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PERSONAL ACTIONS AND REAL ACTIONS

1 Far East Bank v. Spouses Plaza | 154489 | July 25, 2003 Anyog, Rona Graziela Pauline

DOCTRINE/S: An action to compel the mortgagee to accept payment and for the consequent cancellation of a
real estate mortgage is a personal action if the mortgagee has not foreclosed the mortgage and the mortgagor
is in possession of the premises since neither the mortgagor’s title to nor possession of the property is in
question.

ACTIONS IN REM, IN PERSONAM AND QUASI IN REM

2 Lucas v. Lucas, G.R. No. 190710, June 6, 2011 Anyog, Rona Graziela Pauline

DOCTRINE/S: An order denying a motion to dismiss is an interlocutory order which neither terminates nor finally
disposes of a case, as it leaves something to be done by the court before the case is finally decided on the merits
—as such, the general rule is that the denial of a motion to dismiss cannot be questioned in a special civil action
for certiorari, which is a remedy designed to correct errors of jurisdiction and not errors of judgment.

A petition directed against the “thing” itself or the res, which concerns the status of a person, like a petition for
adoption, annulment of marriage, or correction of entries in the birth certificate, is an action in rem.

3 Salva v. Magpile Anyog, Rona Graziela Pauline

DOCTRINE/S: Basic is the rule that the allegations in the complaint and the character of the relief sought
determine the nature of an action. – In order for the trial court to resolve Magpile's petition, the issues regarding
the legality/validity or reasonableness/correctness of the real property tax assessment and collection need not
be dealt with. At bar, the issue of the validity and legality of the tax sale is not essentially related to the issue of
the demandability of the real property tax.

AUTHORS NOTE: The case arose out of respondent alleging that there was lack of due process. Petitioner is
the one who bought the properties of respondent Magpile thru a public auction because of the tax delinquency
the latter had incurred to which Magpile never denied. Magpile alleges that he never received any notices of
demand. Magpile filed for the annulment of the auction which was elevated as the present case, upon which the
Supreme Court ruled that the auction is null and void for violating due process.

4 De Pedro v. Romasan Development Corp. Anyog, Rona Graziela Pauline

DOCTRINE/S: Courts may exercise their powers validly and with binding effect if they acquire
jurisdiction over: (a) the cause of action or the subject matter of the case; (b) the thing or the res; (c) the
parties; and (d) the remedy.

Jurisdiction over the subject matter refers to the power or authority of courts to hear and decide cases of a
general class. It is conferred by the Constitution or by law. It is not acquired through administrative issuances or
court orders. It is not acquired by agreement, stipulation, waiver, or silence. Any decision by a court, without a
law vesting jurisdiction upon such court, is void. Jurisdiction over the thing or res is the power of the court
over an object or thing being litigated. The court may acquire jurisdiction over the thing by actually or
constructively seizing or placing it under the court’s custody. Jurisdiction over the parties refers to the
power of the court to make decisions that are binding on persons. The courts acquire jurisdiction over
complainants or petitioners as soon as they file their complaints or petitions. Over the persons of defendants or
respondents, courts acquire jurisdiction by a valid service of summons or through their voluntary submission.
Generally, a person voluntarily submits to the court’s jurisdiction when he or she participates in the trial despite
improper service of summons.

An action for annulment of certificate of title is a direct attack on the title because it challenges the judgment
decree of title.

PAYMENT OF DOCKET FEES

5 Ballatan v. Court of Appeals, March 2, 1999, 304 SCRA 34 Anyog, Rona Graziela Pauline

DOCTRINE: The rule in this jurisdiction is that when an action is filed in court, the complaint must be
accompanied by the payment of the requisite docket and filing fees.

Where the fees prescribed for the real action have been paid but the fees of certain related damages are not,
the court, although having jurisdiction over the real action, may not have acquired jurisdiction over the
accompanying claim for damages.

If there are unspecified claims, the determination of which may arise after the filing of the complaint or
similar pleading, the additional filing fee thereon shall constitute a lien on the judgment award.

Fedman Development Corp. v. Agcaoili, G.R. No. 165025,


6 Anyog, Rona Graziela Pauline
August 31, 2011, 656 SCRA 354

DOCTRINE: The filing of the complaint or other initiatory pleading and the payment of the prescribed docket fee
are the acts that vest a trial court with jurisdiction over the claim. The prevailing rule is that if the correct
amount of docket fees are not paid at the time of filing, the trial court still acquires jurisdiction upon full
payment of the fees within a reasonable time as the court may grant, barring prescription. The
“prescriptive period” that bars the payment of the docket fees refers to the period in which a specific action must
be filed.

The principle of estoppel, which is based on equity and public policy, dictates that a party’s active participation
in both Regional Trial Court (RTC) proceedings and its seeking therein affirmative reliefs now precluded it from
denying the RTC’s jurisdiction; The Court abhors the practice of any litigant of submitting a case for decision in
the trial court, and then accepting the judgment only if favorable, but attacking the judgment for lack of jurisdiction
if it is not.

MEANING OF CAUSE OF ACTION

Turner v. Lorenzo Shipping Corp., G.R. No. 157479,


7 Anyog, Rona Graziela Pauline
November 24, 2010

DOCTRINE: A cause of action is the act or omission by which a party violates a right of another. The essential
elements of a cause of action are:
(a) The existence of a legal right in favor of the plaintiff;
(b) A correlative legal duty of the defendant to respect such right; and
(c) An act or omission by such defendant in violation of the right of the plaintiff with a resulting injury or damage
to the plaintiff for which the latter may maintain an action for the recovery of relief from the defendant.

Although the first two elements may exist, a cause of action arises only upon the occurrence of the last element,
giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief.

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A complaint whose cause of action has not yet accrued cannot be cured by an amended or supplemental
pleading alleging the existence or accrual of a cause of action during the pendency of the action.

TEST OF THE SUFFICIENCY OF A CAUSE OF ACTION

Belle Corporation v. de Leon-Banks, G.R. No. 174669,


8 Anyog, Rona Graziela Pauline
September 19, 2012

DOCTRINE: Section 2, Rule 2 of the Rules of Court defines cause of action as the acts or omission by which a
party violates a right of another. A cause of action is a formal statement of the operative facts that give rise to a
remedial right. The question of whether the complaint states a cause of action is determined by its
averments regarding the acts committed by the defendant. Thus, it must contain a concise statement of
the ULTIMATE OR ESSENTIAL FACTS constituting the plaintiff’s cause of action. FAILURE TO MAKE A
SUFFICIENT ALLEGATION OF A CAUSE OF ACTION IN THE COMPLAINT WARRANTS ITS DISMISSAL.

ULTIMATE FACTS mean the important and substantial facts which either directly form the basis of the plaintiff’s
primary right and duty or directly make up the wrongful acts or omissions of the defendant.

*Reiteration of the elements of a Cause of Action – Check Case 7*

9 Santos v. Santos-Gran, G.R. No. 197380, October 8, 2014 Anyog, Rona Graziela Pauline

DOCTRINE: Dismissal for failure to state a cause of action may be raised at the earliest stages of the
proceedings through a motion to dismiss under Rule 16 of the Rules of Court, while dismissal for lack of cause
of action may be raised any time after the questions of fact have been resolved on the basis of stipulations,
admissions or evidence presented by the plaintiff.

It is well to point out that the plaintiff’s cause of action should not merely be “stated” but, importantly, the
statement thereof should be “sufficient.” This is why the elementary test in a motion to dismiss on such ground
is whether or not the complaint alleges facts which if true would justify the relief demanded. As a corollary, it has
been held that only ultimate facts and not legal conclusions or evidentiary facts are considered for purposes of
applying the test. This is consistent with Section 1, Rule 8 of the Rules of Court which states that the
complaint need only allege the ultimate facts or the essential facts constituting the plaintiff’s cause of
action. A fact is essential if they cannot be stricken out without leaving the statement of the cause of action
inadequate. Since the inquiry is into the sufficiency, not the veracity, of the material allegations, it follows that
the analysis should be confined to the four corners of the complaint, and no other.

*Reiteration of the elements of a Cause of Action – Check Case 7*

Guillermo v. Philippine Information Agency, G.R. No.


10 Anyog, Rona Graziela Pauline
223751, March 15, 2017

DOCTRINE: To determine the sufficiency of a cause of action in a motion to dismiss, only the facts alleged in
the complaint should be considered, in relation to whether its prayer may be granted. In Heirs of Maramag v.
Maramag, 588 SCRA 774 (2009): When a motion to dismiss is premised on this ground, the ruling thereon should
be based only on the facts alleged in the complaint. The court must resolve the issue on the strength of such
allegations, assuming them to be true.

The test of sufficiency of a cause of action rests on whether, hypothetically admitting the facts alleged
in the complaint to be true, the court can render a valid judgment upon the same, in accordance with the
prayer in the complaint. This is the general rule.
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SPLITTING A SINGLE CAUSE OF ACTION AND ITS EFFECTS

Umale v. Canoga Park Development Corp., G.R. No.


11 Anyog, Rona Graziela Pauline
167246, July

DOCTRINE: As a ground for the dismissal of a civil action, litis pendentia refers to a situation where two
actions are pending between the same parties for the same cause of action, so that one of them becomes
unnecessary and vexatious. LITIS PENDENTIA EXISTS WHEN THE FOLLOWING REQUISITES ARE
PRESENT:
(a) Identity of the parties in the two actions;
(b) Substantial identity in the causes of action and in the reliefs sought by the parties; and
(c) The identity between the two actions should be such that any judgment that may be rendered in one case,
regardless of which party is successful, would amount to res judicata in the other.

12 Mallion v. Alcantara, G.R. No. 141528, October 31, 2006 Anyog, Rona Graziela Pauline

DOCTRINE: Res judicata is defined as “a matter adjudged; a thing judicially acted upon or decided; a thing or
matter settled by judgment. It also refers to the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and
matters determined in the former suit.”

The doctrine of res judicata is a rule which pervades every well-regulated system of jurisprudence and is founded
upon the following precepts of common law, namely: (1) public policy and necessity, which makes it to the interest
of the State that there should be an end to litigation, and (2) the hardship on the individual that he should be
vexed twice for the same cause.

Section 47 (b) and (c) of Rule 49 of the Rules of Court outlines the dual aspect of res judicata. Section 47 (b)
pertains to it in its concept as “bar by prior judgment” or “estoppel by verdict,” which is the effect of a judgment
as a bar to the prosecution of a second action upon the same claim, demand or cause of action. On the other
hand, Section 47 (c) pertains to res judicata in its concept as “conclusiveness of judgment” or otherwise known
as the rule of auter action pendant which ordains that issues actually and directly resolved in a former suit cannot
again be raised in any future case between the same parties involving a different cause of action. Res judicata
in its concept as a bar by prior judgment obtains in the present case.

Res judicata as a bar by prior judgment requires the concurrence of the following requisites: (1) the former
judgment is final; (2) it is rendered by a court having jurisdiction over the subject matter and the parties; (3) it is
a judgment or an order on the merits; and (4) there is—between the first and second actions— identity of parties,
of subject matter, and of causes of action.

The test to determine whether the causes of action are identical is to ascertain whether the same evidence will
sustain both actions, or whether there is an identity in the facts essential to the maintenance of the two actions.

Party cannot evade or avoid the application of res judicata by simply varying the form of his action or adopting a
different method of presenting his case.

SYNOPSIS: The instant case is premised on the claim that the marriage is null and void because no valid
celebration of the same took place due to the alleged lack of a marriage license. In Civil Case No. SP 4341-95,
however, petitioner impliedly conceded that the marriage had been solemnized and celebrated in accordance
with law. Petitioner is now bound by this admission. The alleged absence of a marriage license which petitioner
raises now could have been presented and heard in the earlier case. Suffice it to state that parties are bound
not only as regards every matter offered and received to sustain or defeat their claims or demand but as to any

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other admissible matter which might have been offered for that purpose and of all other matters that could have
been adjudged in that case.

13 Marilag v. Martinez, G.R. No. 201892, July 22, 2015 Anyog, Rona Graziela Pauline

DOCTRINE: The underlying principle of litis pendentia is the theory that a party is not allowed to vex another
more than once regarding the same subject matter and for the same cause of action. This theory is founded on
the public policy that the same subject matter should not be the subject of controversy in courts more than once,
in order that possible conflicting judgments may be avoided for the sake of the stability of the rights and status
of persons, and also to avoid the costs and expenses incident to numerous suits. Consequently, a party will not
be permitted to split up a single cause of action and make it a basis for several suits as the whole cause must
be determined in one action. To be sure, splitting a cause of action is a mode of forum shopping by filing multiple
cases based on the same cause of action, but with different prayers, where the ground of dismissal is litis
pendentia (or res judicata, as the case may be).

*Reiteration of the requisites of Res Judicata – See the next preceding case*

*Reiteration of the meaning of Litis Pendencia and its requisites – See Case 11*

ONE SENTENCE SUMMARY: As petitioner had already instituted judicial foreclosure proceedings over the
mortgaged property, she is now barred from availing herself of an ordinary action for collection, regardless of
whether or not the decision in the foreclosure case had attained finality.

DAMAGES IN EJECTMENT CASES

Progressive Development Corp. Inc. v. Court of Appeals, 301


14 Anyog, Rona Graziela Pauline
SCRA 637

DOCTRINE: All cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial Court which
shall include not only the plea for restoration of possession but also all claims for damages and costs arising
therefrom. – Section 1 of Rule 70 of the Rules of Court provides that any person deprived of the possession of
any land or building by force, intimidation, threat, strategy or stealth, or against whom the possession of any land
or building is unlawfully withheld, may bring an action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, together with damages and costs. The mandate
under this rule is categorical: that all cases for forcible entry or unlawful detainer shall be filed before
the Municipal Trial Court which shall include not only the plea for restoration of possession BUT ALSO
ALL CLAIMS FOR DAMAGES AND COSTS ARISING THEREFROM. Otherwise expressed, no claim for
damages arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim
for restoration of possession.

*Reiteration of the elements of Res Judicata – See Case 12*

15 Teraña v. de Sagun, 587 SCRA 60 Anyog, Rona Graziela Pauline

DOCTRINE: Damages recoverable in an unlawful detainer action are limited to rentals or reasonable
compensation for the use of the property

An action for reimbursement or for recovery of damages may not be properly joined with the action for ejectment.
The former is an ordinary civil action requiring a full-blown trial, while an action for unlawful detainer is
a special civil action which requires a summary procedure.

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Section 5. Joinder of causes of action.— A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) THE JOINDER SHALL NOT INCLUDE SPECIAL CIVIL ACTIONS OR ACTIONS GOVERNED BY
SPECIAL RULES;
(c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions,
the joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money, the aggregate amount
claimed shall be the test of jurisdiction.

Section 11, Rule 8 of the Rules of Court likewise provides that material allegations in the complaint which are
not specifically denied, other than the amount of unliquidated damages, are deemed admitted. A denial made
without setting forth the substance of the matters relied upon in support of the denial, even when to do so is
practicable, does not amount to a specific denial.

Excellent Quality Apparel Inc. v. Win Multi Rich Builders, Anyog, Rona Graziela Pauline
16
Inc., G.R. No. 175048, February 10, 2009 B.

Parties to Civil Actions

Facts: Petitioner herein, Excellent Quality Apparel, entered into a contract with Multi-Rich Builders for the
construction of a garment factory within the Cavite Philippine Economic Zone Authority (CPEZ). The duration of
the project was for a maximum of 5 months and included in the contract is an arbitration clause that any dispute
among the parties shall be submitted to an Arbitration Committee for its resolution. The construction of the factory
building was eventually completed.

Respondent, Win Multi-Rich Builders filed a complaint for sum of money against petitioner (Excellent Quality), to
which the latter then filed an Omnibus Motion questioning the jurisdiction of the trial court and pointing out the
presence of an Arbitration Clause in their contract.

Petitioner also moved to dismiss the case since respondent herein is neither a contractor nor a party to the
contract. Both the trial court and CA found in favor of respondent herein. Hence the present petition.

Issue: Whether or not Win is a real party in interest and has legal personality to institute the case

Ruling: No. Win admitted that the contract was executed between Multi-Rich and EQAI. It further admitted that
Multi-Rich was a sole proprietorship. A sole proprietorship is the oldest, simplest, and most prevalent form of
business enterprise. It is an unorganized business owned by one person. The sole proprietor is personally liable
for all the debts and obligations of the business.

As held in the case of Mangila v. Court of Appeals: “A sole proprietorship does not possess a juridical personality
separate and distinct from the personality of the owner of the enterprise. The law merely recognizes the existence
of a sole proprietorship as a form of business organization conducted for profit by a single individual and requires
its proprietor or owner to secure licenses and permits, register its business name, and pay taxes to the national
government. The law does not vest a separate legal personality on the sole proprietorship or empower it to file
or defend an action in court.”

The original petition was instituted by Win, which is a SEC-registered corporation. It filed a collection of sum of
money suit which involved a construction contract entered into by EQAI and Multi-Rich, a sole proprietorship.
The counsel of Win wanted to change the name of the plaintiff in the suit to Multi-Rich. The change cannot be
countenanced. The plaintiff in the collection suit is a corporation. The name cannot be changed to that of a sole
proprietorship.

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EQAI had continuously contested the legal personality of Win to institute the case. Win was given ample
opportunity to adduce evidence to show that it had legal personality. It failed to do so. In order for a corporation
to be able to file suit and claim the receivables of its predecessor in business, in this case a sole proprietorship,
it must show proof that the corporation had acquired the assets and liabilities of the sole proprietorship. Win
could have easily presented or attached any document e.g., deed of assignment which will show whether the
assets, liabilities and receivables of Multi-Rich were acquired by Win. Having been given the opportunity to rebut
the allegations made by EQAI, Win failed to use that opportunity. Thus, we cannot presume that Multi-Rich is
the predecessor-in-business of Win and hold that the latter has standing to institute the collection suit.

V-Gent Inc. v. Morning Star Travel and Tours, G.R. No. Anyog, Rona Graziela Pauline
17
186305, July 22, 2015 B.

Facts: After buying 26 two-way plane tickets from Morning Star Travel and Tours, Inc (respondent), V-Gent Inc
(petitioner) returned 15 unused tickets to the respondent, which refunded only the six tickets worth. Despite
demand, Morning Star refused to refund the remaining tickets, hence it filed money claim against the respondent.
Morning Star questioned the personality of V-Gent to file the action as it is the passengers who bought the tickets
who are the real parties in interest.

Issue: Whether or not V-Gent is a real party in interest in the case.

Ruling: We disagree with V-Gent. V-Gent admits that it purchased the plane tickets on behalf of the passengers
as the latter’s agent. The tickets were issued in the name of the passengers and paid for with the passengers’
money. No dispute or conclusion in the lower courts’ minds on this point; hence, both the MeTC and the CA
commonly found that V-Gent acted as an agent of the passengers when it purchased the passengers’ plane
tickets. However, while the MeTC held that V-Gent could sue as an agent acting in his own name on behalf of
an undisclosed principal, the CA held that it could not because the requirements for such a suit by the agent had
not been satisfied. The SC agreed with the CA.

Every action must be prosecuted or defended in the name of the real party-in-interest – the party who stands to
be benefited or injured by the judgment in the suit⁠. In suits where an agent represents a party, the principal is
the real party-in-interest; an agent cannot file a suit in his own name on behalf of the principal. Rule 3, Section 3
of the Rules of Court provides the exception when an agent may sue or be sued without joining the principal.
Thus an agent may sue or be sued solely in its own name and without joining the principal when the following
elements concur: (1) the agent acted in his own name during the transaction; (2) the agent acted for the benefit
of an undisclosed principal; and (3) the transaction did not involve the property of the principal. When these
elements are present, the agent becomes bound as if the transaction were its own. In such case, the agent is
the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own,
except when the contract involves things belonging to the principal.

In the present case, only the first element is present; the remaining elements are absent because: (1) V-Gent
disclosed the names of the passengers to Morning Star — in fact the tickets were in their names; and (2) the
transaction was paid using the passengers’ money. Therefore, Rule 3, Section 3 of the Rules of Court cannot
apply.

To define the actual factual situation, V-Gent, the agent, is suing to recover the money of its principals — the
passengers — who are the real parties-in-interest because they stand to be injured or benefited in case Morning
Star refuses or agrees to grant the refund because the money belongs to them. From this perspective, V-Gent
evidently does not have a legal standing to file the complaint.

18 Navarro v. Escobido, November 27, 2009 Anyog, Rona

Facts: Karen T. Go filed two complaints before the RTC for replevin and/or sum of money with damages against
Navarro. She prayed that the RTC issue writs of replevin for the seizure of two motor vehicles in Navarro’s
possession, pursuant to the Lease Agreement with Option to Repurchase contracts they entered into. Navarro
alleges that even if the lease agreements were in the name of Kargo Enterprises, since it did not have the
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requisite juridical personality to sue, the actual parties to the agreement are himself and Glenn Go. Since it was
Karen Go who filed the complaints and not Glenn Go, she was not a real party-in-interest.

Issue: Whether or not Karen Go was a real party-in-interest

Ruling: Karen Go is a real party-in-interest. The central factor in appreciating the issues presented in this case
is the business name Kargo Enterprises. The name appears in the title of the Complaint where the plaintiff was
identified as Karen T. Go doing business under the name Kargo Enterprises. The contract was signed by Glenn
Go, as manager, representing Kargo Enterprises, expressly pointing to Kargo Enterprises as the principal that
Glenn O. Go represented. In other words, by the express terms of this Lease Agreement, Glenn Go did sign the
agreement only as the manager of Kargo Enterprises and the latter is clearly the real party to the lease
agreements.

Kargo Enterprises is a sole proprietorship, which is neither a natural person, nor a juridical person, as defined
by Article 44 of the Civil Code. Thus, pursuant to Section 1, Rule 3 of the Rules, Kargo Enterprises cannot be a
party to a civil action. This legal reality leads to the question: who then is the proper party to file an action based
on a contract in the name of Kargo Enterprises? In Juasing Hardware v. Mendoza, it was ruled that the complaint
should have been filed in the name of the owner of Juasing Hardware. The allegation in the body of the complaint
would show that the suit is brought by such person as proprietor or owner of the business conducted under the
name and style Juasing Hardware. The descriptive words doing business as Juasing Hardware may be added
to the title of the case, as is customarily done. This conclusion should be read in relation with Section 2, Rule 3
of the Rules, which states that a real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit.

As the registered owner of Kargo Enterprises, Karen Go is the party who will directly benefit from or be injured
by a judgment in this case. Thus, contrary to Navarro’s contention, Karen Go is the real party-in-interest, and it
is legally incorrect to say that her Complaint does not state a cause of action because her name did not appear
in the Lease Agreement that her husband signed in behalf of Kargo Enterprises. Whether Glenn Go can legally
sign the Lease Agreement in his capacity as a manager of Kargo Enterprises, a sole proprietorship, is a question
we do not decide, as this is a matter for the trial court to consider in a trial on the merits.

Arcelona v. CA – NB: Read case in the SCRA and take note Aserios, Percy
19 of the Errata: Arcelona v. CA, 280 SCRA 20

Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona are natural-born Filipinos who are
now naturalized Americans residing in California, U.S.A. Petitioner Ruth Arcelona is the surviving spouse and
legal heir of the deceased Benedicto Arcelona, brother of Marcelino and Tomasa. Together with their three
sisters — Pacita Arcelona-Olanday, Maria Arcelona-Arellano and Natividad Arcelona-Cruz (hereinafter
collectively referred to as Olanday, et al.) — petitioners are co-owners pro-indiviso of a fishpond which they
inherited from their deceased parents.4 The six Arcelonas (two brothers and four sisters) are named as co-
owners in Transfer Certificate of Title No. 34341 which evidences ownership over the fishpond.

On March 4, 1978, a contract of lease over the fishpond was executed between Cipriano Tandoc and Olanday,
et al. The lease contract was for a period of three (3) years but was renewed up to February 2, 1984. 5 Private
Respondent Moises Farnacio was appointed in turn by Tandoc as caretaker-tenant of the same fishpond,
effective on the date the contract of lease was executed. After the termination of the lease contract, the lessee
(Tandoc) surrendered possession of the leased premises to the lessors, Olanday, et al.

