palanca sometime
in 1976, covered by a lease contract. Upon its expiration, the lessees
continued leasing the house on a month-to-month basis.
- The lessees failed to pay the rentals due, and by May 1999, their
arrears amounted to P81,818. Berba filed a complaint for eviction and
collection of unpaid rentals only against Pablo in the Office of the
Punong Barangay.
- On June 5, 1999, Berba and Pablo executed an Agreement
approved by the pangkat, wherein: 1) Pablo undertook to pay Berba
P3000 every tenth of the month until fully paid; 2) Pablo will voluntarily
leave the leased premises upon failure to pay; and 3) Pablo will pay
P3450 as monthly rental, on top of the P3000.
- By May 2000, the lessees still had a balance of P71,716. As of May
2001, the total arrearages of the lessees amounted to P135,115.63.
- On May 2, 2001, Berba through counsel wrote to lessees,
demanding payment of the arrearages and to vacate the house within
30 days from notice, otherwise she will sue them. The lessees ignored
the demand.
- On June 21, 2001, Berba filed a complaint against Pablo and the
Heirs of Carlos Palanca in the MTC of Manila for unlawful detainer.
Berba, however, failed to append to her complaint a certification from
the Lupon ng Tagapamayapa that no conciliation or settlement has
been reached.
- In their answer, defendants admitted they stopped paying rentals
because of financial distress. By way of special and affirmative
defenses, they averred that the plaintiff had no cause of action against
them as she failed to secure a Certificate to File Action from the
Lupon.
- During the pre-trial conference, the parties manifested that despite
earnest efforts, no amicable settlement was reached. They defined the
main issue as WON the plaintiff had a valid cause of action for unlawful
detainer against defendants.
- In her position paper, Berba appended an Agreement dated June 5,
1999 between her and Pablo, which appeared to have been approved
by the Punong Barangay and the members of the Lupon. She also
appended a Statement of Account.
- In their position paper, defendants insisted that the dispute did not
go through the Lupon ng Tagapamayapa prior to the filing of the
complaint; hence Berbas complaint was premature.
- In her reply, the plaintiff alleged that there was no more need for her
to secure a Certificate to File Action because she was a resident of
Maligaya St., Malate, Manila, while the defendants were residing in
Barangay 873, Zone 6 in Sta. Ana Manila.
- MTC ruled in favor of Berba. Defendants appealed to the RTC. On
motion of Berba, RTC issued an order for the execution of the decision
pending appeal. The defendants filed a motion for the recall of the
Order, but before the court could resolve the motion, the Sheriff turned
over the physical possession of the property to Berba on May 20,
2002.
- In their Appeal Memorandum, defendants insisted that Berbas
action in the MTC was premature because of the absence of
Certificate to File Action issued by the Lupon. Berba averred there was
no need of a prior referral to the Lupon, and cited Sec 408(f) of the
Local Government Code, pointing out that she resided in a barangay in
Malate, 8 kilometers away from the barangay in Sta. Ana where the
defendants lived.

- RTC granted the appeal, reversing the decision of the MTC and
ordering the dismissal of the complaint for unlawful detainer without
prejudice. The RTC ruled that under Sec 408 of the Local Government
Code, parties who reside in the same city or municipality although in
different barangays are mandated to go through conciliation
proceedings in the Lupon.
- RTC denied Berbas MFR. She then filed petition for review with CA,
claiming that Sec 408 of Local Government Code should be construed
liberally together with Sec 412. She further averred that she had
complied substantially with the requisites of the law, and recalls that
conciliation proceedings before the Lupon resulted in the execution of
an Agreement on June 5, 1999. Upon failure to comply with the
agreement, all chances of amicable settlement were effectively
foreclosed.
- CA dismissed the petition and affirmed the RTC decision.
Issue
WON the CA erred in dismissing the petition and declaring that there
was no substantial compliance with the mandate of the law with
respect to prior referral to the Barangay Court.
Held
NO
- Berba and Pablo executed the Agreement which was approved by
the Lupon. This agreement had the force and effect of a final judgment.
When Pablo failed to comply with her obligation of repaying the back
rentals, Berba had the right to enforce the Agreement against her and
move for her eviction from the premises. However, instead of filing a
motion before the Lupon for the enforcement of the agreement, or an
action in the MTC for the enforcement of the settlement, the petitioner
filed an action against Pablo for unlawful detainer and the collection of
unpaid rentals. The action of Berba against Pablo was barred by the
Agreement of June 5, 1999.
- Berbas complaint against the Heirs of Carlos Palanca was
premature. They were not impleaded by Berba as parties-respondents
before the Lupon. Moreover, they were not privy to the agreement, and
as such, were not bound by it.
- Under Sec 408 of the Local Government Code, parties actually
residing in the same city or municipality are bound to submit their
disputes to the Lupon for conciliation/amicable settlement, unless
otherwise provided therein.
- If the complainant/plaintiff fails to comply with the requirements of
the Local Government Code, such complaint filed with the court may
be dismissed for failure to exhaust all administrative remedies.
Disposition Petition denied.
SUSTIGUER V TAMAYO
G.R. No. 29341
FERNAN; AUG 21 1989
NATURE
Appeal to order by CFI
FACTS
-Sustiguer and Aposaga both claimed that they were qualified and
entitled to purchase a subdivision lot in Bacolod for the reason that
they possess the preferential right to buy it from the Govt of Bacolod,
being the actual occupants of the lot.
- they agreed that the award of the lot be given to Aposaga and that a
down payment of 20% of the total cost of the lot shall be made (or else
the lot will be awarded to other applicants)
-Aposaga failed to pay the price. The same lot was sold to Jose
Tamayo.
-Sustiguer and Aposaga filed for annulment of the sale on installment
and award of said lot against the Govt of Bacolod and Tamayo,
claiming that Tamayo was not qualified to apply for the award nor to
purchase the lot under Ordinance No. 149. It was also claimed that
Tamayo maliciously filed for unlawful detainer against Aposaga and
Sustiguer
- 5 years and 5 months after the complaint was filed, Aposaga filed a
"Motion to Withdraw in Case 6528 (annulment of sale) and Confess
Judgment in Civil Case No. 7512 (unlawful detainer case)" declaring
79
she is no longer interested in its prosecution. The court allowed her
withdrawal as plaintiff.
- Sustiguer filed a manifestation that the withdrawal of Aposaga as
party-plaintiff in Civil Case 6528 and as party defendant in Civil Case
7512 does not change the status and character of the said cases
considering that she was merely accommodated by her codefendant in
occupying the lot in question.
- Tamayo moved for a preliminary hearing on his affirmative and
special defenses and to dismiss both the complaint and complaint in
intervention (of Villamarzo) invoking Sec 5 of Rule 16. He prayed that
he be allowed to submit a written memorandum in support of his
affirmative and special defenses.
-Tamayo filed his memorandum on the issue WON Sustiguer has any
cause of action against the defendants. Sustiguer filed an opposition to
the motion to dismiss and moved for judgment on the pleadings
pursuant to Sec 1 of Rule 19.
-lower court dismissed the complaint of Sustiguer for lack of cause of
action
-Sustiguer filed MFR and new trial claiming that the dismissal of the
complaint is contrary to law as there was no preliminary hearing and
that she still has a valid cause of action even after the withdrawal of
Aposaga from the case as she was suing in her own right as an
awardee entitled to the award in question. CFI denied.
ISSUE
WON dismissal of complaint was proper
HELD
YES
- Rule 3.2 Every action must be prosecuted and defended in the name
of the real party-in-interest. All persons having an interest in the subject
of the action and in obtaining the relief demanded shall be joined as
plaintiffs. . . ."
-The real party-in-interest is the party who stands to be benefited or
injured by the judgment or the party entitled to the avails of the suit.
"Interest" within the meaning of the rule means material interest, an
interest in issue and to be affected by the decree, as distinguished
from mere interest in the question involved, or a mere incidental
interest. As a general rule, one having no right or interest to protect
cannot invoke the jurisdiction of the court as a party-plaintiff in an
action.
- Sustiguer is not entitled to the relief prayed for, she not being the real
party-in-interest. The dismissal of the complaint for lack of cause of
action is proper under the circumstances. It is well-settled that where
the plaintiff is not the real party-in-interest, the ground for the motion to
dismiss is lack of cause of action.
-Sustiguers interest cannot be categorized as material interest within
the meaning of Rule 3.2 considering that it is contingent upon the final
execution of the contract of sale on installment in favor of Aposaga.
-Although the ground of lack of cause of action was pleaded by
Tamayo as one of his special and affirmative defenses in his answer,
the said ground for dismissal of the complaint may be heard
preliminarily as if a motion to dismiss had been filed pursuant to
Section 5 of Rule 16 of the Rules of Court. Tamayo took this
procedural step by filing a motion for preliminary hearing and thereafter
to dismiss the complaint and the complaint in intervention. Records
show that instead of a preliminary hearing, the parties filed their
respective memoranda on the issue WON Sustiguer has a cause of
action.
-When the ground for dismissal is that the complaint states no cause of
action, the rule provides that its sufficiency can only be determined by
considering the facts alleged in the complaint and no other, the test
being whether the court can render a valid judgment from the facts set
forth.The rule is that when the motion to dismiss is based on the
ground that the complaint states no cause of action, no evidence may
be allowed and the issue should only be determined in the light of the
allegations of the complaint. Thus it was erroneous for Sustiguer to
claim that the lower court should have conducted a trial on the merits
instead of dismissing the complaint upon a mere motion.
Disposition dismissal of complaint for lack of cause of action as well

as the order denying MFR affirmed
HEIRS OF LICAROS V SANDIGANBAYAN
440 SCRA 483
PANGANIBAN; October 18, 2004
FACTS
- Gregorio S. Licaros, petitioners predecessor-in-interest, served as
governor of the Central Bank of the Philippines from 1970 to 1980
during the presidency of Marcos. He died on August 3, 1983.
- July 17, 1987 PCGG, assisted by Office of SolGen, filed a
complaint for reversion, reconveyance, restitution, accounting and
damages against Marcos and alleged crony Lucio Tan. The complaint
was to recover ill-gotten wealth which was allegedly acquired and
accumulated in flagrant breach of trust and of their fiduciary obligations
as public officers.
- Aside from the main defendants (Marcos, wife Imelda and Tan), 23
other persons who had purportedly acted as their dummies, nominees
or agents.
- It alleged, among others, that Tan (with the connivance of some
government officials, including CB Governor Licaros) had fraudulently
acquired the assets of the General Bank and Trust Company, now
known as the Allied Bank.
- Despite the allegation, Licaros was not impleaded in this Complaint or
in the subsequent Expanded Complaint.
- September 13, 1991 - 4 years after the original action was filed, RP
filed a Motion for Leave to Amend Complaint and for Admission of a
Second Amended Complaint, which impleaded the Estate/Heirs of
Licaros for the first time.
- The Amended Complaint, reiterating earlier allegations in the
Expanded Complaint, detailed Licaros participation in the alleged
unholy conspiracy.
- Licaros had allegedly facilitated the fraudulent acquisition of the
assets of GBTC worth over P688 million at that time, to favor the
Marcoses and the Lucio Tan Group who acquired said GBTC assets
for only P500,000.00. Hence, his estate represented by his heirs
was impleaded as a party defendant for the purpose of obtaining
complete relief.
- In 1976, GBTC got into financial difficulties and a loan was
extended to it by CB amounting to P310 million.
- In extending this loan, the CB took control of GBTC when the latter
executed an irrevocable proxy of 2/3 of the banks outstanding
shares in favor of the CB. 7 of the 11-member Board of Directors
were CB nominees.
- March 25, 1977 GBTC was declared insolvent and placed under
receivership.
- A public bidding was held for the shares of GBTC. Among the
conditions was the attachment by the bidder of a letter of credit.
This was not fulfilled by Tan, et. al. who only paid P500,000 and
attached a letter from PNB president Domingo. Marcos, Domingo
and Licaros allegedly conspired with each other and gave Tan, et. al.
favors.
- September 3, 2001 - The heirs of Licaros filed a Motion to Dismiss
the Complaint, raising as grounds (1) lack of cause of action and (2)
prescription.
- The Sandiganbayan held that the averments in the Second Amended
Complaint had sufficiently established a cause of action against
Licaros.
- The Sandiganbayan ruled that the argument of petitioners that
Licaros could not be held personally liable was untenable because
the GBTC assets had been acquired by Tan through a public bidding
duly approved by the Monetary Board. According to the anti-graft
court, this argument was a matter of defense that could not be
resorted to in a motion to dismiss, and that did not constitute a valid
ground for dismissal.
- It was immaterial that Licaros was not a business associate of the
main defendants and not an officer, a director, or a stockholder of
any of the defendant corporations. The paramount issue hinged on
his acts as Central Bank governor, particularly his participation in an
allegedly illegal conspiracy with Marcos and Domingo to give undue
advantage to Tans bid for the GBTC assets.
ISSUE
WON the motion to dismiss should have been granted on the
grounds of:
80
1) Lack of cause of action
2) Prescription
HELD
1. NO
Ratio It is a well-settled rule that in a motion to dismiss based on the
ground that the complaint fails to state a cause of action, the question
submitted to the court for determination is the sufficiency of the
allegations in the complaint itself. Whether these allegations are true or
not is beside the point, for their truth is hypothetically admitted. The
issue rather is: admitting them to be true, may the court render a valid
judgment in accordance with the prayer in the complaint? So rigid is
the norm prescribed that if the court should doubt the truth of the facts
averred, it must not dismiss the complaint but require an answer and
proceed to hear the case on the merits.
Reasoning
- Petitioners are seeking the dismissal of the present case, because (1)
the actions imputed to Licaros as Central Bank governor were
allegedly official acts of the members of the Monetary Board acting as
a collegial body; and (2) the acquisition was done through a public
bidding and in good faith. These contentions are evidently matters of
defense, the veracity of which must be determined in a full-blown trial
(or in a pretrial stipulation), and not in a mere motion to dismiss.
- A cause of action exists if the following elements are present: (1) a
right in favor of the plaintiff by whatever means and under whatever
law it arises or is created; (2) an obligation on the part of the named
defendant to respect and not to violate that right; and (3) an act or
omission constituting a breach of obligation of the defendant to the
plaintiff or violating the right of the plaintiff, for which the latter may
maintain an action for recovery of damages.
- The allegations in the Second Amended Complaint clearly and
unequivocally outlines its cause of action against Licaros.
- The Second Amended Complaint was unambiguous when it charged
that Licaros, during his lifetime, had conspired with the main
defendants in facilitating the allegedly questionable transfer of the
GBTC assets to Tan.
- This charge of "conspiracy" casts a wide net, sufficiently extensive to
include all acts and all incidents incidental, related to or arising from
the charge of systematic plunder and pillage against the main
defendants
Ratio An action to recover ill-gotten wealth is outside the purview of
the ordinary rules on prescription, as contained in Article 1146 of the
Civil Code.
Reasoning
- The instant action for reconveyance, restitution, and accounting
impleads the Estate/Heirs of Gregorio Licaros for previous acts
committed by the decedent during his lifetime, more particularly for
conspiring with the main defendants to prejudice the Republic.
- Section 15 of Article XI of the 1987 Constitution states that the right
of the State to recover properties unlawfully acquired by public officials
or employees, from them or from their nominees or transferees, shall
not be barred by prescription, laches or estoppel.
- The intent of the constitutional provision presumably lies in the
special attendant circumstances and the primordial state interests
involved in cases of such nature.
Disposition Petition dismissed
TANCUNTIAN V GEMPESAW
00 SCRA 00
CORONA; October 18, 2004
NATURE
Petition for review under Rule 45 for the reversal of the decision and
resolution of the Court of Appeals which affirmed the order of the
Regional Trial Court dismissing an action for cancellation of title and
damages for alleged lack of legal personality of petitioners.
FACTS
- Plaintiffs, Fausto Tancuntian, Macario Tancuntian and Cristina
Cayang are beneficial owners of that parcel of land
- Sometime in May 1994, the plaintiffs discovered that defendants
applied for a free patent and fraudulently and anomalously secured

