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EVANGELINE ALDAY, petitioner, vs. FGU INSURANCE CORPORATION, respondent.

[G.R. No. 138822. January 23, 2001]

BATTUNG, Marieflor S.

I. Facts:
FGU Insurance Corporation filed a complaint with the Regional Trial Court of Makati
alleging that petitioner Evangeline K. Alday owed it P114,650.76, representing
unliquidated cash advances, unremitted costs of premiums and other charges incurred
by petitioner in the course of her work as an insurance agent for respondent.Respondent
also prayed for exemplary damages, attorneys fees, and costs of suit. Petitioner filed her
answer and by way of counterclaim, asserted her right for the payment of P104,893.45,
representing direct commissions, profit commissions and contingent bonuses earned
from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting
to P500,000.00. In addition, petitioner prayed for attorneys fees, litigation expenses,
moral damages and exemplary damages for the allegedly unfounded action filed by
respondent. Respondent filed a Motion to Strike Out Answer With Compulsory
Counterclaim And To Declare Defendant In Default because petitioners answer was
allegedly filed out of time. However, the trial court denied the motion and similarly rejected
respondents motion for reconsideration. Respondent then filed a motion to dismiss
petitioners counterclaim, contending that the trial court never acquired jurisdiction over
the same because of the non-payment of docket fees by petitioner. In response, petitioner
asked the trial court to declare her counterclaim as exempt from payment of docket fees
since it is compulsory and that respondent be declared in default for having failed to
answer such counterclaim. The trial court granted respondents motion to dismiss
petitioners counterclaim and consequently, denied petitioners motion. The court found
petitioners counterclaim to be merely permissive in nature and held that petitioners failure
to pay docket fees prevented the court from acquiring jurisdiction over the same.The CA
sustained the trial court’s findings.

II. Issue:
1. Whether or not the counterclaim of petitioner is compulsory or permissive
in nature.
2. Whether or not the non-payment of docket fees results in the automatic
dismissal of the case

III. Doctrine:

1. Petitioner’s counterclaim for commissions, bonuses, and accumulated premium
reserves is merely permissive however petitioners claims for damages, allegedly
suffered as a result of the filing by respondent of its complaint, are compulsory.
A compulsory counterclaim is one which, being cognizable by the regular courts of justice,
arises out of or is connected with the transaction or occurrence constituting the subject
matter of the opposing partys claim and does not require for its adjudication the presence
of third parties of whom the court cannot acquire jurisdiction. In Valencia v. Court of
Appeals, this Court capsulized the criteria or tests that may be used in determining
whether a counterclaim is compulsory or permissive, summarized as follows: “1. Are the
issues of fact and law raised by the claim and counterclaim largely the same? 2. Would
res judicata bar a subsequent suit on defendants claim absent the compulsory
counterclaim rule? 3. Will substantially the same evidence support or refute plaintiffs
claim as well as defendants counterclaim?4. Is there any logical relation between the
claim and the counterclaim?”
Another test is applied in the of Quintanilla v. Court of Appeals is, “Is the compelling test
of compulsoriness which requires a logical relationship between the claim and
counterclaim, that is, where conducting separate trials of the respective claims of the
parties would entail a substantial duplication of effort and time by the parties and the
court.” In the present case the evidence required to prove petitioners claims differs from
that needed to establish respondents demands for the recovery of cash accountabilities
from petitioner, such as cash advances and costs of premiums. The recovery of
respondents claims is not contingent or dependent upon establishing petitioners
counterclaim, such that conducting separate trials will not result in the substantial
duplication of the time and effort of the court and the parties. One would search the
records in vain for a logical connection between the parties claims. This conclusion is
further reinforced by petitioners own admissions since she declared in her answer that
respondents cause of action, unlike her own, was not based upon the Special Agents
Contract.

2. No, although the payment of the prescribed docket fees is a jurisdictional
requirement, its non-payment does not result in the automatic dismissal of the case
provided the docket fees are paid within the applicable prescriptive or reglementary
period.
The rule on the payment of filing fees has been laid down by the Court in the case of Sun
Insurance Office, Ltd. v. Hon. Maximiano Asuncion. 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 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. The same rule applies to
permissive counterclaims, third-party claims and similar pleadings, which shall not be

The court may allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. No. LTD. respondents. dismantling. these were dishonored for the reason "PAYMENT STOPPED. The CA rendered the assailed Decision affirming the RTC Orders and dismissing the petition for certiorari filed by the Petitioner. it should have paid docket fees and filed a certificate of non-forum shopping.. HON. When Petitioner deposited the checks. KOREA TECHNOLOGIES CO. VELASCO. Petitioner strongly argues that when Private Respondent filed the counterclaims. Hence. 2008] DIGEST BY: AUSTRIA. 143581 January 7. JR. and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION.considered filed until and unless the filing fee prescribed therefor is paid. and preliminary injunction to enjoin the RTC and Private Respondent from inspecting. ISSUE: . Cavite. Petitioner filed before the Court of Appeals (CA) a petition for certiorari seeking annulment of the RTC Orders and praying for the issuance of writs of prohibition. Private Respondent filed its Answer with Compulsory Counterclaim alleging that Petitioner is liable for damages amounting to PhP 4.. it was denied. Private Respondent informed Petitioner that the former was canceling their Contract. LERMA. Private Respondent replied that the two checks it issued Petitioner were fully funded but the payments were stopped for that Petitioner deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for. Petitioners prayer were denied by the RTC. and that its failure to do so was a fatal defect. (Petitioner) and Pacific General Steel Manufacturing Corp. (Private Respondent) executed a contract whereby Petitioner would set up an LPG Cylinder Manufacturing Plant in Carmona.R.000 for altering the quantity and lowering the quality of the machineries and equipment." Petitioner sent a demand letter to Private Respondent threatening criminal action in case of nonpayment. Petitioner filed an Urgent Motion for Reconsideration before the RTC. DON RODEL A. ALBERTO A. and to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute.500. vs. J. Ltd.. [G. Petitioner filed a Complaint for Specific Performance against Private Respondent before the Muntinlupa City Regional Trial Court (RTC). the Petitioner filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court.: FACTS: Korea Technologies Co. petitioner. and transferring the machineries and equipment in the Carmona plant. mandamus. in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City..

citing the continuing hold-out agreement. 7. as amended by A.M.M. Rule 11.R. We disagree with Petitioner. In 1991.CA and SMC G. Mercado filed an action to annul the continuing hold-out agreement and deed of assignment in the RTC of Manila. effective August 16. 8 on existing counterclaim or cross-claim states. No. 1997 Revised Rules of Civil Procedure. it asked CBC to release the proceeds of the assigned certificates of deposit. Rule 141. the counterclaims of Private Respondent were in accordance with Section 8 of Rule 11. 2004 under Sec. To secure his purchases. We stress. Rule 141. "A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein. DOCTRINE: Docket fees are now required to be paid in compulsory counterclaim or cross-claims. that effective August 16. however. as amended by A. it was not liable to pay filing fees for said counterclaims being compulsory in nature. SMC filed its answer with counterclaim against Mercado. No. Section 8. . 7. 04-2-04-SC. LEONIDES MERCADO vs. SMC extended to him a P7. Mercado assigned three China Banking Corporation (CBC) certificates of deposit amounting to P5 million to SMC and executed a continuing hold-out agreement. CBC approved SMC’s request and informed Mercado. The rule that was effective at the time the Answer with Counterclaim was filed is Rules of Court. SMC notified CBC that Mercado failed to pay for the items he withdrew on credit. 04-2-04-SC. Consequently. Whether or not payment of docket fees is required in filing of Compulsory Counterclaim? RESOLUTION: NO. As aptly ruled by the CA." At the time Private Respondent filed its Answer incorporating its counterclaims against Petitioner. 169576 October 17. Manila since 1967.5 million credit line allowing him to withdraw goods on credit. docket fees are now required to be paid in compulsory counterclaim or cross- claims. No. 2008 Amie Grace Bucalan 2014-0326 Facts: Mercado had been distributing respondent San Miguel Corporation’s (SMC’s) beer products in Quiapo. 2004 under Sec. Sec.