Three days thereafter, on February 7, 1984, Private Respondent Farnacio instituted Civil Case D-7240 for
"peaceful possession, maintenance of security of tenure plus damages, with motion for the issuance of an
interlocutory order" against Olanday, et al., before Respondent Regional Trial Court of Dagupan City, Branch
40. The case was intended to maintain private respondent as tenant of the fishpond.6

The trial court rendered a decision in favor of private respondent. Olanday, et al. elevated the decision to the
then Intermediate Appellate Court (IAC)8 which affirmed with slight modification the decision of the trial court on
May 31, 1985. On appeal, this Court9 sustained the IAC decision in G.R. No. 71217. On May 25, 1991, after
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remand of the case to the court of origin, private respondent was placed in possession of the entire property
covered by TCT 34341.

Petitioners then filed with Respondent Court of Appeals a petition for annulment of the aforesaid judgment
against private respondent and the implementing sheriff.10 On May 8, 1991, Respondent Court issued a
resolution directing petitioners "to implead as party defendant the Regional Trial Court of Dagupan City, Branch
50, Dagupan City."11 Respondent Court promulgated in due course the assailed Decision and Resolution.
Dissatisfied, petitioners lodged this petition for review before us on May 10, 1992. On August 24, 1992, due
course was granted to the petition, and the parties filed their respective memoranda.

The Issues
(1) May a final judgment be annulled on the ground of lack of jurisdiction (over the subject matter and/or over
the person of indispensable parties) and denial of due process, aside from extrinsic fraud?
(2) May extraneous matters, not found in the records of the original case, be used in voiding or defending the
validity of such final judgment?
(3) Procedurally, will an independent action for annulment of the decision of the regional trial court (which was
affirmed both by the Court of Appeals and the Supreme Court) filed before the Court of Appeals prosper, or is
intervention before the court of origin the only remedy?

The Court's Ruling


The petition is meritorious.
First Issue: Grounds for Annulment of Final Judgment
We hold that the Court of Appeals erred in limiting the ground(s) for annulment of judgment to only one, namely,
extrinsic fraud. It is clear then that to set aside a final and executory judgment, there are three remedies available
to a litigant: first, a petition for relief from judgment under Rule 38 of the Rules of Court 25 on grounds of fraud,
accident, mistake and excusable negligence filed within sixty (60) days from the time petitioner learns of the
judgment but not more than six (6) months from the entry thereof; second, a direct action to annul the judgment
on the ground of extrinsic fraud; and third, a direct action for certiorari or collateral attack to annul a judgment
that is void upon its face or void by virtue of its own recitals. To say, then, that petitioners can avail themselves
only of the ground of extrinsic fraud and no other is to fail to appreciate the true meaning and ramifications of
annulment/nullity.

Jurisdiction is conferred by law. Its exercise must strictly comply with the legal requisites; otherwise, a challenge
on the ground of lack of jurisdiction may be brought up anytime. Such jurisdiction normally refers to jurisdiction
over the subject. Ineluctably, a judgment rendered without jurisdiction over the subject matter is void.

Jurisdiction over the Persons of Indispensable Parties

Basic considerations of due process, however, impel a similar holding in cases involving jurisdiction over the
persons of indispensable parties which a court must acquire before it can validly pronounce judgments personal
to said defendants. Courts acquire jurisdiction over a party plaintiff upon the filing of the complaint. On the other
hand, jurisdiction over the person of a party defendant is assured upon the service of summons in the manner
required by law or otherwise by his voluntary appearance. As a rule, if a defendant has not been summoned, the
court acquires no jurisdiction over his person, and a personal judgment rendered against such defendant is null
and void.29 A decision that is null and void for want of jurisdiction on the part of the trial court is not a decision in
the contemplation of law and, hence, it can never become final and executory.30

Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest without whom there
can be no final determination of an action. As such, they must be joined either as plaintiffs or as defendants. The
general rule with reference to the making of parties in a civil action requires, of course, the joinder of all necessary
parties where possible, and the joinder of all indispensable parties under any and all conditions, their presence
being a sine qua non for the exercise of judicial power.31 It is precisely "when an indispensable party is not before
the court (that) the action should be dismissed."32 The absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to the absent parties but even as to
those present.33

8
Petitioners are co-owners of a fishpond. Private respondent does not deny this fact, and the Court of Appeals
did not make any contrary finding. The fishpond is undivided; it is impossible to pinpoint which specific portion of
the property is owned by Olanday, et al. and which portion belongs to petitioners. Thus, it is not possible to show
over which portion the tenancy relation of private respondent has been established and ruled upon in Civil Case
D-7240. Indeed, petitioners should have been properly impleaded as indispensable parties.

Considering that private respondent was suing to establish his status as a tenant over the subject fishpond, the
responsibility for impleading all the indispensable parties undeniably rested on him as provided under Rule 3 of
the Rules of Court. Section 2 of Rule 3 requires that "every action must be prosecuted and defended in the name
of the real party in interest. All persons having an interest in the subject of the action and in obtaining the relief
demanded shall be joined as plaintiffs." Further, Section 7 of the same rule states that "(p)arties in interest without
whom no final determination can be had of an action shall be joined either as plaintiffs or defendants."

And even conceding arguendo that petitioners had authorized Olanday, et al. to enter into a lease contract with
Tandoc, this fact did not authorize the latter to represent petitioners in the civil case he brought. Under Rule 9,
Section 9 of the Rules of Court, the pleader is required to set forth the names, if known to him, of persons who
ought to be parties, if complete relief is to be accorded to those who are already parties but who are not joined;
and to state why they have been omitted. Surely, he brought suit to establish his status as a tenant. It is thus his
responsibility to state the names of all the persons against whom he wants to establish his status as tenant.

Third, both the private respondent and the trial court knew of the obvious omission of petitioners as party
defendants. He also knew that in executing the lease, Pacita Olanday represented only her sisters (Maria and
Natividad) who were residing in the Philippines.

Despite this knowledge of the apparent defect in the complaint and in its jurisdiction, the trial court did not take
the initiative to implead petitioners as defendants or to order private respondent to do so, contrary to the clear
mandate of Rule 3, Sec. 11 of the Rules of Court46 which provides:

Sec. 11. Misjoinder and non-joinder of parties. — Misjoinder of parties is not ground for dismissal of an action.
Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage
of the action and on such terms as are just. Any claim against a party may be severed and proceeded with
separately.

In sum, we hold that the nullity of a judgment grounded on lack of jurisdiction may be shown not only by what
patently appears on the face of such decision but also by documentary and testimonial evidence found in the
records of the case and upon which such judgment is based.

Second Issue: Estoppel and Laches


No laches attach when the judgment is null and void for want of jurisdiction.

The doctrine of estoppel is predicated on and finds its roots in equity which, broadly defined, is justice according
to natural law and right. It is a principle intended to prevent a clear case of injustice. The term is hardly separable
from a waiver of right. Estoppel, like laches, must be intentional and unequivocal, for when misapplied, it can
easily become a most convenient and effective means of injustice. Estoppel is a principle that, as a rule, can be
invoked only in highly exceptional and legitimate cases.63 In Cruz vs. Court of Appeals,64 we reiterated the
requisites of estoppel:

In Kalalo vs. Luz, [fn: 34 SCRA 337] We held that the essential elements of estoppel in respect to the party
claiming it are: (a) lack of knowledge and of the means of knowledge of the truth as the facts in question; (b)
reliance, in good faith, upon the conduct or statements of the party to be estopped; and (c) action or inaction
based thereon of such character as to change the position or status of the party claiming the estoppel, to his
injury, detriment, or prejudice.

The herein facts ineluctably show the absence of the first element in this case. Inasmuch as there is no proof
that petitioners had knowledge of the pending tenancy case filed by private respondent, it is only fair that they

9
should not be held in estoppel for failing to intervene in and to question the jurisdiction of the trial court in Civil
Case No. D-7240.

Third Issue: Intervention as a Remedy of Petitioners

We hold that intervention is not the only remedy to assail a void final judgment. There is no procedural rule
prescribing that petitioners' intervention in the hearing for the issuance of a writ is the only way to question a void
final judgment. As already stated, petitioners were not aware of such hearing. Besides, as already discussed, a
direct action is available in assailing final judgments grounded on extrinsic fraud, while a direct or a collateral
action may be used to show lack of jurisdiction.

20 Carandang v. De Guzman, November 29, 2006 Aserios, Percy

FACTS: [Quirino de Guzman] and [the Spouses Carandang] are stockholders as well as corporate officers of
Mabuhay Broadcasting System (MBS for brevity), with equities at fifty four percent (54%) and forty six percent
(46%) respectively.

On November 26, 1983, the capital stock of MBS was increased, from ₱500,000 to P1.5 million and ₱345,000
of this increase was subscribed by [the spouses Carandang]. Thereafter, on March 3, 1989, MBS again
increased its capital stock, from ₱1.5 million to ₱3 million, [the spouses Carandang] yet again subscribed to the
increase. They subscribed to ₱93,750 worth of newly issued capital stock.

[De Guzman] claims that, part of the payment for these subscriptions were paid by him, ₱293,250 for the
November 26, 1983 capital stock increase and ₱43,125 for the March 3, 1989 Capital Stock increase or a total
of ₱336,375. Thus, on March 31, 1992, [de Guzman] sent a demand letter to [the spouses Carandang] for the
payment of said total amount.

[The spouses Carandang] refused to pay the amount, contending that a pre-incorporation agreement was
executed between [Arcadio Carandang] and [de Guzman], whereby the latter promised to pay for the stock
subscriptions of the former without cost, in consideration for [Arcadio Carandang’s] technical expertise, his newly
purchased equipment, and his skill in repairing and upgrading radio/communication equipment therefore, there
is no indebtedness on their part [sic].

On June 5, 1992, [de Guzman] filed his complaint, seeking to recover the ₱336,375 together with damages. After
trial on the merits, the trial court rendered judgement in favor of [de Guzman]. The spouses Carandang appealed
the RTC Decision to the Court of Appeals, which affirmed the same in the 22 April 2003 assailed Decision. The
Motion for Reconsideration filed by the spouses Carandang was similarly denied by the Court of Appeals in the
6 October 2003 assailed Resolution.

The spouses Carandang then filed before this Court the instant Petition for Review on Certiorari.

ISSUE: Whether or not the RTC should have dismissed the case for failure to state a cause of action, considering
that Milagros de Guzman, allegedly an indispensable party, was not included as a party-plaintiff

RULING:
The spouses Carandang claim that, since three of the four checks used to pay their stock subscriptions were
issued in the name of Milagros de Guzman, the latter should be considered an indispensable party. Being such,
the spouses Carandang claim, the failure to join Mrs. de Guzman as a party-plaintiff should cause the dismissal
of the action because "(i)f a suit is not brought in the name of or against the real party in interest, a motion to
dismiss may be filed on the ground that the complaint states no cause of action."14

The Court of Appeals held: “We disagree. The joint account of spouses Quirino A de Guzman and Milagros de
Guzman from which the four (4) checks were drawn is part of their conjugal property and under both the Civil
Code and the Family Code the husband alone may institute an action for the recovery or protection of the
spouses’ conjugal property.”

10
The Court of Appeals is correct. Petitioners erroneously interchange the terms "real party in interest" and
"indispensable party." A real party in interest is the party who stands to be benefited or injured by the judgment
of the suit, or the party entitled to the avails of the suit.15 On the other hand, an indispensable party is a party in
interest without whom no final determination can be had of an action,16 in contrast to a necessary party, which
is one who is not indispensable but who ought to be joined as a party if complete relief is to be accorded as to
those already parties, or for a complete determination or settlement of the claim subject of the action.17

Quirino and Milagros de Guzman were married before the effectivity of the Family Code on 3 August 1988. As
they did not execute any marriage settlement, the regime of conjugal partnership of gains govern their property
relations.19 credits loaned during the time of the marriage are presumed to be conjugal property.

Consequently, assuming that the four checks created a debt for which the spouses Carandang are liable, such
credits are presumed to be conjugal property. There being no evidence to the contrary, such presumption
subsists. As such, Quirino de Guzman, being a co-owner of specific partnership property,22 is certainly a real
party in interest. Dismissal on the ground of failure to state a cause of action, by reason that the suit was allegedly
not brought by a real party in interest, is therefore unwarranted.

So now we come to the discussion concerning indispensable and necessary parties. When an indispensable
party is not before the court, the action should likewise be dismissed.23 The absence of an indispensable party
renders all subsequent actuations of the court void, for want of authority to act, not only as to the absent parties
but even as to those present.24 On the other hand, the non-joinder of necessary parties do not result in the
dismissal of the case. Instead, Section 9, Rule 3 of the Rules of Court provides for the consequences of such
non-joinder:

Sec. 9. Non-joinder of necessary parties to be pleaded. – Whenever in any pleading in which a claim is asserted
a necessary party is not joined, the pleader shall set forth his name, if known, and shall state why he is omitted.
Should the court find the reason for the omission unmeritorious, it may order the inclusion of the omitted
necessary party if jurisdiction over his person may be obtained.

The failure to comply with the order for his inclusion, without justifiable cause, shall be deemed a waiver of the
claim against such party.

The non-inclusion of a necessary party does not prevent the court from proceeding in the action, and the
judgment rendered therein shall be without prejudice to the rights of such necessary party.

Non-compliance with the order for the inclusion of a necessary party would not warrant the dismissal of the
complaint. This is an exception to Section 3, Rule 17 which allows the dismissal of the complaint for failure to
comply with an order of the court, as Section 9, Rule 3 specifically provides for the effect of such non-inclusion:
it shall not prevent the court from proceeding in the action, and the judgment rendered therein shall be without
prejudice to the rights of such necessary party. Section 11, Rule 3 likewise provides that the non-joinder of
parties is not a ground for the dismissal of the action.

Other than the indispensable and necessary parties, there is a third set of parties: the pro-forma parties, which
are those who are required to be joined as co-parties in suits by or against another party as may be provided by
the applicable substantive law or procedural rule.25 An example is provided by Section 4, Rule 3 of the Rules of
Court:

Sec. 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except as provided by law.

Pro-forma parties can either be indispensable, necessary or neither indispensable nor necessary. The third case
occurs if, for example, a husband files an action to recover a property which he claims to be part of his exclusive
property. The wife may have no legal interest in such property, but the rules nevertheless require that she be
joined as a party.

In cases of pro-forma parties who are neither indispensable nor necessary, the general rule under Section 11,

11
Rule 3 must be followed: such non-joinder is not a ground for dismissal. Hence, in a case concerning an action
to recover a sum of money, we held that the failure to join the spouse in that case was not a jurisdictional
defect.26 The non-joinder of a spouse does not warrant dismissal as it is merely a formal requirement which
may be cured by amendment.27

Conversely, in the instances that the pro-forma parties are also indispensable or necessary parties, the rules
concerning indispensable or necessary parties, as the case may be, should be applied. Thus, dismissal is
warranted only if the pro-forma party not joined in the complaint is an indispensable party.

Milagros de Guzman, being presumed to be a co-owner of the credits allegedly extended to the spouses
Carandang, seems to be either an indispensable or a necessary party. If she is an indispensable party, dismissal
would be proper. If she is merely a necessary party, dismissal is not warranted, whether or not there was an
order for her inclusion in the complaint pursuant to Section 9, Rule 3.

Taken with the presumption of the conjugal nature of the funds used to finance the four checks used to pay for
petitioners’ stock subscriptions, and with the presumption that the credits themselves are part of conjugal funds,
Article 1811 makes Quirino and Milagros de Guzman co-owners of the alleged credit.

Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an action for the
recovery thereof. In sum, in suits to recover properties, all co-owners are real parties in interest. However,
pursuant to Article 487 of the Civil Code and relevant jurisprudence, any one of them may bring an action, any
kind of action, for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-
owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other
co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit
of all co-owners.

We therefore hold that Milagros de Guzman is not an indispensable party in the action for the recovery of the
allegedly loaned money to the spouses Carandang. As such, she need not have been impleaded in said suit,
and dismissal of the suit is not warranted by her not being a party thereto.

WHEREFORE, the Decision of the Court of Appeals, affirming the judgment rendered against the spouses
Carandang, is hereby AFFIRMED.

Vda. de Borromeo v. Pogoy, G.R. No. 63277, November 29,


21 Aserios, Percy
1983, 126 SCRA 217

SYLLABUS

1. CIVIL LAW; ACTIONS FOR FORCIBLE ENTRY AND DETAINER; PRESCRIPTIVE PERIOD; ACTION NOT
BARRED IN THE CASE AT BAR. — Under Article 1147 of the Civil Code, the period for filing actions for forcible
entry and detainer is one year, and this period is counted from demand to vacate the premises. (Desbarat v.
Vda. de Laureano, 18 SCRA 116, Calubayan v. Pascual, 21 SCRA 146, Development Bank of the Philippines
v. Canonoy, 35 SCRA 197) In the case at bar, the letter-demand was dated August 28, 1982, while the complaint
for ejectment was filed in court on September 16, 1982. Between these two dates, less than a month had
elapsed, thereby leaving at least eleven (11) full months of the prescriptive period provided for in Article 1147 of
the Civil Code. Under the procedure outlined in Section 4 of PD 1508, the time needed for the conciliation
proceeding before the Barangay Chairman and the Pangkat should take no more than 60 days. Giving private
respondent nine (9) months-ample time indeed- within which to bring his case before the proper court should
conciliation efforts fail. Thus, it cannot be truthfully asserted, as private respondent would want Us to believe,
that his case would be barred by the Statute of Limitations if he had to course his action to the Barangay Lupon.

2. REMEDIAL LAW; SECTION 4 (A) OF P.D. No. 1508; CONSTRUED. — Under Section 4(a) of PD 1508,
referral of a dispute to the Barangay Lupon is required only where the parties thereto are "individuals." An
"individual" means "a single human being as contrasted with a social group or institution." Obviously, the law

12
applies only to cases involving natural persons, and not where any of the parties is a juridical person such as a
corporation, partnership, corporation sole, testate or intestate, estate, etc.

3. ID.; JURIDICAL PERSON; REAL PARTY IN INTEREST; REFERRAL TO BARANGAY LUPON, NOT
REQUIRED. — In Civil Case No. R-239l5, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf
of the Intestate Estate of Vito Borromeo. while it is true that Section 3, Rule 3 of the Rules of Court allows the
administrator of an estate to sue or be sued without joining the party for whose benefit the action is presented or
defended, it is indisputable that the real party in interest in Civil Case No. R-23915 is the intestate estate under
administration. Since the said estate is a juridical person (Limjoco v. Intestate of Fragante, 80 Phil. 776) plaintiff
administrator may file the complaint directly in court, without the same being coursed to the Barangay Lupon for
arbitration.

FACTS: Petitioner herein seeks to stop respondent Judge Julian B. Pogoy of the Municipal Trial Court of Cebu
City from taking cognizance of an ejectment suit for failure of the plaintiff to refer the dispute to the Barangay
Lupon for conciliation.

The intestate estate of the late Vito Borromeo is the owner of a building bearing the deceased’s name, located
at F. Ramos St., Cebu City. Said building has been leased and occupied by petitioner Petra Vda. de Borromeo
at a monthly rental of P500.00 payable in advance within the first five days of the month.

On August 28, 1982, private respondent Atty. Ricardo Reyes, administrator of the estate and a resident of Cebu
City, served upon petitioner a letter demanding that she pay the overdue rentals corresponding to the period
from March to September 1982, and thereafter to vacate the premises. As petitioner failed to do so, Atty. Reyes
instituted on September 16, 1982 an ejectment case against the former in the Municipal Trial Court of Cebu City.
Petitioner moved to dismiss the case for lack of jurisdiction of the trial court. Pointing out that the parties are
residents of the same city, as alleged in the complaint, petitioner contended that the court could not exercise
jurisdiction over the case for failure of respondent Atty. Reyes to refer the dispute to the Barangay Court, as
required by PD No. 1508, otherwise known as Katarungang Pambarangay Law.

Respondent judge denied the motion to dismiss citing that if the requirement or precondition for were it not met,
the Clerk of Court would not have accepted the filing of the case especially that there is a standing circular from
the Chief Justice of the Supreme Court without even mentioning the Letter of Instruction of the President of the
Philippines that civil cases and criminal cases with certain exceptions must not be filed without passing the
barangay court.

Unable to secure a reconsideration of said order, petitioner came to this Court through this petition for certiorari.
In both his comment and memorandum, private respondent admitted not having availed himself of the barangay
conciliation process, but justified such omission by citing paragraph 4, section 6 of PD 1508 which allows the
direct filing of an action in court where the same may otherwise be barred by the Statute of Limitations, as
applying to the case at bar.

ISSUE: Whether or not then Katarungang Pambarangay Law or the Baranggay Conciliation requirement covers
juridical persons.

No, it does not cover juridical person. The instant petition should be dismissed. Under Section 4(a) of PD No.
1508, referral of a dispute to the Barangay Lupon is required only where the parties thereto are "individuals." An
"individual" means "a single human being as contrasted with a social group or institution." 5 Obviously, the law
applies only to cases involving natural persons, and not where any of the parties is a juridical person such as a
corporation, partnership, corporation sole, testate or intestate, estate, etc.

In Civil Case No. R-23915, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf of the Intestate
Estate of Vito Borromeo. While it is true that Section 3, Rule 3 of the Rules of Court allows the administrator of
an estate to sue or be sued without joining the party for whose benefit the action is presented or defended, it is
indisputable that the real party in interest in Civil Case No. R-23915 is the intestate estate under administration.
Since the said estate is a juridical person 6 plaintiff administrator may file the complaint directly in court, without
the same being coursed to the Barangay Lupon for arbitration.

13
ACCORDINGLY, the petition is hereby dismissed. Respondent judge is ordered to try and decide Civil Case No.
R-23915 without unnecessary delay. No costs. SO ORDERED.

22 Ventura v. Militante, G.R. No. 63145, October 9, 1999 Asuncion, Rogenil Jonathan G

Facts: Private respondent filed a Complaint for a Sum of Money and Damages against petitioner. However,
petitioner moved to dismiss the foregoing complaint on the ground that “the estate of Carlos Ngo has no legal
personality,” the same being “neither a natural nor legal person in contemption of law.” The petitioner then filed
an opposition to private respondent’s Motion to Dismiss. The public respondent then gave private respondent
15 days to make the amendment of the complaint. Petitioner filed a MR of the order of public respondent.

First, she argued that the action instituted by the private respondent to recover P48, 889.70, representing the
unpaid price of the automotive spare parts purchased by her deceased husband during his lifetime, is a money
claim which, under Section 21, Rule 3 of the Revised Rules of Court, does not survive, the same having been
filed after Carlos Ngo had already died. Second, she claimed that the public respondent never acquired
jurisdiction over the subject matter of the case which, being an action to recover a sum of money from a deceased
person, may only be heard by a probate court. Private respondent opposed the foregoing motion. Public
respondent then issued an Order giving private respondent 24 hours to file his amended complaint. Private
respondent then filed his amended complaint. Petitioner then filed a Comment to Plaintiff’s Amended Complaint.
Private respondent then filed A Rejoinder to Defendant’s Comment. Public respondent then issued the herein
assailed order. Hence, the present Petition for Certiorari assailing the said Order.

ISSUE: WON A DEAD PERSON OR HIS ESTATE MAY BE A PARTY PLAINTIFF IN A COURT ACTION?

HELD: No. Firstly, neither a dead person nor his estate may be a party plaintiff in a court action. A deceased
person does not have such legal entity as is necessary to bring action so much so that a motion to substitute
cannot lie and should be denied by the court. An action begun by a decedent's estate cannot be said to have
been begun by a legal person, since an estate is not a legal entity; such an action is a nullity and a motion to
amend the party plaintiff will not likewise lie, there being nothing before the court to amend. Considering that
capacity to be sued is a correlative of the capacity to sue, to the same extent, a decedent does not have the
capacity to be sued and may not be named a party defendant in a court action.

Spouses Rodolfo Berot and Lilia Berot v. Siapno, G.R. No.


23 Asuncion, Rogenil Jonathan G
188944, July 9, 2014

Facts: On May 2002, Spouses Berot and Lilia Berot obtained a loan fof 250k payable within 1 year plus 2%
interest from Felipe C. Siapno. As a security for the loan, Macaria and Lilia Berot mortgaged a parcel of land
owned by Macaria and her Pedro Berot, deceased. On June 2003, Macaria died.