titles on the portions of the same parcels of land from the Bureau of
Lands
- Petitioners prayed for the issuance of a temporary restraining order
and/or writ of preliminary injunction enjoining respondents from selling,
alienating and disposing the subject properties or any portion thereof
during the pendency of the case. They also sought the cancellation
and nullification of all the titles of the subject properties in the names of
respondents as well as the reconveyance thereof to petitioners, plus
damages and attorneys fees.
- Private respondents filed an opposition to the motion for the issuance
of a writ of preliminary injunction on the ground that petitioners had
neither the legal personality nor the authority to institute the
proceedings for cancellation of title.
- Petitioners clarified that they were not asking for the reversion of
subject private land to the public domain, which would have required
the participation of the Director of Lands or the Secretary of the
Department of Environment and Natural Resources (DENR) through
the Solicitor General. In essence, petitioners were seeking the quieting
of their original titles that would ultimately lead to the cancellation of
private respondents unlawfully issued and void free patent titles on the
same private land.
- RTC motu propio dismissed the complaint because only the Republic
of the Philippines through the Solicitor General can file a case for
cancellation of title on the ground of fraud in the processing and
issuance of the said title
- Petitioners filed motions for reconsideration of the said order and
inhibition of the presiding judge.
- Judge Salvador Ibarreta, Jr. of Branch 8 of the Davao City RTC, to
whom the case was re-raffled after Judge Quitains inhibition, granted
the motion for reconsideration and set aside the order of dismissal. In
reinstating the complaint Judge Ibarreta reasoned that it was error for
the court to have dismissed the case without a prior motion to dismiss
having been filed by private respondents.
- Respondents Vicente Gempesaw, et al. filed their answer to the
complaint, while Jofre Saniel, another respondent, filed a motion to
dismiss. They principally invoked petitioners lack of legal personality
and authority to institute the action for cancellation of their titles.
- Respondent Saniel asserted that since the action was for the
cancellation of the original certificates of title issued to them through
free patent, it was only the Government through the Solicitor General
or his duly authorized representative who could institute the reversion
proceeding.
- Eventually, Judge Ibarreta issued an order dismissing the complaint.
- Petitioners appealed to the Court of Appeals which affirmed the trial
court and held: There is no dispute that the titles registered in the
names of the defendants-appellees are free patent titles issued by the
State through the Bureau of Lands. Thus, not being owners, much less
grantors, plaintiffs-appellants cannot as for cancellation or
reconveyance.
- Petitioners filed this petition.
- Petitioners contend that the suit they initially filed in the RTC of
Davao City was not an action for reversion (wherein the real party in
interest would have indeed been the Republic of the Philippines) but
rather an action for cancellation of titles with damages, since the
problem was double titling.
- Petitioners thus pray for the cancellation of titles and free patents
fraudulently secured by respondents over the same parcels of land
which were already registered to them through OCTs which were still
intact and in their names at the time of the issuance of respondents
allegedly void titles.
- Petitioners insist that since the land in question was already private
land at the time it was issued a free patent by the Bureau of Lands, the
inclusion of the Republic of the Philippines as the real party in interest
was unnecessary.
ISSUE
WON the petitioners have legal personality to institute the proceedings.
HELD
YES
- This legal dispute does not involve an action for the reversion of land
to the public domain but one for the cancellation of null and void free
patents over private land.
- Heirs of Ambrocio Kionisala vs. Heirs of Honorio Dacut: An ordinary
civil action for declaration of nullity of free patents and certificates of
title is not the same as an action for reversion. The difference between
81
them lies in the allegations as to the character of ownership of the
realty whose title is sought to be nullified.
- In an action for reversion, the pertinent allegations in the complaint
would admit State ownership of the disputed land. On the other hand,
a cause of action for declaration of nullity of free patent and certificate
of title would require allegations of the plaintiffs ownership of the
contested lot prior to the issuance of such free patent and certificate of
title as well as the defendants fraud or mistake; as the case may be, in
successfully obtaining these documents of title over the parcel of land
claimed by plaintiff. In such a case, the nullity arises strictly not from
the fraud or deceit but from the fact that the land is beyond the
jurisdiction of the Bureau of Lands to bestow and whatever patent or
certificate of title obtained therefor is consequently void ab initio. The
real party in interest is not the State but the plaintiff who alleges a pre-
existing right of ownership over the parcel of land in question even
before the grant of title to the defendant.
- Petitioners claim continuing ownership over the subject parcels of
land since 1976, as evidenced by OCT No. 0-328 and 0-329 in their
names. This can only mean, according to petitioners, that the free
patents and OCTs issued to respondents in 1990 and 1991 were null
and void because the land was their private property, and as such,
could not have been validly disposed of by the Government.
Conformably with our ruling in Heirs of Ambrocio Kionisala, petitioners
are therefore the real party in interest in this case.
- Furthermore, Rule 3, Section 2 of the 1997 Rules of Civil Procedure
states:
Section 2. Parties in interest - 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. Unless otherwise
authorized by law or these Rules, every action must be presented
or defended in the name of the real party in interest.
- Since, petitioners are the real parties in interest under the rules, then
they have the legal personality to sue respondents. The land subject of
the controversy is titled either in their names or that of their
predecessors-in-interest. They stand to be benefited or injured by
whatever decision the court may decree. Hence, they are entitled to
the opportunity to defend their titles and present their side of the
controversy since their titles date even earlier than those of the patent
holders-respondents.
Disposition Petition GRANTED.
MALLION V ALCANTARA
G.R. No. 141528
AZCUNA; October 31, 2006
NATURE
Petition for review on certiorari under Rule 45, ROC
FACTS
-Oct24,1995: Oscar P. Mallion filed a petition with RTC San Pablo City
seeking a declaration of nullity of his marriage to Editha Alcantara
under Article 36 of the Family Code, citing Alcantaras alleged
psychological incapacity. After trial on the merits, RTC denied the
petition upon the finding that Mallion failed to adduce preponderant
evidence to warrant the grant of the relief he is seeking. CA dismissed
the appeal for failure of Mallion to pay the docket and other lawful fees
within the reglementary period.
-After said decision attained finality, Mallion filed on July 12, 1999
another petition for declaration of nullity of marriage with RTC San
Pablo City, this time alleging that his marriage with Alcantara was null
and void due to the fact that it was celebrated without a valid marriage
license. For her part, Alcantara filed an answer with a MTD praying for
the dismissal of the petition on the ground of res judicata and forum
shopping.
-RTC granted MTD and dismissed the case forforum shopping and
multiplicity of suits. Mallions MFR was also denied. Hence, this
petition.
-Mallion argues that while the relief prayed for in the two cases was the
same, that is, the declaration of nullity of his marriage to respondent,
the cause of action in the earlier case was distinct and separate from
the cause of action in the present case because the operative facts
upon which they were based as well as the evidence required to
sustain either were different. Because there is no identity as to the