an educational institution in Bulan. Petitioner appealed to the CA. No. IMELDA MARO LLANO. being logically related to Mercado’s claim.R. had these issues been tried separately. Clearly. (2) falls within the jurisdiction of the court and (3) does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction.Consequently.: FACTS: Respondent Southern Luzon Institute (SLI). vs. DEL CASTILLO. SMC’s counterclaim. SMC’s counterclaim was permissive in nature. SOUTHERN LUZON INSTITUTE as represented by its Vice-President For Operations and Corporate Secretary. Mercado passed away and was substituted by his heirs. GLEN JOHANNES P. ALONZO GIPA. DEMAR BIT ANGCOR. was compulsory in nature. The said decision was void. the RTC never acquired jurisdiction over the counterclaim. affirmed the RTC’s decision. is compulsory. et al. Respondent. VIRGILIO GOJIT. Issue: Whether the counterclaim is permissive or compulsory? Held: SMC sought to collect the payment for the value of goods Mercado purchased on credit. JUANITO LUDOVICE. Petitioners subsequently filed this petition asserting that the CA erred in affirming the RTC decision. Inasmuch as SMC did not pay docket fees. petitioners and their co-defendants who had been . Doctrine: A counterclaim that (1) arises out of (or is necessarily connected with) the transaction or occurrence that is the subject matter of the opposing party’s claim. filed a Complaint for Recovery of Ownership and Possession with Damages against petitioners Alonzo Gipa. however. G. Thus. Mercado’s complaint and SMC’s counterclaim both touched the issues of whether the continuing hold-out agreement and deed of assignment were valid and whether Mercado had outstanding liabilities to SMC. the payment of docket fees was not necessary for the RTC to acquire jurisdiction over the subject matter.The trial court rendered a judgment in favour of SMC. FELIPE MONTALBAN AND DAISY M. SLI alleged that it is the absolute owner of a parcel of land situated in Sorsogon. However. The CA. RUBEN G. 2014 DIGEST BY: CRUZ.1 Petitioners. Thereafter. Based on the foregoing. PLACER. The same evidence would essentially support or refute Mercado’s claim and SMC’s counterclaim.177425. Sorsogon. June 18. J. ASUNCION. the efforts of the RTC and the parties would have had to be duplicated. insisting that Mercado did not default in the payment of his obligations to SMC.

ISSUE: Whether the CA gravely erred in dismissing the appeal filed by the Petitioners for failure to remit the meager amount of ₱300. Despite the lapse of nine months from their counsel’s receipt of the said resolution. that is. they point out that while full payment of docket fees is indispensable in the perfection of an appeal.00 was not paid justifies relaxation of the same. Hence. failed to comply with the CA’s directive. petitioners and their co-defendants. . the appellant shall pay to the clerk of court which rendered the judgment or final order appealed from. Rule 41 of the Rules of Court provides that: Within the period for taking an appeal. which apparently was not included in the ₱3. *Initially. however. The CA denied the Motion for Reconsideration. to remit within 10 days from notice the amount of ₱30. Finding SLI to have proven its ownership of the property. Nevertheless. the said court dismissed the appeal. petitioners invoke the liberal application of technical rules and contend that the fact that only the amount of ₱30. the same admits of exceptions.33 Their case falls under one of the exceptions.00 appeal fee previously paid by them. petitioners concede that the payment of docket fees is not a mere technicality. the RTC rendered a Decision in its favor.000. in the name of substantial justice and fair play. Payment of the full amount of appellate court docket and lawful fees is mandatory and jurisdictional. In view of this. Petitioners file this Petition for Review on Certiorari.00. the CA granted the said motion and consequently reinstated the appeal.00 for legal research fund. Jurisprudence is replete that the nonpayment of the docket and other lawful fees within the reglementary period as provided under Section 4 of Rule 41 of the Revised Rules of [C]ourt is a ground for the dismissal of an appeal.00 after having advanced a substantial portion of the docket fees. the full amount of the appellate court docket and other lawful fees. Section 4.informally occupying a portion of the said property refused to vacate the same despite demand.000. however. DOCTRINE: The Petition fails. Petitioners and their co-defendants promptly filed a MR to which they attached a Certification from the RTC that they paid the appeal fee in the amount of ₱3. Later in their Reply. the CA further required petitioners and their codefendants. Relaxation of the rule on payment of appeal fee is unwarranted in this case. however. as provided for under Section 1(c) Rule 50 of the same Rule. dismissed the appeal since it was not shown that the appellate court docket fees and other lawful fees were paid. Copy of the said resolution was received by petitioners’ counsel.32 however. The CA. Subsequently. Hence.

In both original and appellate cases. In Far Corporation v. And within this period. The information stated that Reyes uttered these words against Gegato: “Salud. Further. The Court is not persuaded. An ordinary appeal from a decision or final order of the RTC to the CA must be made within 15 days from notice. The appellate court does not acquire jurisdiction over the subject matter of the action and the Decision sought to be appealed from becomes final and executory. April Joy A.” Before arraignment. the Court explained that the procedural requirement under Section 4 of Rule 41 is not merely directory. Without such payment. The requirement of paying the full amount of the appellate docket fees within the prescribed period is not a mere technicality of law or procedure. The payment of docket fees within the prescribed period is mandatory for the perfection of an appeal. under Section 1 (c). the appeal is not perfected. the full amount of the appellate court docket and other lawful fees must be paid to the clerk of the court which rendered the judgment or final order appealed from. 193034. It bears stressing that an appeal is not a right. Reyes then filed a Motion to Inhibit the Presiding Judge on the ground that Gegato is the Court Interpreter of the same court but it was also denied. they want this Court to relax the application of the rule on the payment of the appeal fee in the name of substantial justice and equity. Facts of the Case: Salud Gegato filed a Complaint against Rodging Reyes for grave threats in the MCTC of Bayugan and Sibagat. paragraph 2 of the same Code which was denied by the MCTC. on the ground of the non-payment of the docket and other lawful fees within the reglementary period as provided under Section 4 of Rule 41. GEGATO G. an appeal may be dismissed by the CA.R. but a mere statutory privilege. Nevertheless. The payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. No. . PEOPLE OF THE PHILIPPINES and SALUD M. July 20. Bayugan. don't mind our lives for I might kill you. Rule 50. but Other Light Threats under Article 285. petitioner filed a Motion to Quash based on the ground of jurisdiction and that the crime is not Grave Threats under Article 282 of the Revised Penal Code. as with other subsequent cases of the same ruling. the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees. 2015 Cuerdo. as the payment of the docket and other legal fees within the prescribed period is both mandatory and jurisdictional.Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal. Here. Magdaluyo. on its own motion or on that of the appellee. Agusan del Sur. The MCTC found Reyes guilty beyond reasonable doubt of the crime charged. I’m warning you. RODGING REYES VS. petitioners concede that payment of the full amount of docket fees within the prescribed period is not a mere technicality of law or procedure but a jurisdictional requirement. stop your rumor against my wife because she will be embarrassed.