Because of the mortgagors’ default, Siapno filed an action against them for forclosure of mortgages and
damages. Berot Spouses and Lilia alleged alleged that the contested property was the inheritance of the former
from his deceased father, Pedro; that on said property is their family home; that the mortgage is void as it was
constituted over the family home without the consent of their children, who are the beneficiaries thereof; thattheir
obligation is only joint; and that the lower court has no jurisdiction over Macaria for the reason that no summons
was served on her as she was already dead.

The court granted the motion of the plaintiff to file a motion with leave of court in which was amended by
substituting the estate of Macaria in her stead. Thus, the defendants named in the amended complaint are now
the "ESTATE OF MACARIA BEROT, represented by Rodolfo A. Berot, RODOLFO A. BEROT and LILIA P.
BEROT".

The lower court ruled in favor of plaintiff and which the CA affirmed by stating that the failure of the defendant to
object on the personality of the estate of Macaria Berot is deemed a waiver to object as provided in Rule 9 of the
Rules of Court.
14
Issue: whether or not holding that the intestate estate of Macaria Berot could be a proper party by waiver
expressly or impliedly by voluntary appearance?

Ruling: Yes. The Court ruled that when the plaintiff filed his Amended Complaint substituting the estate of
Macaria Berot in place of Macaria Berot as party defendant, defendants made no objections thereto. Not even
an amended answer was filed by the defendants questioning the substitution of the estate of Macaria Berot. For
these reasons, the defendants are deemed to have waivedany objection on the personality of the estate of
Macaria Berot. Section 1, Rule 9 of the Rules of Court provides that, "Defenses and objections not pleaded either
in a motion to dismiss or in the answer are deemed waived

Boston Equity Resources v. CA, G.R. No. 173946, June 19,


24 Asuncion, Rogenil Jonathan G
2013

The petitioner filed a complaint for sum money with a prayer for the issuance of a writ o preliminary attachment
against the spouses Manuel and Lolita Toledo. Respondent filed an Answer but filed a motion for leave to admit
Amend Answer in which she alleged that her husband Manuel is already dead. As a result, petitioner filed a
motion to require respondent to disclose the heirs of Manuel. When the court granted the petition of petioner,
respondent submitted the names and addresses of the heirs. This prompted the petitioner to filed a Motion for
Substitution in order that Manuel be substituted by his children as party defendants. The Court also granted this
petition.

While on trial, the receception of evidence was cancelled upon agreement of the parties and the respondent was
given 15 to file a demurred to evidence. However, respondent filed a motin to dismiss the complaint, citiing the
folliwing grounds (1) that the complaint failed to implead an indispensable party or a real party in interest; hence,
the case must be dismissed for failure to state a cause of action; (2) that the trial court did not acquire jurisdiction
over the person of Manuel pursuant to Section 5, Rule 86 of the Revised Rules of Court; (3) that the trial court
erred in ordering the substitution of the deceased Manuel by his heirs; and (4) that the court must also dismiss
the case against Lolita Toledo in accordance with Section 6, Rule 86 of the Rules of Court.

The trial court, denied the motion to dismiss for having been filed out of time citing Sect 1 of Rule 16 of Rules of
Court but the CA reversed it by stating that issue on jurisdiction may be filed at any stage of the proceeding,
even for the first time on appeal and that when the complaint is filed defendant Manuel is already dead.

Issue: Whether or the motion to dismiss was timely filed?

Ruling: No. The Supreme Court ruled that the trial court did not commit grave abuse of discretion in denying
respondent’s motion to dismiss. It, in fact, acted correctly when it issued the questioned orders as respondent’s
motion to dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE FILED HER AMENDED ANSWER.
This circumstance alone already warranted the outright dismissal of the motion for having been filed in clear
contravention of the express mandate of Section 1, Rule 16, of the Revised Rules of Court. Under this provision,
a motion to dismiss shall be filed within the time for but before the filing of an answer to the complaint or pleading
asserting a claim.

More importantly, respondent’s motion to dismiss was filed after petitioner has completed the presentation of its
evidence in the trial court, giving credence to petitioner’s and the trial court’s conclusion that the filing of the
motion to dismiss was a mere ploy on the part of respondent to delay the prompt resolution of the case against
her.

Heirs of Paciano Labao v. Vand Der Kolk, G.R. No. 207266,


25 Baquiran, Maria Vanessa D.
June 25, 2014

TOPIC: Personality to sue; Estate of a decedent

15
FACTS: The heirs of the Paciano Labao, represented by Remedios Chan, filed a complaint for ownership and
possession against Paz Lentejas Van der Kolk before Municipal Trial Court in Cities. The salient averments in
the complaint were: 2. That plaintiffs herein are the sole surviving heirs of the late spouses Paciano Yabao and
Mercedes Cano;

3. That they are the absolute co-owners of the parcel of land more particularly described and bounded.
Copies of the summons and the complaint were served upon the attorney-in-fact of Van der Kolk, whom she
authorized, among others, to institute and defend all actions for the protection of her rights and interests over
her properties, including the subject lot, by virtue of a special power of attorney, since she was in the Netherlands
at the time of the service. Van der Kolk then filed a Motion to Dismiss the complaint anchored on the following
grounds: 1] lack of jurisdiction by the MTCC over her person due to defective service of summons; and 2] lack
of cause of action. The MTCC issued a Resolution denying the motion to dismiss and holding that there was
proper service of summons. It also denied the motion to declare defendant in default, stating that the motion to
dismiss was seasonably filed. The MTCC further directed Van der Kolk to file an answer within 10 days from
receipt of the aforesaid resolution. Van’s counsel files Manifestation with Motion praying that he be relieved as
his counsel. The heirs of Yabao still reiterated their motion to declare Van der Kolk in default during the hearing
because no answer had yet been filed. Through the new counsel of Van, her Answer to the complaint which was
appended to the Motion for Allowance To Belatedly File Defendant’s Answer. After a year, the MTCC rendered
a decision declaring Van der Kolk in default giving the reason that her nonfiling of an answer within the fresh 10-
day period was deliberately calculated to delay the early termination of the case and resolving the case on the
merits taking into account only the allegations of the complaint. Van der Kolk’s motion for reconsideration of the
above order was denied by the RTC for lack of merit in its Order. Unfazed, Van der Kolk filed a petition for
review20 under Rule 42 before the CA on the following grounds: 1] the MTCC did not acquire jurisdiction over
her person because the summons was served upon Ventures, a nonparty to the case; 2] Remedios Chan was
not authorized to institute Civil Case in representation of the Heirs of Yabao; 3] the MTCC gravely abused its
discretion in declaring her in default and in granting the execution of the December 4, 2006 Decision pending its
appeal; and 4] the RTC erred in dismissing her appeal.

The CA rendered the assailed decision granting the petition “on grounds not raised herein but disclosed by the
records.” It stated that the MTCC erred in granting the reliefs prayed for by the Heirs of Yabao because they
were not warranted by their complaint. Hence this petitition.

ISSUE: WON the MTCC committed flaw in handling the case.

HELD: The MTCC failed to consider the absence of any allegation in the complaint regarding the authority of
Remedios Chan to institute the civil case for the Heirs of Yabao. Section 4, Rule 8 of the Rules of Court provides
that facts showing the capacity of a party to sue or be sued, or the authority of a party to sue or be sued in a
representative capacity must be averred in the complaint. The party bringing suit has the burden of proving the
sufficiency of the representative character that he claims. If a complaint is filed by one who claims to represent
a party as plaintiff but who, in fact, is not authorized to do so, such complaint is not deemed filed and the court
does not acquire jurisdiction over the complaint. It bears stressing that an unauthorized complaint does not
produce any legal effect.

26 Ang v. Ang, G.R. No. 186993, August 22, 2012 Baquiran, Maria Vanessa D.

TOPIC: Personality to sue; Estate of a decedent

FACTS: Spouses Ang obtained a loan of US$300,000 from Theodore and Nancy Ang. Respondents executed
a promissory note in favor of the petitioners wherein they promised to pay the latter the said amount, with interest
at the rate of 10% per annum, upon demand. However, despite repeated demands, the respondents failed to
pay the petitioners. Even after the petitioner receiving a demand letter from the petitioners, the respondent still
failed to pay their loan.

The petitioners, who were then residing in Los Angeles, California, executed their respective SPA in favor of
Atty. Aceron for the purpose of filing an action in court against the respondents. Atty. Aceron, in behalf of the
petitioners, filed a Complaint for sum of collection of money with RTC of QC. The respondents moved for the
16
dismissal of the comlpaint on the grounds of improper venue and prescription. Insisting that the venue of the
petitioners’ action was improperly laid, the respondents asserted that the complaint against them may only be
filed in the court of the place where either they or the petitioners reside. The RTC issued an Order which denied
the respondents’ motion to dismiss. When the RTC denied the respondents’ motion for reconsideration, they
filed with the CA a petition for certiorari alleging that, pursuant to Section 2, Rule 4 of the Rules of Court, the
petitioners’ complaint may only be filed in the court of the place where they or the petitioners reside.

Considering that the petitioners reside in Los Angeles, California, USA, the respondents assert that the complaint
below may only be filed in the RTC of Bacolod City, the court of the place where they reside in the Philippines.
The respondents further claimed that, the petitioners’ grant of SPA in favor of Atty. Aceron to file a complaint
may not be filed in the court of the place where Atty. Aceron resides. They explained that Atty. Aceron, being
merely a representative of the petitioners, is not the real party in interest in the case below; accordingly, his
residence should not be considered in determining the proper venue of the said complaint. The CA held that the
complaint below should have been filed in Bacolod City and not in Quezon City, and directed the dismissal of
the complaint.

ISSUE: WON the CA committed reversible error of law when it ruled that the complaint must be dismissed.

HELD: The CA did not commit any reversible error when it annulled and set aside the orders of the RTC. Atty.
Aceron is not a real party in interest in the case below; thus, his residence is immaterial to the venue of the filing
of the complaint. Contrary to the petitioners’ claim, Atty. Aceron, despite being the attorney-in-fact of the
petitioners, is not a real party in interest in the case below. Section 2, Rule 3 of the Rules of Court provides that:
Sec. 2. Parties in interest.―A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real party in interest.

Interest within the meaning of the Rules of Court means material interest or an interest in issue to be affected by
curiosity about the question involved. A real party in interest is the party who, by the substantive law, has the
right sought to be enforced.

Applying the foregoing rule, it is clear that Atty. Aceron is not a real party in interest in the case below as he does
not stand to be benefited or injured by any judgment therein. He was merely appointed by the petitioners as their
attorney-in-fact for the limited purpose of filing and prosecuting the complaint against the respondents. Such
appointment, however, does not mean that he is subrogated into the rights of petitioners and ought to be
considered as a real party in interest.

Being merely a representative of the petitioners, Atty. Aceron in his personal capacity does not have the right to
file the complaint below against the respondents. He may only do so, as what he did, in behalf of the
petitioners―the real parties in interest. To stress, the right sought to be enforced in the case below belongs to
the petitioners and not to Atty. Aceron. Clearly, an attorney-in-fact is not a real party in interest.

Limos v. Spouses Odones, G.R. No. 186979, August 11,


27 Baquiran, Maria Vanessa D.
2010

TOPIC: Compulsory and permissive joinder of parties

FACTS: Francisco Odones and Arwenia Odones, filed a complaint for Annulment of Deed, Title and Damages
against petitioners Socorro Limos, Rosa Delos Reyes and Spouses Rolando Delos Reyes and Eugene Delos
Reyes, before the Regional Trial Court. In response, petitioners filed a Motion for Bill of Particulars claiming
ambiguity in respondents’ claim that their vendors are the only heirs of Donata Lardizabal. Finding no merit in
the motion, the trial court denied the same and ordered petitioners to file their answer to the complaint. In their
answer, petitioners pleaded affirmative defenses, which also constitute grounds for dismissal of the complaint.
One of their grounds is non-joinder of the other heirs of Donata Lardizabal as indispensable parties. Thereafter,
petitioners served upon respondents a Request for Admission to which the respondents failed to respond
prompting petitioners to file a Motion to Set for Preliminary Hearing on the Special and Affirmative Defenses,
arguing that respondents’ failure to respond or object to the Request for Admission amounted to an implied
17
admission pursuant to Section 2 of Rule 26 of the Rules of Court. The RTC denied the Motion. Petitioners
elevated this incident to the CA by way of a special civil action for certiorari, alleging grave abuse of discretion
on the part of the RTC in issuing the impugned resolution and order. The CA dismissed the petition. As their
motion for reconsideration having been denied, petitioners are now before this Court seeking a review of the
CA’s pronouncements.

ISSUE: WON CA erred in affirming the RTC’s decision not to dismiss the case.

HELD: The SC denied the petition. It is settled that the non-joinder of indispensable parties is not a ground for
the dismissal of an action; Parties may be added by order of the court on motion of the party or on its own
initiative at any stage of the action and/or such times as are just.—Anent the alleged non- joinder of indispensable
parties, it is settled that the non-joinder of indispensable parties is not a ground for the dismissal of an action.
The remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court
on motion of the party or on its own initiative at any stage of the action and/or such times as are just. It is only
when the plaintiff refuses to implead an indispensable party despite the order of the court, that the latter may
dismiss the complaint. In this case, no such order was issued by the trial court.

Pacana-Contreras v. Rovila Water Supply, G.R. No.


28 Bautista, Rey Matthew
168979, December 2, 2013

FACTS: Petitioners operated the "Rovila Water Supply" from their family residence and were engaged in the
distribution of water to customers in Cebu City. The petitioners alleged that Lilia was a former trusted employee
in the family business who hid business records and burned and ransacked the family files.She then claimed
ownership over the family business through a corporation named "Rovila Water Supply, Inc.". The petitioners’
sister, Lagrimas Pacaña-Gonzales, filed a motion for leave to intervene and her answer-in-intervention was
granted by the trial court. At the subsequent pre-trial, the respondents manifested to the RTC that a substitution
of the parties was necessary in light of the deaths of Lourdes and Luciano. They further stated that they would
seek the dismissal of the complaint because the petitioners are not the real parties in interest to prosecute the
case.

ISSUE: Whether or not the case could be dismissed on failure to implead.the real party in interest to the case?

HELD: No. The Court cannot uphold the dismissal of the present case based on the grounds invoked by the
respondents which they have waived for failure to invoke them within the period prescribed by the Rules. The
Court cannot also dismiss the case based on "lack of cause of action" as this would require at least a
preponderance of evidence which is yet to be appreciated by the trial court. At the inception of the present case,
both the spouses Pacaña were not impleaded as parties-plaintiffs. The Court notes, however, that they are
indispensable parties to the case as the alleged owners of Rovila Water Supply. Without their inclusion as parties,
there can be no final determination of the present case. They possess such an interest in the controversy that a
final decree would necessarily affect their rights, so that the courts cannot proceed without their presence.

Their interest in the subject matter of the suit and in the relief sought is inextricably intertwined with that of the
other parties. In Galicia, et al. v. Vda. De Mindo, et al.,72the Court ruled that in line with its policy of promoting a
just and inexpensive disposition of a case, it allowed the intervention of the indispensable parties instead of
dismissing the complaint. Furthermore, in Commissioner Domingo v. Scheer, 73 the Court cited Salvador, et al.
v. Court of Appeals, et al.74 and held that the Court has full powers, apart from that power and authority which
are inherent, to amend the processes, pleadings, proceedings and decisions by substituting as party-plaintiff the
real party in interest. The Court has the power to avoid delay in the disposition of this case, and to order its
amendment in order to implead an indispensable party. With these discussions as premises, the Court is of the
view that the proper remedy in the present case is to implead the indispensable parties especially when their
non-inclusion is merely a technical defect. To do so would serve proper administration of justice and prevent
further delay and multiplicity of suits. Pursuant to Section 9, Rule 3 of the Rules of Court, parties may be added
by order of the court on motion of the party or on its own initiative at any stage of the action. If the plaintiff refuses
to implead an indispensable party despite the order of the court, then the court may dismiss the complaint for
the plaintiff’s failure to comply with a lawful court order.

18
29 Divinagracia v. Parilla, G.R. No. 196750, March 11, 2015 Bautista, Rey Matthew

FACTS: Conrado Nobleza, Sr. owned a 313-square meter parcel of land located at Cor. Fuentes-Delgado
Streets, Iloilo City denominated as Lot 133-B-1-A and covered by Transfer Certificate of Title (TCT) No. T- 12255
(subject land).6 During his lifetime, he contracted two marriages: (a) the first was with Lolita Palermo with whom
he had two (2) children and (b) the second was with Eusela Niangar with whom he had seven (7) children.
According to Santiago, upon Conrado, Sr.’s death, Cresencio, Conrado, Jr., Felcon ), Coronacion, Celestial,
Cecilia, Rogelio, Eduardo, and Ricardo sold their respective interests over the subject land to Santiago for a
consideration of 447,695.66, as embodied in a Deed of Extrajudicial Settlement or Adjudication with Deed of
Sale dated November 22, 1989 (subject document), which was, however, not signed by the other heirs who did
not sell their respective shares, namely, Ceruleo, Celedonio, and Maude (in representation of his husband,
Cebeleo, Sr., and their children). The court ordered the dismissal of the complaint on account of Santiago’s
failure to implead all the indispensable parties in his complaint.

ISSUE: Whether or not the dismissal on failure to implead all the indispensable parties in this case proper?

HELD: No. An indispensable party is one whose interest will be affected by the court’s action in the litigation,
and without whom no final determination of the case can be had. 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. In his absence, there cannot be a resolution of the dispute of
the parties before the court which is effective, complete, or equitable.30 Thus, the absence of an indispensable
party renders all subsequent actions of the court null and void, for want of authority to act, not only as to the
absent parties but even as to those present.

The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any stage of a judicial
proceeding and/or at such times as are just, parties may be added on the motion of a party or on the initiative of
the tribunal concerned. If the plaintiff refuses to implead an indispensable party despite the order of the court,
that court may dismiss the complaint for the plaintiff’s failure to comply with the order.The remedy is to implead
the non-party claimed to be indispensable.

Seno v. Mangubat, G.R. No. L-44339, December 2, 1987,


30 Bautista, Rey Matthew
156 SCRA 113

FACTS: This case stemmed from a complaint filed by plaintiffs on August 29, 1969 seeking 1) the reformation
of a Deed of Sale executed in favor of defendant Marcos Mangubat and, 2) the annulment of a subsequent sale
to defendant spouses Francisco Luzame and Vergita Penaflor of a parcel of land in Barrio Dongalo, Paranaque,
Rizal covered by OCT No. 1197 of the Land Registry of Rizal. On motion of defendant spouses Luzame and
Penaflor, the trial court ordered on October 20, 1975 the inclusion as defendants of Andres Evangelista and
Bienvenido Mangubat on the ground that they are indispensable parties, on December 29, 1971, plaintiffs filed
their amended complaint in compliance with the court's order of October 20, impleading Andres Evangelista and
Bienvenido Mangubat as defendants. The newly impleaded defendants moved for the dismissal of the case
against them on the ground of prescription.

ISSUE: Whether or not the other defendants Andres Evangelista and Bienvenido Mangubat indispensable
parties in the case without whom no action can be properly taken thereon?

HELD: NO. Indispensable parties are those with such an interest in the controversy that a final decree would
necessarily affect their rights, so that the courts cannot proceed without their presence. Necessary parties are
those whose presence is necessary to adjudicate the whole controversy, but whose interests are so far separable
that a final decree can be made in their absence without affecting them. Under Section 7, indispensable parties
must always be joined either as plaintiffs or defendants, for the court cannot proceed without them.

Necessary parties 8 must be joined, under Section 8, in order to adjudicate the whole controversy and avoid
multiplicity of suits. In the present case, there are no rights of defendants Andres Evangelista and Bienvenido

19
Mangubat to be safeguarded if the sale should be held to be in fact an absolute sale nor if the sale is held to be
an equitable mortgage.

Defendant Marcos Mangubat became the absolute owner of the subject property by virtue of the sale to him of
the shares of the aforementioned defendants in the property. Said defendants no longer have any interest in the
subject property. However, being parties to the instrument sought to be reformed, their presence is necessary
in order to settle all the possible issues of tile controversy.

Whether the disputed sale be declared an absolute sale or an equitable mortgage, the rights of all the defendants
will have been amply protected. Defendants-spouses Luzame in any event may enforce their rights against
defendant Marcos Mangubat. In fact the plaintiffs were not after defendants Andres Evangelista and Bienvenido
Mangubat as shown by their non-inclusion in the complaint and their opposition to the motion to include said
defendants in the complaint as indispensable parties.

It was only because they were ordered by the court a quo that they included the said defendants in the complaint.
The lower court erroneously held that the said defendants are indispensable parties.

Pantranco North Express v. Standard Insurance, 453 SCRA Transfiguracion, Alfred


31
482 Satsatin

The case was elevated to the SC by Pantranco and Buncan by reason of the ruling of the CA against them and
the denial of the appellate court of their motion for reconsideration. The CA ruled that there was no misjoinder of
parties in the complaint filed by Standard and Gicale against them, and that they are to be held accountable to
the money claims of the respondents.

FACTS: Crispin Gicale was driving the passenger jeepney owned by his mother Martina Gicale. Alexander
Buncan, on the other hand, was driving a bus owned by Pantranco North Express Inc. Both drivers were travelling
along the National Highway of Talavera, Nueva Ecija in a rainy afternoon. Buncan was driving the bus
northbound while Cripin was trailing behind. When the two vehicles were negotiating a curve along the highway,
the passenger bus overtook the jeepney.

In so doing, the passenger bus hit the left rear side of the jeepney and sped away. Crispin reported the incident
to the police and to the insurer of their jeepney, Standard Insurance Co. The total cost of the repair amounted to
P21, 415. Standard only paid P8,000 while Martina Gicale shouldered the remaining P13,415. Thereafter,
Standard and Martina demanded reimbursements from Pantranco and Buncan, but the bus company and the
driver refused. Thus, Standard and Martina were prompted to file a complaint for sum of money with the RTC of
Manila.

Pantranco and Buncan denied the allegations of the complaint and asserted that it is the MeTC which has
jurisdiction over the case.

RTC: The trial court ruled in favor of Standard and Martina, and ordered Pantranco and Buncan to pay the former
reimbursements with interests due thereon plus attorney's fees, and litigation expenses.

Pantranco and Buncan: The RTC has no jurisdiction over the complaint.
1) Martina Gicale was claiming P13,415, while Standard was claiming P8,000. Their individual claims
are below P20,000. Thus, the case falls under the exclusive jurisdiction of the MTC.
2) There was a misjoinder of parties.

CA: The appellate court affirmed the decision of the RTC.


1) Under the Totality Rule provided for under Sec. 19 of BP 129, it is the sum of the two claims that
determines the jurisdictional amount. At the time this case was heard, cases involving money claims
that amounts to more than P20,000 falls under the exclusive jurisdiction of the RTC.
2) Even assuming that there was a misjoinder of parties, it does not affect the jurisdiction of the court
nor is it a ground to dismiss the complaint. The claims of Gicale and Standard arose from the same

20
vehicular accident involving Pantranco's bus and Gicale's jeepney. Thus, there was a question of fact
common to all parties.

ISSUE: WON there was a misjoinder of parties in the case.

RULING: No. Sec. 6, Rule 3 of the Revised Rules of Court provides the following requirements for a permissive
joinder of parties: (a) the right to relief arises out of the same transaction or series of transactions; (b) there is a
question of law or fact common to all the plaintiffs or defendants; and (c) such joinder is not otherwise proscribed
by the provisions of the Rules on jurisdiction and venue.

In this case, there is a single transaction common to all, that is, Pantranco’s bus hitting the rear side of the
jeepney. There is also a common question of fact, that is, whether petitioners are negligent. There being a
single transaction common to both respondents, consequently, they have the same cause of action against
petitioners.

To determine identity of cause of action, it must be ascertained whether the same evidence which is necessary
to sustain the second cause of action would have been sufficient to authorize a recovery in the first. Here, had
respondents filed separate suits against petitioners, the same evidence would have been presented to sustain
the same cause of action. Thus, the filing by both respondents of the complaint with the court below is in order.
Such joinder of parties avoids multiplicity of suit and ensures the convenient, speedy and orderly administration
of justice.