cause of action, petitioner claims that res judicata does not lie to bar
the second petition. In this connection, petitioner maintains that there
was no violation of the rule on forum shopping or of the rule which
proscribes the splitting of a cause of action.
-Alcantara, in her comment, counters that while the present suit is
anchored on a different ground, it still involves the same issue raised in
the earlier civil case (validity of their marriage) and prays for the same
remedy (declaration of nullity). Respondent thus contends that
petitioner violated the rule on forum shopping. Moreover, respondent
asserts that petitioner violated the rule on multiplicity of suits as the
ground he cites in this petition could have been raised during the trial
in the first case.
ISSUE
WON a previous final judgment denying a petition for declaration of
nullity on the ground of psychological incapacity is bar to a subsequent
petition for declaration of nullity on the ground of lack of marriage
license
HELD: YES
-Res judicata, defined: a matter adjudged; a thing judicially acted
upon or decided; a thing or matter settled by judgment. It also refers to
the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their
privies in all later suits on points and matters determined in the former
suit.
-This doctrine is a rule which pervades every well-regulated system of
jurisprudence and is founded upon the following precepts of common
law, namely: (1) public policy and necessity, which makes it to the
interest of the State that there should be an end to litigation, &(2) the
hardship on the individual that he should be vexed twice for the same
cause. A contrary doctrine would subject the public peace and quiet to
the will and neglect of individuals and prefer the gratification of the
litigious disposition on the part of suitors to the preservation of the
public tranquility and happiness.
-In this jurisdiction, the concept of res judicata is embodied in Sec47(b)
and (c) of Rule 39 of ROC. Res judicata in this sense requires the
concurrence of the following requisites:
(1) the former judgment is final;
(2) it is rendered by a court having jurisdiction over the subject matter
and the parties;
(3) it is a judgment or an order on the merits; and
(4) there is -- between the first and the second actions -- identity of
parties, of subject matter, and of causes of action.
-test to determine whether the causes of action are identical:
ascertain whether the same evidence will sustain both actions, or
whether there is an identity in the facts essential to the maintenance of
the two actions. If the same facts or evidence would sustain both, the
two actions are considered the same, and a judgment in the first case
is a bar to the subsequent action.
-Based on this test, it is apparent that petitioner is simply invoking
different grounds for the same cause of action. By definition, a cause
of action is the act or omission by which a party violates the right of
another. In both petitions, petitioner has the same cause - the
declaration of nullity of his marriage to respondent. What differs is the
ground upon which the cause of action is predicated. These grounds
cited by petitioner essentially split the various aspects of the pivotal
issue that holds the key to the resolution of this controversy, that is, the
actual status of petitioner and respondents marriage.
-Furthermore, the instant case is premised on the claim that the
marriage is null and void because no valid celebration of the same took
place due to the alleged lack of a marriage license. But in the earlier
case, petitioner impliedly conceded that the marriage had been
solemnized and celebrated in accordance with law. Petitioner is now
bound by this admission. The alleged absence of a marriage license
which petitioner raises now could have been presented and heard in
the earlier case.
-Parties are bound not only as regards every matter offered and
received to sustain or defeat their claims or demand but as to any
other admissible matter which might have been offered for that
purpose and of all other matters that could have been adjudged in that
case.
-A party cannot evade or avoid the application of res judicata by simply
varying the form of his action or adopting a different method of
presenting his case. Perez v. CA: the statement of a different form of
liability is not a different cause of action, provided it grows out of the
82
same transaction or act and seeks redress for the wrong. Two actions
are not necessarily for different causes of action simply because the
theory of the second would not have been open under the pleadings in
the first. A party cannot preserve the right to bring a second action after
the loss of the first merely by having circumscribed and limited theories
of recovery opened by the pleadings in the first.
-Litigants are provided with the options on the course of action to take
in order to obtain judicial relief. Once an option has been taken and a
case is filed in court, the parties must ventilate all matters and relevant
issues therein. The losing party who files another action regarding the
same controversy will be needlessly squandering time, effort and
financial resources because he is barred by law from litigating the
same controversy all over again.
-Having expressly and impliedly conceded the validity of their marriage
celebration, petitioner is now deemed to have waived any defects
therein. For this reason, the Court finds that the present action for
declaration of nullity of marriage on the ground of lack of marriage
license is barred by the earlier decision dismissing the petition for
declaration of nullity on the ground of psychological incapacity.
Disposition Petition denied for lack of merit. Costs against petitioner.
SO ORDERED.
LEE BUN TING V ALIGAEN
76 SCRA 416
ANTONIO; April 22, 1977
NATURE
Original petition in the SC. Certiorari with preliminary injunction.
FACTS
- The case involves a question of res judicata. The first case was
Dinglasan v Lee Bun Ting. The present case seeks for the reversal of
the decision in aforementioned case.
DINGLASAN V LEE BUN TING
- Petitioners sold to Lee Liong, a Chinese citizen (predecessor of Lee
Bun Ting), a parcel of land situated in Capiz, for P6,000. After the sale
Lee Liong constructed a concrete building which he used for his
lumber business and his residence.
- Petitioners sought for the declaration of nullity of the sale. Petitioners
contend that the sale was a conditional sale with the right to
repurchase, but the RTC and CA found that the sale was absolute.
Another contention was that the sale is null and void as it violated the
1973 Constitution, Art XIII, Sec. 5 (that foreigners cannot own land in
the Philippines). On June 27, 1956, the Court upheld the sale.
- The Supreme Court held that even if Lee Liong violated the
Constitution, the sale cannot be deemed null and void because at the
time of the sale, one of the plaintiffs, Judge Rafael Dinglasan (an
assistant attorney at the DOJ) knew of the said Constitutional
provision. The vendor was equally guilty, and the doctrine of pari
delicto applied. The doctrine of in pari delicto barred petitioner-
appellants from recovering the title to the property in question and
renders unnecessary the consideration of the other arguments
presented.
- The Court pointed out the absence of policy governing lands sold to
aliens in violation of the Constitutional prohibition.
PRESENT CASE
- Twelve (12) years later, private respondents Dinglasan et al. filed a
complaint on JULY 1, 1968 for the recovery of the same parcel of land
(subject-matter of the previous case), on the basis of the decision of
the SC in Philippine Banking Corporation v Lui She. The respondents
again asserted that the sale violated the Constitution. They prayed that
they be declared the legal owners, the land be surrendered, that Lee
Bun Ting receive P6K as restitution for the land, and that they be paid
P2K monthly until the return of the property.
- A motion to dismiss was filed by Lee Bun Ting on the ground of res
judicata, alleging that the issues have definitely been settled in the
Dinglasan case.
- On Oct. 10, 1968 Aligaen of Capiz CFI denied the motion to dismiss.
A motion for reconsideration was filed by defendants. The claimed that
in the case of Philippine Banking Corporation, there is no statement
which would have the effect of reopening and changing previously
adjudicated rights of parties and finally settled cases (meaning there is
no express prohibition against changing previous cases).

- Lee Bun Ting reiterated their defense of res judicata on the basis of
the decision of the SC on June 27, 1956. They prayed that the
complaint be dismissed.
ISSUE
WON the case Rafael Dinglasan, et al. v Lee Bun Ting, et al. could be
relitigated in view of the subsequent decision of the SC in Philippine
Banking Corp. v Lui She
HELD
NO.
Ratio It is clear that posterior changes in the doctrine of the SC cannot
retroactively be applied to nullify a prior final ruling in the same
proceeding where the prior adjudication was had, whether civil or
criminal.
Reasoning
- Reasons of public policy, judicial orderliness, economy and judicial
time and the interests of litigants, as well as the peace and order of
society, all require that stability be accorded the solemn and final
judgments of the courts or tribunals of competent jurisdiction.
RES JUDICATA
- The doctrine of res judicata applies where, between a pending action
and one which has been finally and definitely settled, there is identity of
parties, subject matter and cause of action. Parties should not be
allowed to litigate the same issue more than once.
Rule 39, Sec. 49(b)
(b) In other cases the judgment or order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised
in relation thereto, conclusive between the parties and their successors
in interest by the title subsequent to the commencement of the action
or special proceeding, litigating for the same title and in the same
capacity.
(c) In any other litigation between the same parties or their successors-
in-interest, that only is deemed to have been adjudged in a former
judgment which appears upon it face to have been so adjudged, or
was actually and necessarily included therein or necessary thereto.
- 49(b) refers to bar by prior judgment, while 49(c) refers to
conclusiveness of judgment. The judgment in the first case constitutes
an absolute bar to the subsequent action. (However, even if there is
identity of parties but no identity or cause of action, the first judgment is
conclusive in the second case.
- In the present case, the names of the parties involved were the same,
and the action and relief prayed for are identicalannulment of sale
and recovery of the parcel of land.
- a subsequent reinterpretation of the law may be applied to new cases
but not to an old one finally and conclusively determined by the people.
Once the judgment of the SC becomes final, it is binding on all inferior
courts, and hence beyond their power and authority to alter or modify.
DISPOSITION
Certiorari is granted, with costs against private respondents.
VILLARINO v AVILA
G.R. No. 131191
TINGA, J.; September 26, 2006
NATURE
Petition for review on certiorari assailing the decision of the CA
affirming the order of dismissal of the RTC
FACTS
- Petitioners spouses Villarino filed an action for Annulment of Title,
Reconveyance, Damages and Injunction against respondents the
Avilas and the Provincial Sheriff. Petitioners opposed the application of
the Avilas for the registration of Lot No. 967 on the ground that a
portion of Lot No. 967 encroached upon Lot No. 968 to the extent of
2,146 square meters. Lot No. 968 is the adjacent property belonging to
petitioners. In their complaint, petitioners averred that the registration
of Lot No. 967 was based on an erroneous survey and technical
description. They sought the reconveyance of the disputed area and
the cancellation of the OCT to reflect the consequent reduction in area.
The Avilas moved for the dismissal of the case on the ground of res
judicata. After a preliminary hearing, the RTC issued the order
dismissing the case.
83
- Petitioners elevated the matter to the CA, contending that the RTC
erred in dismissing the case based on res judicata. The CA upheld the
incontrovertibility of the decree of registration one year after its
issuance. It also debunked the erroneous survey and technical
description foisted by petitioners as not the fraud contemplated under
Sec. 53 of PD 1529, which allows the reconveyance of fraudulently
registered land.
- Petitioners filed the instant petition. They argued that the judgment in
the land registration case is not yet final because the aggrieved party
can still avail of the remedy of reconveyance and recovery of
damages, and that the trial court therein had no jurisdiction over the
disputed area since it had already been covered by an OCT issued in
the name of petitioners.
ISSUES
WON petitioners complaint is barred by res judicata
HELD
YES
Ratio For res judicata to serve as an absolute bar to a subsequent
action, the following requisites must concur:
(1) the former judgment or order must be final; (2) the judgment or
order must be on the merits; (3) it must have been rendered by a court
having jurisdiction over the subject matter and parties; and (4) there
must be between the first and second actions, identity of parties, of
subject matter, and of causes of action. When there is no identity of
causes of action, but only an identity of issues, there exists res
judicata in the concept of conclusiveness of judgment. The rule on
conclusiveness of judgment bars the relitigation of particular facts or
issues in another litigation between the same parties on a different
claim or cause of action.
Reasoning All the elements of res judicata in the mode of bar by prior
judgment are present. There is no question that said decision was an
adjudication on the merits. Petitioners and respondents were the same
party litigants. The subject matter of the civil case was the same
property that was the subject matter in the LRC case. Petitioners
cause of action in the civil case would call for the determination and
adjudication of ownership over the disputed portion, an issue already
passed by the land registration court when it confirmed the Avilas title
over Lot No. 967. Petitioners point out that the land registration court
had no jurisdiction over the disputed portion as this had already been
decreed in an earlier land registration case and a second decree for
the same land is null and void. Petitioners claim that the disputed
portion is covered by their title, but that it was erroneously included in
the survey and technical description subject of the Avilas land
registration application. That was precisely the content and thrust of
petitioners opposition to the Avilas land registration application. But
the land registration court debunked the opposition and upheld the
application. Petitioners could have appealed the decision of the land
registration court. Their failure to do so rendered said decision final
and executory.
Disposition Petition DENIED.
CARILLO V. CA (DABON AND DABON)
(supra)
NATURE
Review on certiorari of decision of Court of Appeals
FACTS
- Gonzales filed complaint (action for specific performance) against
Manio sps, seeking execution of deed of sale of property she bought fr
Priscilla Manio. Gonzales said she pd downpayment to Priscilla
because she had an SPA from her son Aristotle, the owner of the land.
- TC ruled in favor of Gonzales. Gonzales deposited balance w/ the
court and filed motion for execution, w/c was w/drawn bec decision
wasnt served on defendants. Sheriff finally served a copy at an
ungodly hour of 12 mn.
- TCs decision became final and executory.
- The Dabons, claiming to have bought the land fr Aristotle, filed before
the CA a petition for annulment of judgment and orders of the TC.
They alleged that the decision was void for lack of jurisdiction over
their persons as the real parties in interest. CA issued resolution
restraining TC from implementing its decision. Hence, this petition by