Reyes filed a Motion for Extension of time twice which was both denied by the CA. and manifests its willingness to abide by the rules by paying additional docket fees when required by the court. Admittedly. The Court has declared that in appealed cases. Section 1. Accordingly. Asuncion. . this petition was noted but dismissed by the CA among the grounds for its dismissal is failure to pay the complete docket fees. in view of the 23 November 2009 Resolution dismissing this petition with finality. relaxed two (2) years after in the case of Sun Insurance Office. In the Third Motion for Reconsideration. Instead of filing an appeal to the CA within the reglementary period.. in the more recent case of United Overseas Bank v. Reyes filed a Motion for Reconsideration but it was denied for failure of the petitioner to furnish copies to the Solicitor General and the private respondent. Rule 42 of the Rules of Court. Ltd. The second was denied as no further extension may be granted except for most compelling reason. 1. Ltd. Thus. v. Reyes insists that the CA erred in favoring procedural technicalities over his constitutional right to due process. the CA set aside the first resolution denying the 1st Motion for Reconsideration but also dismissed the Petition for Review. failure to pay the appellate court docket fee within the prescribed period warrants only discretionary as opposed to automatic dismissal of the appeal and that the court shall exercise its power to dismiss in accordance with the tenets of justice and fair play. however. it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The first was denied for failure to pay the full amount of the docket fees pursuant to Sec. After the filing of the second Motion for Extension. the court may allow payment of the fee within a reasonable period of time. The rule is that payment in full of the docket fees within the prescribed period is mandatory. Reyes was found guilty only of other light threats. In Manchester v. Rule 42 of the Rules of Court states the need to pay docket fees. this rule is not without recognized qualifications. wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee. and with great deal of circumspection considering all attendant circumstances. the Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees. will apply. Court of Appeals. the liberal doctrine enunciated in Sun Insurance Office. Thus.On appeal to the RTC. and not the strict regulations set in Manchester. Issue: Whether or not the CA ruled correctly in dismissing the petition on the ground of failure to pay the complete docket fees? Doctrine: Yes. petitioner filed a Second Motion for Reconsideration which was also denied by the CA. Now. Ros. Reyes filed this Petition. but in no case beyond the applicable prescriptive or reglementary period. The strict application of this rule was. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required. In this resolution. the CA resolved to merely note without action the petitioner's third Motion for Reconsideration.

It paid a filing fee of P5. FACTS: On Jun 19. 2011. Also pointed out that the RTC’s directive to maintain the status quo . First Sarmiento attempted to file a Complaint for annulment of real estate mortgage with the RTC. 2012. However. June 19. December 29. still failed to pay the principal amount and accrued interest on the loan. 2011. the filing fees filed should have been based on the fair market value of the mortgaged properties. It claimed in its Petition that it sent First Sarmiento several demand letters. yet the latter still sought the extrajudicial foreclosure of real estate mortgage. with prayer for the issuance of temporary restraining order and preliminary injunction.No. the CA. granted First Sarmiento's Urgent Motion to Consider the Value of Subject Matter of the Complaint as Not Capable of Pecuniary Estimation. First Sarmiento filed a Complaint for annulment of real estate mortgage and its amendments. 2003. Executive Judge Francisco et al. in its discretion. G. which was secured by a real estate mortgage over 1. Bulacan. 2002.076 parcels of land. Jan 4.000. PBCOM filed a Petition for Extrajudicial Foreclosure of Real Estate Mortgage. In its Opposition.000. 2006. Bulacan issued a certificate of sale to PBCOM. petitioner failed to convince this Court of the need to relax the rules and the eventual injustice that he will suffer if his prayer is not granted. 2012. agreement was further amended when the loan amount was increased to P100 Million. the Clerk of Court refused to accept the Complaint in the absence of the mortgaged properties' tax declarations.200.545. MARIA DEL O.00.000. Therefore.00 from PBCOM. enjoining the registration of the certificate of sale. the mortgaged properties were auctioned and sold to PBCOM as the highest bidder. It prayed for the issuance of a temporary restraining order and preliminary injunction to enjoin the Ex- Officio Sheriff from proceeding with the foreclosure of the real estate mortgage or registering the certificate of sale in PBCOM's favor with the Registry of Deeds of Bulacan. thus. of the RTC of Malolos City. the RTC directed the parties to observe the status quo ante. 2003. may grant an additional period of fifteen (15) days only within which to file the petition for review upon proper motion and the payment of the full amount of the docket and other lawful fees and the deposit for costs before the expiration of the reglementary period and that no further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. Judge Francisco issued an ex-parte temporary restraining order for 72 hours. loan amount increased to P51. 2011.In that connection. the Clerk of Court and Ex-Officio Sheriff of Malolos. It is only when persuasive reasons exist that the Rules may be relaxed to spare a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure.202836. Recourse granted to it under the loan agreement. Jan 2. Dec 29. Mar 15. First Sarmiento obtained from PBCOM a P40 Million loan. Dec 27. 2012. 2018 DIMANAHAN. the grant of any extensions for the filing of the petition is discretionary and subject to the condition that the full amount of the docket and lawful fees are paid before the expiration of the reglementary period to file the petition. First Sarmiento claimed in its Complaint that it never received the loan proceeds of P100. PBCOM asserted that the Regional Trial Court failed to acquire jurisdiction over First Sarmiento's Complaint because the action for annulment of mortgage was a real action. First Sarmiento Property Holdings Inc.00.R. Jan 2. and ruled that the action for annulment of real estate mortgage was incapable of pecuniary estimation. PBCOM. which would be used to assess the docket fees. Jan 24. Sep 15. In the present case. That same day. v.

