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RULE 34 & 35 The farmer-beneficiaries, the Land Bank of the

Philippines-Land Valuation and Landowners'

G.R. No. 156304 October 23, 2006 Compensation III (LBP-LVLCO III), the
Department of Agrarian Reform (DAR) Secretary,
ANACLETO R. MENESES, FRANCISCO C. and the DAR all filed their respective Answers.
MENESES, CECILIA C. MEMESES, RAMON M. For their part, the farmer-beneficiaries alleged
VASCO, CARMENCITA M. VASCO-ALIVIA, that the land valuation establishing the average
VICTOR A. MENESES, MA. ROSARIO gross production per hectare by the Barangay
MENESES-CARREON, GAVINO A. MENESES, Committee on Land Production (BCLP) based
ARTEMIO A. MENESES, JR., MA. CARMEN R. on three normal crop years before P.D. No. 27 is
BONGGA, MA. THERESA M. RODRIGO, in accordance with the existing guidelines and
JACINTO M. RODRIGO, MA. ELIZABETH M. procedure on Operation Land Transfer; they
RODRIGO, MARTIN M. RODRIGO, JOSE have no unpaid rentals; and jurisdiction over the
ANTONIO M. RODRIGO, DOMINGO M. case lies with the Department of Agrarian
SALONGA, CAROLINA M. SALONGA, Reform Adjudication Board (DARAB).2
SALONGA, CARMELITA M. SALONGA, Meanwhile, the LBP-LVLCO III averred that it
CYNTHIA M. SALONGA and MARILYN F. has been acting in good faith in discharging its
SALONGA, petitioners, obligations, and that the computation was
vs. obtained through the valuation processes of the
SECRETARY OF AGRARIAN REFORM, LAND DAR on lands covered by P.D. No. 27 and
BANK OF THE PHILIPPINES, RODRIGO Executive Order No. 228 (E.O. No. 228). The
VELAYO, ANGEL SOLIMAN, RICARDO LBP-LVLCO III likewise alleged that jurisdiction
MASASU, REGINA STA. ANA, JUANITO over the case lies with the DARAB.3
CUEVAS, MANOLO GARCIA, RODRIGO The DAR Secretary, on the other hand, alleged
URBANO, FELIX BINUYA, GORGONIO CATU, that the valuation of the property was pursuant to
ERLINDA ABLAZA, IGMEDIO SANTOS, the Operation Land Transfer under P.D. No. 27
FLORENTINA SUSPAN, PEDRO SUPAN, and the reckoning date should be at the time of
GABRIEL PONCE, FELIPE PONCE, MAGNO the taking of the property, i.e., October 21,
MOISES MORALES, LAZARO MATIAS, Lastly, the DAR claimed that the filing of the
FORTUNATA MANUGON, ROMEO MANUZON, case is premature since there is no valuation yet
and DAMASO DURIA, respondents. made by the DAR based on E.O. No. 228, and
petitioners must cooperate with the DAR by
submitting all the necessary papers for proper
valuation and expeditious payment of the land.
DECISION The DAR also claimed that it must first determine
the valuation before resort to the court can be