There is NO MISJOINDER OF PARTIES if the money sought to be claimed is in favor of the same plaintiff/s and
against the same defendant/s.

On the issue of lumping together the claims of Gicale and Standard, Section 5(d), Rule 2 of the same Rules
provides:
“Sec. 5. Joinder of causes of action. – A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions:
xxx
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction.”

Further, the Court reiterates the Totality rule exemplified by Sec. 33 (1) of BP 129: “where there are several
claims or causes of action between the same or different parties, embodied in the same complaint, the amount
of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of
action arose out of the same or different transactions.”

Hence, PETITION IS DENIED.

Adm. Matter No. No. 88-1-646: Re Request of the Heirs of


the Passengers of Dona Paz to set aside the Order of Judge Transfiguracion, Alfred
32
B.V. Chingcuangco, promulgated on March 31, 1988, 159 Satsatin
SCRA 623

Facts: A complaint for damages amounting to more than P1.5 billion was filed in the name of the relatives/heirs
of the victims of the “worst sea disaster in history”: the sinking of the Dona Paz which collided w/ another vessel.
The complaint was characterized as a class suit prosecuted by 27 plaintiffs in behalf of approx. 4,000 people
who are all close relatives/legal heirs of the passengers. They claim that the institution of a class suit is proper
because the identified plaintiffs are sufficiently numerous.

Together with the complaint was a Motion for Leave to File Case a Pauper Litigant because a big majority of
them have no means to finance the filing of the case. On the same day, their counsel submitted a certification of
the City Assessor of Quezon City: according to the assessment records there is no property registered for
taxation purposes in the names of 7 of the plaintiffs. The motion to file a case as pauper litigants was granted by
Judge Chingcuangco to those 7 plaintiffs. It is this order that the plaintiffs ask this Court to set aside. They ask
21
that all be allowed to prosecute the case as pauper litigants and be exempt from filing fees. Judge Chingcuangco
says: He opted to leave the matter of the propriety of the class suit to the judgment of the branch to which this
case may be raffled although he personally would have freely allowed all plaintiffs to litigate as pauper litigants
and close his eyes to the fact that one of them is the present Clerk of this Court and another RTC Judge. He
suggested to the plaintiffs' counsel to seek the assistance of the SC which can exercise judicial activism by
allowing (that which this Executive Judge cannot do), all plaintiffs to litigate as pauper litigants and consider the
case as a class suit, in the highest interest of public service. Defendant Sulpicio Lines says: There were only
1,493 passengers at the time of the tragedy, not 4,000 It is doubtful whether the 27 plaintiffs are sufficiently
numerous and representative to fully protect the interests of all. There are in truth only 7 plaintiffs qualified to
sue as pauper litigants

Issue/Held: Is this case one of a proper class suit? [NO]

Ratio: It is not the rule governing class suits (Sec 12, Rule 3 Rules of Court) that is involved in the proceedings
at bar, but that concerning permissive joinder of parties in Section 6 of the Rule 3.

Similarities:
The same transaction or series of transactions is involved
Common questions of fact or law are at issue
Difference:
In a class suit, there is only one right or cause of action pertaining or belonging in common to many persons, not
separately or severally to distinct individuals

To distinguish the rule on class suits from that of permissive joinder of parties is the numerousness of parties
involved in a class suit. For a class suit to be allowed, it is needful inter alia that the parties be so numerous that
it would be impracticable to bring them all before the court.

Transfiguracion, Alfred
33 Navarra v. Liongson, G.R. No. 217930, April 18, 2016
Satsatin

34 Algura v. LGU of City of Naga, October 30, 2006 Cruz, Joan mae

Doctrine: The Constitution affords litigants moneyed or poor equal access to the courts; moreover, it specifically
provides that poverty shall not bar any person from having access to the courts. Accordingly, laws and rules
must be formulated, interpreted, and implemented pursuant to the intent and spirit of this constitutional provision.
As such, filing fees, though one of the essential elements in court procedures, should not be an obstacle to poor
litigants opportunity to seek redress for their grievances before the courts.

Facts: This Petition for Review on Certiorari seeks the annulment of the September 11, 2001 Order of the
Regional Trial Court (RTC) of Naga City, Branch 27, in Civil Case No. 99-4403, dismissing the case for failure
of petitioners Algura spouses to pay the required filing fees.

Spouses Antonio F. Algura and Lorencita S.J. Algura filed a Verified Complaint for damages against the Naga
City Government and its officers, arising from the alleged illegal demolition of their residence and boarding house
and for payment of lost income derived from fees paid by their boarders amounting to Php7,000.00 monthly.
Thereafter, petitioners filed an Ex Parte Motion to litigate as Indigent litigants. Executive Judge Jose T.Atienza
of Naga City granted the petitioners plea for exemption from filing fees. The place was partly demolished.
Respondent filed a motion to disqualify the petitioner from non payment of filing fees. Petitioners subsequently
interposed the respondent’s motion.

Issue: Whether petitioners should be considered as indigent litigants who qualify for exemption from paying filing
fees?

22
Held: No. There were two (2) existing rules on pauper litigants that are compatible with each other, Sec 21 of
Rule 3 and Section 19 of Rule 141. The trial court Rule 3, Section 21 to the application of the Alguras after their
affidavits and supporting documents showed that petitioners did not satisfy the twin requirements on gross
monthly income and ownership of real property under Rule 141.

Ayala Land, Inc. v. The alleged heirs of the late Lucas


35 Cruz, Joan mae
Lactao, G.R. No. 208213, August 8, 2018

Topic: Indigent Party

Facts: This is a Petition for Review on Certiorari regarding the CA’s Decision in CA-G.R. SP No. 122999, which
considered the issue of payment of additional docket fees moot and academic by reason of the RTC’s decision
allowing respondents to litigate as pauper litigants, and the CA's July 16, 2013 Resolution which denied
petitioner's Motion for Reconsideration.

Private Respondent filed a case for annulment, cancellation, and quieting of titles over a parcel of land against
the Capitol Hills Golf and Country Club. Thereafter Heirs of Lucas Lactao applied as indigent litigants and
executed an Affidavit of Undertaking that in the event of deficiency in the payment of filing fees, they would settle
the same through a first lien on any monetary judgment rendered in their favor.

Issue: Whether or not respondents should be declared as indigent litigants

Held: The RTC considered respondents as indigent litigants, with no property to cover the additional fees. The
RTC also noted that filing fees, albeit insufficient, were initially paid by respondents and there was no intention
on their part to defraud the government

36 Medrano v. de Vera, G.R. No. 165770, August 9, 2010 Cruz, Joan mae

Topic: Transferee pendent lite

Doctrine: In cases where the property is transferred by the defendant during the pendency of the litigation, the
interest of the transferee pendente lite cannot be considered independent of the interest of his transferors. If the
transferee files an answer while the transferor is declared in default, the case should be tried on the basis of the
transferee’s answer and with the participation of the transferee.

Facts: This case involves a parcel of land owned by Flaviana de Gracia which was later on passed to Francisca
Medrano, who then executed a Complaint for quieting of title/ and or partition with damages against the children
of Flaviana De Gracia. Estanislao De Vera presented himself as the real party in interest. De Vera presented
documents which shown that the documents issued in favor of Medrano was null and void for want of
consideration. The court declared the named defendants in default for not answering the complaint despite valid
service of summons. Thus, it appears that the court a quo treated the named defendants and De Vera as distinct
and separate parties. De Vera, as a transferee pendente lite, was bound by the final judgment or decree rendered
against his transferors.

Issue: Whether De Vera is bound by the judgment against his transferors

Held: Trial Court gravely abused its discretion in refusing to allow De Vera to participate in the case and requiring
him to file a motion to intervene. De Vera’s interest is not independent of or severable from the interest of the
named defendants. De Vera is a transferee pendente lite of the named defendants. His rights were derived from
the named defendants and he would be bound by any judgment against his transferors under the rules of res
judicata. What the TC should have done is to treat De Vera (as transferee pendente lite) as having been joined
as a party-defendant, and to try the case on the basis of the answer De Vera had filed and with De Vera’s
participation.

23
Rule 3 Section 19 gives the TC discretion to allow or disallow the substitution or joinder by the transferee.
Discretion is permitted because, in general, the transferee’s interest is deemed by law as adequately represented
and protected by the participation of his transferors in the case. In legal contemplation, he is not really denied
protection as his interest is one and the same as his transferors, who are already parties to the case.The TC
should have tried the case based on De Vera’s answer, which answer is deemed to have been adopted by the
non-answering defendants.

Villanueva v. Judge Mosqueda, G.R. No. L-58287, August


37 Del Mundo, Jan Daniel V.
19, 1982

TOPIC: Venue of Real Action

FACTS: Bonifacio (lessor) and Villanueva (lessee) entered in to a supplementary lease agreement on August
19, 1970 regarding Bonifacio’s house located in Tondo, Manila. Bonifacio resided at Masantol, while Villanueva
resided in Tondo. It was stipulated that if the lessor violates the contract, he can be sued in Manila. If the lessee
violates the contract, he can be sued in Masantol, Pampanga.

Bonifacio (lessor) filed an ejectment suit against Villanueva (lessee) on June 1980 in Masantol. Villanueva filed
a motion to dismiss on the ground of lack of jurisdiction because the venue of the action should be in Manila
where the property is located. Filing the action in Masantol is void and is contrary to section 2(a), Rule 4 of the
ROC. Municipal court denied the motion.

Villanueva filed a certiorari petition in the CFI of Pampanga wherein he assailed the municipal court’s order
denying his motion. CFI dismissed the petition and decided that the venue was properly laid in Masantol pursuant
to the agreement of the parties who had validly waived the legal venue.

ISSUE: Whether or not there was lack of jurisdiction on Bonifacio’s ejectment suit against Villanueva?

HELD: No, there was no lack of jurisdiction on Bonifacio’s ejectment suit. The court in Masantol, like other inferior
courts, have exclusive original jurisdiction to entertain ejectment suits. Section 1(a), Rule 4 (now Section 1 (par.
2), Rule 4) of the Rules of Court does not refer to the jurisdiction over the subject matter, but only to the place
where the ejectment suit may be brought.

The case should be distinguished from a case where the parties stipulated the actions of a construction contract
may be institutied in the CFI of Naga City. The Contractor who is from Pampanga sued the other party in the CFI
of Pampanga and not in Naga City. The Court held that the suit was properly filed in Pampanga because the
agreement of the parties on the venue of the actions between them was “simply permissive”. They did not waive
their right to choose the venue provided for in section 2(b), Rule 4 (now Section 2, Rule 4) of the Rules of Court.

Union Bank of the Philippines v. Maunlad Homes Inc., G.R.


38 Del Mundo, Jan Daniel V.
No. 190071, August 15, 2012

TOPIC: Venue of Real Action

FACTS: Maunlad Homes (buyer) and Union Bank (seller) entered into a contract to sell involving the Maunlad
Shopping Mall which is located in Malolos, Bulacan. The purchase price is at 151 Million Pesos. 2.4 Million Pesos
was the downpayment to be payable on or before July 5, 2002, with the balance to be amortized over the 180-
month period. Certain consequences will ensue due to failure of payment.

Maunlad Homes failed to pay the monthly amortization. Union Bank sent a Notice of Rescission of Contract to
Maunlad on February 2003 demanding payment of the installments due in 30 days. Maunlad failed to comply.
On November 2003, Union Bank sent Maunlad Homes a letter demanding payment of the rentals due and
requiring that the subject property be vacated and its possession turned over to Union Bank. Maunlad Homes
refused.

24
Union Bank instituted an ejectment suit before the MeTC of Makati City on February 2004. Maunlad claimed that
it is the owner of the property as Union Bank did not reserve ownership of the property under the terms of the
contract. MeTC dismissed Union Bank’s ejectment suit because Union Bank’s cause of action was based on a
breach of contract. On appeal, the RTC of Makati City affirmed the MeTC ruling and stated that the proper venue
of the ejectment action is in Malolos, Bulacan, pursuant to Section 1 (par. 2), Rule 4 of the Rules of Court. The
RTC declared that Union Bank cannot rely on the waiver of venue provision in the contract because ejectment
is not an action arising out of or connected with the contract. Union Bank appealed to the CA. The CA affirmed
the RTC decision without any ruling on the issue of venue of the action.

ISSUE: Whether or not filing the action in Makati City was proper?

HELD: Yes, filing the action in Makati City was proper. Used as basis of Maunlad Homes, Section 1, Rule 4 of
the Rules of Court states the proper venue for ejectment actions. Section 4 of the same Rule provides otherwise
where the rule shall not apply “where the parties have validly agreed in writing before the filing of the action on
the exclusive venue thereof.” The parties provided for a different venue. As stated in the stipulation of their
contract, it was stated that “the venue of all suits and actions arising out of or in connection with this Contract to
Sell shall be at Makati City.” Since the unlawful detained action is connected with the contract, Union Bank
rightfully filed the complaint with the MeTC of Makati City. The Court granted the petition. Maunlad Homes was
ordered to vacate the property and was ordered to pay the rentals-in arrears, as well as rentals accruing in the
interim until it vacates the property.

Latorre v. Latorre, G.R. No. 183926, March 29, 2010, 617


39 Del Mundo, Jan Daniel V.
SCRA 88

TOPIC: Venue of Real Action

FACTS: On October 2000, Generosa Latorre (petitioner) filed before the RTC of Muntinlupa City a Complaint for
Collection and Declaration of Nullity of Deed of Absolute Sale against her own son, Luis Latorre (respondent),
and Ifzal Ali. On September 1999, Ifzal and Luis entered into a Contract of Lease over the property located in
Dasmarinas Village, Makati City. Luis declared under the contract that he was the absolute and registered owner
of the property. Generosa contested because she and Luis were co-owners in equal shares. She claims that on
1989, she and Luis executed their respective Deeds of Donation conveying the property in favor of the
Foundation. On September 1994, both petitioner and respondent executed separate Deeds of Revocation of
Donation, but it was not registered. The subject property remained in the name of the Foundation. Hence both
Generosa and Luis are still co-owners. On August 2000, Luis caused an adverse claim on the TCT of the
property, claming full ownership over the same by virtue of a Deed of Absolute Sale in favor of Luis. Petitioner
claims that the deed was a falsified document. Generosa prays that both Luis and Ifzal be enjoined in the case
to fulfill their obligations.

Luis countered by filing a Motion to Dismiss claiming that the venue of the case was improperly laid. Respondent
claimed that petitioner should have filed the case before the RTC of Makati City and not of Muntinlupa City. RTC
denied the motion to dismiss. RTC ruled that the nature of an action was determined by the allegations in the
complaint.

Luis filed an Answer Ad Cautelam on March 2001. Respondent claimed that he took good care of petitioner
hence both parties agreed that Generosa would convey her share over the property to Luis through a Deed of
Absolute Sale in favor of respondent. The relationship between Generosa and Luis deteriorated sometime on
March 2000 hence the case was filed against Luis. The case against Ifzal was dismissed because the dispute
was between the Latorre’s. The RTC favored Luis. Petitioner filed her Motion for Reconsideration which the RTC
denied.

ISSUE: Whether or not the RTC erred in treating the venue as jurisdiction?

HELD: Yes, the RTC erred in treating the venue as jurisdiction. Petitioner filed her complaint with the RTC of
Muntinlupa, but should be Makati which is the proper venue in this case. Section 1 and 2, Rule 4 of the Rules of
Court provided an answer to the issue of venue. The subject property is situated in Makati City hence the venue
25
is the proper court of Makati City. In this jurisdiction, the Court adheres to the principle that the nature of an
action is determined by the allegations in the Complaint itself, rather than by its title or heading. It is also settled
that what determines the venue of a case is the primary objective for the filing of the case. Petitioner’s complaint
is a real action involving the recovery of the subject property on the basis of her co-ownership. The Court found
no merit in the petition hence denying the petition.

Marcos-Araneta v. Court of Appeals, G.R. No. 154096,


40 Domalanta, Marc Denver L
August 22, 2008

Venue of Personal Actions

Facts: Petitioner Irene Marcos-Araneta, resident of Forbes Park, Makati City, filed a reconveyance complaint
against the private respondents known as the the Benedicto group in the Regional Trial Court of Batac, Ilocos
Norte after learning that her shares in Far East Managers and Investors, Inc. and Universal Equity Corporation
were transferred to the private respondents. Benedicto Group filed a motion to dismiss on the grounds of
improper venue contending that the petitioner was not a resident of Batac, Ilocos Norte. Irene counter claimed
that she was resident of Batac, Ilocos Norte by showing her community tax certificate and by including in her
amended complaint her co-plaintiffs who were resident of Batac, Ilocos Norte. The Regional Trial Court of Batac
dismissed the complaint filed by Irene on the grounds of improper venue being that she was not a resident of
Batac and that the inclusion of his co-plaintiff does not cure the said defect. Upon appeal, the Court of Appeals
affirmed the decision of the lower courts. Hence the case.

Issue: W/N the proper venue of the complaint should be the Regional Trial Court of Batac, Ilocos Norte?

Held: NO. The Supreme Court ruled that under Sec. 2 Rule 4 of the Rules of Court provides that the Venue of
Personal Actions may be commenced and tried where the plaintiff or any of the principal plaintiff resides or where
the defendant or where the principal defendants reside or in the case of non-residents defendants where he may
be found, at the election of the plaintiff. The law is quite clear that if there are more that one plaintiff, the residence
of the principal plaintiff shall be the basis for determining the proper venue. In the case at bar, Since Irene is the
principle plaintiff in the complaint in light with the said Rule the subject of the civil case should commence at the
residences of Irene at Makati City making it the proper venue and not at Batac, Ilocos Norte.

41 Garces v. CA, June 23, 1988, 162 SCRA504 Domalanta, Marc Denver L

Venue of Personal Actions

Facts: Petitioner, Triumfo Garces, a resident of Malate, Manila, filed an ejectment case at the Metropolitan Trial
Court of Manila against private respondent Daisy Escalante ,residing in the same barangay, after the latter
refused to vacate his apartment building located in the Malate, Manila which was owned by the former. The
MTC ruled in favor of Garces ordering Escalante to leave the said premises. Upon appeal by Escalante to the
Regional Trial Court of Manila, the RTC reversed the decision of the MTC which ruled that the Garces was not
able to comply with the requirements of of Sec 6. Of PD 1508 which requires amicable settlements of a dispute
at the barangay level.Upon appeal by a petition of review, Garces claimed that it was not required for him to
comply with the said Section because Sec. 3 of the same Decree applies only to disputes “between or among
persons actually residing in the same barangay” and to disputes “involving actual residents of different barangays
within the same city or municipality” being that the actual resident of Escalante is in Cavite where she intends to
reside and that the leased apartment where she was staying was only by reason of her workdays. The Court of
Appeals affirmed the decision of the RTC. Hence the case.

Issue: W/N the proper Venue of Personal Action is in Manila?

Held: YES. The Supreme Court ruled that determination of Venue under Section 3 of P. D 1508( Establing a
System of Amicably Settling Disputes at the Barangal Level) is determined when is dispute between or among
persons actually residing in the same barangay or those involving actual residents of different barangays within
the same city or municipality. The phrase “actually residing” and “actual resident” as the Supreme Court ruled
26
does not refer to one’s legal residence or domicile but it refers to persons where they actually and physically
reside. In the case at bar, despite Escalante legal residence or domicile is in Cavite her actual and physical
residence is located at Malate, Manila at the time the case of ejectment was filed and applying Sec. 3 of the
Decree the proper venue therefore is in Manila.

Mangila v. Court of Appeals, G.R. No. 125027, August 12,


42 Domalanta, Marc Denver L
2002

Venue of Personal Actions

Facts: Petitioner Anita Mangila, a seafood exporter, filed a motion to dismiss a Writ of attachment filed by private
respondent Loreta Guina, a registered proprietor freight forwarding business against the petitioner. The writ
resulted from the non-payment of the petitioner for the services rendered by the private respondent to the former
under invoice stipulation. Despite residency of petitioner in San fernando, Pampanga and private respondent in
Paraaque City, the Writ of Attachment was filed in the Regional Trial court of Pasay City. Petitioner ground of
dismissal was improper venue because there is a provision in the invoice that if a court litigation is necessary to
enforce collection the venue of such action is Makati, Metro Manila but the private respondent counter claimed
that although Makati was the venue provided in the stipulation it wa merely an advertence by the printing press.
The RTC dismissed the motion of the petitioner which was upheld by the Court of Appeals. Hence the case.

Issue: W/N the proper venue of the personal action is in Makati City?

Held: NO. The Supreme Court ruled that under the Rules of Court parties to an action may agree in writing on
the venue on which an action should be brought. However, a mere stipulation on the venue of an action is not
enough to preclude parties from the bringing a case in other venues the parties must be able to show that such
stipulation is exclusive absent of such words the courts will allow the filing of the case in any venue as long as
the jurisdictional requirement are followed. Venue stipulation in a contract, while valid and enforceable, do not
as a rule supersede the general rule set forth in Rule 4 of Rules of Court. Absent of qualifying words, they should
be considered merely as an agreement on additional forum, not as limiting the venue of the specified place. In
the instance case, the stipulation does not limit the venue exclusively to Makati. There are no qualifying or
restrictive words in the invoice that would evince the intention of the parties that Makati is the only exclusive
venue where the action could be instituted.

Hyatt Elevators and Escalators Corp. v. Goldstar Elevators


43 Dulay, Robert Ross
Phils., 473 SCRA 705

TOPIC: Venue of Personal Actions

FACTS: In this case, the petitioner is Goldstar Elevator Philippines Inc. and on the other hand the private
respondent, Hyatt Elevators and Escalators Company. Both engaged in installing, maintaining/servicing of
elevators and escalators. Hyatt (herein petitioner) filed an unfair trade practices and damages against LG
industrial systems Co. Ltd, and LG International Corporation alleging that it was appointed as the exclusive
distributor of LG elevators and escalators in the Philippines under Distributorship Agreement. LG filed a motion
to dismiss alleging that lack of jurisdiction over the persons of defendant, improper venue and failure to state a
cause of action.

Hyatt filed a motion for leave of court to amend the complaint, alleging that LG transferred all assets to a joint
venue agreement with Otis elevator Company of the USA to LG Otis Elevator Company Goldstar filed a Motion
to dismiss the amended complaint alleging that venue was improperly laid as neither the Hyatt, LG or Goldstar
itself resided in Mandaluyong city where the case was originally filed. The RTC denied the motion. The CA
dismissed the case and held that Makati was the principal place of business of both respondent and petitioner,
as stated in the latter’s Articles of Incorporation, that place was controlling for purposes of determining the proper
venue.

Issue: Whether or not the venue was improper.


27
Held: Yes, petition denied. Section 2 of Rule 4 of the 1997 Revised Rules of Court:
"Sec. 2. Venue of personal actions. – All other actions may be commenced and tried where the plaintiff or any
of the principal plaintiff resides, or where the defendant or any of the principal defendant resides, or in the case
of a non-resident defendant where he may be found, at the election of the plaintiff."

Since both parties to this case are corporations, there is a need to clarify the meaning of "residence." The law
recognizes two types of persons: (1) natural and (2) juridical. Corporations come under the latter in accordance
with Article 44(3) of the Civil Code.

A corporation, however, has no residence in the same sense in which this term is applied to a natural person.
This is precisely the reason why the Court in Young Auto Supply Company v. Court of Appeals ruled that "for
practical purposes, a corporation is in a metaphysical sense a resident of the place where its principal
office is located as stated in the articles of incorporation."

The residence of a corporation is the place where its principal office is established.

In the present case, there is no question as to the residence of respondent. What needs to be examined is that
of petitioner. the latter’s principal place of business is Makati, as indicated in its Articles of Incorporation. Since
the principal place of business of a corporation determines its residence or domicile, then the place
indicated in petitioner’s articles of incorporation becomes controlling in determining the venue for this
case.

Jurisprudence has, however, settled that the place where the principal office of a corporation is located,
as stated in the articles, indeed establishes its residence. This ruling is important in determining the
venue of an action by or against a corporation.