Mahinay v. ISSUE: Whether the RTC attained jurisdiction over petitioner's Complaint with the amount of docket fees paid. The contrary rule espoused in Home Guaranty is thereby set aside. provides that a property sold through an extrajudicial sale may be redeemed at any time within the term of one year from and after the date of the sale. negating bad faith or intent on its part to defraud the government. which is the latest jurisprudence on the matter to the effect that an action for annulment or rescission of contract does not operate to efface the true objective and nature of the action which is to recover real property. Aug 17. Agcaoili reiterated that where the assessed docket fees have been paid and the assessment turns out to be insufficient. Dura Tire&Rubber. this Court reaffirms that the nature of an action is determined by the principal relief sought in the complaint. even if a claim over a sum of money or real property results as a consequence of the principal relief. Jul 25. the action is incapable of pecuniary estimation. If the principal relief is for the recovery of a sum of money or real property. the court still acquires jurisdiction over the case. First Sarmiento sought direct recourse to this Court with its Petition for Review under Rule 45. Fedman Development v. This is because the sale of registered land does not 'take effect as a conveyance. hence. RTC dismissed the Complaint for lack of jurisdiction: Following ruling in Home Guaranty Corp. DOCTRINE: Yes. 2012. In the case at bar." The registration of the certificate of sale is a . subject to payment of the deficiency assessment. In light of the foregoing. To determine the nature of an action. v. the nature of the principal action or relief sought must be ascertained. Inc. It is not disputed that R-II Builders paid the assessed docket fees when it filed its Complaint. 3135. clarified that "[t]he date of the sale' referred to in Section 6 is the date the certificate of sale is registered with the Register of Deeds. then the action is capable of pecuniary estimation. The evidence on record supports petitioner's claim. this Court hereby RESOLVES TO DISMISS the instant case for lack of jurisdiction. petitioner contends that its complaint prayed for the annulment of the real estate mortgage it entered into with respondent and not for the recovery or reconveyance of the mortgaged properties because it was still the registered owner when it filed its complaint. It insists that its Complaint for the annulment of real estate mortgage was incapable of pecuniary estimation. as amended. irrespective of the other causes of actions that may also crop up as a consequence of the principal relief prayed for. plaintiff having failed to pay the appropriate filing fees. II Builders.order beyond 72 hours constituted an indefinite extension of the TRO. Section 6 of Act No. if the principal relief sought is not for the recovery of sum of money or real property. 2012. RTC denied First Sarmiento's motion for reconsideration. 2012. R. Home Guaranty likewise erred in dismissing the action because of non-payment of the correct filing fees. there was no reason for the dismissal of its Complaint for lack of jurisdiction. a clear contravention of the rules. Apr 3. The only exception is when the deficiency in docket fees is accompanied with bad faith and an intention to defraud the government. & NHA. However. whether or not its subject matter is capable or incapable of pecuniary estimation. cited by the bank in its Rejoinder. or bind the land' until it is registered.

I. claimed that the lease rentals from crop year 1994- 1995 to crop year 1998-1999 were not paid. Jr. AND ROLANDO OGSOS. thus. ADRIENNE C. between Ogsos. instead. their ownership and possession remained with petitioner since the certificate of sale was not registered with the Registry of Deeds. this Court is convinced that the RTC acquired jurisdiction over the Complaint for annulment of real estate mortgage. Therefore. 221062. SR.: Case digest by: ESPAÑOLA. the case should not have been dismissed. October 05. 2016 ELIZABETH SY-VARGAS. Thus. PERLAS-BERNABE. and the Heirs of Fermina. In the case at bar. Petitioner. even if the properties had already been foreclosed when the Complaint was filed. even if it is assumed that the instant case were a real action and the correct docket fees were not paid by petitioner. elevated the matter via a petition for certiorari to the CA. respondents. In respondents' answer. J. No. but respondent Ogsos. This supports petitioner's claim that it never asked for the reconveyance of or asserted its ownership over the mortgaged properties when it filed its Complaint since it still enjoyed ownership and possession over them. v. which the RTC granted. then.R. Respondents moved for the dismissal of the complaint in view of the absence . hence. petitioner readily paid the docket fees assessed by the clerk of court. JR. the Ex-Officio Sheriff was restrained from registering the certificate of sale with the Registry of Deeds and the certificate of sale was only issued to respondent after the Complaint for annulment of real estate mortgage was filed. the payment of additional docket fees should have been made a lien on the judgment award. wherein the CA granted and remanded the case to the RTC. they alleged that obligations were faithfully complied. The records attest that in filing its complaint. And accordingly. if the certificate of sale is not registered with the Registry of Deeds.mandatory requirement. 2002. Respondent. there was no evidence of bad faith or intention to defraud the government that would have rightfully merited the dismissal of the Complaint G. Facts of the Case: A contract of lease was entered. THE ESTATE OF ROLANDO OGSOS. That a motion for reconsideration having been denied by the RTC. Thus. only filed a motion to admit answer and answer to the complaint after more than 2 years. petitioner filed an opposition thereto. upon the direction of the Executive Judge. Furthermore. or on December 17. The Petitioners. Summons was served in May 2000.. covering 5 parcels of agricultural land in Negros Oriental. a complaint was filed before the RTC in order to recover the unpaid lease rentals. Considering that petitioner paid the docket fees as computed by the clerk of court. who are among the heirs of Fermina. and moved to declare respondents in default. the property sold at auction is not conveyed to the new owner and the period of redemption does not begin to run. Sr. respondents filed a counterclaim for these lost profits plus damages.

the latter would not be barred by res judicata had they opted to litigate its counterclaim in a separate proceeding. whether or not petitioner and Kathryn are liable for damages for taking over the possession of the leased premises and harvesting and appropriating respondents' crops planted therein. II. and (d) the recovery of petitioner's claim is not contingent or dependent upon proof of respondents' counterclaim. absent the compulsory counterclaim rule? (c) Will substantially the same evidence support or refute plaintiff's claim as well as the defendant's counterclaim? and (d) Is there any logical relation between the claim and the counterclaim. and thus. III. thus. respondents moved for the hearing of their counterclaim. which the RTC granted. which was granted by the RTC. which was. Respondents filed an Ex-Parte Motion to Set Case for Pre-Trial. holding that the payment of the required docket fees was no longer necessary.e. such that the conduct of separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court? If these tests result in affirmative answers. such that conducting separate trials will not result in the substantial duplication of the time and effort of the court and the parties. whether or not respondents are liable to pay lease rentals. i. to wit: (a) Are the issues of fact or law raised by the claim and the counterclaim largely the same? (b) Would res judicata bar a subsequent suit on defendant's claims.. Issue: WON CA correctly ruled that respondents' counterclaim for damages is compulsory and not permissive in nature. Petitioners filed a motion to dismiss respondents' counterclaim arguing that the same were permissive and that respondents had not paid the appropriate docket fees. Then. Petitioners moved to quash the order. no payment of docket fees is required. is entirely different from the issue in the counterclaim. i. however.. but none was filed. the counterclaim is compulsory. (c) the evidence required to prove petitioner's claim that respondents failed to pay lease rentals is likewise different from the evidence required to prove respondents' counterclaim that petitioner and Kathryn are liable for damages for performing acts in bad faith. However. to which the RTC required petitioner and Kathryn to submit a comment. and that respondents be allowed to present evidence on their counterclaim ex-parte. denied on the ground that the period to ask for reconsideration or for the lifting of the order had already lapsed. respondents filed a manifestation with motion to present evidence ex- parte praying that petitioners be declared in default. . Thus.of the required Certificate of Non-Forum Shopping and the RTC dismissed the case without prejudice. This is because: (a) the issue in the main case. the RTC denied the said motion declaring respondents' counterclaim as compulsory. The four tests to determine whether a counterclaim is compulsory or not are the following. (b) since petitioner and respondents' respective causes of action arose from completely different occurrences. Petitioner and their counsel failed to appear at the pre-trial and to file their pre- trial brief. Doctrine: The Court finds that the counterclaim of respondents is permissive in nature.e.