AUSTRIA-MARTINEZ, J.: Thereafter, in an Order dated June 22, 1994, the

RTC dismissed the complaint for lack of cause of
Petitioners were co-owners pro-indiviso of an action. According to the RTC, the determination
irrigated rice land in Barangay Batasan, San of just compensation must first be filed with the
Miguel, Bulacan, measuring 60.8544 hectares DAR and not the Special Agrarian Court.6
and registered in the name of their grandparents,
the spouses Ramon Meneses and Carmen Petitioners filed a motion for reconsideration,
Rodriguez-Meneses. On October 21, 1972, the which was partially granted by the RTC in its
property was distributed to farmer-beneficiaries Order dated September 7, 1994, setting aside its
by virtue of Presidential Decree No. 27 (P.D. No. order of dismissal, ordering the suspension of
27). the proceedings and archiving the case until
primary determination has been made on the
On July 16, 1993, petitioners filed with the issue of just compensation.7
Regional Trial Court (RTC) of Bulacan, Branch
13, a complaint for determination and payment On October 5, 1994, petitioners filed a complaint
of just compensation. Petitioners alleged that for determination and payment of just
from the time the land was distributed to compensation with the DARAB. The DARAB,
farmer-beneficiaries in 1972 up to the time of the however, dismissed the complaint on the ground
filing of the complaint, no payment or rentals has that it has no jurisdiction to hear and decide
been made, and titles have already been issued valuation cases covered by P.D. No. 27, as the
to the farmer-beneficiaries. Petitioners also same is within the exclusive administrative
alleged that the fair market value of the property powers of the Office of the Secretary.8 Because
is P6,000,000.00.1 of the foregoing dismissal, petitioners filed with
the RTC a motion to re-open and calendar case
for hearing,9 which was granted by the RTC.
In an Order dated May 9, 1996, the RTC, with Petitioners argue that the CA erred in sustaining
the agreement of the parties, constituted the propriety of the motion for judgment on the
Commissioners to determine just pleadings filed by respondents with the RTC. It
compensation, but the same was dissolved per was the CA's ruling that the motion for judgment
its Report and Recommendation dated October on the pleadings was proper since respondents
9, 1996, 11as granted by the RTC in its Order can be considered as plaintiffs in a counter-claim.
dated October 11, 1996.12 Petitioners also impute error in the CA's ruling
that the RTC properly dismissed the case since it
Pre-trial was terminated on July 10, 1997, and appears that there was no initial valuation yet
petitioners were scheduled to present their made by the DARAB.
evidence.13 During the hearing held on August
14, 1997, the parties agreed as to the issue to be Respondents, however, argue that the CA
resolved – "whether or not the plaintiffs Decision dated May 30, 2002 is already final and
[petitioners] are entitled to just compensation as executory due to petitioners' failure to
provided for in Republic Act No. 6657 (R.A. No. seasonably file a motion for reconsideration.
6657) and the Constitution of 1987 and not P.D. Respondents also argue, among others, that the
No. 27 which was the basis of valuation made by applicable law in this case is P.D. No. 27 and
defendants Secretary of Agrarian Reform and E.O. No. 228, which provides for the formula for
the Land Bank of the Philippines of the subject the determination of just compensation, as
parcel of land which was acquired in October 21, recognized in the cases of Land Bank of the
1972."14 The parties were then given a period Philippines v. Court of Appeals, 378 Phil. 1248
within which to fie their respective motions for (1999), and Gabatin v. Land Bank of the
judgment on the pleadings and Philippines, G.R. No. 148223, November 25,
comment/opposition thereto, after which the 2004, 444 SCRA 176.
case shall be deemed submitted for resolution.15
The Courts finds merit in the petition.
On February 7, 1998, the RTC rendered its
Decision dismissing the complaint. It was the It is true that petitioners' failure to file their motion
RTC's ruling that since the subject property was for reconsideration within the reglementary
taken from petitioners on October 21, 1972 period rendered the CA Decision dated May 30,
under the DAR's Operation Land Transfer 2002 final and executory. For all intents and
pursuant to P.D. No. 27, then just compensation purposes, said Decision should now be
must be based on the value of the property at immutable and unalterable; however, the Court
the time of taking. relaxes this rule in order to serve substantial
justice considering (a) matters of life, liberty,
Thus, petitioners filed an appeal with the Court of honor or property, (b) the existence of special or
Appeals (CA), docketed as CA-G.R. CV No. compelling circumstances, (c) the merits of the
60355, where petitioners prayed for a remand of case, (d) a cause not entirely attributable to the
the case to the RTC for further proceedings fault or negligence of the party favored by the
and/or reception of evidence on the just and fair suspension of the rules, (e) a lack of any
market value of the property. showing that the review sought is merely
frivolous and dilatory, and (f) the other party will
On May 30, 2002, the CA16 rendered its Decision not be unjustly prejudiced thereby.21
dismissing the appeal.17 Petitioners filed a
motion for reconsideration, but the same was The explanation of petitioners' counsel for the
denied on the grounds that it was filed 44 days delayed filing of the motion for reconsideration
late and the CA found no was that their law firm secretary failed to inform
the court of their change of address.22 This, of
cogent reason to reverse or modify its course, is not a valid excuse. As a general rule, a
Decision.18 client is bound by the acts of his counsel,
including even the latter's mistakes and
Hence, this petition for review negligence. But where such mistake or neglect
on certiorari based on the following reasons: would result in serious injustice to the client, a
departure from this rule is warranted. To cling to
I - THAT THE APPEALED DECLISION (sic) IS the general rule is to condone rather than rectify
RENDERED BY THE COURT OF APPEALS a serious injustice to petitioners whose only fault
NOT IN ACCORDANCE WITH LAW OR WITH was to repose his faith and entrust his innocence
In Ginete v. Court of Appeals,24 the Court
II - THAT THE COURT OF APPEALS HAS disregarded the failure of the petitioners to file a
DEPARTED FROM THE ACCEPTED AND motion for reconsideration of the CA's dismissal,
USUAL COURSE OF JUDICIAL and instead, ruled that their counsel's negligence
PROCEEDINGS OR HAS SANCTIONED SUCH should not prejudice the merits of their case, as
DEPARTURE BY THE LOWER COURT.20 they were bound to lose their alleged rightful
share in their inheritance to a 59-hectare
In Philippine Ports Authortity v. Sargasso On the propriety of the filing of a motion for
Construction & Development Corp.,25 the Court judgment on the pleadings by the LBP and
excused the Office of the Government Corporate adopted by the DAR Secretary – the Court finds
Counsel's belated filing of the notice of appeal that the CA erred in sustaining its propriety.
because sustaining the finality of the CA's
dismissal of the appeal would leave the Rule 34, Section 1 of the Rules of
petitioner no other remedy to assail the decision Court,28 provides that a judgment on the
of the trial court, and it would then have to pleadings is proper when an answer fails to
implement the award of the reclamation project render an issue or otherwise admits the material
to the respondents for the enhancement of the allegations of the adverse party's pleading. The
San Fernando, La Union port for the price essential question is whether there are issues
of P30,794,230.89 without the benefit of a public generated by the pleadings. A judgment on the
bidding, and sans the approval of its Board of pleadings may be sought only by a claimant,
Directors. who is the party seeking to recover upon a claim,
counterclaim or cross-claim; or to obtain a
After reviewing the records of this case, the declaratory relief.29
Court resolves to give due course to the case in
order to put to rest the issues herein presented, In this case, the separate Answers filed by the
specially in light of the Court's ruling in Solmayor respondents definitely tendered issues, as it
v. Arroyo,26 to wit: made specific denials of the material allegations
in the complaint and asserted affirmative
Furthermore, we must bear in mind that defenses, which would bar recovery by
procedural rules are intended to ensure the petitioners. Moreover, it was erroneous for the
proper administration of law and justice. The RTC to require the filing of a motion for judgment
rules of procedure ought not to be applied in a on the pleadings and for the LBP and the DAR
very rigid, technical sense, for they are adopted Secretary to file the same since in the first place,
to help secure, not override, substantial justice. the latter are neither plaintiffs in the case nor
A deviation from its rigid enforcement may thus counter-claimants or cross-claimants.
be allowed to attain its prime objective, for after
all, the dispensation of justice is the core reason What the RTC obviously meant to be filed was a
for the existence of courts. Moreover, we motion for summary judgment, a procedural
cannot shy away from our constitutionally device designed for the prompt disposition of
mandated duty to questions of law set forth actions, which may be rendered if the pleadings,
in this petition which hinges on the supporting affidavits, depositions and
determination of the rights of herein litigants admissions on file show that, after a summary
in the light of a very important piece of social hearing, there is no genuine issue regarding any
legislation, Presidential Decree No. 27, which material fact, except as to the amount of
aims for the equitable distribution and damages, and the moving party is entitled to a
ownership of land, without disregarding the judgment as a matter of law, and which may be
property rights of landowners. Thus, for applied for by either a claimant or a defending
pragmatic reasons and consideration of justice party.30 This is obvious from the fact that
and equity, the Court must put to rest the issues although the Answers raised issues, these were