Golden Arches Development Corp. v. St. Francis Square


44 Dulay, Robert Ross
Holding Inc., 640 SCRA 227

TOPIC: Venue of Personal Actions

FACTS: Golden Arches Development Corporation (petitioner) entered into a lease contract over a property
owned by Prince City Realty, Inc. located at the corner of Julia Vargas Avenue and Bank Drive, Ortigas Center,
Mandaluyong City. The lease contract commenced on June 27, 1991 and was to terminate on February 27,
2008. On November 2, 2006, however, petitioner informed St. Francis Square Holdings, Inc. (respondent),
successor-in-interest of ASB Holdings, Inc. by which Prince Realty, Inc. eventually became known, of its intention
to discontinue the lease. Amicable negotiations between the parties having failed, respondent filed an action for
breach of contract and damages against petitioner before the RegionalTrial Court (RTC) of Mandaluyong.
Petitioner filed a Motion to Dismiss for lack of cause of action and improper venue. It claimed that respondent
maintained its principal address in Makati as records of the Securities and Exchange Commission (SEC) in 2007.
Opposing the Motion to Dismiss, respondent claimed that it had closed down its office in Makati effective
December 31, 2005 as it now holds office in Mandaluyong City of which petitioner is aware. Mandaluyong RTC
denied the motion to dismiss. Petitioner moved to reconsider the denial of the motion, pointing out that
respondent violated SEC Memorandum Circular No. 03 dated February 16, 2006, the relevant portion of which
reads: In line with the full disclosure requirement of existing laws, all corporations and partnerships applying for
registration with the Securities and Exchange Commission should state in their Articles of Incorporation or
Articles of Partnership the (i) specific address of their principal office, which shall include, if feasible, the street
name, barangay, city or municipality; and (ii) specific residence address of each incorporator, stockholder,
director, trustee, or partner. Metro Manila shall no longer be allowed as address of the principal office.

ISSUE: Whether venue was proper.

HELD: The petition fails. Venue, in essence, concerns a rule of procedure. In personal actions, it is fixed for the
greatest possible convenience of the plaintiff and his witnesses,and to promote the ends of justice.

28
Respondent’s complaint, being one for enforcement of contractual provisions and recovery of damages, is in the
nature of a personal action which, under Section 2, Rule 4 of the Rules of Court, shall be filed at the plaintiffs
residence. Specifically with respect to a domestic corporation, it is in a metaphysical sense a resident of the
place where its principal office is located as stated in the articles of incorporation.

IN FINE, although respondents Amended Articles of Incorporation of 2007 indicates that its principal business
address is at Metro Manila, venue was properly laid in Mandaluyong since that is where it had actually been
residing (or holding its principal office) at the time it filed its complaint. Section 2, Rule 4 of the Rules of Court,
quoted earlier, authorizes the plaintiff (respondent in this case) to make a choice of venue for personal actions
whether to file the complaint in the place where he resides or where defendant resides.Respondents choice must
be respected as [t]he controlling factor in determining venue for cases is the primary objective for which said
cases are filed.Respondents purpose in filing the complaint in Mandaluyong where it holds its principal office is
obviously for its convenience and for orderly administration of justice.

45 Ang v. Ang, G.R. No. 186993, August 22, 2012 Dulay, Robert Ross

TOPIC: Venue of actions against non-residents

FACTS: Spouses Alan & Em Ang (respondents) obtained a loan ($300k) from Theodore & Nancy Ang
(petitioners), also, a promissory note was executed in favor of the petitioners wherein they promised to pay the
latter the said amount, with interest at the rate of 10% per year, upon demand. However, despite repeated
demands, the respondents failed to pay the petitioners. Since the loan already amounted to almost $720k,
inclusive of interest, petitioner, who were then resident in LA, executed their SPA in favor of Atty. Aceron for the
purpose of filing an action in court against the respondents. A complaint for collection of sum of money was then
filed with the RTCQC.

Respondent moved for the dismissal of the complaint in the grounds of improper venue and prescription asserting
that the complaint against them may only be filed in the court of the place where either they or the petitioners
reside. Respondent reside in Bacolod while petitioner reside in LA. The RTC denied respondent’s motion to
dismiss. Since Atty. Aceron is the duly appointed attorney-in-fact of petitioners, venue of the action may lie where
re resides as provided in Sec. 2, Rule 4, of the 1997 Rules of Civil Procedure Respondents claim that Atty.
Aceron, being merely a representative of the petitioners, is not a real party in interest in the case; hence, his
residence should not be considered in determining the proper venue of the said complaint. CA decided that the
Complaint should have been filed in Bacolod City.

ISSUE: Whether the complaint must be dismissed on the ground that venue was not proper.

HELD: Yes. It is a legal truism that the rules on the venue of personal actions are fixed for the convenience of
the plaintiffs and their witnesses. Equally settled, however, is the principle that choosing the venue of an action
is not left to a plaintiff’s caprice; the matter is regulated by the Rules of Court. The petitioners’ complaint for
collection of sum of money against the respondents is a personal action as it primarily seeks the enforcement of
a contract.

The Rules give the plaintiff the option of choosing where to file his complaint. He can file it in the place (1) where
he himself or any of them resides, or (2) where the defendant or any of the defendants resides or may be found.
The plaintiff or the defendant must be residents of the place where the action has been instituted at the time the
action is commenced.

If the plaintiff does not reside in the Philippines, the complaint in such case may only be filed in the court of the
place where the defendant resides. In Cohen and Cohen v. Benguet Commercial Co., Ltd., 34 Phil. 526 (1916),
this Court held that there can be no election as to the venue of the filing of a complaint when the plaintiff has no
residence in the Philippines. In such case, the complaint may only be filed in the court of the place where the
defendant resides.

29
46 Gumabon v. Larin, G.R. No. 142523, November 27, 2001 Estudillo, Alessandra Sofia E.

WHEN THE RULES ON VENUE DO NOT APPLY

FACTS: Petitioners execute in favor of respondent Aquilino Larin a "Deed of Sale With Right of Repurchase"
over a parcel of land covered by TCT No. 6643, located in Pangdara, Candaba, Pampanga.Thirty-nine years
later, petitioners filed a complaint against respondent before the RTC of Quezon City, seeking the return of the
certificate of title from Larin who, it was alleged, refused to hand over the certificate despite the full payment,
nearly seven times the original amount, of their loan.The case was raffled to Branch 82 of RTC Quezon City. In
due time, Judge Ceguera issued the assailed order, dismissing the complaint on the ground that, being a real
action, the case should have been filed before the RTC of Pampanga, not the RTC of Quezon City, which could
validly take cognizance of the controversy.

Respondent Larin never assailed, at any stage theretofore, the venue of the case nor raised in issue the
competence of the RTC of Quezon City to try the case.

ISSUE: Whether or not a trial court judge can motu proprio dismiss an action for its improper venue.

HELD: NO. Petitioners assert that the relief they seek is not to be declared the owners of the land, but merely to
compel respondent to return the certificate of title back to them.

Sections 1 and 2, Rule 4, of the 1997 Rules of Civil Procedure, under the title "Venue of Actions," provide:
"Section 1. Venue of Real Actions. Actions affecting title to or possession of real property, or interest therein,
shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.

"Sec. 2. Venue of personal actions. All other actions may be commenced and tried where the plaintiff or any of
the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case
of a non-resident defendant where he may be found, at the election of the plaintiff."

Real actions, as so opposed to personal actions, are those which affect the title to or possession of real property.
Where a contrary claim to ownership is made by an adverse party, and where the relief prayed for cannot be
granted without the court deciding on the merits the issue of ownership and title, more specifically so as to who,
between the contending parties, would have a better right to the property, the case can only be but a real action.

Jurisdiction, on the other hand, is more substantive than procedural. It refers to the authority of the court to hear
and decide a case, and, it is one that is dictated by law, and the matter ordinarily can be raised at any stage of
the trial, even upon appeal. The rule, of course, deviates from this general rule in criminal cases where locus
criminis itself defines the jurisdiction of the trial court.

The wrong venue in Civil Case No. 97-31709, being merely a procedural infirmity, not a jurisdictional impediment,
does not, without timely exception, disallow the RTC of Quezon City to take cognizance of, and to proceed with,
the case. In failing to raise his objection to it either in a motion to dismiss or in his answer, coupled by his having
sought relief from the court and favorable judgment on his demurrer to evidence, respondent has himself evinced
an acceptance on the venue of the action. The court a quo has thus erred in dismissing motu proprio the
complaint on the ground of improper venue.

Unimasters Conglomeration Inc. v. CA, G.R. No. 119657,


47 Estudillo, Alessandra Sofia E.
February 7, 1997

EFFECTS OF STIPULATIONS ON VENUE

FACTS: Kubota and Unimasters entered into a "Dealership Agreement for Sales and Services" of the former's
products in Samar and Leyte Provinces. The contract contained:
30
". . . All suits arising out of this Agreement shall be filed with/in the proper Courts of Quezon City,"
UNIMASTERS filed an action in the RTC of Tacloban City against KUBOTA for damages for breach of contract.

KUBOTA filed a motion for dismissal of the case on the ground of improper venue.

ISSUE: What construction should be placed on the stipulation in the Dealership Agreement that" (a)ll suits arising
out of this Agreement shall be filed with/in the proper Courts of Quezon City."

HELD: Written stipulations as to venue may be restrictive in the sense that the suit may be filed only in the place
agreed upon, or merely permissive in that the parties may file their suit not only in the place agreed upon but
also in the places fixed by law (Rule 4, specifically). As in any other agreement, what is essential is the
ascertainment of the intention of the parties respecting the matter.

This Court construed the venue stipulations involved as merely permissive:

Polytrade Corporation v. Blanco. In this case, the venue stipulation was as follows:
“The parties agree to sue and be sued in the Courts of Manila.”

This Court ruled that such a provision "does not preclude the filing of suits in the residence of the plaintiff or the
defendant. The plain meaning is that the parties merely consented to be sued in Manila. Qualifying or restrictive
words which would indicate that Manila and Manila alone is the venue are totally absent therefrom. It simply is
permissive. The parties solely agreed to add the courts of Manila as tribunals to which they may resort. In the
case hereunder mentioned, stipulations on venue were held to be restrictive, or mandatory.Gesmundo v. JRB
Realty Corporation: “. . (V)enue for all suits, whether for breach hereof or damages or any cause between the
LESSOR and LESSEE, and persons claiming under each, . . (shall be) the courts of appropriate jurisdiction in
Pasay City. . .”

This Court held that: "(t)he language used leaves no room for interpretation. It clearly evinces the parties' intent
to limit to the 'courts of appropriate jurisdiction of Pasay City' the venue for all suits between the lessor and the
lessee and those between parties claiming under them. This means a waiver of their right to institute action in
the courts provided for in Rule 4, sec. 2(b)."

In this case at bar, " . . All suits arising out of this Agreement shall be filed with / in the proper Courts of
Quezon City," without mention of Tacloban City. The question is whether this stipulation had the effect
of effectively eliminating the latter as an optional venue and limiting litigation between UNIMASTERS
and KUBOTA only and exclusively to Quezon City.

The question should receive a negative answer. Absent additional words and expressions definitely and
unmistakably denoting the parties' desire and intention that actions between them should be ventilated
only at the place selected by them, Quezon City — or other contractual provisions clearly evincing the
same desire and intention — the stipulation should be construed, not as confining suits between the
parties only to that one place, Quezon City, but as allowing suits either in Quezon City or Tacloban City,
at the option of the plaintiff (UNIMASTERS in this case).

48 Briones v. CA, G.R. No. 204444, January 14, 2015 Estudillo, Alessandra Sofia E.

EFFECTS OF STIPULATIONS ON VENUE

FACTS: Briones alleged that he is the owner of a subject property, and that his sister informed him that his
property had been foreclosed and a writ of possession had already been issued in favor of Cash Asia.
Briones discovered that: (a) he purportedly executed a promissory note, loan agreement, and deed of real estate
mortgage covering the subject property in favor of Cash Asia in order to obtain a loan from the latter; and (b)
since the said loan was left unpaid, Cash Asia proceeded to foreclose his property.

Briones claimed that he never contracted any loans from Cash Asia as he has been living and working in Vietnam
since October 2007. He further claimed that he only went back to the Philippines on December 2007 until January
31
2008, and that during his brief stay in the Philippines, nobody informed him of any loan agreement entered into
with Cash Asia. Essentially, Briones assailed the validity of the foregoing contracts claiming his signature to be
forged.

Cash Asia filed a Motion to Dismiss, praying for the outright dismissal of Briones’ complaint on the ground of
improper venue. Cash Asia pointed out the venue stipulation in the subject contracts stating that "all legal actions
arising out of this notice in connection with the Real Estate Mortgage subject hereof shall only be brought in or
submitted to the jurisdiction of the proper court of Makati City."

ISSUE: Whether or not the CA gravely abused its discretion in ordering the outright dismissal of Briones’s
complaint on the ground of improper venue?

HELD: YES. Rule 4 VENUE OF ACTIONS


SEC. 4. When Rule not applicable. — This Rule shall not apply –
(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof.
The parties, however, are not precluded from agreeing in writing on an exclusive venue, as qualified by Section
4 of the same rule. Written stipulations as to venue may be restrictive in the sense that the suit may be filed only
in the place agreed upon, or merely permissive in that the parties may file their suitnot only in the place agreed
upon but also in the places fixed by law.

As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown thatsuch stipulation is
exclusive. In the absence of qualifying or restrictive words, such as "exclusively," "waiving for this purpose any
other venue," "shall only" preceding the designation of venue, "to the exclusion of the other courts," or words of
similar import, the stipulation should be deemed as merely an agreement on an additional forum,not as limiting
venue to the specified place.

In this case, the venue stipulation found in the subject contracts is indeed restrictive in nature, considering that
it effectively limits the venue of the actions arising therefrom to the courts of Makati City. However, it must be
emphasized that Briones's complaint directly assails the validity of the subject contracts, claiming forgery in their
execution. Given this circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation,
as his compliance therewith would mean an implicit recognition of their validity. Hence, pursuant to the general
rules on venue, Briones properly filed his complaint before a court in the City of Manila where the subject property
is located.

Ley Construction and Development Corp. v. Sedano, G.R.


49 Gamboa, Joelyn Marie G
No. 222711, August 23, 2017

EFFECTS OF STIPULATIONS ON VENUE

FACTS: On March 13, 2012, petitioner filed a Complaint for Collection of Sum of Money and Damages against
respondent Marvin Medel Sedano. In its complaint, petitioner alleged that on January 14, 2005, it leased a
50,000-square meter (sq.m.) parcel of land from respondent third-party defendant, the Philippine National
Construction Corporation (PNCC). On September 11, 2006, petitioner subleased the 14,659.80-sq.m. portion
thereof to respondent for a term often (10) years beginning November 15, 2005. Respondent allegedly failed to
pay the rent due for the period August 2011 to December 2011, amounting to a total of P8,828,025.46, and
despite demands, refused to setmtle his obligations; hence, the complaint.

Respondent pointed out that the venue was improperly laid since Section 21 of the lease contract provides that
"all actions or cases filed in connection with this case shall be filed with the Regional Trial Court of Pasay City,
exclusive of all others." Hence, the complaint should be dismissed on the ground of improper venue.

In an Order dated June 15, 2015, the Valenzuela-RTC granted respondent's motion and dismissed the complaint
on the ground of improper venue. It held that Section 21 of the lease contract between petitioner and respondent
is void insofar as it limits the filing of cases with the RTC of Pasay City, even when the subject matter jurisdiction
over the case is with the Metropolitan Trial Courts. However, with respect to the filing of cases cognizable by the
RTCs, the stipulation validly limits the venue to the RTC of Pasay City. Since petitioner's complaint is one for
32
collection of sum of money in an amount that is within the jurisdiction of the RTC, petitioner should have filed the
case with the RTC of Pasay City.

Aggrieved, petitioner moved for reconsideration which was, however, denied by the Valenzuela-RTC in its Order
dated January 27, 2016; hence, the present petition.

ISSUE: Whether or not the Valenzuela-RTC erred in ruling that venue was improperly laid.

HELD: The petition has no merit. Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit:

Section 2. Venue of personal actions. - All other actions may be commenced and tried where the plaintiff
or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants
resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff.

Section 4. When Rule not applicable. - This Rule shall not apply
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue
thereof.(Emphases supplied)

Based on these provisions, the venue for personal actions shall - as a general rule - lie with the court which has
jurisdiction where the plaintiff or the defendant resides, at the election of the plaintiff. As an exception, parties
may, through a written instrument, restrict the filing of said actions in a certain exclusive venue.

Hongkong and Shanghai Banking Corp. v. Sherman, G.R.


50 Gamboa, Joelyn Marie G
No. 72494, August 11, 1989

DOCTRINE OF FORUM NON-CONVENIENS

FACTS: Sometime in 1981, Eastern Book Supply Service PTE, Ltd. (COMPANY), a company incorporated in
Singapore applied with and was granted by HSBC Singapore branch an overdraft facility in the maximum amount
of Singapore dollars 200,000 with interest at 3% over HSBC prime rate, payable monthly, on amounts due under
said overdraft facility.

As a security for the repayment by the COMPANY of sums advanced by HSBC to it through the aforesaid
overdraft facility, in 1982, both private respondents and a certain Lowe, all of whom were directors of the
COMPANY at such time, executed a Joint and Several Guarantee in favor of HSBC whereby private respondents
and Lowe agreed to pay, jointly and severally, on demand all sums owed by the COMPANY to petitioner BANK
under the aforestated overdraft facility.

The Joint and Several Guarantee provides, inter alia, that:

This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined
under and may be enforced in accordance with the laws of the Republic of Singapore. We hereby agree that the
Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee.

The COMPANY failed to pay its obligation. Thus, HSBC demanded payment and inasmuch as the private
respondents still failed to pay, HSBC filed A complaint for collection of a sum of money against private
respondents Sherman and Reloj before RTC of Quezon City.

Private respondents filed an MTD on the ground of lack of jurisdiction over the subject matter. The trial court
denied the motion. They then filed before the respondent IAC a petition for prohibition with preliminary injunction
and/or prayer for a restraining order. The IAC rendered a decision enjoining the RTC Quezon City from taking
further cognizance of the case and to dismiss the same for filing with the proper court of Singapore which is the
proper forum. MR denied, hence this petition.

33
ISSUE: Do Philippine courts have jurisdiction over the suit, vis-a-vis the Guarantee stipulation regarding
jurisdiction?

HELD: YES. One basic principle underlies all rules of jurisdiction in International Law: a State does not have
jurisdiction in the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi
in rem or in personam. To be reasonable, the jurisdiction must be based on some minimum contacts that will not
offend traditional notions of fair play and substantial justice.

The defense of private respondents that the complaint should have been filed in Singapore is based merely on
technicality. They did not even claim, much less prove, that the filing of the action here will cause them any
unnecessary trouble, damage, or expense. On the other hand, there is no showing that petitioner BANK filed the
action here just to harass private respondents.

Philippine Deposit Insurance Corp. v. Citibank and Bank of


51 Gamboa, Joelyn Marie G
America S.T. & N.A., G.R. 170290, April 11, 2012

DOCTRINE OF FORUM NON-CONVENIENS

FACTS: In 1977, PDIC conducted an examination of the books of account of Citibank. It discovered that Citibank,
in the course of its banking business, from September 30, 1974 to June 30, 1977, received from its head office
and other foreign branches a total of P11,923,163,908.00 in dollars, covered by Certificates of Dollar Time
Deposit that were interest-bearing with corresponding maturity dates. These funds, which were lodged in the
books of Citibank under the account “Their Account-Head Office/Branches-Foreign Currency,” were not reported
to PDIC as deposit liabilities that were subject to assessment for insurance. As such, in a letter dated March 16,
1978, PDIC assessed Citibank for deficiency in the sum of P1,595,081.96.

Similarly, sometime in 1979, PDIC examined the books of accounts of BA which revealed that from September
30, 1976 to June 30, 1978, BA received from its head office and its other foreign branches a total of
P629,311,869.10 in dollars, covered by Certificates of Dollar Time Deposit that were interest-bearing with
corresponding maturity dates and lodged in their books under the account “Due to Head Office/Branches.”
Because BA also excluded these from its deposit liabilities, PDIC wrote to BA on October 9, 1979, seeking the
remittance of P109,264.83 representing deficiency premium assessments for dollar deposits.

Believing that litigation would inevitably arise from this dispute, Citibank and BA each filed a petition for
declaratory relief before the Court of First Instance (now the Regional Trial Court) of Rizal on July 19, 1979 and
December 11, 1979, respectively. In their petitions, Citibank and BA sought a declaratory judgment stating that
the money placements they received from their head office and other foreign branches were not deposits and
did not give rise to insurable deposit liabilities under Sections 3 and 4 of R.A. No. 3591 (the PDIC Charter) and,
as a consequence, the deficiency assessments made by PDIC were improper and erroneous. The cases were
then consolidated.

ISSUE: Whether or not a branch of a bank has a separate legal Personality.

HELD: No. A branch has no separate legal personality. This Court is of the opinion that the key to the resolution
of this controversy is the relationship of the Philippine branches of Citibank and BA to their respective head
offices and their other foreign branches.

The Court begins by examining the manner by which a foreign corporation can establish its presence in the
Philippines. It may choose to incorporate its own subsidiary as a domestic corporation, in which case such
subsidiary would have its own separate and independent legal personality to conduct business in the country.
In the alternative, it may create a branch in the Philippines, which would not be a legally independent unit, and
simply obtain a license to do business in the Philippines.

The Court agrees with the CA ruling that there is nothing in the definition of a “bank” and a “banking institution”
in Section 3(b) of the PDIC Charter which explicitly states that the head office of a foreign bank and its other
branches are separate and distinct from their Philippine branches.
34
There is no need to complicate the matter when it can be solved by simple logic bolstered by law and
jurisprudence. Based on the foregoing, it is clear that the head office of a bank and its branches are considered
as one under the eyes of the law. While branches are treated as separate business units for commercial and
financial reporting purposes, in the end, the head office remains responsible and answerable for the liabilities of
its branches which are under its supervision and control. As such, it is unreasonable for PDIC to require the
respondents, Citibank and BA, to insure the money placements made by their home office and other branches.

Deposit insurance is superfluous and entirely unnecessary when, as in this case, the institution holding the funds
and the one which made the placements are one and the same legal entity.

52 Rosete v. Lim, G.R. No. 136051, June 8, 2006 Guevarra, Ivan Frasser S.

Facts: On 5 December 1995, respondents Juliano Lim and Lilia Lim filed before Branch 77 of the RTC of Quezon
City a Complaint for Annulment, Specific Performance with Damages against AFP Retirement and Separation
Benefits System (AFP-RSBS), Espreme Realty and Development Corporation (Espreme Realty), Alfredo P.
Rosete, Maj. Oscar Mapalo, Chito P. Rosete, Bank of the Philippine Islands (BPI), and Register of Deeds of the
Province of Mindoro Occidental. It asked, among other things, that the Deed of Sale executed by AFP-RSBS
covering certain parcels of lands in favor of Espreme Realty and the titles thereof under the name of the latter
be annulled; and that the AFP-RSBS and Espreme Realty be ordered to execute the necessary documents to
restore ownership and title of said lands to respondents, and that the Register of Deeds be ordered to cancel
the titles of said land under the name of Espreme Realty and to transfer the same in the names of respondents.

On 18 January 1996, petitioners filed a Motion to Dismiss on the grounds that the court has no jurisdiction over
the subject matter of the action or suit and that venue has been improperly laid. A Supplemental Motion to
Dismiss was filed by petitioner Alfredo P. Rosete. Respondents opposed the Motion to Dismiss filed by
petitioners to which petitioners filed their Reply. Respondents filed a Comment on the Reply. AFP-RSBS,
Espreme Realty, and, BPI filed their respective Motions to Dismiss which respondents opposed. The Motions to
Dismiss filed by all the defendants were denied. The Motions for Reconsideration filed by petitioners and BPI,
which respondents opposed, were also denied. BPI filed its Answer with Compulsory Counterclaim and Cross-
claim to which respondents filed their Reply and Answer to Counterclaim.