the RTC had already found such counterclaim to be compulsory in nature. sickwage allowance. Such finding was then upheld in the July 2. exhibits their good faith in not paying the docket fees. It has long been settled that while the court acquires jurisdiction over any case only upon the payment of the prescribed docket fees. . 2014. the lower courts did not require respondents to pay docket fees and even proceeded to rule on their entitlement thereto. 2007 RTC Decision and affirmed on appeal by the CA in its assailed Decision. Camaso got a tonsillar cancer where he underwent 8 chemotheraphy sessions but when the respondents stopped from giving sickwage allowances. should not necessarily lead to the dismissal of their counterclaim. CAMASO v. 2016 FACTS: Camaso signed a contract of employment with respondents TSM Shipping (Phils). 2015. Rule 46 of the Revised Rules of Court. Officer-in-Charge of the CA Receiving Section. he joined his vessel of assignment and prior to said contract. respondents are required to pay docket fees. Camaso claimed to have been working for respondents for almost five 5 years and boarded (8) of their vessels. Here. November 07. Citing the presumption of regularity of official duties. much more their intention not to defraud the government. On October 18. TSM SHIPPING G.In view of the finding that the counterclaim is permissive.e. the CA gave credence to the explanation of Myrna D. Camaso filed an instant complaint instant complaint for disability benefits. Almira. such personal check. No. Inc. 2015 under the personal account of a certain Pedro L. and other consequential damages before NLRC. they denied Camaso’s motion for lack of merit. However. respondents cannot be faulted for non-payment of docket fees in connection with their counterclaim. the counterclaim should not be dismissed for non-payment of docket fees. and (b) there was no intention on the part of the claimant to defraud the government. In a Resolution dated August 12. primarily because as early as November 16. and Jones Tulod to work as a Second Mate on-board the vessel "M/V Golfstraum. Thus. or check attached to Camaso's petition when it was originally filed before the CA. and not compulsory as held by the courts a quo. respondents' reliance on the findings of the courts a quo. Metrobank check dated July 6. Verily. postal money order. it must be clarified that respondents' failure to pay the required docket fees. Utkilen. per se. i. the CA dismissed Camaso's petition "for non-payment of the required docketing fees as required under Section 3. reimbursement of medical and hospital expenses. As such. its non-payment at the time of filing of the initiatory pleading does not automatically cause its dismissal provided that: (a) the fees are paid within a reasonable period." for a period of six 6 months. 223290. 2006. he filed a petition for certiorari before the CA.R." Camaso filed a motion for reconsideration arguing that a check was attached on his petition as a payment for required docket fees but in a resolution of CA... that there was no cash. In any event. albeit erroneous. Aggrieved. Labor Arbiter ruled in favour of Camaso but NLRC reversed the ruling of LA then dismissed Camaso’s complaint for lack of merit. the CA held that assuming that a check was indeed attached to the petition.

Linsangan. No. Lim and . second. Linsangan was attached thereto to serve as payment of docket fees. hence. respondent. Oliver were partners in a rice and palay trading business. G. dismissal. a Metrobank check dated July 6. HELD: No. ISSUE: Whether or not the CA correctly dismissed Camaso's petition for certiorari before it for non-payment of docket fees? DOCTRINE: The strict application of the rule may be qualified by the following: first. manager's or cashier's checks payable to the CA. 2002 CYRIL ANN Q IRIBERRI FACTS: Pangan Lim. MERCEDES M. certified. OLIVER. such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play. is not a mode of payment sanctioned by the 2009 Internal Rules of the Court of Appeals (2009 IRCA). The Court deems it appropriate to relax the technical rules of procedure in the interest of substantial justice and. Upon approval of their loan application. remands the instant case to the CA for the resolution of its substantial merits and directed to order Camaso to pay the required docket fees within a reasonable period of 30 days from notice of such order. Although under Section 6.R. not automatic. petitioner. As to the assertion of the Officer-in-Charge of the CA Receiving Section that there was no check attached to Camaso's petition is clearly belied by the fact that when it was examined at the Office of the Division Clerk of Court. postal money order. vs. the attachment of such personal check shows that Camaso exerted earnest efforts to pay the required docket fees. which allows only payment in cash. They applied for a P17 million loan and offered as collateral a lot situated in Tunasan. CHINA BANKING CORPORATION. Muntinlupa registered in the name of Oliver. Jr. Rule VIII of the 2009 IRCA it was not a mode of payment. Here. 135796 October 3. Therefore it exhibits good faith and evinces his intention not to defraud the government. and Mercedes M. They opened a joint account with China Banking Corporation (Chinabank) at EDSA Balintawak Branch. failure to pay those fees within the reglementary period allows only discretionary. in this case when Camaso filed his petition through his counsel and via mail. as well as with a great deal of circumspection in consideration of all attendant circumstances. the check was found to be still stapled thereto. 2015 under the account name of Pedro L.

as well as a REM on the property. claimed that she was the registered and lawful owner of the land subject of the REM. She stands to be benefited in case the mortgage is declared valid. there being no temporary restraining order or writ of preliminary injunction issued. 2. Respondent claiming that she is Mercedes M. Oliver. herein called Oliver One. and (3) the Registry of Deeds be ordered to issue a new and clean title in her name. the mortgagor. Whether or not the mortgagor who goes by the name of Mercedes M.000. For brevity. Chinabank filed with the CA a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and/or restraining order to enjoin enforcement of Judge Perello’s order. Flores. An indispensable party is a party in interest. Oliver with address at No. without whom no final determination can be had of an action. (2) the mortgage be declared null and void. San Pedro.Oliver executed in favor of Chinabank a promissory note for P16. Chinabank filed a Motion to Dismiss for lack of cause of action and non-joinder of an indispensable party. and that she did not apply for a loan or surrender her title to Chinabank. Rizal St. and Deputy Register of Deeds Atty. is an indispensable party in the civil case. It is true that mortgagor Oliver One is a party in interest. She prayed that: (1) the owners duplicate copy surrendered to Chinabank as well as the original title with the Registry of Deeds be cancelled. Whether or not Section 7 Rule 3 of the 1997 Rules of Civil Procedure applies in this case. ISSUES: 1. The CA directed respondent Oliver Two to file her comment and deferred action on the prayer for the issuance of the preliminary injunction pending submission of the comment. The mortgage was registered and annotated on the OCT under the custody of the Registry of Deeds of Makati and on the owners duplicate copy in the banks possession. Petitioners contention is far from tenable. Register of Deeds Atty. Respondent. for she will be affected by the outcome of the case. Ignacio. Consequently. The mortgage document showed Mercedes Olivers address to be No. filed an action for annulment of mortgage and cancellation of title with damages against Chinabank. 95 Malakas Street. or injured in case her title is declared fake.650. Quezon City. It argued that the special civil action for certiorari filed in the Court of Appeals interrupted the proceedings before the trial court. petitioner Chinabank filed a supplemental petition seeking annulment of the CA’s order declaring it in default. Laguna. The trial court granted the motion and declared petitioner in default. However.P. mortgagor Oliver Ones absence from the case does not hamper the trial court in resolving the dispute . that the owners duplicate copy of the title had always been in her possession. Diliman. The CA held that the filing of the special civil action for certiorari with the Court of Appeals did not interrupt the period to file an answer.. HELD/ DOCTRINE: 1. 40 J. Ferdinand P. referred to as Oliver Two. she is hereafter referred to as Oliver One. Mila G. Respondent Oliver Two moved to declare petitioner Chinabank in default for failure to file its answer within the reglementary period. thereby staying the period for filing the answer. Judge Perello denied the motion to dismiss on the ground that the matters alleged were all evidentiary .