presented before us. (Emphasis supplied) not factual ones requiring trial, nor were they
genuine issues,31 as the parties were able to
If the Court sustains the CA Decision, which agree to limit the same to whether petitioners are
affirmed the RTC Decision, petitioners will be left entitled to just compensation under R.A. No.
holding an empty bag, so to speak. It should be 6657 and not P.D. No. 27.32
noted that the property subject of this case has
already been distributed to the The Court also finds that the CA erred in
farmer-beneficiaries way back in 1972, and up to sustaining the RTC ruling that just compensation
now, 34 years later, petitioners have yet to enjoy in this case should be based on the value of the
the fruits of its value. Moreover, petitioners will property at the time of taking, October 21, 1972,
be left without any recourse as regards the which is the effectivity date of P.D. No. 27.
resolution of the issue of just compensation
since both the RTC and the DARAB already Respondent correctly cited the case of Gabatin v.
dismissed the separate complaints for just Land Bank of the Philippines,33 where the Court
compensation filed before them. Indeed, the ruled that "in computing the just compensation
"Court has the power to except a particular case for expropriation proceedings, it is the value of
from the operation of the rule whenever the the land at the time of the taking [or October 21,
purposes of justice requires it because what 1972, the effectivity date of P.D. No. 27], not at
should guide judicial action is that a party is the time of the rendition of judgment, which
given the fullest opportunity to establish the should be taken into consideration." Under P.D.
merits of his action or defense rather than for No. 27 and E.O. No. 228, the following formula is
him to lose life, honor, or property on mere used to compute the land value for palay:
LV (land value) = 2.5 x AGP x GSP x (1.06)n
It should also be pointed out, however, that in It would certainly be inequitable to determine just
the more recent case of Land Bank of the compensation based on the guideline provided
Philippines vs. Natividad,34the Court by PD 27 and EO 228 considering the DAR's
categorically ruled: "the seizure of the failure to determine the just compensation for a
landholding did not take place on the date of considerable length of time. That just
effectivity of P.D. No. 27 but would take effect on compensation should be determined in
the payment of just compensation." Under accordance with RA 6657, and not PD 27 or EO
Section 17 of R.A. No. 6657, the following 228, is especially imperative considering that just
factors are considered in determining just compensation should be the full and fair
compensation, to wit: equivalent of the property taken from its owner
by the expropriator, the equivalent being real,
Sec. 17. Determination of Just substantial, full and ample.
Compensation. - In determining just
compensation, the cost of acquisition of the In this case, the trial court arrived at the just
land, the current value of like properties, its compensation due private respondents for their
nature, actual use and income, the sworn property, taking into account its nature as
valuation by the owner, the tax declarations, irrigated land, location along the highway,
and the assessment made by government market value, assessor's value and the volume
assessors shall be considered. The social and and value of its produce. This Court is convinced
economic benefits contributed by the that the trial court correctly determined the
farmers and the farm-workers and by the amount of just compensation due private
Government to the property as well as the respondents in accordance with, and guided by,
non-payment of taxes or loans secured from RA 6657 and existing
any government financing institution on the 35
jurisprudence. (Emphasis supplied)
said land shall be considered as additional
factors to determine its valuation. (Emphasis As previously noted, the property was
supplied) expropriated under the Operation Land Transfer
scheme of P.D. No. 27 way back in 1972. More
Consequently, the question that arises is which than 30 years have passed and petitioners are
of these two rulings should be applied? yet to benefit from it, while the
farmer-beneficiaries have already been
Under the circumstances of this case, the Court harvesting its produce for the longest time.
deems it more equitable to apply the ruling in Events have rendered the applicability of P.D.
the Natividad case. In said case, the Court No. 27 inequitable. Thus, the provisions of R.A.
applied the provisions of R.A. No. 6657 in No. 6657 should apply in this case.
computing just compensation for property
expropriated under P.D. No. 27, stating, viz.: Finally, the Court sustains petitioners' contention
that the CA erred in ruling that the RTC correctly
Land Bank's contention that the property was dismissed their complaint. Even assuming that
acquired for purposes of agrarian reform on the RTC was correct in holding that P.D. No. 27
October 21, 1972, the time of the effectivity of applies, still it should not have simply dismissed
PD 27, ergo just compensation should be based the complaint after resolving the issue of which
on the value of the property as of that time and law should apply. Instead, it should have
not at the time of possession in 1993, is likewise proceeded to determine the just compensation
erroneous. In Office of the President, due to petitioners.
Malacañang, Manila v. Court of Appeals, we
ruled that the seizure of the landholding did not Records show that the complaint for just
take place on the date of effectivity of PD 27 but compensation was first filed in the RTC, but this
would take effect on the payment of just was dismissed in the Order dated June 22, 1994,
compensation. for the reason that the determination of just
compensation must first be filed with the
Under the factual circumstances of this case, DAR.36 Conformably with said ruling, petitioners
the agrarian reform process is still filed the complaint with the DAR, which
incomplete as the just compensation to be dismissed the same on the ground that it has no
paid private respondents has yet to be jurisdiction to hear and decide valuation cases
settled. Considering the passage of Republic covered by P.D. No. 27.37 Because of said
Act No. 6657 (RA 6657) before the completion dismissal, petitioners went back to the RTC for
of this process, the just compensation the re-opening of the case. Petitioners' case was
should be determined and the process obviously thrown back and forth between the two
concluded under the said law. Indeed, RA venues, and with the RTC's second dismissal,
6657 is the applicable law, with PD 27 and EO they were left hanging and without any recourse,
228 having only suppletory effect, which, of course, is iniquitous considering that
conformably with our ruling in Paris v. their property has already long been
Alfeche. expropriated by the government and its fruits
enjoyed by the farmer-beneficiaries.
Given the foregoing conclusion, this case should Petitioner, through his representatives and
then be remanded to the Regional Trial Court agents, assured respondent that the outstanding
(RTC) of Bulacan, Branch 13, for the final account of Macrogen Realty would be paid, and
determination of just compensation. requested respondent to continue working on
the construction project. Relying on the
WHEREFORE, the petition is GRANTED. The assurances made by petitioner, who was no less
Decision dated May 30, 2002 and Resolution than the President of Macrogen Realty,
dated December 9, 2002 rendered by the Court respondent continued the construction project.
of Appeals in CA-G.R. CV No. 60355
is REVERSED and SET ASIDE. The records of In August 1998, respondent suspended work on
this case is ordered REMANDED to Regional the construction project since the conditions that
Trial Court (RTC) of Bulacan, Branch 13, for it imposed for the continuation thereof, including
further proceedings with deliberate dispatch and payment of unsettled accounts, had not been
in accordance with the Court's discussion in this complied with by Macrogen Realty. On 1
Decision. September 1999, respondent instituted with the
Construction Industry Arbitration Commission
No costs. (CIAC) a case for arbitration against Macrogen
Realty seeking payment by the latter of its
SO ORDERED. unpaid billings and project costs. Petitioner,
through counsel, then conveyed to respondent
G.R. No. 173526 August 28, 2008 his purported willingness to amicably settle the
arbitration case. On 17 April 2000, before the
BENJAMIN BITANGA, petitioner, arbitration case could be set for trial, respondent
vs. and Macrogen Realty entered into a
PYRAMID CONSTRUCTION ENGINEERING Compromise Agreement,5 with petitioner acting
CORPORATION, respondent. as signatory for and in behalf of Macrogen
Realty. Under the Compromise Agreement,
DECISION Macrogen Realty agreed to pay respondent the
total amount of P6,000,000.00 in six equal
CHICO-NAZARIO, J.: monthly installments, with each installment to be
delivered on the 15th day of the month, beginning
Assailed in this Petition for Review under Rule 15 June 2000. Macrogen Realty also agreed that
451 of the Revised Rules of Court are: (1) the if it would default in the payment of two
Decision2 dated 11 April 2006 of the Court of successive monthly installments, immediate
Appeals in CA-G.R. CV No. 78007 which execution could issue against it for the unpaid
affirmed with modification the partial balance, without need of judgment or decree
Decision dated 29 November 2002 of the from any court or tribunal. Petitioner guaranteed
Regional Trial Court (RTC), Branch 96, of the obligations of Macrogen Realty under the
Quezon City, in Civil Case No. Q-01-45041, Compromise Agreement by executing a Contract
granting the motion for summary judgment filed of Guaranty6 in favor of respondent, by virtue of
by respondent Pyramid Construction and which he irrevocably and unconditionally
Engineering Corporation and declaring petitioner guaranteed the full and complete payment of the
Benjamin Bitanga and his wife, Marilyn Bitanga principal amount of liability of Macrogen Realty
(Marilyn), solidarily liable to pay P6,000,000.000 in the sum of P6,000,000.00. Upon joint motion
to respondent; and (2) the Resolution4dated 5 of respondent and Macrogen Realty, the CIAC
July 2006 of the appellate court in the same case approved the Compromise Agreement on 25
denying petitioner’s Motion for Reconsideration. April 2000.7