Respondents also filed a Motion to Serve Supplemental Allegation against BPI and petitioner Chito Rosete which
the trial court granted in an order. Petitioners manifested that they filed a Petition for Certiorari and Prohibition
in the Court of Appeals, challenging the trial court’s orders that denied their Motions to Dismiss and
Reconsideration. They likewise informed the trial court that they filed an Ex-Parte Motion to Admit Answers Ex
Abudanti Cautela. Petitioner Chito Rosete filed a motion asking that the order granting the Motion to Serve
Supplemental Allegation against BPI and him be reconsidered and set aside, and that respondents be ordered
to reduce their supplemental allegations in the form and manner required by the Rules of Court. It was denied in
an order. This denial was appealed to the Court of Appeals. Petitioner Chito Rosete filed his Supplemental
Answer (Ex Abudanti Cautela). Respondents filed a Notice to Take Deposition Upon Oral Examination giving
notice that on June 18 and 20, 1997 at 9:00 a.m., they will cause the deposition of petitioners Oscar Mapalo and
Chito Rosete.

Petitioners filed an Urgent Ex-Parte Motion and Objection to Take Deposition Upon Oral Examination. They
argued that the deposition may not be taken without leave of court as no answer has yet been served and the
issues have not yet been joined since their Answer was filed ex abudanti cautela, pending resolution of the
Petition for Certiorari challenging the orders that denied their Motions to Dismiss and for Reconsideration,
respectively.

This is in addition to the fact that they challenged via a Petition for Certiorari before the Court of Appeals the
lower court’s Orders which, respectively, granted respondents’ Motion to Serve Supplemental Allegation Against
Defendants BPI and Chito Rosete, and for the latter to plead thereto, and denied Chito Rosete’s Motion for
Reconsideration of the order dated 23 July 1996. They contend that since there are two criminal cases pending
before the City Prosecutors of Mandaluyong City and Pasig City involving the same set of facts as in the present
case wherein respondent Juliano Lim is the private complainant and petitioners are the respondents, to permit
35
the taking of the deposition would be violative of their right against self-incrimination because by means of the
oral deposition, respondents would seek to establish the allegations of fact in the complaint which are also the
allegations of fact in the complaint-affidavits in the said criminal cases.

Ruling: Ex abudanti cautela means "out of abundant caution" or "to be on the safe side." An answer ex abudanti
cautela does not make their answer less of an answer. An answer is a pleading in which a defending party sets
forth his defenses and the failure to file one within the time allowed may cause a defending party to be declared
in default. Petitioners’ argument that the issues of the case have not yet been joined must necessarily fail in light
of our ruling that petitioners have filed their answers although the same were made ex abudanti cautela. Issues
are joined when all the parties have pleaded their respective theories and the terms of the dispute are plain
before the court. In the present case, the issues have, indeed, been joined when petitioners, as well as the other
defendants, filed their answers. The respective claims and defenses of the parties have been defined and the
issues to be decided by the trial court have been laid down.

Korea Technologies Co. Inc. v. Judge Lerma,


53 Guevarra, Ivan Frasser S.
G.R. No. 143581, January 7, 2008
Filing fees for compulsory counterclaim or cross-claims

FACTS: Petitioner KOGIES and respondent PGSMC executed a Contract whereby KOGIES would set up an
LPG Cylinder Manufacturing Plant for respondent. Respondent unilaterally cancelled the contract on the ground
that petitioner had altered the quantity and lowered the quality of the machineries and equipment it delivered.
Petitioner opposed informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle
and transfer the machineries and equipment on mere imagined violations by petitioner. Petitioner then filed a
Complaint for Specific Performance against respondent before the RTC.

Respondent filed its Answer with Compulsory Counterclaim asserting that it had the full right to dismantle and
transfer the machineries and equipment because it had paid for them in full as stipulated in the contract. KOGIES
filed a motion to dismiss respondent’s counterclaims arguing that when PGSMC filed the counterclaims, it should
have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.
The RTC dismissed the petitioner’s motion to dismiss respondent’s counterclaims as these counterclaims fell
within the requisites of compulsory counterclaims.

ISSUE: WON payment of docket fees and certificate of non-forum shopping were required in the respondent’s
Answer with counterclaim?

HELD: NO. The counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim in
accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the
time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, “A
compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be
contained therein.” As to the failure to submit a certificate of forum shopping, PGSMC’s Answer is not an initiatory
pleading which requires a certification against forum shopping under Sec. 524 of Rule 7, 1997 Revised Rules of
Civil Procedure. It is a responsive pleading, hence, the courts a quo did not commit reversible error in denying
KOGIES’ motion to dismiss PGSMC’s compulsory counterclaims. At the time PGSMC filed its Answer
incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being
compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended
by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross-claims.

Spouses Mendiola v. Court of Appeals, G.R. No.


54 Guevarra, Ivan Frasser S.
159746, July 18, 2012

Filing fees for compulsory counterclaim or cross-claims

Facts: On July 31, 1985, Pilipinas Shell Petroleum Corporation (Shell) entered into an agreement for the
distribution of Shell petroleum products by Pacific Management & Development (Pacific), a single proprietorship
36
belonging to petitioner Ramon G. Mendiola (Ramon). To secure Pacific’s performance of its obligations under
the agreement, petitioners executed on August 1, 1985 a real estate mortgage in favor of Shell covering their
real estate and its improvements, located in the then Municipality of Parañaque.

Pacific ultimately defaulted on its obligations, impelling Shell to commence extrajudicial foreclosure proceedings.
After application of the proceeds of the sale to the obligation of Pacific, a deficiency of P170,228.00 remained.
The deficiency was not paid by Ramon. Thus, on September 2, 1987, Shell sued in the RTC in Manila to recover
the deficiency. In his answer with counterclaim filed on October 28, 1987, Ramon asserted that the extra-judicial
foreclosure of the mortgage had been devoid of basis in fact and in law; and that the foreclosure and the filing
of the action were made in bad faith, with malice, fraudulently and in gross and wanton violation of his rights.

On March 22, 1988, petitioners commenced in the RTC in Makati an action to annul the extrajudicial foreclosure.
The defendants moved for the dismissal of the case. After the Makati RTC denied both motions, Shell filed its
answer ad cautelam. Pending the trial of the Makati case, the Manila RTC rendered judgment in favor of Shell.
As sole defendant in the Manila case, Ramon appealed (C.A.-G.R. No. CV-28056), but his appeal was decided
adversely to him on July 22, 1994, with the CA affirming the Manila RTC’s decision and finding that he was guilty
of forum shopping for instituting the Makati case.

Undaunted, he next appealed to the Court (G.R. No. 122795), which denied his petition for review on February
26, 1996,16 and upheld the foreclosure of the mortgage. The decision of the Court became final and executory,
as borne out by the entry of judgment issued on June 10, 1996. Shell sought the reconsideration of the decision
but it was denied. Aggrieved by the decision of the Makati RTC, Shell and Tabangao filed a joint notice of appeal.
On November 22, 2002, the CA denied petitioners’ motion to dismiss appeal. On July 31, 2002, the CA denied
petitioners’ motion for reconsideration through the second assailed resolution. Hence, petitioners brought these
special civil actions for certiorari, mandamus and prohibition.

Issue: Whether or not a counterclaim is compulsory.

Ruling of the Court: Rule 6 of the 1997 Rules of Civil Procedure defines a compulsory counterclaim as follows:

Section 7. Compulsory counterclaim. — 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 party’s claim and does not require for its adjudication the presence of third parties of whom the
court cannot acquire jurisdiction. Such a counterclaim must be within the jurisdiction of the court both as to the
amount and the nature thereof, except that in an original action before the Regional Trial Court, the counterclaim
may be considered compulsory regardless of the amount.

Accordingly, a counterclaim is compulsory if: (a) it arises out of or is necessarily connected with the transaction
or occurrence which is the subject matter of the opposing party’s claim; (b) it does not require for its adjudication
the presence of third parties of whom the court cannot acquire jurisdiction; and (c) the court has jurisdiction to
entertain the claim both as to its amount and nature, except that in an original action before the RTC, the
counterclaim may be considered compulsory regardless of the amount.

The four tests to determine whether a counterclaim is compulsory or not are the following, 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, 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, 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?

The four tests are affirmatively met as far as the Makati case was concerned. The Makati case had the logical
relation to the Manila case because both arose out of the extrajudicial foreclosure of the real estate mortgage
constituted to secure the payment of petitioners’ credit purchases under the distributorship agreement with Shell.
Specifically, the right of Shell to demand the deficiency was predicated on the validity of the extrajudicial
foreclosure, such that there would not have been a deficiency to be claimed in the Manila case had Shell not
validly foreclosed the mortgage. As earlier shown, Ramon’s cause of action for annulment of the extrajudicial

37
foreclosure was a true compulsory counterclaim in the Manila case. Thus, the Makati RTC could not have missed
the logical relation between the two actions.

Bungcayao Sr. v. Fort Ilocandia Property


55 Holdings and Development Corp., G.R. No. Julian, Jenelyn D.
170483, April 19, 2010

Rule 6, Filing fees for compulsory counterclaim or cross-claims

Facts: Petitioner Manuel Bungcayao Sr claimed to be one of the two entrepreneurs who introduced
improvement on the foreshore area of Calayad Beach when Fort Ilocandia Hotel started its construction in the
area. Thereafter, other entrepreneurs began setting up their own stalls in the foreshore area and formed
themselves into the DSierto Beach Resort Owners Association, Inc. (DSierto). Subsequently, six parcels of land
in Calayad were transferred, ceded and conveyed to the Philippine Tourism Authority (PTA) pursuant to PD No
1704. Petitioner and other DSierto members applied for a foreshore lease with the Community Environment and
Natural Resources Office (CENRO) and was granted a provisional permit, however later denied by the DENR
director on the ground that the subject area applied for fell either within the titled property or within the foreshore
areas applied for by respondent.

Atty. Marcos was asked to mediate in a luncheon set by Ilocandia Hotel. She offered P300,000 as financial
settlement per claimant in consideration of the improvements introduced, on the condition that they would vacate
the area, but was countered by the DSietos in the amount of P400,000. Later, Petitioner filed an action for
declaration of nullity and alleged that his son had no authority to represent him and that the deed was void and
not binding upon him. As a counterclaim, respondent filed three counterclaims. The first was for recovery of the
P400,000 given to Manuel, Jr. which was rendered moot by the issuance of Order; the second was for recovery
of possession of the subject property; and the third was for damages which was renounced thereafter.

Trial court rendered decision DISMISSING the claim of plaintiff for damages and finding the counterclaim of the
defendant for recovery of possession of the lot occupied by the plaintiff to be meritorious. On appeal, Court of
appeals sustained the trial court decision.

Issue: Whether respondent counterclaim is compulsory?

Held: No, the court ruled that respondent counterclaim is not compulsory in nature but permissive counterclaim.
A compulsory counterclaim is any claim for money or any relief, which a defending party may have against an
opposing party, which at the time of suit arises out of, or is necessarily connected, with, the same transaction or
occurrence that is the subject matter of the plaintiff’s complaint.

It is compulsory in the sense that it is within the jurisdiction of the court, does not require for its adjudication the
presence of third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not
set up in the answer to the complaint in the same case. Any other counterclaim is permissive.

Likewise a positive answer to below questions would indicate that the counterclaim is compulsory: (a) Are issues
of fact and law raised by the claim and by the counterclaim largely the same?; (b) Would res judicata bar a
subsequent suit on defendants claim, absent the compulsory rule?; (c) Will substantially the same evidence
support or refute plaintiffs claim as well as defendants counterclaim?; (d) Is there any logical relations between
the claim and the counterclaim?

In the case at bar, the only counterclaim that remained was for the recovery of possession of the subject property.
Respondent’s second counterclaim, contrary to the findings of the trial court and the Court of Appeals, is only a
permissive counterclaim. It is capable of proceeding independently of the main case.

The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the counterclaimant is bound
to pay the prescribed docket fees. Any decision rendered without jurisdiction is a total nullity and may be struck
down at any time, even on appeal before this Court. In this case, respondent did not dispute the non-payment

38
of docket fees. Respondent only insisted that its claims were all compulsory counterclaims. As such, the
judgment by the trial court in relation to the second counterclaim is considered null and void without prejudice to
a separate action which respondent may file against petitioner.

WHEREFORE, the judgment is modified and dismissed the respondent’s permissive counterclaim without
prejudice to filing a separate action against petitioner.

56 Firaza Sr. v. Ugay, G.R. No. 165838, April 3, 2013 Julian, Jenelyn D.

Facts: Respondents alleged that they are the registered owners of Lot No. 2887-A as evidenced by Original
Certificate of Title. They prayed for the annulment of Tax Declaration issued in the name of the petitioner on the
ground that it creates a cloud upon the respondents’ title. In reply, the petitioner contended that the respondents
obtained their title through fraud and misrepresentation. And respondents connived with Land Management
Officer who favorably recommended their application despite petitioner’s prior claim. Petitioner also filed a
counterclaim praying for the: (1) nullification of OCT No. P-16080; (2) reconveyance to him of the ownership of
the subject lot; and (3) payment of moral and exemplary damages, and attorney’s fees.

The trial court denied the petitioner’s affirmative defense on the ground that the same can be better ventilated
along with the allegations of the complaint and answer in a full-blown trial. Further, the trial court issued an
Order disallowing any issue pertaining to the petitioner’s counterclaim which in turn was adjudged as a direct
attack to the validity of the respondents’ title, hence, prohibited.

Petitioner filed for motion for consideration but was denied, hence he sought recourse with the Court of Appeals
for certioarari. Court of Appeals affirmed the decision of the lower court. He then moved for reconsideration but
was denied.

Issue: Whether the petitioner’s counterclaim constitutes a collateral attack of the respondents’ land title and thus
bars the former from introducing evidence thereon in the latter’s civil action for quieting of title?

Held: No, Section 48 of PD 29 proscribes a collateral attack to a certificate of title and allows only a direct attack
thereof, “Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It
cannot be altered, modified or cancelled except in a direct proceedings in accordance with law.

The attack is considered direct when the object of an action is to annul or set aside such proceeding, or enjoin
its enforcement. Conversely, an attack is indirect or collateral when, in an action to obtain a different relief, an
attack on the proceeding is nevertheless made as an incident thereof. Such action to attack a certificate of title
may be an original action or a counterclaim, in which a certificate of title is assailed as void.

In the instant case, the original complaint is for recovery of possession filed by petitioner against private
respondent, not an original action filed by the latter to question the validity of TCT No. 10101 on which petitioner
bases its right. To rule on the issue of validity in a case for recovery of possession is tantamount to a collateral
attack.

From the foregoing, it is immediately apparent that the courts a quo erred in their conclusions. The CA
erroneously classified the herein counterclaim as a collateral attack. On the other hand, the RTC correctly
adjudged the same as a direct attack to the respondents’ land title but mistakenly declared it as a prohibited
action.

As clearly pronounced in the above-cited jurisprudence, the petitioner’s counterclaim is a permissible direct
attack to the validity of respondents’ torrens title. As such counterclaim, it involves a cause of action separate
from that alleged in the complaint; it has for its purpose the vindication of a right in as much as the complaint
similarly seeks the redress of one. As the plaintiff in his own counterclaim, the petitioner is equally entitled to the
opportunity granted the plaintiff in the original complaint, to establish his cause of action and to prove the right
he asserts. WHEREFORE, premises considered, the petition is GRANTED.

39
Lafarge Cement Phil. Inc. v. Continental Cement
57 Julian, Jenelyn D.
Corp., G.R. No. 155173, November 23, 2004

Facts: Petitioner Lafarge Cement Philippines, Inc. (Lafarge) and Respondent Continental Cement Corporation
(CCC) entered into a Sale and Purchase Agreement whereby Lafarge agreed to purchase the cement business
of CCC. At the time of the foregoing transactions, petitioners were well aware that CCC had a case pending with
the Supreme Court. In anticipation of the liability that SC might adjudge against CCC, the parties, under Clause
2 (c) of the SPA, allegedly agreed to retain from the purchase price a portion of the contract price in the amount
of P117,020,846.84 -- the equivalent of US$2,799,140. This amount was to be deposited in an interest-bearing
account in the First National City Bank of New York (Citibank) for payment to APT, the petitioner in pending case
of CCC.

However, petitioners allegedly refused to apply the sum to the payment to APT, despite the subsequent finality
of the Decision in other case in favor of the latter and the repeated instructions of Respondent CCC. Fearful that
nonpayment to APT would result in the foreclosure, not just of its properties covered by the SPA with Lafarge
but of several other properties as well, CCC filed before the Regional Trial Court a Complaint with Application
for Preliminary Attachment against petitioners.

Petitioners moved to dismiss the Complaint on the ground that it violated the prohibition on forum-shopping. The
trial court denied the Motion. Petitioners elevated the matter before the Court of Appeals.

In the meantime, to avoid being in default and without prejudice to the outcome of their appeal, petitioners filed
their Answer and Compulsory Counterclaims before the trial court. They prayed by way of compulsory
counterclaims against Respondent CCC, its majority stockholder and president Gregory T. Lim, and its corporate
secretary Anthony A. Mariano for the sums of (a) P2,700,000 each as actual damages, (b) P100,000,000 each
as exemplary damages, (c) P100,000,000 each as moral damages, and (d) P5,000,000 each as attorneys fees
plus costs of suit.

On the other hand, Lim and Mariano of CCC moved to dismiss petitioner’s compulsory counterclaims.

Trial court dismissed the petitioner’s counterclaims, on motion for reconsideration, the trial court denied the
motion hence this petition.

Issues: Whether petitioner’s counterclaims against Respondent CCC (Lim and Mariano) are compulsory?

Held: Yes, counterclaims against Respondents CCC, Gregory T. Lim and Anthony A. Mariano are compulsory.
Counterclaims are defined in Section 6 of Rule 6 of the Rules of Civil Procedure as any claim which a defending
party may have against an opposing party. They are generally allowed in order to avoid a multiplicity of suits and
to facilitate the disposition of the whole controversy in a single action, such that the defendants demand may be
adjudged by a counterclaim rather than by an independent suit. The only limitations to this principle are (1) that
the court should have jurisdiction over the subject matter of the counterclaim, and (2) that it could acquire
jurisdiction over third parties whose presence is essential for its adjudication.

A counterclaim may either be permissive or compulsory. It is permissive if it does not arise out of or is not
necessarily connected with the subject matter of the opposing partys claim. A permissive counterclaim is
essentially an independent claim that may be filed separately in another case.

A counterclaim is compulsory when its object arises out of or is necessarily 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.

The petitioners counterclaims for damages were the result of respondents (Lim and Mariano) act of filing the
Complaint and securing the Writ of Attachment in bad faith. In Tiu Po v. Bautista the court ruled counterclaim for
damages fulfills the necessary requisites of a compulsory counterclaim. They are damages claimed to have been
suffered by petitioners as a consequence of the action filed against them. They have to be pleaded in the same

40
action; otherwise, petitioners would be precluded by the judgment from invoking the same in an independent
action. In Papa vs. Banaag “compensatory, moral and exemplary damages, allegedly suffered by the creditor in
consequence of the debtor’s action, are also compulsory counterclaim barred by the dismissal of the debtors
action. They cannot be claimed in a subsequent action by the creditor against the debtor.”

Aside from the fact that petitioners counterclaim for damages cannot be the subject of an independent action, it
is the same evidence that sustains petitioners counterclaim that will refute private respondents own claim for
damages. This is an additional factor that characterizes petitioners counterclaim as compulsory.

Since the counterclaim for damages is compulsory, it must be set up in the same action; otherwise, it would be
barred forever. If it is filed concurrently with the main action but in a different proceeding, it would be abated on
the ground of litis pendentia; if filed subsequently, it would meet the same fate on the ground of res judicata.

Banco de Oro v. CA and Sps. Locsin, G.R. No.


58 Lagasca, James Ellis
160354, August 25, 2005

COMPULSORY COUNTERCLAIM

The counterclaim must be existing at the time of the filing of the answer, though not at the commencement of
the action—a premature counterclaim cannot be set in the answer; The party who fails to interpose a
counterclaim although arising out of or is necessarily connected with the transaction or occurrence of the
plaintiff’s suit but which did not exist or mature at the time said party files his answer is not thereby barred from
interposing such claim in a future litigation.

Setting up of an “after-acquired counterclaim” is merely permissive, not compulsorily.

FACTS: Having failed to comply with the Credit Line Agreement, herein petitioner, Banco de Oro, filed before
the Regional Trial Court an application for an extrajudicial foreclosure of the mortgaged properties against herein
respondent spouses Gabriel and Ma. Geraldine Locsin. Subsequently, respondent spouses filed a complaint
with the RTC against petitioner bank for the Issuance of a Temporary Restraining Order against petitioner on
the ground that payment had in fact already been made. The RTC denied the issuance of a TRO.

A Supplemental Complaint was filed by the Locsins. They repleaded in toto the allegations in their Complaint
and additionally alleged that BDO proceeded with the public auction of the properties covered by the mortgage
in the CLA “contrary to law.” BDO admitted that the public auction took place but it denied that it was contrary to
law. Petitioner thereafter filed a complaint against respondent spouses before the RTC for the collection of a
sum of money.

Respondent Spouses filed a Motion to Dismiss on the ground that it should have been raised as a compulsory
counterclaim against respondent spouses’ complaint for specific performance, damages and nullification of the
public auction, and by failing to raise it as such, it is now barred by the rules. The RTC denied the same. The
Court of Appeals reversed the ruling of the RTC on the ground presented by respondent spouses. Hence this
case.

ISSUE/S: WHETHER OR NOT BDO‘S COMPLAINT IS BARRED FOR FAILURE TO RAISE IT AS A


COMPULSORY COUNTERCLAIM IN ITS ANSWER TO THE LOCSINS‘ COMPLAINT?

HELD: NO. The Court held that until after the Locsins allegedly refused and failed to settle the alleged deficiency
amount of their outstanding obligation, despite BDO‘s letter of demand sent to the Locsins, BDO‘s cause of
action had not arisen. BDO could not, therefore, have set its claim even assuming arguendo that it is a
compulsory counterclaim.

*Refer to the doctrine presented above.

41
GSIS v. Heirs of Caballero, G.R. No. 158090,
59 Lagasca, James Ellis
October 4, 2010

COMPULSORY COUNTERCLAIM

To determine whether a counterclaim is compulsory or not, the Court has devised the following tests: (a) Are the
issues of fact and law raised by the claim and by the counterclaim largely the same? (b) Would res judicata bar
a subsequent suit on defendant’s claims, 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? A positive answer to all four questions would indicate
that the counterclaim is compulsory.

FACTS: Herein Respondents, Spouses Fernando and Sylvia Caballero, acquired a loan from herein petitioner,
GSIS in the amount of P20,000.00 which was secured by a mortgage upon respondents’ residential lot. Fernando
defaulted on the payment of his loan with GSIS. Negotiations ensued but the same parties did not come into
agreement. A public bidding ensued after a failed negotiation with Fernando to buy back his property. In this
bidding, Jocelyn, Fernando’s daughter submitted a bid but was unfortunately defeated by Carmelita Mercantile
Trading Corporation. With this, Fernando, filed with the RTC a Complaint for nullity of bidding against CMTC,
and GSIS on the ground that the same bidding was void for the irregularities in the conduct of it. (Respondents
allege that CMTC misrepresented itself to be wholly filipino citizens.)

GSIS and its officers filed their Answer with Affirmative Defenses and Counterclaim. GSIS alleged that Fernando
owed the amount of P130,365.81 representing back rentals, including additional interests, and the additional
amount of P249,800.00. Caballero, on the other hand, alleged that GSIS's counterclaim is permissive and its
failure to pay the prescribed docket fees results into the dismissal of its claim.

The RTC ruled in favor of GSIS and dismissed the complaint. In the same decision, the trial court granted GSIS's
counterclaim and directed Fernando to pay GSIS the rentals paid by CMTC in the amount of P249,800.00. The
same decision was affirmed by the CA upon appeal by the respondents, but was modified insofar as deleting
the order to pay rentals paid by CMTC since according to the CA, the same is in the nature of a permissive
counterclaim. Hence this case.

ISSUE: WHETHER OR NOT THE COUNTERCLAIM OF GSIS IS PERMISSIVE?

HELD: YES. Tested against the above-mentioned criteria, the SC agreed with the CA's view that GSIS's
counterclaim for the recovery of the amount representing rentals collected by Fernando from the CMTC is
permissive. The issue in the main action, i.e., the nullity or validity of the bid award, deed of absolute sale and
TCT in favor of CMTC, is entirely different from the issue in the counterclaim. The rule in permissive
counterclaims is that for the trial court to acquire jurisdiction, the counterclaimant is bound to pay the prescribed
docket fees. This, GSIS did not do so.