Gonzales.
ISSUE/S
1. WON there was basis to annul the decision of the TC.
2. WON the Dabons can seek annulment of the TC judgment
HELD
1. YES.
Ratio
An action should be brought against the real party in interest. The real
party in interest is the one who would be benefited or injured by the
judgment or is the one entitled to the avails of the suit.
Reasoning
- Named petitioners herein are Carillo (Presiding Judge), Guyot (Clerk
of Court), Senoy (Deputy Sheriff), Risonar (Registrar of Deeds), and
Gonzales. Carillo, Guyot, Senoy and Risonar are not interested
parties because they would not benefit from the affirmative reliefs
sought. Only Gonzales remains as genuine party-petitioner in this
case.
- Gonzales insists that the Dabons have no right to seek annulment of
the TCs judgment bec theyre not parties to the specific performance
case. But the Dabons insist that they are parties in interest bec they
are buyers, owners and possessors of the contested land.
- The specific performance case brought by Gonzales to the TC
named Priscilla Manio and husband as defendants. However, the lot is
owned by Aristotle, their son. Priscilla had no interest on the lot and
can have no interest in the judgment of the TC. Failure to implead
Aristotle Manio renders the proceedings in the specific performance
case null and void.
2. YES.
Ratio
A person need not be a party to the judgment sought to be annulled.
What is essential is that he can prove that the judgment was obtained
by fraud and he would be adversely affected thereby.
Reasoning
Although the Dabons are not parties to the specific performance case,
any finding of extrinsic fraud would adversely affect their ownership
and could be basis of annulment of judgment. In this case, Gonzales
knew of the sale of lot by Aristotle Manio to the Dabons yet Gonzales
did not include the Dabons in her petition. This is extrinsic fraud.
Disposition Petition is denied.
REGALA V SANDIGANBAYAN
G.R. No. 10538
KAPUNAN; September 20, 1996
NATURE
Special civil action for certiorari
FACTS
- This is an offshoot of the complaint before the Sandiganbayan
through the PCGG against Eduardo Cojuangco Jr. for recovery of
alleged ill-gotten wealth including shares of stocks in certain
corporations.
- ACCRA Law Firm performs legal svcs incl. organization and
acquisition of business associations/orgs. Sometimes, members of the
firm act as incorporators or stockholders. They acquire info relative to
assets of clients and their personal/biz circumstances. In this case,
ACCRA lawyers acted as nominees-stockholders of said corps
involved in sequestration proceedings.
- PCGG filed Third Amended Complaint w/c excluded respondent Raul
Roco because he promised to reveal identity of principal/s for whom he
acted as nominee-stockholder
- ACCRA lawyers said it was in furtherance of legit lawyering and they
became holders of shares of stock only as incorporating or acquiring
stockholders, and as such, they do not claim any proprietary interest in
said shares.
- Petitioner Paraja Hayudini, who separated fr ACCRA, filed a
separate answer.
- ACCRA lawyers filed a counter-motion that PCGG also exclude them
as parties-defendant as it did to Roco. PCGG set conditions for
exclusion of the petitioners:
- disclosure of identity of clients
84
- submission of docs substantiating lawyer-client relationship
- submission of deeds of assignments petitioners executed in
favor of its clients covering their respective shareholdings.
- PCGG presented supposed proof to substantiate compliance by
Roco of the said conditions.
- Sandiganbayan denied exclusion of petitioners fr the PCGG case.
That denial is now being questioned.
ISSUE/S
1. WON there is a cause of action against the defendants
2. WON lawyer-client confidentiality applies in this case
3. WON Roco and the ACCRA lawyers are similarly situated, thus,
making the denial of the ACCRA lawyers exclusion from the PCGG
case a violation of equal protection clause.
HELD
1. NO.
Reasoning
- It is quite apparent that petitioners were impleaded by the PCGG as
co-defendants to force them to disclose the identity of their clients.
Clearly, respondent PCGG is not after petitioners but the bigger fish
as they say in street parlance. This ploy is quite clear from the
PCGGs willingness to cut a deal with petitioners -- the names of their
clients in exchange for exclusion from the complaint
- It would seem that petitioners are merely standing in for their clients
as defendants in the complaint. Petitioners are being prosecuted
solely on the basis of activities and services performed in the course of
their duties as lawyers. Quite obviously, petitioners inclusion as co-
defendants in the complaint is merely being used as leverage to
compel them to name their clients and consequently to enable the
PCGG to nail these clients. Such being the case, respondent PCGG
has no valid cause of action as against petitioners and should exclude
them from the Third Amended Complaint
2. Yes
Ratio
- The right to counsel of an accused is also involved in this issue. If
client were made to choose bet legal representation w/o effective
communication and disclosure and legal representation w/ all his
secrets revealed then he might be compelled to stay away from the
judicial system or lose right to counsel.
Reasoning
- GENERAL RULE:
- Court has right to know that client whose privileged info is
sought to be protected is flesh and blood.
- Privilege exists only after atty-client relationship has been
established. It does not attach until there is a client.
- Privilege generally pertains to subject matter of the relationship.
- Due process requires that the opposing party should, as a
general rule, know his adversary.
- EXCEPTIONS
- Client identity is privileged where a strong probability exists that
revealing clients name would implicate that client in the very
activity for w/c he sought the lawyers advice.
- It is also privileged where disclosure would open the client to
civil liability.
- It is also privileged when govts lawyers have no case against
an attys client unless, by revealing the clients name, the said
name would furnish the only link that would be necessary to
convict an individual of a crime.
- Apart fr the exceptions above, other situations could qualify as
exceptions. Info relating to the identity of client may fall w/in privilege
when clients name itself has independent significance such that
disclosure would reveal client confidence.
- The instant case FALLS UNDER AT LEAST 2 EXCEPTIONS. First,
disclosure would lead to establish the clients connection w/ the very
fact in issue. Also, the link bet the offense and the legal advice/svc
was duly established by no less than the PCGG itself. Petitioners have
a legitimate fear that identifying their clients would implicate them.
Revelation of the name would provide the link for prosecution to build
its case, where none otherwise exists.
- It is diff when the client consults atty for illicit purposes, seeking
advice on how to around the law. In this case, a client thinks he might
have previously committed something illegal and consults atty abt it.
- Court is trying to avoid fishing expedition by the prosecution. After

all, there are alternative sources of info available to prosecutor w/c
does not depend on utilizing a defendants counsel as convenient and
readily available source of info.
- Lawyer-client confidentiality and loyalty exists not only during
relationship but even after termination of the relationship.
3. Yes
- Respondents failed to show that Roco actually revealed the identity of
his clients. PCGG shld show that Roco was treated as a species apart
fr the ACCRA lawyers on basis of classification w/c made substantial
distinctions based on real differences. No such substantial distinctions
exist.
Disposition Decision of the Sandiganbayan annulled and set aside
DISMISSAL BY CLAIMANT
GOJO V GOYALA
(supra)
NATURE
Appeal from a decision of the CFI of Sorsogon
FACTS
-Appellee Segundo Goyala, with his now deceased wife Antonina sold
to Gojo a 2.5 hectare parcel of agricultural land for P750 by a Deed of
Pacto de Retro Sale, the repurchase to be made within one year, as
stated in the deed. The deed also indicates that the vendee paid
another P100 in addition to the purchase price. 10 years after the
execution of said document, Gojo filed a case with the CFI against
Goyala by way of a petition for consolidation of ownership of said land.
Gojo alleged that the period for repurchasing had expired and
ownership had become consolidated in him and that for purposes of
recording the consolidation in the Registry of Property, it was
necessary that a judicial order be issued to that effect.
-Goyala filed an answer to the petition, alleging that they had obtained
a cash loan of P810 from Gojo payable w/in one year w/o interest and
that to guarantee payment, Goyala executed a mortgage in favor of the
petitioner on the parcel of land in question. Hence, although the deed
was executed in the form of a pacto de retro sale, the true intention of
the parties was for it to be a mere mortgage to secure payment.
Goyala further claimed that he and his wife attempted to pay the debt
but petitioner refused to receive the sum and cancel the mortgage. By
way of counterclaim, Goyala prayed that petitioner receive the P810
and that the document of mortgage be declared so, and not a pacto de
retro sale. He further prayed for P1800 per annum until the final
termination of the case for the fruits of said property and in the case
that the instrument be deemed a true pacto de retro sale, that
petitioner be ordered to execute a deed of resale in favor of
respondents in accordance with A1606CC.
-Counsel for Goyala filed a manifestation informing the TC that the
named defendant, Antonina, had died, prompting the TC to issue an
order requiring counsel for the plaintiff to submit an amended
Complaint substituting Antonina with one of her successors in interest
as party defendants. Goyala filed a motion to dismiss the petition on
the ground that notwithstanding the lapse of 43 days after appellants
receipt of a copy of the said TC order, said appellant failed and
neglected to submit the amended complaint required of him. Appellant
opposed the motion but the TC dismissed the complaint.
-Appellee filed a motion to declare appellant in default in respect of
said appellees counterclaim, which was granted by the TC, which
further required Goyala to submit his evidence before the Clerk of
Court. TC rendered favorable judgment on appellees counterclaim,
declaring the Deed of Pacto de Retro Sale an equitable mortgage and
ordering Gojo to receive the P810 and to restore possession to the
defendants and allowing them to redeem the same.
-Appellant appealed to the CA, which upon finding that the said appeal
involves purely questions of law, certified the same to the SC.
ISSUES
WON TC erred in declaring plaintiff in default with respect to
defendants counterclaim
HELD
85
YES. The appellant contends that there is no occasion for the TC to
declare him in default in respect of appellees counterclaim as said
counterclaim falls within the category of compulsory counterclaim
which does not call for an independent answer as the complaint
already denies its material allegations. It is now settled that a plaintiff
who fails or chooses not to answer a compulsory counterclaim may
not be declared in default, principally because the issues raised in the
counterclaim are deemed automatically joined by the allegations of the
complaint.
-While it is true that under Sec. 3 of Rule 17, a complaint may be
dismissed for failure to prosecute if the plaintiff fails to comply with an
order of the court, said provision cannot apply when the order ignored
is a void one, as in this case. (As in Sec 20 of Rule 3, the death of the
defendant in a contractual money claim does dismiss such action for
recovery, but will be allowed to continue until final judgment is entered.
Favorable judgment obtained by the plaintiff shall be enforced in the
manner provided in these Rules for prosecuting claims against the
estate of a deceased person. In Barrameda vs Barbara, the SC held
that an order to amend the complaint, before the proper substitution of
parties as directed by Sec. 17, Rule 3 (Sec. 16, new law), is void and
imposes upon the plaintiff no duty to comply therewith to the end that
an order dismissing the said complaint, for such non-compliance,
would similarly be void. It was further held in Ferriera vs Gonzales that
the continuance of a proceeding during the pendency of which a party
thereto dies, without such party having been validly substituted in
accordance with the rules, amounts to lack of jurisdiction.
WHEREFORE, the decision appealed from is set aside
JUDGMENT ON THE PLEADINGS
PRE-TRIAL
JONATHAN LANDOIL INTERNATIONAL CO. V.
MANGUDADATU
00 SCRA 00
PANGANIBAN, August 16, 2004
NATURE
Petition for Review under Rule 45
FACTS
-Spouses Suharto and Miriam Sangki Mangudadatu (Respondent) filed
with the RTC of Tacurong City, Sultan Kudarat, a Complaint for
damages against Jonathan Landoil International Co., Inc. ("JLI"
-Petitioner). Parties submitted their respective Pretrial Briefs.
-Trial proceeded without the participation of petitioner, whose absence
during the pretrial had led the trial court to declare it in default.
Petitioner received a copy of the RTCs Decision. It filed an Omnibus
Motion for New Trial and Change of Venue. This Motion was deemed
submitted for resolution but was eventually denied by the trial court in
an Order. Petitioner received a copy of a Writ of Execution. Alleging
that it had yet to receive a copy of an Order resolving the Omnibus
Motion for New Trial, petitioner filed a Motion to Quash/Recall Writ of
Execution. Its counsels -- Attys. Jaime L. Mario Jr. and Dioscoro G.
Peligro -- submitted separate withdrawals of appearance. On the same
date, the law firm Ong Abad Santos & Meneses filed an Entry of
Appearance with Supplement to Motion to Quash/Recall Writ of
Execution. To its Supplement, petitioner attached the Affidavits of Attys.
Mario and Peligro attesting that they had not yet received a copy of the
Order resolving the Omnibus Motion for New Trial. On the same day,
January 7, 2002, petitioner received a Sheriffs Notice regarding the
public auction sale of its properties. By reason of the immediate threat
to implement the Writ of Execution, it filed with the CA a Petition for
Prohibition seeking to enjoin the enforcement of the Writ until the
resolution of the Motion to Quash. RTC issued an Order directing
respondents to file their written comment on the Motion to Quash and
scheduled the hearing thereon for February 1, 2002. Petitioner
received a copy of respondents Vigorous Opposition (Re: Motion to
Quash/Recall Writ of Execution, and its Supplement) dated January
16, 2001. Attached to this pleading were two separate Certifications
supposedly issued by the postmaster of Tacurong City, affirming that
the Order denying the Motion for New Trial had been received by
petitioners two previous counsels of record. The Certification
pertaining to Atty. Peligro alleged that a certain Michelle Viquira had