The generative facts are: However, contrary to petitioner’s assurances,

Macrogen Realty failed and refused to pay all
On 6 September 2001, respondent filed with the the monthly installments agreed upon in the
RTC a Complaint for specific performance and Compromise Agreement. Hence, on 7
damages with application for the issuance of a September 2000, respondent moved for the
writ of preliminary attachment against the issuance of a writ of execution8 against
petitioner and Marilyn. The Complaint was Macrogen Realty, which CIAC granted.
docketed as Civil Case No. Q-01-45041.
On 29 November 2000, the sheriff 9 filed a return
Respondent alleged in its Complaint that on 26 stating that he was unable to locate any property
March 1997, it entered into an agreement with of Macrogen Realty, except its bank deposit
Macrogen Realty, of which petitioner is the of P20,242.33, with the Planters Bank, Buendia
President, to construct for the latter the Branch.
Shoppers Gold Building, located at Dr. A. Santos
Avenue corner Palayag Road, Sucat, Parañaque Respondent then made, on 3 January 2001, a
City. Respondent commenced civil, structural, written demand10 on petitioner, as guarantor of
and architectural works on the construction Macrogen Realty, to pay the P6,000,000.00, or
project by May 1997. However, Macrogen Realty to point out available properties of the Macrogen
failed to settle respondent’s progress billings. Realty within the Philippines sufficient to cover
the obligation guaranteed. It also made verbal and that this case does not come within the
demands on petitioner. Yet, respondent’s exception.12
demands were left unheeded.
Petitioner filed with the RTC on 12 November
Thus, according to respondent, petitioner’s 2001, his Answer13 to respondent’s Complaint
obligation as guarantor was already due and averring therein that he never made
demandable. As to Marilyn’s liability, respondent representations to respondent that Macrogen
contended that Macrogen Realty was owned Realty would faithfully comply with its obligations
and controlled by petitioner and Marilyn and/or under the Compromise Agreement. He did not
by corporations owned and controlled by them. offer to guarantee the obligations of Macrogen
Macrogen Realty is 99% owned by the Asian Realty to entice respondent to enter into the
Appraisal Holdings, Inc. (AAHI), which in turn is Compromise Agreement but that, on the contrary,
99% owned by Marilyn. Since the completion of it was respondent that required Macrogen Realty
the construction project would have redounded to offer some form of security for its obligations
to the benefit of both petitioner and Marilyn before agreeing to the compromise. Petitioner
and/or their corporations; and considering, further alleged that his wife Marilyn was not
moreover, Marilyn’s enormous interest in AAHI, aware of the obligations that he assumed under
the corporation which controls Macrogen Realty, both the Compromise Agreement and the
Marilyn cannot be unaware of the obligations Contract of Guaranty as he did not inform her
incurred by Macrogen Realty and/or petitioner in about said contracts, nor did he secure her
the course of the business operations of the said consent thereto at the time of their execution.
As a special and affirmative defense, petitioner
Respondent prayed in its Complaint that the argued that the benefit of excussion was still
RTC, after hearing, render a judgment ordering available to him as a guarantor since he had set
petitioner and Marilyn to comply with their it up prior to any judgment against him.
obligation under the Contract of Guaranty by According to petitioner, respondent failed to
paying respondent the amount exhaust all legal remedies to collect from
of P6,000,000.000 (less the bank deposit of Macrogen Realty the amount due under the
Macrogen Realty with Planter’s Bank in the Compromise Agreement, considering that
amount of P20,242.23) and P400,000.000 for Macrogen Realty still had uncollected credits
attorneys fees and expenses of litigation. which were more than enough to pay for the
Respondent also sought the issuance of a writ of same. Given these premise, petitioner could not
preliminary attachment as security for the be held liable as guarantor. Consequently,
satisfaction of any judgment that may be petitioner presented his counterclaim for
recovered in the case in its favor. damages.

Marilyn filed a Motion to Dismiss,11 asserting that At the pre-trial held on 5 September 2002, the
respondent had no cause of action against her, parties submitted the following issues for the
since she did not co-sign the Contract of resolution of the RTC:
Guaranty with her husband; nor was she a party
to the Compromise Agreement between (1) whether the defendants were liable under the
respondent and Macrogen Realty. She had no contract of guarantee dated April 17, 2000
part at all in the execution of the said contracts. entered into between Benjamin Bitanga and the
Mere ownership by a single stockholder or by plaintiff;
another corporation of all or nearly all of the
capital stock of another corporation is not by (2) whether defendant wife Marilyn Bitanga is
itself a sufficient ground for disregarding the liable in this action;
separate personality of the latter corporation.
Respondent misread Section 4, Rule 3 of the (3) whether the defendants are entitled to the
Revised Rules of Court. benefit of excussion, the plaintiff on the one
hand claiming that it gave due notice to the
The RTC denied Marilyn’s Motion to Dismiss for guarantor, Benjamin Bitanga, and the
lack of merit, and in its Order dated 24 January defendants contending that no proper notice was
2002 decreed that: received by Benjamin Bitanga;