In this case. To support said allegations. that applies. which requires compulsory joinder of indispensable parties in a case. INC. which involves the land used as collateral for the loan.. March 5. Rule 3. Further. Oliver referred to in the TCT. Court of Appeals. Inc.). resulting in the mortgages annotation on TCT No. Instead. Nos. however. JUANA COMPLEX I HOMEOWNERS ASSOCIATION. Parties may be added by order of the court. S-50195 in the Registry of Deeds custody. we held that a party is not indispensable to the suit if his interest in the controversy or subject matter is distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a judgment which does complete justice to the parties in court.R. who in turn can raise other defenses pertinent to the two of them. does not apply. Section 7. since mortgagor Oliver One is not an indispensable party. A person who is not a party to an action may be impleaded by the defendant either on the basis of liability to himself or on the ground of direct liability to the plaintiff. it is Section 11. 152397. FIL-ESTATE LAND. and hence.between respondent Oliver Two and petitioner. as in the case of Chinabank and mortgagor Oliver One. 152272 and G. together with individual residents of Juana Complex I and other neighboring subdivisions (collectively referred as JCHA. Chinabank has interest in the loan which. INC. No. 2012 Case digest by: Quevedo. vs. respondent Oliver Two can do in her complaint without necessarily impleading the mortgagor Oliver One. . This. Inc. a declaration of the mortgages nullity in this case will not necessarily prejudice mortgagor Oliver One. Oliver One is not an indispensable party in the case filed by Oliver Two. A perusal of Oliver Twos allegations in the complaint below shows that it was for annulment of mortgage due to petitioners negligence in not determining the actual ownership of the property. in its own behalf and as a class suit representing the regular commuters and motorists of Juana Complex I and neighboring subdivisions who were deprived of the use of La Paz Road. is distinct and divisible from the mortgagors interest.. and (2) that she is not the same person using that name who entered into a deed of mortgage with the petitioner. In Noceda vs. et. A party is also not indispensable if his presence would merely permit complete relief between him and those already parties to the action. The latters participation in this case will simply enable petitioner Chinabank to make its claim against her in this case. Hence. G. avoid the institution of another action. Facts of the Case Juana Complex I Homeowners Association. Non-joinder of parties is not a ground for dismissal of an action. against Fil-Estate Land. et al. As to the second issue. (JCHA). instituted a complaint for damages. or will simply avoid multiple litigation. Thus. either on its own initiative or on motion of the parties. respondent Oliver Two had to prove (1) that she is the real Mercedes M. Rule 3 of the 1997 Rules of Civil Procedure. 2. R. Arrah Svetlana T. 313 SCRA 504 (1999). I. it was the bank who should have filed a third-party complaint or other action versus the mortgagor Oliver One. al. The bank still needs to initiate proceedings to go after the mortgagor.

and 3) the parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned. 2) the parties affected are so numerous that it is impracticable to bring them all to court. Issue Whether or not the complaint was properly filed as a class suit. and further claimed that La Paz Road was a Torrens registered private road and there was neither a voluntary nor legal easement constituted over it.Accordingly. Not satisfied. II. ELENA R. against them since each of them has a separate and distinct purpose and each may be affected differently than the others. CORONACION PARILLA (GR No. these petitions for review. MA. failed to show that they had a clear and unmistakable right to the use of La Paz Road. Resolution The Court held that the complaint was properly filed as a class suit. Doctrine A class suit is applicable when the individuals sought to be represented by private respondents in the suit are so numerous that it is impracticable to join them all as parties and be named individually as plaintiffs in the complaint. JCHA. IV. 196750. Mar 11. In this case. 2015) . et al. They claim that the excavation of La Paz Road would not necessarily give rise to a common right or cause of action for JCHA. Hence. et al. the suit is clearly one that benefits all commuters and motorists who use La Paz Road. The RTC issued an Order granting the WPI and denied Fil-Estate’s motion to dismiss. also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate from stopping and intimidating them in their use of La Paz Road. The CA ordered the remand of the case to the RTC for a full-blown trial on the merits. Fil-Estate averred that JCHA. The necessary elements for the maintenance of a class suit are: 1) the subject matter of controversy is one of common or general interest to many persons. The CA annulled the granting of writ of preliminary injunction but the motion to dismiss was denied. DIVINAGRACIA v. Fil-Estate filed a motion to dismiss arguing that the complaint failed to state a cause of action and that it was improperly filed as a class suit. III. With regard to the issuance of the WPI. Fil-Estate filed a petition for certiorari and prohibition to annul RTC’s Order before the CA. et al.

887. children: Cebeleo Jr. the non-vendee heirs’ (Maude. Ceruleo). as well as the cancellation of the land’s title with the consequent issuance of a new owner’s duplicate certificate in his favor. Santiago was ordered by the RTC to pay the remaining amount of the purchase price of the subject land. the RTC ordered the partition of said land between him and the respondents. may validly inherit the same. Conrado Nobleza .’s death.807. this deed was not signed by the other heirs who did not sell their respective shares (see table below).’s son. For their part. On the premise that Santiago. as embodied in a Deed of Extrajudicial Settlement or Adjudication with Deed of Sale 10 dated November 22. According to Santiago Divinigracia. the RTC ruled that Santiago had not acquired the same because Felcon. owners of the disputed property. Sr. upon Conrado Nobleza. Thereafter. upon the sale of the aforesaid land. the same parties executed a Supplemental Contract whereby the vendors-heirs and Santiago agreed that out of the aforesaid consideration. Mateo SOLD thru Felcon’s Jr. However.695. However. 1989. HEIRS STATUS OF SHARES SPOUSE AND OTHER DESCENDANTS ON RECORD Cresencio (1st marriage) X SOLD Conrado Jr. Mateo Sr.’s share. and UNSOLD Neobel Rogelio (Illegitimate) X SOLD Eduardo (Illegitimate) X SOLD Ricardo (Illegitimate) X SOLD However. This prompted Santiago to file a complaint before the Regional Trial Court of Iloilo City for Judicial Partition and Receivership. Sr. (1st) Felcon. became a co-owner over the same. However.93 will be paid up front. majority of the latter’s heirs sold their respective shares over said property to him for a consideration of Php 447. Giovanni. the respondents maintained that Santiago had no legal right to institute said action nor compel them to surrender the land’s title because: a) he has not yet paid in full the purchase price. Eusela. Santiago was not able to have the same transferred in his name. Landelin.66.. Contracted two (2) marriages in which he had several children. to partition the aforesaid property and surrender its title. Tito. He also had some illegitimate children. no authority from his siblings Coronacion (2nd) (respondent) SOLD X Celestial (2nd) (respondent) X SOLD Cecilia (2nd) (Respondent) X SOLD Celedenio (2nd) X UNSOLD Ceruleo (2nd) X UNSOLD Cebeleo Sr.73 upon the partition of the subject land. T12255. Celedenio. with regard to Mateo Sr. and b) only the legal heirs of Conrado Sr and Eusela (2nd wife). because of the refusal of the respondents. On Reconsideration of the non-vendee heirs. . (2ns) Maude (wife). (1st) X SOLD Mateo Sr. admitted his lack of authority to bind his siblings.FACTS: During his lifetime. and Gaylord representation. only Php 109. and that Santiago will only pay the remaining balance of - 337. He also owned a 313-square meter parcel of land located in Iloilo City denominated covered by Transfer Certificate of Title (TCT) No.