60 Sy-Vargas v. Estate of Rolando Ogsos, Sr. | 221062 | 2016 Lagasca, James Ellis

COMPULSORY COUNTERCLAIM

Reiteration of the test of Compulsory Counterclaim given in case 59; non-payment of docket fees.

FACTS: On February 10, 1994, Rolando Ogsos, Sr. and herein petitioners, entered into a Contract of Lease
over plots of land in Negros Oriental owned by the latter, in exchange of piculs of centrifugal sugar every crop
year as lease rental. The same agreement was extended until 2004. On the same year, the said contract was
amended, and the lease rental modified from piculs of centrifugal sugar every crop year to P150,000.00 in cash,
beginning the crop year 1996-1997. On April 27, 2000, petitioners filed a complaint before the RTC, claiming
that the lease rentals for two crop years were not paid. The crop year 1999-2000 was not included by reason of
the respondents’ abandonment of the leased premises. Respondents denied the allegations and claimed that
petitioner unlawfully took possession of the leased premises and appropriated for themselves the sugarcane
42
ready for harvest under the pretext that they would apply the proceeds thereof to the unpaid rent resulting to loss
of profit on the side of respondents. Accordingly, the respondents filed a counterclaim for the lost profits
plus damages. The RTC granted respondents’ counterclaim. Petitioner appealed to the CA. The CA affirmed
the ruling of the RTC. The CA ruled that the RTC was correct in ruling that respondents’ counterclaim is not
permissive but compulsory, hence, payment of docket fees was not necessary. Hence, this case.

ISSUE: WHETHER OR NOT THE COUNTERCLAIM IS COMPULSORY?

HELD: NO. Based on the above mentioned standards, the Court finds that the counterclaim of
respondents is permissive in nature. This is because:
(a) The issue in the main case, is entirely different from the issue in the counterclaim;
(b) Since petitioner and respondents’ respective causes of action arose from completely different occurrences,
the latter would not be barred by res judicata had they opted to litigate its counterclaim in a separate
proceeding;
(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 are liable for
damages for performing acts in bad faith; and
(d) The recovery of petitioner’s claim is not contingent or dependent upon proof of respondents’ counterclaim,
such that conducting separate trials will not result in the substantial duplication of the time and effort of the
court and the parties.

It has long been settled that while the court acquires jurisdiction over any case only upon the payment
of the prescribed docket fee, its non-payment at the time of the filing of the initiatory pleading does not
automatically cause its dismissal provided that:
(a) The fees are paid within a reasonable period; and
(b) There was no intention on the part of the claimant to defraud the government.

Moreover, where a litigant’s non-payment of docket fees was made in good faith and without any
intention of defrauding the government, the clerk of court of the court a quo should be ordered to assess the
amount of deficient docket fees due from such litigant, which will constitute a judgment lien on the amount
awarded to him, and enforce such lien, as in this case.

Philtranco Service Enterprises Inc. v. Paras, G.R. No. 161909,


61 Lazaro, Ivan Rei
April 25, 2012

Topic: Rule 6

Facts: On February 8, 1987 Paras boarded a bus owned and operated by Inland and driven by Calvin Coner
going to Manila coming from Bicol Region. While travelling along Maharlika Highway said bus was bumped at
the rear by another bus which is owned by Philtranco. As a result the bus of Paras hit a cargo truck parked along
the shoulder of the highway. Paras was brought to the National Orthopedic Hospital where he was diagnosed to
be affected with several injuries. He filed a complaint for damages based on breach of contract of carriage. Inland
denied responsibility, and with the leave of court they filed a third-party complaint against Philtranco and Apolinar
Miralles the driver, to which they also sought for the exoneration of its liabilities to paras. RTC ruled against
Philtranco and was ordered to pay. Upon Philtranco was ordered to pay Paras and Inland. Hence this petition.

Issue: W/N awarding of the moral damages by means a third-party complaint was proper and valid.

Held: Yes. Moral damages may not be recovered in an action on a breach of contract because it is not listed
under Art. 2219 of the Civil Code, at the same time it does not fall under the exceptions. However the court ruled
that the third-party complaint was proper and valid and it is in line with Section 12, Rule 6 of the Rules of Court.
Apart from the requirement that the third-party complainant should assert a derivative or secondary claim for
relief from the third-party defendant there are other limitations on said party’s ability to implead. The rule requires
that the third-party defendant is not a party to the action for otherwise the proper procedure for asserting a claim
against one who is already a party to the suit is by means of counterclaim or cross-claim under sections 6 and 7
of Rule 6. In addition to the aforecited requirement, the claim against the third-party defendant must be based
43
upon plaintiff's claim against the original defendant (third-party claimant). The crucial characteristic of a claim
under section 12 of Rule 6, is that the original defendant is attempting to transfer to the third-party defendant the
liability asserted against him by the original plaintiff.

Accordingly, the requisites for a third-party action are, firstly, that the party to be impleaded must not yet be a
party to the action; secondly, that the claim against the third-party defendant must belong to the original
defendant; thirdly, the claim of the original defendant against the third-party defendant must be based upon the
plaintiffs claim against the original defendant; and, fourthly, the defendant is attempting to transfer to the third-
party defendant the liability asserted against him by the original plaintiff. Paras’ cause of action against Inland
(breach of contract of carriage) did not need to be the same as the cause of action of Inland against Philtranco
and its driver (tort or quasi-delict) in the impleader. It is settled that a defendant in a contract action may join as
third-party defendants those who may be liable to him in tort for the plaintiffs claim against him, or even directly
to the plaintiff. The third-party claim need not be based on the same theory as the main claim. Impleader also is
proper even though the third partys liability is contingent, and technically does not come into existence until the
original defendants liability has been established. In addition, the words is or may be liable in Rule 14(a) make
it clear that impleader is proper even though the third-party defendants liability is not automatically established
once the third-party plaintiffs liability to the original plaintiff has been determined. Nor was it a pre-requisite for
attachment of the liability to Philtranco and its driver that Inland be first declared and found liable to Paras for the
breach of its contract of carriage with him.

Samala v. Judge Victor, 170 SCRA 453; CDCP v. Cuenca,


62 Lazaro, Ivan Rei
466 SCRA 714

Topic: Rule 6 (Nature and office of a third-party complaint)

FACTS: In the morning of February 7, 1976 Emerita Jumanan on her way to her work she took a jeepney owned
by Spouses Garcia, which was then being driven by Virgilio Profeta. A Saint Raphael bus (owned by Purificacion
Samala and driven by Leonardo Esguerra) was running fast and it tried to overtake a vehicle however it bumped
the back portion of the delivery panel which caused for it to swerve in front of the Jumanan’s jeepney thus
resulting to the injury of the passengers of the jeepney After being admitted, she was discharged on a wheelchair
and was advised to have a complete bed rest for thirty days.

She filed before the CFI of Cavite a complaint for damages arising from physical injuries against owner and
operators spouses Felisa and Tomas Garcia. The spouses Garcia and Profeta filed a third-party complaint
against Purificacion Samala and Leonardo Esguerra, owner and driver, respectively, of the Saint Raphael Transit
Bus. The latter defendants, in turn, filed a fourth-party complaint against the insurer of the Saint Raphael Transit
Bus, Imperial Insurance, Inc. The CFI rendered a decision against third and fourth party defendants. Hence this
petition.

ISSUE: the nature and office of a third-party complaint.

HELD: Quite apparent from these arguments is the misconception entertained by appellants with respect to the
nature and office of a third party complaint. Section 16, Rule 6 of the Revised Rules of Court defines a third party
complaint as a "claim that a defending party may, with leave of court, file against a person not a party to the
action, called the third-party defendant, for contribution, indemnification, subrogation, or any other relief, in
respect of his opponent's claim.” Under this Rule, a person not a party to an action may be impleaded by the
defendant either (a) on an allegation of liability to the latter; (b) on the ground of direct liability to the plaintiff-, or,
(c) both (a) and (b).

The situation in (a) is covered by the phrase "for contribution, indemnity or subrogation;" while (b) and (c) are
subsumed under the catch all "or any other relief, in respect of his opponent's claim." The case at bar is one in
which the third party defendants are brought into the action as directly liable to the plaintiffs upon the allegation
that "the primary and immediate cause as shown by the police investigation of said vehicular collision between
the Above-mentioned three vehicles was the recklessness and negligence and lack of imprudence of the third-
party defendant Virgilio (should be Leonardo) Esguerra y Ledesma then driver of the passenger bus."

44
The effects are that "plaintiff and third party are at issue as to their rights respecting the claim" and "the third
party is bound by the adjudication as between him and plaintiff." It is not indispensable in the premises that the
defendant be first adjudged liable to plaintiff before the third-party defendant may be held liable to the plaintiff,
as precisely, the theory of defendant is that it is the third party defendant, and not he, who is directly liable to
plaintiff. The situation contemplated by appellants would properly pertain to situation wherein the third party
defendant is being sued for contribution, indemnity or subrogation, or simply stated, for a defendant's "remedy
over."

Anent appellant's claim that plaintiff who sued on contractual breach cannot recover on the basis of quasi-delict,
suffice it to say that as the primary purpose of this rule is to avoid circuity of action and to dispose of in one
litigation, the entire subject matter arising from a particular set of fact it is immaterial that the third-party plaintiff
asserts a cause of action against the third party defendant on a theory different from that asserted by the plaintiff
against the defendant. It has likewise been held that "a defendant in a contract action may join as third-party
defendants those liable to him in tort for the plaintiff s claim against him or directly to the plaintiff.

Paramount Life & General Insurance v. Castro, G.R. No.


63 Lazaro, Ivan Rei
195728, April 19, 2016

Topic: Rule 6

FACTS: Sometime in 2004, Philippine Postal Savings Bank, Incorporated (PPSBI) applied and was granted an
insurance from Paramount. In the said policy it stated that “all death benefits shall be payable to the creditor,
PPSBI, as its interest may appeal." Virgilio Castro obtained a housing loan from PPSBI in the amount of P1.5
million, he was required to apply for a mortgage redemption insurance from Paramount to cover the loan, to
which he did and named his wife and son as beneficiaries. In 2009 Virgilio died, thus a claim was filed for death
benefits under the individual insurance coverage issued under the group policy but this was denied because of
failure to disclose material information about his health history.

G.R. No. 195728: On October 29, 2009 wife of Virgilio filed a motion to include PPSBI as an indespensible party-
defendant, and a subsequent Motion for Leave to File a Third Party-Complaint and to Admit Attached Third-Party
Complaint, arguing that due to the death of Virgilio and by the virtue of the policies PPSBI stepped into the shoes
of the wife and son of Virgilio but both actions were denied.

G.R. No. 211329: January 7, 2014 Virgilio’s wife filed a motion to Dismiss the Complaint but it was likewise
denied Owing to its previous Order dated 26 May 2010, which declared the Castro’s as in default for failure to
attend the pretrial, the RTC treated the Motion to Dismiss as a mere scrap of paper and expunged it from the
records. Hence this petition.

ISSUE: W/N the CA erred in remanding the case for the RTC for the admission of the Third-Party Complaint
against PPSBI.

HELD: In allowing the inclusion of the PPSBI as a third-party defendant, the Court recognizes the inseparable
interest of the bank (as policyholder of the group policy) in the validity of the individual insurance certificates
issued by Paramount. The PPSBI need not institute a separate case, considering that its cause of action is
intimately related to that of Paramount as against the Castro’s. The soundness of admitting a third-party
complaint hinges on causal connection between the claim of the plaintiff in his complaint and a claim for
contribution, indemnity or other relief of the defendant against the third-party defendant. In this case, the Castro’s
stand to incur a bad debt to the PPSBI - the exact event that is insured against by Group Master Policy No. G-
086 - in the event that Paramount succeeds in nullifying Virgilio's Individual Insurance Certificate.

Paramount further argues that the propriety of a third-party complaint rests on whether the possible third-party
defendant (in this case PPSBI) can raise the same defenses that the third-party plaintiffs (the Castro’s) have
against the plaintiff. However, the Rules do not limit the third-party defendant's options to such a condition. Thus:
Section 13. Answer to third (fourth, etc.)-party complaint. – A third (fourth, etc.)-party defendant may allege
in his answer his defenses, counterclaims or cross-claims, including such defenses that the third (fourth,

45
etc.)-party plaintiff may have against the original plaintiffs claim. In proper cases, he may also assert a
counterclaim against the original plaintiff in respect of the latter's claim against the third-party plaintiff.

The CA correctly ruled that to admit the Castro’s Third-Party Complaint, in which they can assert against the
PPSBI an independent claim they would otherwise assert in another action, would prevent multiplicity of suits.
Considering also that the original case from which these. Present Petitions arose has not yet been resolved, the
Court deems it proper to have all the parties air all their possible grievances in the original case still pending with
the RTC.

Bon-Mar Realty and Sport Corp. v. Spouses de Guzman,


64 Manliclic, Marianne P.
G.R. No. 182136-37, August 29, 2008;

TOPIC: Intervention

FACTS: The DE GUZMANS were the owners of two lots located in Greenhills, San Juan, Metro Manila (the
subject lots or properties). Owing to the need for campaign funds for Nicanors candidacy as member of the
House of Representatives, the DE GUZMANS borrowed money from the SIOCHIS. As collateral, the DE
GUZMANS executed a deed of sale dated April 10, 1987 in favor of the Siochis over the subject lots.Specifically,
they assail the portion of the Decision directing the Regional Trial Court of Pasig City, Branch 168 to allow
petitioner Bon-Mar Realty and Sport Corporation (BON-MAR) the opportunity to introduce evidence on its third-
party claim in Civil Case No. 56393 with a view to determining the nature and extent of its claim to the subject
lots, as well as the denial of their prayer for the issuance of a writ of possession.

The DE GUZMANS argue that since the decision in Civil Case No. 67315[2] cannot bind them, the same being
a proceeding quasi in rem, BON-MAR should not be allowed to intervene in Civil Case No. 56393 and, instead,
they should be granted a writ of possession over the disputed lots; that BON-MAR’s intervention in Civil Case
No. 56393 is not proper since the case is now at its execution stage; that res judicata should instead set in; and
that since the final and executory decision in CA-G.R. SP No. 82807 has settled BON-MAR’s status as a stranger
to the litigation in Civil Case No. 56393, the latter should thus be precluded from intervening in said case. Finally,
they question the Court’s finding that the decision in Civil Case No. 67315 declared BON-MAR as the DE
GUZMANS’ successor-in-interest to the disputed lots.

ISSUE: May BON MAR(YES) and DE GUZMAN(NO) intervene?

HELD: BON-MAR as successor-in-interest of the DE GUZMANS. Thus, BON-MAR is not a mere stranger to the
litigation, it is a necessary party who must be joined in the suit if complete relief is to be accorded as to those
already parties, or for a complete determination or settlement of the claim subject of the action. It is clear that
BON-MAR has acquired legal interest over the subject lots by virtue of the final and executory decision in Civil
Case No. 67315, which adjudged it as the owner of the disputed lots.

The Rules of Court provide that a person who has a legal interest in the matter in litigation, or in the success of
either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or
other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed
to intervene in the action.

To warrant intervention, two requisites must concur:


(a) The movant has a legal interest in the matter in litigation; and
(b) Intervention must not unduly delay or prejudice the adjudication of the rights of the parties nor should the
claim of the intervenor be capable of being properly decided in a separate proceeding.

Proceedings to resolve the possession of third-party claimants may proceed independently of the action which
said claimants may bring to enforce or protect their claim of ownership over the property. The propriety of DE
GUZMANS intervention in SCA No. 2988-SJ, this Court finds that contempt is not the proper remedy available
to BON-MAR for the Registrar of Deeds denial of its request for issuance of titles pursuant to the judgment in
Civil Case No. 67315.

46
65 Republic v. CA, G.R. No. 174385, February 20, 2013 Manliclic, Marianne P.

TOPIC: Intervention

FACTS: Indigo Distribution Corporation and thirteen other petitioners (collectively referred to as lower court
petitioners) filed before the respondent judge a petition for declaratory relief with prayer for temporary restraining
order (TRO) and preliminary mandatory injunction against the Honorable Secretary of Finance, et al. The petition
sought to nullify the implementation of Section 6 of Republic Act (R.A.) No. 9334, otherwise known as "AN ACT
INCREASING THE EXCISE TAX RATES IMPOSED ON ALCOHOL AND TOBACCO PRODUCTS, AMENDING
FOR THE PURPOSE OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED," as
unconstitutional. The Republic moved to reconsider the respondent judge’s August 11, 2005 order, arguing that
it had been denied due process because it never received copies of the private respondents’ motions and
complaints-in-intervention.

ISSUE: WON the respondent judge issued the assailed orders with grave abuse of discretion

HELD: Due process of law is a constitutionally guaranteed right reserved to every litigant. Even the Republic as
a litigant is entitled to this constitutional right, in the same manner and to the same extent that this right is
guaranteed to private litigants.

A motion for intervention, like any other motion, has to comply with the mandatory requirements of notice and
hearing, as well as proof of its service, save only for those that the courts can act upon without prejudice to the
rights of the other parties. A motion which fails to comply with these requirements is a worthless piece of paper
that cannot and should not be acted upon. The reason for this is plain: a movant asks the court to take a specific
course of action, often contrary to the interest of the adverse party and which the latter must then be given the
right and opportunity to oppose.

The notice of hearing to the adverse party thus directly services the required due process as it affords the adverse
party the opportunity to properly state his agreement or opposition to the action that the movant asks for.
Consequently, our procedural rules provide that a motion that does not afford the adverse party this kind of
opportunity should simply be disregarded

An original complaint must be served on the defendant, a copy of the complaint-in-intervention must be served
on the adverse party with the requisite proof of service duly filed prior to any valid court action. Absent these or
any reason duly explained and accepted excusing strict compliance, the court is without authority to act on such
complaint; any action taken without the required service contravenes the law and the rules, and violates the
adverse party’s basic and constitutional right to due process.

In the present case, records show that the OSG had never received – contrary to the private respondents’ claim
– a copy of the motions and complaints-in-intervention. The Republic duly and fully manifested the irregularity
before the respondent judge. Thus, the mere statement in the assailed orders that the parties were duly notified
is insufficient on the face of the appropriate manifestation made and the supporting proof that the Republic
submitted. In these lights, the motions and complaints-in-intervention cannot but be mere scraps of paper that
the respondent judge had no reason to consider; in admitting them despite the absence of prior notice, the
respondent judge denied the Republic of its right to due process.

66 Vda. de Formoso v. PNB, June 1, 2011 Manliclic, Marianne P.

TOPIC: Rule 7, Rules of Court

FACTS: Nellie Panelo Vda. De Formoso and her children executed a special power of attorney in favor of
Primitivo Malcaba (Malcaba) authorizing him, among others, to secure all papers and documents including the
owners copies of the titles of real properties pertaining to the loan with real estate mortgage originally secured
by Nellie and her late husband, Benjamin S. Formoso, from Philippine National Bank, Vigan Branch (PNB). On
47
March 24, 1994, the petitioners filed a Complaint for Specific Performance against PNB before the Regional Trial
Court of Vigan, Ilocos Sur.

PNB filed a motion for reconsideration but it was denied for failure to comply with Rule 15, Section 5 of the 1997
Rules of Civil Procedure. PNB then filed a Notice of Appeal but it was dismissed for being filed out of time. The
petitioners filed a petition for certiorari before the CA. In Loquias v. Office of the Ombudsman, it was ruled that
all petitioners must be signatories to the certification of non-forum shopping unless the one who signed it is
authorized by the other petitioners. In the case at bar, there was no showing that the one who signed was
empowered to act for the rest. Therefore, it cannot be presumed that the one who signed knew to the best of his
knowledge whether his co-petitioners had the same or similar claims or actions filed or pending.

ISSUE: WON petitioners claim that the petition for certiorari that they filed before the CA substantially complied
with the requirements provided for under the 1997 Rules of Civil Procedure on Verification and Certification of
Non-Forum Shopping? –NO

HELD: The Court disagrees. The failure of the petitioner to comply with any of the foregoing requirements shall
be sufficient ground for the dismissal of the petition. Certiorari is an extraordinary, prerogative remedy and is
never issued as a matter of right; the party who seeks to avail of it must strictly observe the rules laid down by
law. The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for
the dismissal of the petition.

The acceptance of a petition for certiorari as well as the grant of due course thereto is, in general, addressed to
the sound discretion of the court. Although the Court has absolute discretion to reject and dismiss a petition for
certiorari, it does so only:
(1) When the petition fails to demonstrate grave abuse of discretion by any court, agency, or branch of the
government; or
(2) When there are procedural errors, like violations of the rules of court or Supreme Court circulars.

We have consistently held that the certification against forum shopping must be signed by the principal parties.
With respect to a corporation, the certification against forum shopping may be signed for and on its behalf, by a
specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such
document.

67 Bank of Philippine Islands v. CA, October 6, 2010 Mercado, Ralph Louie

TOPIC: Verification and Certification of Non-Forum Shopping

FACTS: First Union borrowed from BPI the sums of P5M and $123,218.32, evidenced by separate promissory
notes. As partial security for the loan obligations of First Union, defendant Linda and her spouse (Eddy Tien)
executed a Real Estate Mortgage Agreement. Despite repeated demands to satisfy the loan obligations upon
maturity, First Union failed to pay BPI the amounts due. First Unions and Lindas continued failure to settle their
outstanding obligations prompted BPI to file, on January 3, 2002, a complaint for collection of sum of money with
the RTC of Makati City.

The complaints verification and certificate of non-forum shopping were signed by Ma. Cristina F. Asis and Kristine
L. Ong. However, no Secretary’s Certificate or Board Resolution was attached to evidence Asis and Ongs
authority to file the complaint. On April 1, 2002, First Union and Linda filed a motion to dismiss on the ground
that BPI violated Rule 7, Section 5 of the Rules of Civil Procedure (Rules); BPI failed to attach to the complaint
the necessary board resolution authorizing Asis and Ong to institute the collection action against First Union and
Linda.

ISSUE: Whether or not there was substantial compliance in authorizing Asis and Ong to file the complaint.

HELD: NO, This Court has repeatedly emphasized the need to abide by the Rules of Court and the procedural
requirements it imposes. The verification of a complaint and the attachment of a certificate of non-forum shopping

48
are requirements that as pointed out by the Court, time and again are basic, necessary and mandatory for
procedural orderliness.

Thus, we cannot simply and in a general way apply given the factual circumstances of this case the liberal
jurisprudential exception in Shipside and its line of cases to excuse BPIs failure to submit a board resolution.
While we may have excused strict compliance in the past, we did so only on sufficient and justifiable grounds
that compelled a liberal approach while avoiding the effective negation of the intent of the rule on non-forum
shopping. In other words, the rule for the submission of a certificate of non-forum shopping, proper in form and
substance, remains to be a strict and mandatory rule.

Heirs of Lazaro Gallardo v. Soliman, G.R. No. 178952, April


68 Mercado, Ralph Louie
10, 2013

TOPIC: Verification and Certification of Non-Forum Shopping

FACTS: Petitioners filed a Complaint for collection of land amortizations, dispossession, ejectment, and
cancellation of Deed of Transfer and Emancipation Patent against respondent Porferio Soliman.
It appears that a Kasunduan and a notarized Deed of Transfer were executed by Lazaro and Porferio. Under
said deeds, Porferio, as sole farmer-beneficiary and in consideration for the transfer of the whole of the land in
his favor, obliged himself to pay the petitioners cavans of palay. However, Porferio paid only a total of 121.2
cavans or 480.9 cavans short of the total amortizations due from 1986 to 1995. Petitioners claimed that
notwithstanding written demands and the failure/refusal of Porferio to attend Barangay Agrarian Reform
Committee scheduled mediation and pay amortizations on the land, the Tarlac PARO issued Emancipation
Patents (EP Nos. 437306 to 308) not only in favor of Porferio, but also of his children, herein respondents Vivian
and Antonio who were not legally instituted farmer tenant-transferees of the land under PD 27.

The CA issued the assailed Resolution dismissing petitioners’ Petition for Review on the ground that the
verification and certification against forum shopping was signed by only four of the six petitioners. Petitioners
Mario Lazaro P. Gallardo and Lazaro P. Gallardo, Jr. did not sign, and no special power of attorney to sign in
their favor accompanied the Petition. The CA held that the certification against forum shopping must be executed
and signed by all of the petitioners, or else it is insufficient.