The Motion To Dismiss Complaint Against (4) if damages are due, which party is liable; and
Defendant Marilyn Andal Bitanga filed on
November 12, 2001 is denied for lack of merit (5) whether the benefit of excussion can still be
considering that Sec. 4, Rule 3, of the Rules of invoked by the defendant guarantor even after
Court (1997) specifically provides, as follows: the notice has been allegedly sent by the plaintiff
although proper receipt is denied.14
"SEC. 4. Spouses as parties. – Husband and
wife shall sue or be sued jointly, except as On 20 September 2002, prior to the trial proper,
provided by law." respondent filed a Motion for Summary
Judgment.15 Respondent alleged therein that it
was entitled to a summary judgment on account
of petitioner’s admission during the pre-trial of WHEREFORE, summary judgment is rendered
the genuineness and due execution of the ordering defendants SPOUSES BENJAMIN
Contract of Guaranty. The contention of BITANGA and MARILYN ANDAL BITANGA to
petitioner and Marilyn that they were entitled to pay the [herein respondent], jointly and severally,
the benefit of excussion was not a genuine issue. the amount of P6,000,000.00, less P20,242.23
Respondent had already exhausted all legal (representing the amount garnished bank
remedies to collect from Macrogen Realty, but its deposit of MACROGEN in the Planters Bank,
efforts proved unsuccessful. Given that the Buendia Branch); and the costs of suit.
inability of Macrogen Realty as debtor to pay the
amount of its debt was already proven by the Within 10 days from receipt of this partial
return of the writ of execution to CIAC unsatisfied, decision, the [respondent] shall inform the Court
the liability of petitioner as guarantor already whether it shall still pursue the rest of the claims
arose.16 In any event, petitioner and Marilyn against the defendants. Otherwise, such claims
were deemed to have forfeited their right to avail shall be considered waived.20
themselves of the benefit of excussion because
they failed to comply with Article 206017 of the Petitioner and Marilyn filed a Motion for
Civil Code when petitioner ignored respondent’s Reconsideration of the afore-quoted Decision,
demand letter dated 3 January 2001 for payment which the RTC denied in an Order dated 26
of the amount he guaranteed.18 The duty to January 2003.21
collect the supposed receivables of Macrogen
Realty from its creditors could not be imposed on In time, petitioner and Marilyn filed an appeal
respondent, since petitioner and Marilyn never with the Court of Appeals, docketed as CA-G.R.
informed respondent about such uncollected CV 78007. In its Decision dated 11 April 2006,
credits even after receipt of the demand letter for the appellate court held:
payment. The allegation of petitioner and Marilyn
that they could not respond to respondent’s UPON THE VIEW WE TAKE OF THIS CASE,
demand letter since they did not receive the THUS, the judgment appealed from must be, as
same was unsubstantiated and insufficient to it hereby is, MODIFIED to the effect that
raise a genuine issue of fact which could defeat defendant-appellant Marilyn Bitanga is adjudged
respondent’s Motion for Summary Judgment. not liable, whether solidarily or otherwise, with
The claim that Marilyn never participated in the her husband the defendant-appellant Benjamin
transactions that culminated in petitioner’s Bitanga, under the compromise agreement or
execution of the Contract of Guaranty was the contract of guaranty. No costs in this
nothing more than a sham. instance.22

In opposing respondent’s foregoing Motion for In holding that Marilyn Bitanga was not liable,
Summary Judgment, petitioner and Marilyn the Court of Appeals cited Ramos v. Court of
countered that there were genuinely disputed Appeals,23 in which it was declared that a
facts that would require trial on the merits. They contract cannot be enforced against one who is
appended thereto an affidavit executed by not a party to it. The Court of Appeals stated
petitioner, in which he declared that his spouse further that the substantial ownership of shares
Marilyn could not be held personally liable under in Macrogen Realty by Marilyn Bitanga was not
the Contract of Guaranty or the Compromise enough basis to hold her liable.
Agreement, nor should her share in the conjugal
partnership be made answerable for the The Court of Appeals, in its Resolution dated 5
guaranty petitioner assumed, because his July 2006, denied petitioner’s Motion for
undertaking of the guaranty did not in any way Reconsideration24 of its earlier Decision.
redound to the benefit of their family. As
guarantor, petitioner was entitled to the benefit of Petitioner is now before us via the present
excussion, and he did not waive his right thereto. Petition with the following assignment of errors:
He never received the respondent’s demand
letter dated 3 January 2001, as Ms. Dette I
Ramos, the person who received it, was not an
employee of Macrogen Realty nor was she THE COURT OF APPEALS GRAVELY ERRED
authorized to receive the letter on his behalf. As IN AFFIRMING THE VALIDITY OF THE
a guarantor, petitioner could resort to the benefit PARTIAL SUMMARY JUDGMENT BY THE
of excussion at any time before judgment was REGIONAL TRIAL COURT OF QUEZON CITY,
rendered against him.19 Petitioner reiterated that BRANCH 96, DESPITE THE CLEAR
Macrogen Realty had uncollected credits which EXISTENCE OF DISPUTED GENUINE AND
were more than sufficient to satisfy the claim of MATERIAL FACTS OF THE CASE THAT
On 29 November 2002, the RTC rendered a
partial Decision, the dispositive portion of which II
PETITIONER BENJAMIN M. BITANGA AS A defense, i.e.,29 issues of fact calling for the
MERE GUARANTOR TO THE BENEFIT OF presentation of evidence upon which reasonable
EXCUSSION UNDER ARTICLES 2058, 2059, findings of fact could return a verdict for the
2060, 2061, AND 2062 OF THE CIVIL CODE OF non-moving party, although a mere scintilla of
THE PHILIPPINES.25 evidence in support of the party opposing
summary judgment will be insufficient to
As in the two courts below, it is petitioner’s preclude entry thereof.
position that summary judgment is improper in
Civil Case No. Q-01-45041 because there are Significantly, petitioner does not deny the receipt
genuine issues of fact which have to be threshed of the demand letter from the respondent. He
out during trial, to wit: merely raises a howl on the impropriety of
service thereof, stating that "the address to
(A) Whether or not there was proper service of which the said letter was sent was not his
notice to petitioner considering the said letter of residence but the office of Macrogen Realty,
demand was allegedly received by one Dette thus it cannot be considered as the correct
Ramos at Macrogen office and not by him at his manner of conveying a letter of demand upon
residence. him in his personal capacity."30