the heirs of Santiago. . the complaint impleaded his wife. or equitable. Meanwhile. the absence of an indispensable party renders all subsequent actions of the court null and void. when pursuant to Article 97235 of the Civil Code. the CA’s dismissal of Santiago’s complaint for judicial partition is incorrect. excluding therefrom his siblings and co-representatives. In his absence. As correctly noted by the CA. the proper representatives to his interest should have been his children. The Supreme Court affirmed the decision of the CA in so far as its decision who the indispensable parties are in this case are concerned. as represented by petitioner Ma. setting forth in his complaint the nature and extent of his title and an adequate description of the real estate of which partition is demanded and joining as defendants all other persons interested in the property. In this regard. the Court ruled that all the co-heirs and persons having an interest in the property are indispensable parties. Sr. and Neobel. Consequently. moved for reconsideration. an action for partition will not lie without the joinder of the said parties. It held that Felcon’s siblings. Aggrieved. which. Hence. thus.’s interest. Similarly. set aside and dismissed Santiago’s complaint. as well as Maude’s children. however. As explained by the Court. Rule 69 of the Rules of Court provides that “[a] person having the right to compel the partition of real estate may do so as provided in this Rule. Section 1. which. ISSUE: Was the dismissal of the complaint by the CA proper? RULING: No. are indispensable parties to the judicial partition of the subject land and. As such. they should no longer be regarded as indispensable parties deserves no merit. Elena. the court cannot properly issue an order to divide the property. Verily. in turn. Jr. was denied in a Undaunted. not only as to the absent parties but even as to those present. Elena R. The Court emphasized that the proper remedy is to implead them and not to dismiss the case. in actions for partition. The party’s interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties’ that his legal presence as a party to the proceeding is an absolute necessity.’s interest. complete. Divinagracia. Instead. instituted the present petition. with regard to actions for partition. Cebeleo. for want of authority to act. with regard to Cebeleo. until and unless this issue of co-ownership is definitely and finally resolved. it should have remanded the case to the RTC for the inclusion of the indispensable parties who were not impleaded in Santiago’s complaint. and without whom no final determination of the case can be had. This is so even amidst Santiago’s contention that he had already bought the interests of the majority of the heirs and. Santiago’s omission of the aforesaid heirs renders his complaint for partition defective. there cannot be a resolution of the dispute of the parties before the court which is effective. unless it first makes a determination as to the existence of coownership. Maude. thus.Aggrieved. an indispensable party is one whose interest will be affected by the court’s action in the litigation. Ma. the respondents appealed to the Court of Appeals. Sr. The court must initially settle the issue of ownership.” Here. facts reveal that as regards Mateo. Therefore. which is the first stage in an action for partition. only Felcon was impleaded. as administratrix of Santiago’s estate. With regard to the CA’s order to dismiss Santiago’s complain on the ground that Santiago failed to implead all of the indispensable parties. the Supreme Court held that it erred in doing so. their non-inclusion as defendants in Santiago’s complaint would necessarily result in its dismissal. it would be premature to effect a partition of the disputed properties.

He filed with PPI several money claims. (PPI). Respondent Schonfeld reported for work in Manila and was paid the corresponding compensation by PPI until Henrichsen informed him that his employment had been terminated because PCIJ and PPI had not been successful in the water and sanitation sector in the Philippines. and JENS PETER HENRICHSEN. Petitioners. Canada. through Henrichsen. as Sector Manager of PPI for its Water and Sanitation Department. vs. His salary was paid partly by PPI and PCIJ. a Canadian citizen and was a resident of New Westminster. he filed a Complaint for Illegal Dismissal against petitioners PPI and Henrichsen with the Labor Arbiter. KLAUS K. requested respondent Schonfeld to stay put in his job until such time that he would be able to report on certain projects and discuss all the opportunities he had developed. headed by its president.the correct course of action in the instant case is to order its remand to the RTC for the inclusion of those indispensable parties who were not impleaded and for the disposition of the case on the merits. British Columbia. Inc.R. Respondent Schonfeld signed the letter of employment sent by Henrichsen which stated pertinent information on commencement of employment. 2007 THIRD DIVISION STATEMENT OF FACTS: Respondent Schonfeld. SUZETTE P. remuneration and other entitlements. leave pay. PPI is a subsidiary of Pacific Consultants International of Japan (PCIJ). As a result. Henrichsen. No. VALDEZ 2014-0365 PACIFIC CONSULTANTS INTERNATIONAL ASIA. is a corporation duly established and incorporated in accordance with the laws of the Philippines. Jens Peter Henrichsen. had been a consultant in the field of environmental engineering and water supply and sanitation. Respondent Schonfeld continued his work with PPI but the latter failed to pay his remunerations and other entitlements. however. . Petitioner Pacicon Philippines. February 19. and cost of shipment of goods to Canada. PPI partially settled his claims but refused to pay the rest. air fare from Manila to Canada. including unpaid salary. When PCIJ engaged in consultancy services for water and sanitation in the Philippines. Respondent. 166920. SCHONFELD. and arbitration proceedings. it hired respondent Schonfeld. The Department of Labor and Employment approved his application for an Alien Employment Permit. He was accorded the status of a resident alien. INC. G.

While there was. determine which quasi-judicial body has jurisdiction. The CA found the petition meritorious on the following grounds: (a) The four-fold test of determining an employer-employee relationship was complied with. Respondent Schonfeld contended that he was employed by PPI to work in the Philippines under contract separate from his original contract of employment with PCIJ. The Labor Arbiter ruled in favor of the Petitioner Pacicon on the ground that the contract of employment between respondent and PCIJ was controlling: (a) the Philippines was only the duty station where respondent Schonfeld was required to work under the General Conditions of Employment. Philippine Labor Laws apply in this case. under Section 12 of the General Conditions of Employment appended to the letter of employment. this agreement is controlling. (b) the parties had agreed that any differences regarding employer-employee relationship should be submitted to the jurisdiction of the court of arbitration in London. Section 21 of the Arbitration Clause in the General Conditions of Employment does not provide for an exclusive venue where the complaint against PPI for violation of the Philippine Labor Laws may be filed. Said decision was affirmed by the NLRC causing respondent Schonfeld to file a petition for certiorari under Rule 65 with the CA. indeed. Moreover. a Philippine-registered corporation. and (2) venue was improperly laid. it is inconsequential that PPI is a wholly-owned subsidiary of PCIJ because the two corporations have separate and distinct personalities. He further insisted that the principles of forum non conveniens and lex loci contractus do not apply. Japan. and he received orders and instructions from Henrichsen.Petitioner Pacicon moved for the dismissal of the complaint on the following grounds: (1) the Labor Arbiter had no jurisdiction over the subject matter. under the principle of lex loci contractus. and. Since respondents Schonfeld’s cause of action was based on his letter of employment executed in Tokyo. (b) The parties were not precluded from bringing a case related thereto in other venues. the complaint should have been filed in Tokyo. complainant and PCIJ had agreed that any employment-related dispute should be brought before the London Court of Arbitration. a transient expatriate who had left the Philippines. Japan. It averred that respondent was a Canadian citizen. the venue is not exclusive. He insisted that his employer was PPI. . not petitioners’ defenses. since there is no stipulation that the complaint cannot be filed in any other forum other than in the Philippines. He added that material allegations of the complaint. and that although he is a Canadian citizen. an agreement that issues between the parties were to be resolved in the London Court of Arbitration. a foreign corporation with principal office in Tokyo. Japan. He was employed and dismissed by PCIJ. and.