received a copy of the Order intended for him. The Certification as
regards Atty. Mario stated that he had personally received his copy on
December 21, 2001.
-Petitioner personally served counsel for respondents a Notice to Take
Deposition Upon Oral Examination of Attys. Mario and Peligro. The
Deposition was intended to prove that petitioner had not received a
copy of the Order denying the Omnibus Motion for New Trial. At 9:30
a.m. on January 28, 2002, the deposition-taking proceeded as
scheduled -- at the Business Center Conference Room of the
Mandarin Oriental Hotel in Makati City -- before Atty. Ana Peralta-
Nazareno, a notary public acting as deposition officer. At 12:00 noon of
the same day, respondents sent petitioner a fax message via JRS
Express, advising it that they had filed a Motion to Strike Off from the
records the Notice to Take Deposition; and asking it not to proceed
until the RTC would have resolved the Motion, a copy of which it
eventually received later in the day, at 3:10 p.m. On January 29, 2002,
separate Notices were sent by Atty. Nazareno to Attys. Mario and
Peligro, as witnesses, for them to examine the transcript of their
testimonies. On the same date, Atty. Nazareno filed via registered mail
a Submission to the RTC attaching (1) a Certification that the
witnesses had been present and duly sworn to by her; (2) a transcript
bearing their signatures, attesting that it was a true record of their
testimonies; (3) a copy of the Notice to Take Deposition delivered to
her; and (4) a copy of the Notice signed by respondents counsel.
Hearing on the Motion to Quash, petitioner submitted its (1) Formal
Offer of Exhibits, together with the documentary exhibits marked during
the deposition-taking; (2) Reply to respondents Vigorous Opposition
to the Motion to Quash; and (3) Opposition ad Cautelam to
respondents Motion to Strike Off the Notice to Take Deposition.
Meanwhile CA issued a Resolution denying the Petition for Prohibition.
Petitioner received a copy of the RTCs Resolution dated February 21,
2002, denying the Motion to Quash, it received a copy of respondents
Motion to Set Auction Sale of Defendants Levied Properties. Petitioner
filed with the CA a Petition for Certiorari and Prohibition, seeking to
hold in abeyance the February 21, 2002 RTC Resolution and the
December 4, 2001 Writ of Execution. Petitioner alleged that since it
had not received the Order denying its Motion for New Trial, the period
to appeal had not yet lapsed.[33] It thus concluded that the judgment,
not being final, could not be the subject of a writ of execution.
Ruling of the Court of Appeals = It ruled that petitioner could no longer
avail itself of a deposition under Rule 23 of Rules of Court, since trial
had already been terminated. The appellate court also opined that the
alleged error committed by the trial court -- when the latter disregarded
two witnesses oral depositions -- was an error of judgment not
reviewable by certiorari or prohibition. Finally, it ruled that between the
denial of a lawyer and the certification of a postmaster, the latter would
prevail.
ISSUES
(1) whether petitioner received the Order denying its timely filed Motion
for New Trial;
(2) whether the taking of oral depositions was proper under the
circumstances.
HELD
1. No. It is readily apparent that petitioner is raising factual issues that
this Court does not review. A motion for new trial may be filed on the
grounds of (1) fraud, accident, mistake or excusable negligence that
could not have been guarded against by ordinary prudence, and by
reason of which the aggrieved partys rights have probably been
impaired; or (2) newly discovered evidence that, with reasonable
diligence, the aggrieved party could not have discovered and produced
at the trial; and that, if presented, would probably alter the result. In its
Omnibus Motion for New Trial, petitioner argued that its counsel Atty.
Mario was sick, a fact that allegedly constituted excusable negligence
for his failure to appear at the August 8, 2000 pretrial. With regard to
Atty. Rogelio Fernandez, the collaborating counsel, it alleged that the
Board of Directors had terminated his legal services on August 4,
2000.
-These grounds relied upon by petitioner cannot properly secure a new
trial. Counsels are not the only ones required to attend the pretrial.
The appearance of the plaintiff and the defendant is also mandatory.
The pertinent rule states:
Section 4. Appearance of parties. -- It shall be the duty of the parties
and their counsel to appear at the pre-trial. The non-appearance of a
party may be excused only if a valid cause is shown therefore or if a
86
representative shall appear in his behalf fully authorized in writing to
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and of documents.
-The rationale for this requirement of compelling the parties to appear
personally before the court is to exhaust the possibility of reaching a
compromise. While notice of the pretrial is served on counsels, it is
their duty to notify the party they represent.
The explanation offered by petitioner as regards the absence of its
counsel from the pretrial is therefore unacceptable. It should have also
justified its own absence therefrom. Having failed to do so, it had no
valid ground to request a new trial.
Petitioner also failed to justify the absence of both its counsels.
Until their formal withdrawal is granted, lawyers are deemed to be the
representatives of their clients.
Atty. Fernandez may have been notified of the termination of his
services on August 7, 2004. But as far as the trial court was
concerned, he continued to be petitioners counsel of record, since no
withdrawal of appearance had yet been granted. Hence, his absence
from the pretrial was still not excusable. While he could no longer
represent petitioner, his presence would have afforded him an
opportunity to make a formal withdrawal of appearance. An
improvident termination of legal services is not an excuse to justify
non-appearance at a pretrial. Otherwise, the rules of procedure would
be rendered meaningless, as they would be subject to the counsels
will.
-The Proper Remedy under the new Rules, the consequence of non-
appearance without cause at the pretrial is not for the petitioner to be
considered "as in default," but "to allow the plaintiff to present evidence
ex parte and [for] the court to render judgment on the basis thereof."
This procedure was followed in the instant case.
To the trial courts order allowing the ex parte presentation of
evidence by the plaintiff, the defendants remedy is a motion for
reconsideration. An affidavit of merit is not required to be attached to
such motion, because the defense has already been laid down in the
answer.
Liberality is the rule in considering a motion for reconsideration.
It is best for the trial court to give both the plaintiff and the defendant a
chance to litigate their causes fairly and openly, without resort to
technicality. Unless the reopening of the case is clearly intended for
delay, courts should be liberal in setting aside orders barring
defendants from presenting evidence. Judgments based on an ex
parte presentation of evidence are generally frowned upon.
In the present case, petitioner did not file a motion for
reconsideration after the trial court had allowed respondents ex parte
presentation of evidence. The Rules of Court does not prohibit the
filing of a motion for a new trial despite the availability of a motion for
reconsideration. But the failure to file the latter motion -- without due
cause -- is a factor in determining whether to apply the liberality rule in
lifting an order that allowed the ex parte presentation of evidence. In
its motions and petitions filed with this Court and the lower courts,
petitioner did not explain why it had failed to file a motion for
reconsideration.
The lapse of time -- from the August 8, 2000 pretrial to the September
5, 2000 ex parte presentation of evidence, and until the June 19, 2001
promulgation of the Decision-- shows the negligence of petitioner and
its counsels. Prior to the trial courts resolution of the case, it had
ample opportunity to challenge the Order allowing the ex parte
presentation of evidence. Too late was the challenge that it made after
the Decision had already been rendered.
-In addition to the foregoing facts, petitioner fails to convince us that it
has not received the trial courts Order denying its Motion for New Trial.
There is a disputable presumption that official duties have been
regularly performed. On this basis, we have ruled that the
postmasters certification prevails over the mere denial of a lawyer.
This rule is applicable here. Petitioner has failed to establish its non-
receipt of the trial courts Order denying its Motion for New Trial. This
Court notes the trial courts finding that petitioner received a copy of
respondents September 24, 2001 Motion for Execution and November
21, 2001 Motion for Early Resolution, as well as the trial courts
September 28, 2001 Order submitting the Motion for Execution for
resolution. Given these unrebutted facts, it is unbelievable that
petitioner did not know that a ruling on the Motion for New Trial had
already been issued. At the very least, the Motions filed by
respondents should have alerted it of such issuance. Otherwise, it
could have opposed their Motion for Execution by requesting the RTC

to resolve the Motion for New Trial; or the trial court could have been
informed by petitioner of the latters non-receipt of the Order resolving
respondents Motion.
2. No. A deposition may be taken with leave of court after jurisdiction
has been obtained over any defendant or over property that is the
subject of the action; or, without such leave, after an answer has been
served. Deposition is chiefly a mode of discovery, the primary function
of which is to supplement the pleadings for the purpose of disclosing
the real points of dispute between the parties and affording an
adequate factual basis during the preparation for trial. The liberty of a
party to avail itself of this procedure, as an attribute of discovery, is
"well-nigh unrestricted if the matters inquired into are otherwise
relevant and not privileged, and the inquiry is made in good faith and
within the bounds of the law."
Limitations would arise, though, if the examination is conducted in bad
faith; or in such a manner as to annoy, embarrass, or oppress the
person who is the subject of the inquiry; or when the inquiry touches
upon the irrelevant or encroaches upon the recognized domains of
privilege.
As a mode of discovery resorted to before trial, deposition has
advantages, as follows:
-1. It is of great assistance in ascertaining the truth and in checking
and preventing perjury. x x x 2. It is an effective means of detecting
and exposing false, fraudulent, and sham claims and defenses. 3. It
makes available in a simple, convenient, and often inexpensive way
facts which otherwise could not have been proved, except with great
difficulty and sometimes not at all.
4. It educates the parties in advance of trial as to the real value of their
claims and defenses, thereby encouraging settlements out of court. 5.
It expedites the disposal of litigation, saves the time of the courts, and
clears the docket of many cases by settlements and dismissals which
otherwise would have to be tried. 6. It safeguards against surprise at
the trial, prevents delays, and narrows and simplifies the issues to be
tried, thereby expediting the trial. 7. It facilitates both the preparation
and the trial of cases.
-The Rules of Court and jurisprudence, however, do not restrict a
deposition to the sole function of being a mode of discovery before
trial. Under certain conditions and for certain limited purposes, it may
be taken even after trial has commenced and may be used without the
deponent being actually called to the witness stand. In Dasmarias
Garments v. Reyes, we allowed the taking of the witnesses
testimonies through deposition, in lieu of their actual presence at the
trial. Thus, "[d]epositions may be taken at any time after the institution
of any action, whenever necessary or convenient. There is no rule that
limits deposition-taking only to the period of pre-trial or before it; no
prohibition against the taking of depositions after pre-trial." There can
be no valid objection to allowing them during the process of executing
final and executory judgments, when the material issues of fact have
become numerous or complicated.
In keeping with the principle of promoting the just, speedy and
inexpensive disposition of every action and proceeding, depositions
are allowed as a "departure from the accepted and usual judicial
proceedings of examining witnesses in open court where their
demeanor could be observed by the trial judge." Depositions are
allowed, provided they are taken in accordance with the provisions of
the Rules of Court (that is, with leave of court if the summons have
been served, without leave of court if an answer has been submitted);
and provided, further, that a circumstance for their admissibility exists
(Section 4, Rule 23, Rules of Court).
The Rules of Court vests in the trial court the discretion to order
whether a deposition may be taken or not under specified
circumstances that may even differ from those the proponents have
intended. However, it is well-settled that this discretion is not unlimited.
It must be exercised -- not arbitrarily, capriciously or oppressively -- but
in a reasonable manner and in consonance with the spirit of the law, to
the end that its purpose may be attained.
When a deposition does not conform to the essential requirements of
law and may reasonably cause material injury to the adverse party, its
taking should not be allowed.
-The Rules of Court provides adequate safeguards to ensure the
reliability of depositions. The right to object to their admissibility is
retained by the parties, for the same reasons as those for excluding
evidence if the witness were present and had testified in court; and for
errors and irregularities in the deposition. As a rule, depositions should
87
be allowed, absent any showing that taking them would prejudice any
party.
-Depositions may be used for the trial or for the hearing of a motion or
an interlocutory proceeding, under the circumstances specified
hereunder:
Section 4. Use of Depositions. -- At the trial or upon the hearing of a
motion or an interlocutory proceeding, any part or all of a deposition,
so far as admissible under the rules of evidence, may be used against
any party who was present or represented at the taking of the
deposition or who had due notice thereof, in accordance with any one
of the following provisions:
(a)Any deposition may be used by any party for the purpose of
contradicting or impeaching the testimony of deponent as a witness;
(b)The deposition of a party or of anyone who at the time of taking the
deposition was an officer, director, or managing agent of a public or
private corporation, partnership, or association which is a party may be
used by an adverse party for any purpose; (c) The deposition of a
witness, whether or not a party, may be used by any party for any
purpose if the court finds: (1) that the witness is dead; or (2) that the
witness resides at a distance more than one hundred (100) kilometers
from the place of trial or hearing, or is out of the Philippines, unless it
appears that his absence was procured by the party offering the
deposition; or (3) that the witness is unable to attend or testify because
of age, sickness, infirmity, or imprisonment; or (4) that the party offering
the deposition has been unable to procure the attendance of the
witness by subpoena; or (5) upon application and notice, that such
exceptional circumstances exist as to make it desirable, in the interest
of justice and with due regard to the importance of presenting the
testimony of witnesses orally in open court, to allow the deposition to
be used; and (d) If only part of a deposition is offered in evidence by a
party, the adverse party may require him to introduce all of it which is
relevant to the part introduced, and any party may introduce any other
parts.
The present case involved a circumstance that fell under the above-
cited Section 4(c)(2) of Rule 23 -- the witnesses of petitioner in Metro
Manila resided beyond 100 kilometers from Sultan Kudarat, the place
of hearing. Petitioner offered the depositions in support of its Motion to
Quash (the Writ of Execution) and for the purpose of proving that the
trial courts Decision was not yet final. As previously explained, despite
the fact that trial has already been terminated, a deposition can still be
properly taken.
We note, however, that the RTC did not totally disregard petitioners
depositions. In its February 21, 2001 Resolution, the trial court
considered and weighed -- against all other evidence -- that its Order
denying the Motion for New Trial filed by petitioner had not been
received by the latters counsels. Despite their depositions, petitioner
failed to prove convincingly its denial of receipt.
Disposition. WHEREFORE, the Petition is DENIED, and the assailed
Decision and Resolution AFFIRMED. Costs against petitioner. SO
ORDERED.
PAREDES V VERANO
G.R. No.164375
TINGA; October 12, 2006
NATURE
Petition for review
FACTS
- A complaint for the establishment of a right of way was filed at RTC
Maasin by Paredes, Alago and Baybay (plaintiffs-petitioners) against
Verano and Hinunangan (defendants-respondents). It culminated in a
judgment by compromise. In the Compromise Agreement, Hinunangan
granted a 2- meter-wide right of way in favor of Paredes for a
consideration of P6K.
- Alleging that petitioners had blocked the passage way in violation of
the Compromise Agreement, respondents filed a complaint for specific
performance with damages against petitioners. Petitioners answered,
denied having violated the Compromise Agreement. They alleged that
like them, respondents were not actual residents of Brgy Tagnipa
where the "road right of way" was established and that respondent
Hinunangan had already sold his only remaining lot in the vicinity to
petitioner Paredes