(B) Whether or not petitioner is entitled to the Section 6, Rule 13 of the Rules of Court states:
benefit of excussion?26
SEC. 6. Personal service. – Service of the
We are not persuaded by petitioner’s arguments. papers may be made by delivering personally a
copy to the party or his counsel, or by leaving it
Rule 35 of the Revised Rules of Civil Procedure in his office with his clerk or with a person
provides: having charge thereof. If no person is found in
his office, or his office is not known, or he has no
Section 1. Summary judgment for claimant. – A office, then by leaving the copy, between the
party seeking to recover upon a claim, hours of eight in the morning and six in the
counterclaim, or cross-claim or to obtain a evening, at the party’s or counsel’s residence, if
declaratory relief may, at any time after the known, with a person of sufficient age and
pleading in answer thereto has been served, discretion then residing therein.
move with supporting affidavits, depositions or
admissions for a summary judgment in his favor The affidavit of Mr. Robert O. Pagdilao,
upon all or any part thereof. messenger of respondent’s counsel states in
For a summary judgment to be proper, the
movant must establish two requisites: (a) there 2. On 4 January 2001, Atty. Jose Vicente B.
must be no genuine issue as to any material fact, Salazar, then one of the Associates of the
except for the amount of damages; and (b) the ACCRA Law Offices, instructed me to deliver to
party presenting the motion for summary the office of Mr. Benjamin Bitanga a letter dated
judgment must be entitled to a judgment as a 3 January 2001, pertaining to Construction
matter of law. Where, on the basis of the Industry Arbitration Commission (hereafter,
pleadings of a moving party, including "CIAC") Case No. 99-56, entitled "Pyramid
documents appended thereto, no genuine issue Construction Engineering Corporation vs.
as to a material fact exists, the burden to Macrogen Realty Corporation."
produce a genuine issue shifts to the opposing
party. If the opposing party fails, the moving 3. As instructed, I immediately proceeded to the
party is entitled to a summary judgment.27 office of Mr. Bitanga located at the 12th Floor,
Planters Development Bank Building, 314
In a summary judgment, the crucial question is: Senator Gil Puyat Avenue, Makati City. I
are the issues raised by the opposing party not delivered the said letter to Ms. Dette Ramos, a
genuine so as to justify a summary judgment?28 person of sufficient age and discretion, who
introduced herself as one of the employees of Mr.
First off, we rule that the issue regarding the Bitanga and/or of the latter’s
companies. (Emphasis supplied.)
propriety of the service of a copy of the demand
letter on the petitioner in his office is a sham
issue. It is not a bar to the issuance of a We emphasize that when petitioner signed the
summary judgment in respondent’s favor. Contract of Guaranty and assumed obligation as
guarantor, his address in the said contract was
A genuine issue is an issue of fact which the same address where the demand letter was
requires the presentation of evidence as served.32 He does not deny that the said place of
distinguished from an issue which is a sham, service, which is the office of Macrogen, was
fictitious, contrived or false claim. To forestall also the address that he used when he signed as
summary judgment, it is essential for the guarantor in the Contract of Guaranty. Nor does
non-moving party to confirm the existence of he deny that this is his office address; instead,
genuine issues, as to which he has substantial, he merely insists that the person who received
plausible and fairly arguable the letter and signed the receiving copy is not an
employee of his company. Petitioner could have latter should fail to do so. The guarantor who
easily substantiated his allegation by a pays for a debtor, in turn, must be indemnified by
submission of an affidavit of the personnel the latter. However, the guarantor cannot be
manager of his office that no such person is compelled to pay the creditor unless the latter
indeed employed by petitioner in his office, but has exhausted all the property of the debtor and
that evidence was not submitted.33 All things are resorted to all the legal remedies against the
presumed to have been done correctly and with debtor. This is what is otherwise known as the
due formality until the contrary is proved. benefit of excussion.37
This juris tantum presumption stands even
against the most well-reasoned allegation Article 2060 of the Civil Code reads:
pointing to some possible irregularity or
anomaly.34 It is petitioner’s burden to overcome Art. 2060. In order that the guarantor may make
the presumption by sufficient evidence, and so use of the benefit of excussion, he must set it up
far we have not seen anything in the record to against the creditor upon the latter’s demand for
support petitioner’s charges of anomaly beyond payment from him, and point out to the creditor
his bare allegation. Petitioner cannot now be available property of the debtor within Philippine
heard to complain that there was an irregular territory, sufficient to cover the amount of the
service of the demand letter, as it does not debt.38
escape our attention that petitioner himself
indicated "314 Sen. Gil Puyat Avenue, Makati The afore-quoted provision imposes a condition
City" as his office address in the Contract of for the invocation of the defense of excussion.
Guaranty. Article 2060 of the Civil Code clearly requires
that in order for the guarantor to make use of the
Moreover, under Section 6, Rule 13 of the Rules benefit of excussion, he must set it up against
of Court, there is sufficiency of service when the the creditor upon the latter’s demand for
papers, or in this case, when the demand letter payment and point out to the creditor available
is personally delivered to the party or his counsel, property of the debtor within the Philippines
or by leaving it in his office with his clerk or sufficient to cover the amount of the debt.39
with a person having charge thereof, such as
what was done in this case. It must be stressed that despite having been
served a demand letter at his office, petitioner
We have consistently expostulated that in still failed to point out to the respondent
summary judgments, the trial court can properties of Macrogen Realty sufficient to cover
determine a genuine issue on the basis of the its debt as required under Article 2060 of the
pleadings, admissions, documents, affidavits or Civil Code. Such failure on petitioner’s part
counter affidavits submitted by the parties. When forecloses his right to set up the defense of
the facts as pleaded appear uncontested or excussion.
undisputed, then there is no real or genuine
issue or question as to any fact, and summary Worthy of note as well is the Sheriff’s return
judgment is called for.35 stating that the only property of Macrogen Realty
which he found was its deposit of P20,242.23
The Court of Appeals was correct in holding that: with the Planters Bank.

Here, the issue of non-receipt of the letter of Article 2059(5) of the Civil Code thus finds
demand is a sham or pretended issue, not a application and precludes petitioner from
genuine and substantial issue. Indeed, against interposing the defense of excussion. We quote:
the positive assertion of Mr. Roberto O. Pagdilao
(the private courier) in his affidavit that he Art. 2059. This excussion shall not take place:
delivered the subject letter to a certain Ms. Dette
Ramos who introduced herself as one of the xxxx
employees of [herein petitioner] Mr. Benjamin
Bitanga and/or of the latter’s companies, said (5) If it may be presumed that an execution on
[petitioner] merely offered a bare denial. But the property of the principal debtor would not
bare denials, unsubstantiated by facts, which result in the satisfaction of the obligation.
would be admissible in evidence at a
hearing, are not sufficient to raise a genuine As the Court of Appeals correctly ruled:
issue of fact sufficient to defeat a motion for
summary judgment.36 We find untenable the claim that the [herein
petitioner] Benjamin Bitanga cannot be
We further affirm the findings of both the RTC compelled to pay Pyramid because the
and the Court of Appeals that, given the settled Macrogen Realty has allegedly sufficient assets.
facts of this case, petitioner cannot avail himself Reason: The said [petitioner] had not genuinely
of the benefit of excussion. controverted the return made by Sheriff Joseph
F. Bisnar, who affirmed that, after exerting
Under a contract of guarantee, the guarantor diligent efforts, he was not able to locate any
binds himself to the creditor to fulfill the property belonging to the Macrogen Realty,
obligation of the principal debtor in case the except for a bank deposit with the Planter’s Bank
at Buendia, in the amount of P20,242.23. It is respondent and D’Sierto members. In an
axiomatic that the liability of the guarantor arises undated Order,3 DENR Regional Executive
when the insolvency or inability of the debtor to Director Victor J. Ancheta denied the foreshore
pay the amount of debt is proven by the return of lease applications of the D’Sierto members,
the writ of execution that had not been including petitioner, on the ground that the
unsatisfied.40 subject area applied for fell either within the titled
property or within the foreshore areas applied for
WHEREFORE, premises considered, the instant by respondent. The D’Sierto members appealed
petition is DENIED for lack of merit. The the denial of their applications. In a
Decision of the Court of Appeals dated 11 April Resolution4 dated 21 August 2003, then DENR
2006 and its Resolution dated 5 July 2006 Secretary Elisea G. Gozun denied the appeal on
are AFFIRMED. Costs against petitioner. the ground that the area applied for encroached
on the titled property of respondent based on the
SO ORDERED. final verification plan.