(3) that the Philippine Court has or is likely to have power to enforce its decision.Respondents. and had agreed that any dispute between them "shall be finally settled by the court of arbitration in London” DOCTRINE: The settled rule on stipulations regarding venue. Petitioners insistence on the application of the principle of forum non conveniens must be rejected. Petitioner. as held by this Court in the vintage case of Philippine Banking Corporation v. Tensuan. solely. not as limiting venue to the specified place. no restrictive words like only. vs. The Labor Code of the Philippines does not include forum non conveniens as a ground for the dismissal of the complaint. is that while they are considered valid and enforceable. was hired abroad by a foreign corporation. this Court held that: xxx [a] Philippine Court may assume jurisdiction over the case if it chooses to do so. NT&SA. Ltd. particularly. or words of equal import were stated in the contract. there must be accompanying language clearly and categorically expressing their purpose and design that actions between them be litigated only at the place named by them. executed his employment contract abroad. 175796 July 22. hence.R. BPI FAMILY SAVINGS BANK INC. Court of Appeals. in no other court save. it is properly considered as defense. v. and.. In the instant case. If the intention of the parties were to restrict venue. provided. The bare fact that respondent is a Canadian citizen and was a repatriate does not warrant the application of the principle for the following reasons: First.ISSUE: Whether or not. SPOUSES BENEDICTO & TERESITA YUJUICO. They should be considered merely as an agreement or additional forum. No. 2015 . rather permissive. that the following requisites are met: (1) that the Philippine Court is one to which the parties may conveniently resort to. The propriety of dismissing a case based on this principle requires a factual determination. as a rule. xxx Admittedly. the Labor Arbiter has jurisdiction over respondent Schonfeld’s claim despite the fact that he is a foreign national. In Bank of America. exclusively in this court. Bank of America International. (2) that the Philippine Court is in a position to make an intelligent decision as to the law and the facts. supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying or restrictive words. They are not exclusive but. Third. venue stipulations in a contract do not. It cannot be said that the court of arbitration in London is an exclusive venue to bring forth any complaint arising out of the employment contract. Second. nowhere else but/except. G. all the foregoing requisites are present in this case.

L 22761. was a real action that should have been brought in the Manila RTC because Manila was the place where the properties were located. Two of the parcels of land were previously mortgaged to Citytrust Banking Corporation. being a supplementary action of the extrajudicial foreclosure proceedings. 1969 that "an action cannot be dismissed on a ground not alleged in the motion therefore even if said ground. The respondents then filed their reply. The respondents moved to dismiss the complaint on several grounds. the petitioner's predecessor-in-interest. Ruling: We grant the petition for review on certiorari. in which they raised for the first time their objection on the ground of improper venue." Hence. namely: that the suit was barred by res judicata. is provided in Rule 16. . and that the plaintiffs claim had been waived. Claiming a deficiency amounting to Pl8. After holding the public auction. since the said ground was not raised in the defendant's Motion to Dismiss. 000. under a First Real Estate Mortgage Contract.00. e. that the complaint stated no cause of action. or extinguished. Which the RTC denied. The judgment became final and executory and was entered in the book of entries of judgment. Bush. prescription. They contended that the action for the recovery of the deficiency. Manila and registered in the name of respondent Teresita Yujuico. only raised in the motion for reconsideration filed in the lower court after it denied respondents’ motion to dismiss is contrary to law and jurisprudence.Facts: the City of Manila filed a complaint against the respondents for the expropriation of 5 parcels of land in Tondo.g. vs. and held on the issue of improper venue that: It would be improper for this Court to dismiss the plaintiffs complaint on the ground of improper venue. the sheriff awarded the two lots to the petitioner as the highest bidder at ₱10. The RTC of Manila rendered its judgment declaring the five parcels of land expropriated for public use. The Makati RTC denied the respondents' motion for reconsideration for its lack of merit. assuming that the venue is indeed improperly laid. 000. The petitioner subsequently filed a Motion to Intervene in Execution with Partial Opposition to Defendant's Request to Release. the petitioner adopted its comment/opposition to the motion to dismiss. the petitioner decided to extrajudicially foreclose the mortgage constituted on the two parcels of land subject of the respondents' loan. 522155. When respondents moved for reconsideration. the petitioner sued the respondents to recover such deficiency in the Makati RTC. abandoned.. reiterating their grounds earlier made in their motion to dismiss. it was held in the case of Malig. Issue: Whether or not the Honorable Court of Appeals’ act of appreciating the additional ground of improper venue. et al.42. On this point. May 31. but the RTC denied the motion for having been "filed out of time.

or foreclosure of mortgage on. 03-450 on the ground of improper venue.25Section 1. According to Section 1. As it relates to the place of trial. or a portion thereof. The determinants of whether an action is of a real or a personal nature have been fixed by the Rules of Court and relevant jurisprudence. venue is procedural. or an interest therein. is situated. at the election of the plaintiff. or in the case of a non- resident defendant where he may be found. they came to raise the objection of improper venue for the first time only in their reply to the petitioner's comment on their Motion for Reconsideration. Based on the distinctions between real and personal actions. or where the defendant or any of the principal defendants resides. for which reason the action is considered a transitory one. real property is a real action. not jurisdictional. unless the defendant seasonably objects. or for the enforcement of some contract or recovery of damages for its breach. which explains why the action is also referred to as a local action. the Rules of Court declares all other actions as personal actions. They did so belatedly. and may be waived by the defendant if not seasonably raised either in a motion to dismiss or in the answer. assuming that the venue had been improperly laid. Thus. As earlier indicated. The real action is to be commenced and tried in the proper court having jurisdiction over the area wherein the real property involved. We underscore that in civil proceedings. such actions may include those brought for the recovery of personal property. rather than to restrict their access to the courts. that it would be improper to dismiss Civil Case No. the petitioner correctly brought Civil Case No. considering that the respondents had not raised such ground in their Motion to Dismiss. indeed. and the observation is correct in our view. Rule 4 of the Rules of Court. the Makati RTC observed. an action for partition or condemnation of. 26 In other words. or any interest therein. The venue of a personal action is the place where the plaintiff or any of the principal plaintiffs resides. or for the recovery of damages for the commission of an injury to the person or property. . for it does not affect title to or possession of real property. any action may be tried by a court despite its being the improper venue. Rule 9 of the Rules of Court thus expressly stipulates that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. In contrast. Moreover.03-450 in the Makati RTC because Makati was the place where the main office of the petitioner was located. an action to recover the deficiency after the extrajudicial foreclosure of the real property mortgage is a personal action.It is basic that the venue of an action depends on whether it is a real or a personal action. venue is meant to provide convenience to the parties. a real action is one that affects title to or possession of real property.