- Petitioners next filed MTD for lack of cause of action, which was
denied by RTC. Petitioners elevated case to CA and SC but to no
avail. Petitioners asked Judge Kapili to inhibit himself from the case.
The judge denied the motion
- Pre-trial was initially set and reset and reset again. In the pre-trial,
Baybay's counsel moved to reset it to another date on account of a
conflicting hearing. However, petitioner Baybay, who is the father of the
counsel for petitioners, was present in court along with the other
defendants. RTC was informed of a proposed settlement between the
parties, although respondent Baybay qualified his reaction by telling
the court that he would first have to inform his lawyer and the co-
defendants of the said proposal. The RTC then commented
unfavorably on the absence of petitioners' counsel, expressing
disappointment towards his attitude, even making note of the fact that
not once had the counsel appeared before the RTC, even though the
case had already reached SC over the denial of MTD. RTC again reset
the pre-trial date.
- Before the new pre-trial date, counsel for petitioners filed a
Manifestation of Willingness to Settle With Request for Cancellation.
Apart from manifesting his willingness to settle the complaint,
petitioners' counsel suggested to the opposing counsel that he be
informed of the terms of the proposed settlement. So, petitioners'
counsel requested the cancellation of the 23 Jan 2004 hearing.
- But the hearing pushed through on 23 Jan 2004. Private respondents
and their counsel were present. So were Baybay and Paredes, and co-
defendant Alago, but not their counsel. The RTC allowed respondents
to present their evidence ex parte, "for failure of the defendants
counsel to appear before RTC. Petitioners filed MFR, but was denied
- So, petitioners filed a petition for certiorari with CA. CA dismissed it
for failure to attach duplicate original copies of the annexes to the
petition other than the RTC Orders and for failure to submit such other
pleadings relevant and pertinent to the petition. Petitioners filed MFR
with Motion to Admit Additional Exhibits, adverting to the documents
previously missing from the petition but attached to the motion.
- MFR dismissed. CA resolved on the merits, ruling that under Sec 5,
Rule 18 ROC, it is the failure of the defendant, and not defendant's
counsel, to appear at the pre-trial that would serve cause to allow
plaintiff to present evidence ex parte. CA noted that Baybay had made
it clear that he would never enter into any amicable settlement without
the advice of his counsel.
- CA cited Sps. Ampeloquio, Sr. v. CA where the Court held that if
every error committed by RTC were to be a proper object of review by
certiorari, then trial would never come to an end and the appellate
court dockets would be clogged with petitions challenging every
interlocutory order of the TC. It concluded that the acts of Judge Kapili
did not constitute grave abuse of discretion equivalent to lack of
jurisdiction.
ISSUE
WON the absence of the counsel for defendants at the pre-trial, with all
defendants themselves present, is a ground to declare defendants in
default and to authorize plaintiffs to present evidence ex parte.
HELD
NO
Ratio The absence of counsel for defendants at pre-trial does not ipso
facto authorize the judge to declare the defendant as in default and
order the presentation of evidence ex parte. It bears stressing that
nothing in the Rules of Court sanctions the presentation of evidence ex
parte upon instances when counsel for defendant is absent during pre-
trial. The Rules do not countenance stringent construction at the
expense of justice and equity
Reasoning
- The order of RTC allowing respondents to present evidence ex parte
was undoubtedly to the detriment of petitioners. Since the RTC would
only consider the evidence presented by respondents, and not that of
petitioners, the order strikes at the heart of the case, disallowing as it
does any meaningful defense petitioners could have posed. A
judgment of default against a defendant who failed to attend pre-trial,
or even any defendant who failed to file an answer, implies a waiver
only of their right to be heard and to present evidence to support their
allegations but not all their other rights.
- Nothing in the ROC authorizes a trial judge to allow the plaintiff to
present evidence ex parte on account of the absence during pre-trial of
the counsel for defendant. In Rule 18, Sect. 4 imposes the duty on
litigating parties and their respective counsel during pre-trial. The
88
provision also provides for the instances where the non-appearance of
a party may be excused. Nothing, however, in Sec. 4 provides for a
sanction should the parties or their respective counsel be absent
during pre-trial. Instead, the penalty is provided for in Sec. 5. Notably,
what Section 5 penalizes is the failure to appear of either the plaintiff or
the defendant, and not their respective counsel.
-The Court also cited cases and discussed why although they have
similar facts are inapplicable or do not constitute a precedent to the
instant case. These cases are: UCPB v. Magpay, Jonathan Landoil
International Co. v. Mangudadat, SSS v. Chaves, Africa v. IAC. (See
original)
- Due process dictates that petitioners be deprived of their right to be
heard and to present evidence to support their allegations if, and only
if, there exists sufficient basis in fact and in law to do so. There being a
manifest lack of such basis in this case, petitioners would be unjustly
denied of the opportunity to fully defend themselves should the Court
affirm the questioned orders which were evidently issued by the RTC
with grave abuse of discretion. The better and certainly more prudent
course of action in every judicial proceeding is to hear both sides and
decide on the merits rather than dispose of a case on technicalities
- While counsel is somewhat to blame for his non-attendance at pre-
trial, incidentally the operative act which gave birth to the controversy
at bar, it would be most unfair to penalize petitioners for what may be
the deficiency of their lawyer when the consequent penalty has no
basis in law.
Disposition Petition is granted. RTC and CA rulings reversed.
COURSE OF TRIAL
1. trial proper
2. kinds of trial
a. consolidated/ separate trial
SPS. YU V MAGNO CONSTRUCTION
G.R. No. 138701-02
GARCIA; October 17, 2006
NATURE
Petition for review on certiorari
FACTS
- The spouses Roque Yu, Sr. and Asuncion Yu are the controlling
stockholders of Leyte Lumber. During his lifetime, Engr. Basilio G.
Magno entered into a verbal agreement with Leyte Lumber through
Roque Yu, Sr., whereby the latter agreed to supply Magno with building
materials he may need in his construction business. The success of
Magno's business gave birth to the Basilio G. Magno Construction and
Development Enterprises, Inc.
- Owing to this fruitful relationship, the two (Roque Yu, Sr. and Magno)
entered into a joint venture, the Great Pacific Construction Company
(GREPAC), with Yu as President and Magno as Vice President. The
relationship between Yu and Magno began in 1975 and continued until
Magno's death on August 21, 1978.
- On January 30, 1979, in the RTC of Tacloban City, the petitioners
instituted two separate complaints for sums of money with damages
and preliminary attachment against the respondents. One was Civil
Case No. 5822, raffled to Branch 8 of the court, instituted by Leyte
Lumber against BG Magno and the Estate of Basilio Magno, to collect
on the principal amount of P1,270,134.87 for construction materials
claimed to have been obtained on credit by BG Magno, and the other
was Civil Case No. 5823, raffled to Branch 6, filed by the Yu spouses
against BG Magno and the Estate of Basilio Magno, to collect upon
loans and advances (P3,575,000.00) allegedly made by the spouses
to BG Magno.
- On June 17, 1993 the court rendered its decision i favor of the
defendant on both cases. The two separate decisions of even date
were penned by Judge Getulio M. Francisco, the presiding judge of
Branch 6 to which only Civil Case No. 5823 was raffled. The parties did
not move for a reconsideration of the two decisions nor did they call
the attention of Judge Francisco on the absence of an order for
consolidation of the two cases. Instead, they directly interposed their
respective appeals to the CA.
- In the CA, the two cases on appeal were consolidated. In Civil Case
No. 5822, the appealed decision is MODIFIED by declaring that
defendant B.G. Magno Construction and Development Enterprises,

Inc., made an overpayment in the amount of P631,235.61, instead of
P620,239.61 and ordering plaintiff to return said amount to defendant,
with interest of 12% per annum from promulgation hereof until fully
paid, and by DELETING the award of exemplary damages in the sum
of P200,000.00 in favor of defendan. In Civil Case No. 5823, the
appealed decision is REVERSED and SET ASIDE. Accordingly,
defendant B.G. Magno Construction and Development Enterprises,
Inc. is ordered to pay plaintiffs the sum of P625,000.00, with 12%
interest per annum from promulgation hereof until fully paid, and the
further sum of P50,000.00 by way of attorney's fees, plus costs of suit.
ISSUE
WON Branch 6 had jurisdiction to decide Civil Case No. 5822
pending in Branch 8 in the absence of a motion or order of
consolidation of the two cases
HELD
YES
- There was nothing irregular in the procedure taken. The records show
that there appears to have been a previous agreement to either
transfer or consolidate the two cases for decision by the presiding
judge of Branch 6.
- Indeed, when the respondents filed a Motion to Lift, Dissolve and
Quash the Writs of Attachment with Branch 6 on January 20, 1993, the
caption thereof indicated the docket numbers of both cases. Likewise,
on October 29, 1993, when the petitioners' new counsel entered his
Formal Appearance, in the caption thereof was also written the docket
numbers of both cases. Petitioners' previous counsel of longstanding
(whose representation dates back to the filing of the two complaints in
1979) filed his Motion to Withdraw as Counsel on October 30, 1993,
and the caption thereof similarly indicated the docket numbers of both
cases. Subsequent orders of the court which emanated from Branch 6
also bear, in the caption thereof, the titles and docket numbers of both
cases. In other words, as early as six months prior to the promulgation
of Judge Franciscos decisions in the two cases, there appears to have
been a transfer or consolidation of said cases in Branch 6 and the
parties knew of it, albeit the actual date when the two cases were
consolidated or transferred does not appear on record. Nonetheless,
the fact remains that no opposition or objection in any manner was
registered by either of the parties to the same, thereby evincing their
consent thereto. It is, therefore, already too late in the day for the
petitioners to question the competence of Judge Francisco to render
the separate decisions in the two cases. Petitioners may not now
question the transfer or consolidation of the two cases on appeal, for
they knew of it and did not question the same in the court below. They
may not now make a total turn-around and adopt a contrary stance;
more so when the judgment issued is adverse to their cause.
- The next logical questions are: Is the consolidation of the two cases
(Civil Case Nos. 5822 and 5823) a procedural step which the court a
quo could have properly taken? Is it a remedy available within the
context of the surrounding circumstances? We answer both questions
in the affirmative. The two cases were filed just a few months apart;
they involve simple cases of collection of sums of money between
identical parties and no other; the respondents (as defendants therein)
claim, in both cases, essentially the same defense, which is
overpayment; they cover the same period of transacting continuous
business that spans four years; they relate to simple issues of fact that
are intimately related to each other; they entailed the presentation of
practically identical evidence and witnesses; in fact, a broad part of the
evidence and testimonies in one case was totally adopted or
reproduced in the other by either or both parties. And the trial court,
being multi-sala courts, its Branches 6 and 8 possessed jurisdiction to
try either or both cases on their own.
- A court may order several actions pending before it to be tried
together where they arise from the same act, event or transaction,
involve the same or like issues, and depend largely or substantially on
the same evidence, provided that the court has jurisdiction over the
case to be consolidated and that a joint trial will not give one party an
undue advantage or prejudice the substantial rights of any of the
parties (citing 1 CJS, 1347). Consolidation of actions is expressly
authorized under Section 1, Rule 31 of the Rules of Court:
Section 1. Consolidation. When actions involving a common
question of law or fact are pending before the court, it may order a joint
hearing or trial of any or all the matters in issue in the actions; it may
order all the actions consolidated; and it may make such orders
89
concerning proceedings therein as may tend to avoid unnecessary
costs or delay.
- The obvious purpose of the above rule is to avoid multiplicity of suits,
to guard against oppression and abuse, to prevent delays, to clear
congested dockets, to simplify the work of the trial court; in short the
attainment of justice with the least expense and vexation to the parties
litigants (citing 1 CJS 1342-1343).
- Consolidation of actions is addressed to the sound discretion of the
court, and its action in consolidating will not be disturbed in the
absence of manifest abuse of discretion. In the instant case,
respondent judge did not abuse his discretion in ordering the joint trial
of the two cases. There is no showing that such joint trial would
prejudice any substantial right of petitioner. Neither does the latter
question the court's jurisdiction to try and decide the two cases.
- The ordered consolidation of cases, to our mind, crystallizes into
reality the thinking of our predecessors that:
". . . The whole purpose and object of procedure is to make the powers
of the court fully and completely available for justice. The most perfect
procedure that can be devised is that which gives opportunity for the
most complete and perfect exercise of the powers of the court within
the limitations set by natural justice. It is that one which, in other words,
gives the most perfect opportunity for the powers of the court to
transmute themselves into concrete acts of justice between the parties
before it. The purpose of such a procedure is not to restrict the
jurisdiction of the court over the subject matter, but to give it effective
facility in righteous action. It may be said in passing that the most
salient objection which can be urged against procedure today is that it
so restricts the exercise of the court's powers by technicalities that part
of its authority effective for justice between the parties is many times
an inconsiderable portion of the whole. The purpose of procedure is
not to thwart justice. Its proper aim is to facilitate the application of
justice to the rival claims of contending parties. It was created not to
hinder and delay but to facilitate and promote the administration of
justice. It does not constitute the thing itself which courts are always
striving to secure to litigants. It is designed as the means best adapted
to obtain that thing. In other words, it is a means to an end. It is the
means by which the powers of the court are made effective in just
judgments. When it loses the character of the one and takes on that of
the other the administration of justice becomes incomplete and
unsatisfactory and lays itself open to grave criticism."
Disposition Judgment is hereby rendered MODIFYING the assailed
CA decision by setting aside and deleting the award of the
respondents counterclaim in the amount of P142,817.27 in Civil Case
No. 5822; reiterating the P50,000.00 award of attorneys fees and
litigation expenses in favor of the respondents in Civil Case No. 5822;
and deleting the award of attorneys fees to the petitioners in Civil Case
No. 5823. In all other respects, the assailed decision is AFFIRMED.
b. trial by commissioners
ANGARA v FEDMAN
G.R. NO. 156822
AUSTRIA-MARTINEZ; October 18, 2004
NATURE: Motion for Reconsideration
FACTS:
- On February 8, 1996, respondent filed a complaint for Accion
Reinvindicatoria and/or Quieting of Title against petitioner before the
Regional Trial Court, Nasugbu, Batangas , claiming to be the rightful
owners of the land currently occupied by petitioner. They even
conducted a relocation survey.
-petitoner on the other hand claimed that he is the lawful owner; the
said parcels of land do not encroach on respondent's property; and
assuming that there is such an encroachment, he nevertheless had
acquired title thereto by virtue of acquisitive prescription
-RTC ordered the constitution of committee of three surveyors
composed of geodetic engineers representing the petitioner,
respondent and the DENR