G.R. No. 170483 April 19, 2010 In a letter dated 18 September

2003, respondent, through its Public Relations
MANUEL C. BUNGCAYAO, SR., represented Manager Arlene de Guzman, invited the D’Sierto
in this case by his Attorney-in-fact ROMEL R. members to a luncheon meeting to discuss
BUNGCAYAO,Petitioner, common details beneficial to all parties
vs. concerned. Atty. Liza Marcos (Atty. Marcos),
FORT ILOCANDIA PROPERTY HOLDINGS, wife of Governor Bongbong Marcos, was present
AND DEVELOPMENT as she was asked by Fort Ilocandia hotel officials
CORPORATION, Respondent. to mediate over the conflict among the parties.
Atty. Marcos offered ₱300,000 as financial
DECISION settlement per claimant in consideration of the
improvements introduced, on the condition that
CARPIO, J.: they would vacate the area identified as
respondent’s property. A D’Sierto member made
The Case a counter-offer of ₱400,000, to which the other
D’Sierto members agreed.
Before the Court is a petition for
review1 assailing the 21 November 2005 Petitioner alleged that his son, Manuel
Decision2 of the Court of Appeals in CA-G.R. CV Bungcayao, Jr., who attended the meeting,
No. 82415. manifested that he still had to consult his parents
about the offer but upon the undue pressure
The Antecedent Facts exerted by Atty. Marcos, he accepted the
payment and signed the Deed of Assignment,
Manuel C. Bungcayao, Sr. (petitioner) claimed to Release, Waiver and Quitclaim6 in favor of
be one of the two entrepreneurs who introduced respondent.
improvements on the foreshore area of Calayab
Beach in 1978 when Fort Ilocandia Hotel started Petitioner then filed an action for declaration of
its construction in the area. Thereafter, other nullity of contract before the Regional Trial Court
entrepreneurs began setting up their own stalls of Laoag, City, Branch 13 (trial court), docketed
in the foreshore area. They later formed as Civil Case Nos. 12891-13, against
themselves into the D’Sierto Beach Resort respondent. Petitioner alleged that his son had
Owner’s Association, Inc. (D’Sierto). no authority to represent him and that the deed
was void and not binding upon him.
In July 1980, six parcels of land in Barrio
Balacad (now Calayad) were transferred, ceded, Respondent countered that the area upon which
and conveyed to the Philippine Tourism petitioner and the other D’Sierto members
Authority (PTA) pursuant to Presidential Decree constructed their improvements was part of its
No. 1704. Fort Ilocandia Resort Hotel was titled property under Transfer Certificate of Title
erected on the area. In 1992, petitioner and No. T-31182. Respondent alleged that
other D’Sierto members applied for a foreshore petitioner’s sons, Manuel, Jr. and Romel,
lease with the Community Environment and attended the luncheon meeting on their own
Natural Resources Office (CENRO) and was volition and they were able to talk to their parents
granted a provisional permit. On 31 January through a cellular phone before they accepted
2002, Fort Ilocandia Property Holdings and respondent’s offer. As a counterclaim,
Development Corporation (respondent) filed a respondent prayed that petitioner be required to
foreshore application over a 14-hectare area return the amount of ₱400,000 from respondent,
abutting the Fort Ilocandia Property, including to vacate the portion of the respondent’s
the 5-hectare portion applied for by D’Sierto property he was occupying, and to pay damages
members. The foreshore applications became because his continued refusal to vacate the
the subject matter of a conflict case, docketed property caused tremendous delay in the
Department of Environment and Natural planned implementation of Fort Ilocandia’s
Resources (DENR) Case No. 5473, between expansion projects.
In an Order7 dated 6 November 2003, the trial The Court of Appeals sustained the trial court in
court confirmed the agreement of the parties to resorting to summary judgment as a valid
cancel the Deed of Assignment, Release, procedural device for the prompt disposition of
Waiver and Quitclaim and the return of ₱400,000 actions in which the pleadings raise only a legal
to respondent. Petitioner’s counsel, however, issue and not a genuine issue as to any material
manifested that petitioner was still maintaining its fact. The Court of Appeals ruled that in this case,
claim for damages against respondent. the facts are not in dispute and the only issue to
be resolved is whether the subject property was
Petitioner and respondent agreed to consider within the titled property of respondent. Hence,
the case submitted for resolution on summary summary judgment was properly rendered by
judgment. Thus, in its Order8 dated 28 the trial court.
November 2003, the trial court considered the
case submitted for resolution. Petitioner filed a The Court of Appeals ruled that the
motion for reconsideration, alleging that he counterclaims raised by respondent were
manifested in open court that he was compulsory in nature, as they arose out of or
withdrawing his earlier manifestation submitting were connected with the transaction or
the case for resolution. Respondent filed a occurrence constituting the subject matter of the
Motion for Summary Judgment. opposing party’s claim and did not require for its
adjudication the presence of third parties of
The trial court rendered a Summary whom the court could not acquire jurisdiction.
Judgment9 dated 13 February 2004. The Court of Appeals ruled that respondent was
the rightful owner of the subject property and as
The Decision of the Trial Court such, it had the right to recover its possession
from any other person to whom the owner has
The trial court ruled that the only issue raised by not transmitted the property, including petitioner.
petitioner was his claim for damages while
respondent’s issue was only his claim for The dispositive portion of the Court of Appeals’
possession of the property occupied by decision reads:
petitioner and damages. The trial court noted
that the parties already stipulated on the issues WHEREFORE, the assailed decision dated
and admissions had been made by both parties. February 13, 2004 of the Regional Trial Court of
The trial court ruled that summary judgment Laoag City, Branch 13 is hereby AFFIRMED in
could be rendered on the case. toto.

The trial court ruled that the alleged pressure on SO ORDERED.11

petitioner’s sons could not constitute force,
violence or intimidation that could vitiate consent. Thus, the petition before this Court.
As regards respondent’s counterclaim, the trial
court ruled that based on the pleadings and The Issues
admissions made, it was established that the
property occupied by petitioner was within the Petitioner raises the following issues in his
titled property of respondent. The dispositive Memorandum:12
portion of the trial court’s decision reads:
1. Whether respondent’s counterclaim is
WHEREFORE, the Court hereby renders compulsory; and
judgment DISMISSING the claim of plaintiff for
damages as it is found to be without legal basis, 2. Whether summary judgment is appropriate in
and finding the counterclaim of the defendant for this case.
recovery of possession of the lot occupied by the
plaintiff to be meritorious as it is hereby The Ruling of this Court
GRANTED. Consequently, the plaintiff is hereby
directed to immediately vacate the premises The petition has merit.
administratively adjudicated by the executive
department of the government in favor of the Compulsory Counterclaim
defendant and yield its possession unto the
defendant. No pronouncement is here made as A compulsory counterclaim is any claim for
yet of the damages claimed by the defendant. money or any relief, which a defending party
may have against an opposing party, which at
SO ORDERED.10 the time of suit arises out of, or is necessarily
connected with, the same transaction or
Petitioner appealed from the trial court’s occurrence that is the subject matter of the
decision. plaintiff’s complaint.13 It is compulsory in the
sense that it is within the jurisdiction of the court,
The Decision of the Court of Appeals does not require for its adjudication the presence
of third parties over whom the court cannot
In its 21 November 2005 Decision, the Court of acquire jurisdiction, and will be barred in the
Appeals affirmed the trial court’s decision in toto. future if not set up in the answer to the complaint
in the same case.14Any other counterclaim is was for the recovery of possession of the subject
permissive.15 property. While this counterclaim was an
offshoot of the same basic controversy between
The Court has ruled that the compelling test of the parties, it is very clear that it will not be
compulsoriness characterizes a counterclaim as barred if not set up in the answer to the
compulsory if there should exist a logical complaint in the same case. Respondent’s
relationship between the main claim and the second counterclaim, contrary to the findings of
counterclaim.16 The Court further ruled that there the trial court and the Court of Appeals, is only a
exists such a relationship when conducting permissive counterclaim. It is not a compulsory
separate trials of the respective claims of the counterclaim. It is capable of proceeding
parties would entail substantial duplication of independently of the main case.
time and effort by the parties and the court; when
the multiple claims involve the same factual and The rule in permissive counterclaim is that for
legal issues; or when the claims are offshoots of the trial court to acquire jurisdiction, the
the same basic controversy between the counterclaimant is bound to pay the prescribed
parties.17 docket fees.20 Any decision rendered without
jurisdiction is a total nullity and may be struck
The criteria to determine whether the down at any time, even on appeal before this
counterclaim is compulsory or permissive are as Court.21 In this case, respondent did not dispute
follows: the non-payment of docket fees. Respondent
only insisted that its claims were all compulsory
(a) Are issues of fact and law raised by the claim counterclaims. As such, the judgment by the trial
and by the counterclaim largely the same? court in relation to the second counterclaim is
considered null and void22 without prejudice to a
(b) Would res judicata bar a subsequent suit on separate action which respondent may file
defendant’s claim, absent the compulsory rule? against petitioner.1avvphi1

(c) Will substantially the same evidence support Summary Judgment

or refute plaintiff’s claim as well as defendant’s
counterclaim? Section 1, Rule 35 of the 1997 Rules of Civil
Procedure provides:
(d) Is there any logical relations between the
claim and the counterclaim? Section 1. Summary Judgment for claimant. - A
party seeking to recover upon a claim,
A positive answer to all four questions would counterclaim, or cross-claim or to obtain a
indicate that the counterclaim is compulsory.18 declaratory relief may, at any time after the
pleading in answer thereto has been served,
In this case, the only issue in the complaint is move with supporting affidavits, depositions or
whether Manuel, Jr. is authorized to sign the admissions for a summary judgment in his favor
Deed of Assignment, Release, Waiver and upon all or any part thereof.
Quitclaim in favor of respondent without
petitioner’s express approval and authority. In an Summary judgment has been explained as
Order dated 6 November 2003, the trial court follows:
confirmed the agreement of the parties to cancel
the Deed of Assignment, Release, Waiver and Summary judgment is a procedural device
Quitclaim and the return of ₱400,000 to resorted to in order to avoid long drawn out
respondent. The only claim that remained was litigations and useless delays. When the
the claim for damages against respondent. The pleadings on file show that there are no genuine
trial court resolved this issue by holding that any issues of fact to be tried, the Rules allow a party
damage suffered by Manuel, Jr. was personal to to obtain immediate relief by way of summary
him. The trial court ruled that petitioner could not judgment, that is, when the facts are not in
have suffered any damage even if Manuel, Jr. dispute, the court is allowed to decide the case
entered into an agreement with respondent summarily by applying the law to the material
since the agreement was null and void. facts. Conversely, where the pleadings tender a
genuine issue, summary judgment is not proper.
Respondent filed three counterclaims. The first A "genuine issue" is such issue of fact which
was for recovery of the ₱400,000 given to requires the presentation of evidence as
Manuel, Jr.; the second was for recovery of distinguished from a sham, fictitious, contrived or
possession of the subject property; and the third false claim. Section 3 of the said rule provides
was for damages. The first counterclaim was two (2) requisites for summary judgment to be
rendered moot with the issuance of the 6 proper: (1) there must be no genuine issue as to
November 2003 Order confirming the agreement any material fact, except for the amount of
of the parties to cancel the Deed of Assignment, damages; and (2) the party presenting the
Release, Waiver and Quitclaim and to return the motion for summary judgment must be entitled to
₱400,000 to respondent. Respondent waived a judgment as a matter of law. A summary
and renounced the third counterclaim for judgment is permitted only if there is no genuine
damages.19 The only counterclaim that remained issue as to any material fact and a moving party
is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the
pleadings on their face appear to raise issues,
the affidavits, depositions, and admissions
presented by the moving party show that such
issues are not genuine.23

Since we have limited the issues to the damages

claimed by the parties, summary judgment has
been properly rendered in this case.

WHEREFORE, we MODIFY the 21 November

2005 Decision of the Court of Appeals in CA-G.R.
CV No. 82415 which affirmed the 13 February
2004 Decision of the Regional Trial Court of
Laoag City, Branch 13, insofar as it ruled that
respondent’s counterclaim for recovery of
possession of the subject property is compulsory
in nature. We DISMISS respondent’s permissive
counterclaim without prejudice to filing a
separate action against petitioner.