-On June 22, 2000, the RTC issued subpoena ad testificandum to the
three Geodetic Engineers who composed the Board of Commissioners
to testify in connection with their individual reports. The RTC also
reminded respondent that the case was filed as early as February 8,
1996, the pre-trial was conducted on January 20, 1999 and since then
respondent has not even commenced presenting its evidence on the
merits.
-On September 27, 2000, the RTC ordered the dismissal of the case
due to the failure of the respondent to prosecute its case for an
unreasonable length of time. However, upon respondent's motion for
reconsideration, the RTC reconsidered the order of dismissal.
-petitioner filed an Omnibus Motion praying that judgment be rendered
on the basis of the commissioners' report and, alternatively, all other
persons who will be adversely affected by the relocation survey be
impleaded as parties
-RTC denied the said Omnibus Motion. The RTC held that according to
respondent there was no joint survey conducted by the commissioners
as ordered by it and as agreed upon by the parties, hence the report of
the commissioners cannot be the basis of the judgment, petitioner filed
a motion for reconsideration which was rejected by the RTC. Petitioner
then filed a petition for certiorari with the CA. this too was rejected.
Petitoner filed a petition for certiorari with the SC. Court denied the
petition for review on certiorari for failure to sufficiently show that the
CA committed any reversible error. Hence, the present Motion for
Reconsideration
ISSUE: WON CA erred in rejecting the appeal
HELD: no.
-According to petitioner, this is a "simple case of an alleged
'encroachment' or 'overlapping' of property boundaries." Considering
that the issue involves principally a factual and technical matter for
which the RTC, at the instance of the parties, created a Panel of
Commissioners has done its job and the chairman submitted his report
on the basis of his evaluation of the separate surveys conducted by the
members. The RTC, however, simply ignored the report on the
technical and lame excuse that the Panel of Commissioners did not
conduct a "joint survey."
-petitioner submits that the RTC cannot simply ignore the
commissioners' report without considering its merits simply because
the parties agreed that the same is not final and binding. Petitioner
argues that the RTC should have considered the merits of the report
and acted on its recommendation instead of rejecting it outright without
any cause or reason. As to the insistence of respondent that the RTC
ordered a "joint survey", petitioner submits that there is nothing in the
order of the RTC defining or specifying what a "joint" survey is.
-Petitioner reiterates his arguments in the petition that a joint survey, as
understood by respondent, wherein the commissioners literally go out
together, conduct a survey in the presence of one another, and prepare
one report, could not have been contemplated by the RTC since the
commissioners nominated by the parties insisted on two different
methods or approaches for the survey.
-A battle of semantics is principally being waged before this Court.
Petitioner argues that undue emphasis was placed on the words "joint
relocation survey, which literally means one that is conducted
physically together or in the presence of one another." The order
constituting the panel of commissioners, however, does not define
what a joint relocation survey entails nor does it lay out the steps or
procedures in conducting the same. Petitioner submits that the term
"joint survey" does not rule out a survey that is coordinated and linked
together resulting in a joint finding and recommendation. On the other
hand, respondent subscribes to the pronouncement of the RTC that
the record is replete with explicit motion and orders of the court calling
for joint survey.
*issue of certiorari (important to note)
- It must be emphasized that the petition before the CA is a special civil
action for certiorari under Rule 65 of the Rules of Court. Certiorari
under Rule 65 is a remedy narrow in scope and inflexible in character.
It can be invoked only for an error of jurisdiction, that is, one where the
act complained of was issued by the court, without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to
lack or in excess of jurisdiction.
-In this case, the assailed orders of the RTC are but resolutions on
incidental matters which do not touch on the merits of the case or put
an end to the proceedings. They are interlocutory orders since there
leaves something else to be done by the RTC with respect to the
merits of the case. Consequently, the Court is perplexed that, in
90
resolving the petition before it, the Court of Appeals chose to delve into
the wisdom and soundness of the orders of the RTC, overlooking the
nature of the petition before it. The supervisory jurisdiction of the court
to issue a certiorari writ cannot be exercised in order to review the
judgment of the lower court as to its intrinsic correctness, either upon
the law or the facts of the case
-Petitioner failed to demonstrate his claim that the RTC acted with
grave abuse of discretion amounting to lack or in excess of its
jurisdiction in denying petitioner's prayer for rendition of judgment
based on the commissioners' report. The Rules of Court clearly
provides that the trial court is not bound by the findings of the
commissioners or precluded from disregarding the same. It may adopt,
modify, reject the report or recommit it with instructions, or require the
parties to present further evidence
3. incidents/ processes
a. calendar of cases
b. intervention
HOLIDAY INN V SANDIGANBAYAN
186 SCRA 447
MEDIALDEA: June 8, 1990
NATURE:
Petition for review on certiorari (treated as a special civil action for
certiorari)
FACTS:
- On January 1, 1976, Holiday Inn, Inc. (HII) entered into a
management contract with New Riviera Hotel and Development Co.,
Inc. (NRHDC) for a period of ten (10) years. Article 18 of said
agreement stipulates:
ARTICLE 18 RIGHT OF FIRST REFUSAL
If Owner, at any time or times during the term hereof, shall receive a
bona fide offer from a third party acceptable to Owner, or which
Owner does not promptly reject, to purchase the Premises or any
part thereof, or the business conducted in connection therewith, or in
the buildings, equipment, or furnishings used in connection therewith,
or any interest in Owner (whether a partnership, or corporation or
otherwise), Owner shall deliver to Manager an executed original copy
of such offer and agrees concurrently therewith to deliver to Manager
an financial information (including but not limited to, certified balance
sheets and operating statements) involved and such, other
information as may be reasonably requested by Manager. Manager
may, within twenty one (21) days of its receipt of such offer and said
financial data, at its portion, purchase said interest of said Owner on
the terms of said offer.
- On January 1, 1976, NRHDC and HII assigned all their rights under
the above mentioned agreement to petitioner Holiday Inn (Phils.), Inc.
(HIP)
- On April 22, 1986, NRHDC was sequestered by the PCGG which
subsequently appointed fiscal agents and/or placed an operating team
to monitor the activities of said corporation.
- Because of numerous controversies and conflicts resulting in
operational problems regarding NRHDC, PCGG and Roberto S.
Benedicto, who is perceived to be the controlling stockholder of the
company, entered into an agreement whereby 2/3 of the members of
the Board of Directors of NRHDC shall be nominees of the PCGG and
1/3 thereof shall be nominees of Mr. Benedicto.
- On July 14, 1986, HIP and NRHDC, as sequestered by PCGG
entered into an agreement (addendum) extending the terms of their
January 1, 1976 agreement thereof to an indefinite period "on its
existing terms and conditions" with either party having the right to
terminate the agreement upon six (6) months prior written notice to the
other party
- On May 10, 1988, NRHDC served upon HIP a letter advising that
the management agreement shall be terminated six (6) months from
said date. It was latter learned that the letter of termination was
brought about by NRHDCs decision to have New World Hotel
Philippines (NWHP) manage the property in lieu of HIP.
- Contending that there was breach of Article 18 of its original
management agreement with NRHDC, HIP initiated on November 2,
1988 an action for intervention in Sandiganbayan, a sequestration
case, and wherein NRHDC was included as among the firms
sequestered, alleged to be part of the ill-gotten wealth amassed by

Roberto S. Benedicto in conspiracy with former President Ferdinand
Marcos.
- The proposed complaint-in-intervention attached to the motion-in-
intervention questions the termination of the management agreement
without the corresponding prior notice and/or right of first refusal under
Article 18 of the Agreement. Petitioner likewise prayed for recovery of
unpaid management fees under the agreement.
- On November 11, 1988, the Sandiganbayan issued the questioned
Resolution denying HIPs motion for intervention for lack of jurisdiction
since
- HIP has flied the present petition contending that, the
Sandiganbayan has exclusive and original jurisdiction over all cases
civil or criminal, and all incidents arising from incidental to, or related
to, such cases necessarily fall likewise under the Sandiganbayan's
exclusive, and original jurisdiction subject to review on certiorari
exclusively by the Supreme Court
- The court a quo issued a temporary restraining order on November
16, 1988.
ISSUES
1. WON petitioner has a legal interest sufficient to justify its
intervention
2. WON the Sandiganbayan has jurisdiction over the subject
matter of petitioners proposed complaint-in-intervention
HELD
1. NO
Reasoning
Sec. 2 of Rule 12 tells us that a person may intervene in proceedings
in progress if that person has a legal interest in the success of either of
the parties, or against both or when a disposition of the property
involved would affect the prospective intervenor. Holiday Inn, Inc., has
not shown how the termination or continuation of its management
contract would be legally affected by a finding of whether or not
Roberto S. Benedicto lawfully acquired RIVIERA.
The subject-matter of petitioner's proposed complaint-in-intervention
involves basically, an interpretation of contract, i.e., whether or not the
right of first refusal could and/or should have been observed, based on
the Addendum/Agreement of July 14, 1988, which extended the terms
and conditions of the original agreement of January 1, 1976. The
question of whether or not the sequestered property was lawfully
acquired by Roberto S. Benedicto has no bearing on the legality of the
termination of the management contract by NRHDC's Board of
Directors. The two are independent and unrelated issues and
resolution of either may proceed independently of each other.
Upholding the legality of Benedicto's acquisition of the sequestered
property is not a guarantee that HIP's management contract would be
upheld, for only the Board of Directors of NRHDC is qualified to make
such a determination.
2. NO
Reasoning
The original and exclusive jurisdiction given to the Sandiganbayan over
PCGG cases pertains to (a) cases filed by the PCGG, pursuant to the
exercise of its powers under Executive Order Nos. 1, 2 and 14. as
amended by the Office of the President, and Article XVIII, Section 26 of
the Constitution, i.e., where the principal cause of action is the
recovery of ill-gotten wealth, as well as all incidents arising from,
incidental to, or related to such cases and (b) cases filed by those who
wish to question or challenge the commission's acts or orders in such
cases.
Evidently, petitioner's proposed complaint-in-intervention is an ordinary
civil case that does not pertain to the Sandiganbayan. As the Solicitor
General stated, the complaint is not directed against PCGG as an
entity, but against a private corporation, in which case it is not per se, a
PCGG case.
Dispositive. Dismissed.
ORDONEZ V GUSTILO
192 SCRA 469
PARAS; December 20, 1990
NATURE
91
Petition for certiorari to review decision and order of RTC Cavite, Br.
16, Cavite City, Gustilo, J.
FACTS
- Respondent Espiritu filed complaint for specific performance and
damages against respondents Municipality of Rosario, Cavite and
Mayor Enriquez to enforce their agreement contained in a Reclamation
Contract. Plaintiff prays that a portion of the foreshore land of the town
be conveyed to him as assignee of Salinas Devt. Corp. (SADECO),
the entity which reclaimed the land in question. Defendants resisted
the claim stating it was barred by the statute of limitations.
- Herein petitioner, the barangay captain of Tejeros Convention,
Rosario, Cavite, together with 7 others intervened and alleged in their
Answer-in-Intervention that the area being claimed by Espiritu came
about by natural accretion and that the Reclamation Contract is null
and void.
- At the pre-trial conference, where the original parties and intervenors
were present, Espiritu and defendant municipality manifested that they
would submit to a compromise agreement at a latter date.
- On the other hand, intervenors asked that they be allowed to present
evidence to prove their defense.
- The principal litigants submitted to the court their compromise
agreement. TC approved and rendered a decision in accordance
therewith. Yet, intervenors continued to present evidence, regarding
their allegations.
- 2 years later, intervenors filed a motion to set aside the compromise
agreement. Respondent judge denied. Judge Gustilo also terminated
the proceedings and ordered the case to be closed.
ISSUE/S
WON trial court erred in stopping/preventing the intervenors from
further presenting evidence in support of their Answer-in-Interevention.
HELD
1. NO. Intervention is defined as a proceeding in a suit or action by
which a third party is permitted by the court to make himself a party,
either joining plaintiff in claiming what is sought by the complaint, or
uniting with defendant in resisting the claims of plaintiff, or demanding
something adversely to both of them; the act or proceeding by which a
third person becomes a party in a suit pending between the others; the
admission, by leave of court, of a person not an original party to
pending legal proceedings, by which such person becomes a party
thereto for the protection of some right or interest alleged by him to be
affected by such proceedings.
Ratio Intervention is only collateral or ancillary to the main action.
Hence, it was previously ruled that the final dismissal of the
principal action results in the dismissal of said ancillary
action.
Reasoning A judgment approving a compromise agreement is final
and immediately executory. All pending issues will become moot
and academic once a compromise submitted by the parties is
approved by the trial court.
The continuation of reception of intervenors evidence would serve no
purpose at all. Should intervenors fail to prove that the Reclamation
Contract is null and void and that no actual reclamation was made, the
correctness and propriety of the decision based upon the compromise
agreement would be strengthened. On the other hand, should they
succeed in proving that the contract is null and void, and that the area
in question came into being through the natural action of the sea, still
the decision of the lower court could no longer be set aside, inasmuch
as it has already become final and executed.
Disposition WHEREFORE, for lack of merit, the petition is
DISMISSED. Costs against petitioner.
AGULTO v TECSON
G.R. No.145276
CORONA;November 29, 2005
FACTS:
-On August 25, 1997, the respondent William Z. Tecson filed an action
for damages against petitioners Rolando Agulto, Maxima Agulto,
Cecille Tenoria and a certain Maribel Mallari in the RTC of Quezon
City. Agulto filedan answer claiming that Tecson had no cause of action
and alleged malicious prosecution. RTC dismissed Tecsons complaint

(failure to prosecute for an unreasonable length of time). Tecson filed a
motion for reconsideration, which was gracted. Court required the
parties to appear during the pre-trial conference scheduled on January
21, 1999. The pre-trial was, however, reset to April 29, 1999.
-During the scheduled pre-trial on April 29, 1999, petitioner Rolando
Agulto and his counsel were informed by an employee of the RTC that
the presiding judge was on leave. Counsel for Agulto suggested that it
be re-scheduled on June 17. Employee advised petitioners counsel
that the suggested setting was not yet official as it would depend on
the calendar of the court and the counsel of respondent.
-The pre-trial proceeded on June 17, 1999. For failure of petitioners to
appear at the pre-trial and to submit their pre-trial brief, the RTC issued
an order allowing the respondent to present his evidence ex parte
-Petitioners filed a motion for reconsideration of the June 17, 1999
order of the RTC. They claimed that they were not notified of the pre-
trial held on June 17, 1999. Before the motion could be heard,
however, the court rendered its July 12, 1999 decision in favor of
respondent. Petitioners were ordered to pay respondent moral
damages, exemplary damages and attorneys fees in the aggregate
amount of P170,000.
-Petitioners filed a petition for certiorari under Rule 65 of the 1997
Rules of Civil Procedure with the CA on November 24, 1999. They
claimed that the RTC gravely abused its discretion when it issued the
September 24, 1999 order
-CA dismissed the petition. It ruled that the proper remedy was appeal
by writ of error, i.e., ordinary appeal, under Rule 41 of the 1997 Rules
of Civil Procedure, not a petition for certiorari under Rule 65. The CA
also held that the petitioners failed to show that their absence during
the scheduled pre-trial was for a valid cause
-Hence, this petition for review on certiorari under Rule 45 of the Rules
of Court
ISSUE: WON RTC acted with grave abuse of discretion in not
considering Agultos motions for reconsideration regarding the pre-trial.
HELD: YES
-Under the present Section 3, Rule 18 of the 1997 Rules of Civil
Procedure, the notice of pre-trial should be served on counsel. The
counsel served with notice is charged with the duty of notifying the
party he represents. It is only when a party has no counsel that the
notice of pre-trial is required to be served personally on him.
-Thus, the present rule simplifies the procedure in the sense that notice
of pre-trial is served on counsel, and service is made on a party only if
he has no counsel. It does not, however, dispense with notice of pre-
trial.
-Thus, sending a notice of pre-trial stating the date, time and place of
pre-trial is mandatory. Its absence will render the pre-trial and
subsequent proceedings void. Thus, the trial courts order allowing the
plaintiff to present his evidence ex parte without due notice of pre-trial
to the defendant constitutes grave abuse of discretion
-Although the failure of the defendant to file a pre-trial brief has the
same effect as his failure to appear at the pre-trial (this is, the plaintiff
may be allowed to present his evidence ex parte and the court shall
render judgment on the basis thereof), a condition precedent is the
service of notice of pre-trial. Otherwise, the defendant will be groping in
the dark as to when exactly he is supposed to file his pre-trial brief.
-More specifically, under Section 6, Rule 18 of the 1997 Rules of Civil
Procedure, the parties are required to file with the court and serve on
the adverse party, in such manner as shall ensure their receipt thereof
at least three days before the date of the pre-trial, their respective pre-
trial briefs. Clearly, the date of the pre-trial is the reckoning point for the
filing of the pre-trial brief. But without prior notice of pre-trial, the parties
cannot reasonably be expected to know the date of the pre-trial.
c. subpoena
d. Rule 22
UY vs. FIRST METRO INTEGRATED STEEL CORP.
G.R. No. 167245
YNARES-SANTIAGO; September 27, 2006
NATURE: Petition for Review
FACTS: Private respondent First Metro Integrated Steel Corporation
(FMISC) filed a complaint for sum of money with prayer for writ of
92
preliminary attachment against Robert Juan Uy (Robert), Midland
Integrated Construction Company (MICC) and petitioner Elpidio Uy.
The complaint arose from petitioners issuance of a check in the
amount of P695,811.00 in favor of FMISC to cover payment for
deformed steel bars delivered by the latter to petitioner and private
respondents MICC and Robert. However, the check was dishonored
upon presentment and despite demands, MICC, Robert and petitioner
refused to pay.
After the filing of the respective Answers of FMISC, Robert
and MICC, hearings were thereafter conducted for the reception of
their respective evidence. The initial reception of petitioner's evidence
was set on February 28, 2001 but it was cancelled because petitioner
had influenza. The hearing was reset six more times, but in each
instance, petitioner, through his lawyers, moved for the cancellation
and resetting of the presentation of his evidence. During the sixth
scheduled hearing on February 28, 2002, Atty. Baares, counsel for
petitioner arrived late. Upon motion of FMISC, the trial court ordered
that petitioner's right to present evidence is deemed waived and the
parties were directed to file their respective memorandum. Atty.
Baares withdrew his appearance on January 8, 2003 with petitioner's
conformity.
On March 7, 2003, the trial court rendered judgment against
petitioner and in favor of FMISC. On April 4, 2003, petitioner received a
copy of the Decision. On April 21, 2003, petitioner through Atty. Lucas
C. Carpio, Jr. filed a Motion for New Trial on the ground of gross
negligence of petitioner's counsel in failing to attend the hearing for the
reception of evidence, thus impairing his rights to due process. The
trial court denied the motion for new trial. Dissatisfied, petitioner filed
with the Court of Appeals a petition for certiorari. The CA dismissed the
petition and denied petitioner's motion for reconsideration. Hence, this
Petition.
ISSUES: (1) WON petitioners motion for new trial was filed out of time;
(2) WON a petition for certiorari is the proper remedy to overturn the
denial of a motion for new trial; (3) WON the motion for new trial should
be granted.
HELD:
(1) NO. A scrutiny of the records discloses that while the Motion for
New Trial was received by the trial court on April 28, 2003, the date on
the Registry Receipt attached to the Affidavit of Service as well as that
stamped on the envelope which contained the copy of the motion,
reveals that it was filed and served by registered mail on April 21,
2003, a Monday, because April 19, 2003, the last day for filing the
same was a Saturday. Section 1, Rule 22 of the Rules of Court states
that if the last day of the period thus computed falls on a Saturday, a
Sunday, or a legal holiday in the place where the court sits, the time
shall not run until the next working day. Thus, the motion was actually
filed on time it having been filed on April 21, 2003, the next working
day, following the last day for filing which fell on a Saturday.
(2) YES. Section 9, Rule 37 of the Rules of Court which provides that
the remedy to an order denying a motion for new trial is to appeal the
judgment or final order, must be read in conjunction with Section 1,
Rule 41 which provides that no appeal may be taken from an order
denying a new trial or reconsideration. Rule 41, Section 1 further
provides that: where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule
65. Thus, the filing by the petitioner of a petition for certiorari with the
Court of Appeals from the denial of the motion for new trial by the trial
court is proper.
(3) NO. Section 1, Rule 37 provides that a motion for new trial may be
filed within the period for taking an appeal based, among others, on
excusable negligence. Negligence to be excusable must be one which
ordinary diligence and prudence could not have guarded against. In
the instant case, the negligence of petitioner's counsel in failing to
attend the hearings for the reception of evidence is inexcusable. The
trial court scheduled the hearing for the reception of petitioner's
evidence seven times. The initial hearing set on February 28, 2001
was cancelled because petitioner allegedly had influenza. The
hearings scheduled on April 26, 2001 and May 10, 2001 were
cancelled and moved to October 25, 2001 and December 13, 2001.
Petitioner was represented by Atty. Carpio, Jr. as collaborating counsel
during the hearing on October 25, 2001 but no evidence was
 93

presented. Instead, the hearing was cancelled. On December 13,

2001, Atty. Baares, petitioner's new counsel, appeared but he .
requested for a resetting. On February 14, 2002, Atty. Baares moved
to postpone the hearing to February 28, 2002 as previously scheduled.
On February 28, 2002, Atty. Baares arrived late. The records disclose
that the hearings were postponed or cancelled without any justification.
However, the trial court accommodated the requests for postponement
or resetting in order to accord petitioner due process. Under the
circumstances, petitioner's counsel's failure to attend the seven
scheduled hearings is without justifiable reason tantamount to
inexcusable neglect. As such, it cannot be a ground for new trial.

In addition, the Rule requires that motions for new trial founded on
fraud, accident, mistake or excusable negligence must be
accompanied by affidavits of merits, i.e., affidavits showing the facts
(not mere conclusions or opinions) constituting the valid cause of
action or defense which the movant may prove in case a new trial is
granted, because a new trial would serve no purpose and would just
waste the time of the court as well as the parties if the complaint is
after all groundless or the defense is nil or ineffective.

Under the Rules, the moving party must show that he has a
meritorious defense. The facts constituting the movant's good and
substantial defense, which he may prove if the petition were granted,
must be shown in the affidavit which should accompany the motion for
a new trial. Petitioner's Affidavit of Merit did not contain clear
statements of the facts constituting a good and valid defense which he
might prove if given the chance to introduce evidence. The allegations
that he has a "meritorious defense" and a "good cause" are mere
conclusions which did not provide the court with any basis for
determining the nature and merit of the case. An affidavit of merit
should state facts, and not mere opinion or conclusions of law.
Petitioner's motion for new trial and affidavit of merit did not mention
the evidence which he was prevented from introducing, nor did it allege
that such evidence would change the outcome of the case.

Petitioner's argument that his counsel's negligence was so gross that

he was deprived of due process fails to impress. Gross negligence is
not one of the grounds for a motion for a new trial. We cannot declare
his counsel's negligence as gross as to liberate him from the effects of
his failure to present countervailing evidence. Besides, we find that
petitioner's and his counsel's negligence are concurrent. During the
initial hearing for the reception of his evidence, petitioner was absent
allegedly due to influenza. During the succeeding scheduled hearings,
petitioner was absent but his lawyer, Atty. Molina, was present but did
not present any evidence. Instead, motions for postponement or
resetting were made. In one occasion, Atty. Molina was absent but Atty.
Carpio, Jr. appeared as collaborating counsel. Still, no evidence was
presented but a resetting was again requested.

Finally, petitioner's counsel's inexcusable neglect did not amount to

petitioner's deprivation of due process of law. The right to due process
safeguards the opportunity to be heard and to submit any evidence
one may have in support of his claim or defense. In the instant case,
petitioner was given several opportunities to be heard and to submit
evidence but he squandered them. Blunders and mistakes in the
conduct of the proceedings in the trial court as a result of the
ignorance, inexperience or incompetence of counsel do not qualify as
a ground for new trial.

DISPOSITIVE: The Petition is DENIED for lack of merit.