ISSUE: Whether or not the signing of non-forum shopping by only 4 of the 6 petitioners is insufficient to meet
the requirements of the rule.

HELD: YES, In HLC Construction and Development Corporation v. Emily Homes Subdivision Homeowners
Association, it was held that the signature of only one of the petitioners in the certification against forum shopping
substantially complied with rules because all the petitioners share a common interest and invoke a common
cause of action or defense.

In the instant case, petitioners share a common interest and defense inasmuch as they collectively claim a right
not to be dispossessed of the subject lot by virtue of their and their deceased parents’ construction of a family
home and occupation thereof for more than 10 years. The commonality of their stance to defend their alleged
right over the controverted lot thus gave petitioners x x x authority to inform the Court of Appeals in behalf of the
other petitioners that they have not commenced any action or claim involving the same issues in another court
or tribunal, and that there is no other pending action or claim in another court or tribunal involving the same
issues.

Heirs of Josefina Gabriel v. Cebrero, G.R. No. 222737,


69 Mercado, Ralph Louie
November 12, 2018

TOPIC: Verification and Certification of Non-Forum Shopping

FACTS: Segundina Cebrero, through her attorney-in-fact Remedios Muyot, executed a real estate mortgage
over the subject property located in Sampaloc, Manila registered under the name of Cebrero's late husband
Virgilio as security for the payment of the amount of P8M.
49
Upon Cebrero's failure to pay the amount, an action for foreclosure of the real estate mortgage was filed. Gabriel,
being the sole bidder, purchased Cebrero's undivided share of the property. However, Gabriel had not registered
the Final Deed of Sale. Cebrero's attorney-in-fact, purportedly conveying the entire property in favor of
Progressive Trade & Services Enterprises. Eduardo Cafiiza allegedly in behalf of Gabriel, instituted a Complaint
for declaration of nullity of sale. Respondents alleged that Gabriel has no legal capacity to sue as she was
bedridden and confined at the Makati Medical Center since 1993. The complaint should be dismissed because
Cafiiza signed the verification and certification of the complaint without proper authority.

ISSUE: Whether or not the complaint should be dismissed since the verification and certification of non-forum
shopping was not supported with a SPA.

HELD: YES, there was no duly executed SPA appended to the complaint to prove Cafiiza's supposed authority
to file and prosecute suits on behalf of Gabriel. The Court cannot consider the mere mention in the December
15, 1993 Decision that he was Gabriel's attorney-in-fact as evidence that he was indeed authorized and
empowered to initiate the instant action against respondents. There was also no evidence of substantial
compliance with the rules or even an attempt to submit an SPA after filing of the complaint.

Considering that the complaint was filed by Cafiiza, who has failed to prove that he was validly authorized to do
so, the complaint does not produce any legal effect. The RTC never validly acquired jurisdiction over the case.
Thus, the instant petition must be dismissed.

Arevalo v. Planters Development Bank, G.R. No. 193415,


70 Odiña, Danisse Anne M.
April 18, 2012

FACTS: This case involves the trial court’s refusal to issue a writ of preliminary injunction in favor of petitioner
Spouses Daisy and Socrates M. Arevalo (Spouses Arevalo) based on their failure to comply with Section 2 of
the Procedure in Extra-Judicial or Judicial Foreclosure of Real Estate Mortgages (Procedure on Foreclosure)
issued by this Court. This procedure required them to pay twelve percent (12%) per annum interest on the
amount of the principal obligation, as stated in the application for foreclosure sale, before an injunctive writ may
issue against the extra-judicial foreclosure of real estate mortgage. The conflict between the parties arose from
a Loan Agreement, petitioners executed with respondent Planters Development Bank (Bank). Petitioners
thereafter filed the First Complaint which was later on dismissed by the RTC and CA.

ISSUE: Whether or not the requirement to pay 12% interest per annum before the issuance of an injunctive writ
to enjoin an impending foreclosure sale is applicable to the instant case

HELD: The Court denied the petition for review. The issue of the applicability to this case of the requirement to
pay 12% interest per annum before the issuance of an injunctive writ to enjoin an impending foreclosure sale is
moot. The Court rules that upon dismissal of the First Complaint by the trial court on 27 October 2009, the issue
of whether the writ of injunction should issue has become moot. A case becomes moot and academic when
there is no more actual controversy between the parties or useful purpose that can be served in passing upon
the merits. There remains no actual controversy in the instant Petition because the First Complaint has already
been dismissed by the trial court. Upon its dismissal, the question of the non-issuance of a writ of preliminary
injunction necessarily died with it.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an adjunct of, and subject to the outcome
of the main case. Thus, a writ of preliminary injunction is deemed lifted upon dismissal of the main case, any
appeal therefrom notwithstanding, as this Court emphasized in Buyco v. Baraquia from which we quote: The writ
is provisional because it constitutes a temporary measure availed of during the pendency of the action and it is
ancillary because it is a mere incident in and is dependent upon the result of the main action. It is well-settled
that the sole object of a preliminary injunction, whether prohibitory or mandatory, is to preserve the status quo
until the merits of the case can be heard. It is usually granted when it is made to appear that there is a substantial
controversy between the parties and one of them is committing an act or threatening the immediate commission
of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can
be had on the merits of the case.
50
71 Argana v. Republic, G.R. No. 147227, November 19, 2004 Odiña, Danisse Anne M.

FACTS: On July 29, 1987, respondent Republic of the Philippines filed with the Sandiganbayan a Petition for
Forfeiture of alleged ill-gotten assets and properties of the late Maximino A. Argana, who served as Mayor of the
Municipality of Muntinlupa. After a series of motions were again filed by petitioners, the Sandiganbayan finally
set the case for pre-trial on November 26, 1997, but the pre-trial was reset several times in view of the
manifestation of the parties that they were in the process of negotiating a compromise.

ISSUE/S:
1. Whether or not the PCGG lawyers had no authority to ask for the rescission of the subject Compromise
Agreement without the consent of the PCGG En Banc and the President of the Republic of the Philippines.
2. Whether or not the Motion to Rescind, which was treated by the Sandiganbayan (Third Division) as a Petition
for Relief under Rule 38 of the Rules of Court is fatally defective

HELD:
The Court dismissed the petition for lack of merit. Petitioners contention that the Motion to Rescind filed by the
lawyers of the PCGG and of the OSG should have been treated by the Sandiganbayan as a mere scrap of paper
because the motion was filed without the authority of the PCGG En Banc and of the President of the Republic
has no legal basis. There is no requirement under the law that pleadings and motions filed by lawyers of the
government or the PCGG must first be approved by the PCGG En Banc and by the President of the Philippines.
More importantly, R.A. No. 1379 expressly authorizes the OSG to prosecute cases of forfeiture of property
unlawfully acquired by any public officer or employee.

It must be remembered that it was the OSG which filed Civil Case No. 0026 for the forfeiture of petitioners
allegedly ill-gotten wealth, and that the Compromise Agreement between petitioner and respondent was an
amicable settlement of that case. By filing an action for rescission of the Compromise Agreement based on
extrinsic fraud, the OSG was merely performing its legal duty to recover the wealth purportedly amassed
unlawfully by the late Mayor Argana during his terms as Mayor of Muntinlupa.

The Motion to Rescind was filed precisely because the PCGG, as respondents authorized representative in the
compromise, discovered that the execution of the Compromise Agreement was attended by fraud and sought
the help of the OSG which in turn is the duly authorized government agency to represent respondent in forfeiture
cases under R.A. No. 1379.

The Court also finds that there was no grave abuse of discretion on the part of the Sandiganbayan in granting
the Motion to Rescind, which it treated as a petition for relief from judgment under Rule 38 of the 1997 Rules on
Civil Procedure. Section 3 thereof prescribes the periods within which the petition for relief must be filed. A
petition provided for in either of the preceding sections of this Rule must be verified, filed within sixty (60) days
after the petitioner learns of the judgment, final order or other proceeding to be set aside, and not more than six
(6) months after such judgment or final order was entered, or such proceeding was taken, and must be
accompanied with affidavits showing the fraud, accident, mistake or excusable negligence relied upon, and the
facts constituting the petitioners good and substantial cause of action or defense, as the case may be.

72 de Guzman v. Chico, G.R. No. 195445, December 7, 2016 Odiña, Danisse Anne M.

FACTS: The subject of this case is a property situated at 7-A 32 A. Bonifacio Street, Bangkal, Makati City. On
May 24, 2006, the property was sold at a public auction of tax delinquent properties conducted by the City
Government of Makati City pursuant to Sections 254 to 260 of the Local Government Code. Respondent was
the winning bidder at the public auction, and the City Government of Makati executed a Certificate of Sale in her
favor on even date.

Petitioners failed to redeem the property within the one-year period. Thus, on July 12, 2007, respondent filed
with the RTC of Makati City an application for new certificate of title under Section 75 in relation to Section 107
of Presidential Decree (PD) No. 1529 or the Property Registration Decree (LRC Case No. M-4992). On August
51
28, 2009, petitioners filed an urgent motion to cite respondent in contempt, and to nullify the proceedings on the
ground that LRC Case No. M-5188 contained a defective/false verification/certification of non-forum shopping.

ISSUE/S:
1. Whether or not proceedings were void, being summary and in the nature of proceedings for an ex parte
motion
2. Whether or not a certification of non-forum shopping was unnecessary in the ex parte petition, and thus it
was unnecessary to examine respondent Chico and her counsel on said certification

HELD: The Court denied the petition and affirmed the CA’s decision. No certificate against forum shopping is
required in a petition or motion for issuance of a writ of possession. An ex parte petition for the issuance of writ
of possession is not a complaint or other initiatory pleading as contemplated in Section 5, Rule 7 of the 1997
Rules of Civil Procedure.

The non-initiatory nature of an ex parte motion or petition for the issuance of a writ of possession is best explained
in Arquiza v. Court of Appeals. In that case we ruled that the ex parte petition for the issuance of a writ of
possession filed by the respondent is not an initiatory pleading. What distinguishes a motion from a petition or
other pleading is not its form or the title given by the party executing it, but rather its purpose. A petition for the
issuance of a writ of possession does not aim to initiate new litigation, but rather issues as an incident or
consequence of the original registration or cadastral proceedings.

As such, the requirement for a forum shopping certification is dispelled. The court also cannot subscribe to
petitioners' narrow view that only cases covered by foreclosure sales under Act No. 3135 are excused from the
requirement of a certificate against forum shopping.

Based on jurisprudence, a writ of possession may be issued in the following instances:


(a) Land registration proceedings under Section 17 of Act No. 496, otherwise known as The Land Registration
Act;
(b) Judicial foreclosure, provided the debtor is in possession of the mortgaged realty and no third person, not
a party to the foreclosure suit, had intervened;
(c) Extrajudicial foreclosure of a real estate mortgage under Section 7 of Act No. 3135, as amended by Act
No. 4118; and
(d) In execution sales.

We note that there is no law or jurisprudence which provides that the petition for the issuance of a writ of
possession depends on the nature of the proceeding in which it is filed. Thus, we find no logical reason for
petitioners' contention that only cases covered by Act No. 3135 are exempt from the requirement of a certificate
against forum shopping.

73 Brown-Araneta v. Araneta, G.R. No. 190814, October 9, 2013; Ponce, Edward John Jr., C.

TOPIC: What constitutes forum shopping (Rule 7, Rules of Court)

FACTS: Juan Ignacio and Michelle were married in Las Vegas, Nevada, USA. The union produced two (2)
children, Ara and Ava. After a little over seven years of disharmonious relationship, husband and wife separated.
Since the couple’s estrangement and de facto separation, Ara and Ava have remained in Michelle’s custody.

Juan filed a petition for custody of their children with the Makati RTC, pursuant to A.M. No. 03-04-04-SC (Rule
on custody of minors) with prayer to be granted visitation rights. After initially failing to file an answer Michelle
filed a Motion to Admit Answer and with a Very Urgent Ex-Parte Motion for Issuance of Protection Order when
the visitation grant was granted. The Makati judge was disinclined to grant Michelle’s motion of or a TPO and
declared her in default.

Subsequently, she interposed a Motion to Withdraw her Motion for TPO. Subsequently, Michelle initiated a
petition for temporary and permanent protection order with the Muntinlupa RTC, which granted the same. Juan
filed a Motion to Dismiss on the ground of litis pendentia and arguing that this constitutes forum shopping, which
52
the RTC only partially granted. He then filed a Petition for Certiorari with the CA. CA ruled that although the
Petition for Certiorari is a prohibited pleading under RA 9262, the case can’t be dismissed because it would in
effect “reward” the forum shopping done by Michelle.

ISSUE: Whether or not Michelle committed forum shopping?

HELD: Yes, Michelle committed forum shopping. Forum shopping is the institution of 2 or more actions involving
the same parties for the same cause of action, either simultaneously or successively, on the supposition that
one or the other court would come out with a favorable disposition.

Litis pendentia refers to the situation wherein another action is pending between the same parties for the same
cause of action, such that the second cause of action becomes vexatious and unnecessary.

Applying the rules, Michelle committed forum shopping because, as a result or in anticipation of the adverse
ruling of Makati RTC, she sought the favorable opinion of Muntinlupa RTC.

Petition For Temporary And Permanent Protection Order in Muntinlupa RTC is dismissed.

Clark Development Corp. v. Mondragon Leisure and Resorts


74 Ponce, Edward John Jr., C.
Corp., G.R. No. 150986, March 2, 2007

TOPIC: What constitutes forum shopping (Rule 7, Rules of Court)

FACTS: Clark Development Corp (CDC) is a GOCC. Through RA 7227 or the Bases Conversion and
Development Act of 1992, CDC was authorized to develop the Clark Special Economic Zone. CDC entered into
a Lease Agreement with Mondragon Leisure and Resorts Corp (MLRC) covering the area now known as Mimosa
Leisure Estate. 4 years after, CDC demanded payment from Mondragon to pay rentals worth 427 million within
30 days, otherwise the lease would be terminated. Mondragon filed before the Angeles City RTC, Branch 58 an
action for specific performance with prayer for injunctive reliefs pendente lite against petitioner docketed as Civil
Case No. 9242 entitled Mondragon Leisure and Resorts Corporation, et al. v. Clark Development Corporation
(First Mondragon Case).

Before the trial court could resolve the motion or on November 12, 1999, Mondragon filed a Petition for
Declaratory Relief and Specific Performance before the Angeles City RTC, Branch 60, which was docketed as
Civil Case No. 9596 entitled Mondragon Leisure and Resorts Corporation, etal. v. Clark Development
Corporation (Second Mondragon Case).

On November 15, 1999, Mondragon filed before the Angeles City RTC, Branch 60 a Motion for Consolidation.
Petitioner opposed the motion and the presiding judge thereafter denied the Motion for Consolidation.
Mondragon filed a Motion for Reconsideration of said dismissal, which was likewise denied by the trial court. The
CA held that the presiding judge of the Angeles City RTC, Branch 60 abused her discretion in finding Mondragon
guilty of forum shopping.

To address the issue frontally, this Court shall compare the two cases as to: (a) nature of action; (b) causes of
action; and (c) reliefs sought. As to nature of action: Civil Case No. 9242 is for specific Performance while Civil
Case No. 9596 is for Declaratory Relief. It is too obvious that the nature of the action, the causes of action and
reliefs prayed for in Civil Case No. 9242 and Civil Case No. 9596 are entirely different. but that is no reason to
charge Mondragon with forum shopping.

ISSUE: Whether forum shopping was committed.

HELD: Yes. We defined forum shopping as the "institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other court would make a favorable disposition" or "the act
of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum other than by appeal or the special civil action of certiorari." In First Philippine
International Bank v. Court of Appeals, we held that the test to determine whether forum shopping exists is
53
whether the elements of litis pendencia are present or where a final judgment in one case will amount to res
judicata in the other.

Res judicata means a matter or thing adjudged, judicially acted upon or decided, or settled by judgment.
Its requisites are:
(1) The former judgment or order must be final;
(2) The judgment or order must be one on the merits;
(3) It must have been rendered by a court having jurisdiction over the subject matter and parties; and
(4) Between the first and second actions, there must be identity of parties, subject matter, and causes of action.

75 Tumpag v. Tumpag, G.R. No. 199133, September 29, 2014 Ponce, Edward John Jr., C.

TOPIC: Rule 8, Rules of Court

FACTS: Petitioner Esperanza Tumpag filed a complaint for recovery of possession with damages against
Samuel Tumpag before the RTC Branch 61, Kabankalan City, Negros Occidental. Defendant moved to dismiss
for failure to state cause of action and lack of jurisdiction. RTC denied the motion to dismiss and ruled in favor
of the plaintiff. Defendant appealed before the CA questioning the RTC’s lack of jurisdiction. CA granted appeal
and held that petitioner’s failure to allege in her complaint the assessed value of the disputed property warranted
the complaint’s dismissal. Petitioner moved to reconsider but CA denied, hence the filing of a petition for review
on certiorari with the SC. Petitioner argues that the dismissal of her complaint was unwarranted as she attached
a copy of the Declaration of Real Property which indicated the assessed valued of the disputed property to her
complaint.

ISSUE: Whether or not the RTC acquired jurisdiction.

HELD: Yes. SC granted the petition, stating that the general rule is that the court should only look into the facts
alleged in the complaint to determine whether or not it is within its jurisdiction, however, in instances where rigid
application of the rule would defeat substantial justice, the rule may be relaxed, especially in the instant case,
considering that a mere reference to the attached document would resolve the question of the value of the
property involved and which court had proper jurisdiction.

The defendant, in filing a motion to dismiss, hypothetically admits the truth of the factual and material allegations
in the complaint, as well as the documents attached to a complaint whose due execution and genuineness are
not denied under oath by the defendant; these attachments must be considered as part of the complaint without
need of introducing evidence thereon. —In his comment to the present petition, the respondent contends that
the assessed value of the property subject of the case is actually much below than the value stated in the
attached Declaration of Real Property.

However, the test of the sufficiency of the facts alleged in the complaint is whether, admitting the facts alleged,
the court can render a valid judgment upon the complaint in accordance with the plaintiff’s prayer. The defendant,
in filing a motion to dismiss, hypothetically admits the truth of the factual and material allegations in the complaint,
as well as the documents attached to a complaint whose due execution and genuineness are not denied under
oath by the defendant; these attachments must be considered as part of the complaint without need of
introducing evidence thereon.

Quirolgico, Bienvenido Miguel DC.


76 Santos v. Alcazar, G.R. No. 183034, March 12, 2014
III

TOPIC: How to contest such documents. (Rule 8, Sec. 8)

FACTS: Alcazar filed a case for a sum of money against spouses Santos, who had unpaid obligations amounting
to 1,456,000 million pesos despite repeated demands. In a document entitled “Acknowledgement”, Fernando
Santos acknowledged that he had such existing obligation. After alcazar presented the document to court as
evidence, Spouses Santos filed a demurrer to evidence. According to the spouses, the document that Alcazar
54
presented was not an original copy, and thus inadmissible. However, there was an original copy of the document
in the records of the court, thus the RTC denied the demurrer to evidence. Accordingly, the CA affirmed the
decision of the RTC.

ISSUE: Is the genuineness and due execution of the Acknowledgement deemed admitted?

HELD: YES. Spouses Santos failed to deny specifically under oath the genuineness and due execution of the
acknowledgement in their answer. The effect of this as provided for by section 8 Rule 8 of the Rules of court is
that the genuineness and due execution of the acknowledgement is deemed admitted. By the admission of the
genuineness and due execution [of such document] is meant that the party whose signature it bears admits that
he signed it or that it was signed by another for him with his authority; that at the time it was signed it was in
words and figures exactly as set out in the pleading of the party relying upon it; that the document was delivered;
and that any formal requisites required by law, such as a seal, an acknowledgment, or revenue stamp, which it
lacks, are waived by him. Hence, such defenses as that the signature is a forgery, or that it was unauthorized,
or that the party charged signed the instrument in some other capacity than that alleged in the pleading setting
it out, or that it was never delivered are cut off by the admission of its genuineness and due execution.

Heirs of Nicolas S. Cabigas v. Limbaco, G.R. No. 175291, Quirolgico, Bienvenido Miguel DC.
77
July 27, 2011 III

FACTS: The petitioners filed a complaint for the annulment of titles of various parcels of land. The complaint
alleged that petitioner Lolita Cabigas and her late husband, Nicolas Cabigas, purchased two lots from Salvador
Cobarde on January 15, 1980. Cobarde in turn had purchased these lots from Ines Ouano on February 5, 1948.
Notwithstanding the sale between Ouano and Cobarde, and because the two lots remained registered in her
name, Ouano was able to sell these same lots to the National Airports Corporation on November 25, 1952 for
its airport expansion project.

The National Airports Corporation promptly had the titles of these properties registered in its name. When the
airport expansion project fell through, respondents, the legal heirs of Ouano, succeeded in reclaiming title to the
two lots through an action for reconveyance filed with the lower court; the titles over these lots were thereafter
registered in their names. They then subdivided the two lots and sold them to New Ventures Realty Corporation,
Eugenio Amores, Henry See, Freddie Go, Benedict Que, Petrosa, and AWG. AWG, in turn, sold one of the
parcels of land to UCB. All the buyers registered the titles over their respective lots in their names. After the
respondents had filed their individual Answers, respondents filed a motion for summary judgment on April 13,
2005, admitting as true the facts stated in the petitioners complaint, but claiming that the petitioners had no legal
right to the properties in question.

The RTC then issued a resolution granting the motion for summary judgment filed by AWG, Petrosa and UCB,
and dismissing the petitioners’ complaint. The petitioners filed a notice of appeal to question the RTC resolution.
In response, respondents AWG, Petrosa, and UCB filed a motion to dismiss the appeal, claiming that the
petitioners raised only questions of law in their appeal; thus, they should have filed an appeal by certiorari with
the Supreme Court, and not an ordinary appeal with the appellate court. The CA ruled that the petitioners should
have filed a petition for review on certiorari under Rule 45 of the Rules of Court with the Supreme Court instead
of an ordinary appeal since they only raised a question of law.

ISSUE: Whether or not the petitioners should have files a petition for review on certiorari under Rule 45 of the
Rules of Court with the Supreme Court instead of an ordinary appeal?

HELD: YES. The first mode of appeal, the ordinary appeal under Rule 41 of the Rules of Court, is brought to the
CA from the RTC, in the exercise of its original jurisdiction, and resolves questions of fact or mixed questions of
fact and law. The second mode of appeal, the petition for review under Rule 42 of the Rules of Court, is brought
to the CA from the RTC, acting in the exercise of its appellate jurisdiction, and resolves questions of fact or mixed
questions of fact and law.

The third mode of appeal, the appeal by certiorari under Rule 45 of the Rules of Court, is brought to the Supreme
Court and resolves only questions of law. Where a litigant files an appeal that raises only questions of law with
55
the CA, Section 2, Rule 50 of the Rules of Court expressly mandates that the CA should dismiss the appeal
outright as the appeal is not reviewable by that court.

There is a question of law when the issue does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted, and the doubt concerns the correct application of law
and jurisprudence on the matter. On the other hand, there is a question of fact when the doubt or controversy
arises as to the truth or falsity of the alleged facts.

Heirs of Andres Naya v. Naya, G.R. No. 215759, November 28, Quirolgico, Bienvenido Miguel DC.
78
2016 III

TOPIC: Fraud, Mistake, Malice, Intent, Knowledge, and other condition of the mind judgements, official
documents or acts (Rule 8, Sec. 5)

FACTS: Petitioners filed a complaint for quieting of title, reconveyance of ownership, damages, and attorney's
fees against respondents involving a parcel of land in Cebu City. Petitioners claim that they, together with
respondent Orlando P. Naya, are the legitimate and compulsory heirs of the late Spouses Andres and Gregoria
Naya. Andres’ heirs executed an extra judicial adjudication and settlement of estate where his surviving spouse,
Gregoria, held all his properties in trust in favor of the other heirs and on the condition that she will assume all
debts and pay all the obligations of the estate. Gregoria failed to fulfill this condition. Despite such failure, Orlando
allegedly sold the property, under the name of his parents, to one Alfonso Uy. Uy, after the property was titled in
his name then sold it to Orlando, who registered it in his name. Orlando sold the property to respondent
Honesimo Ruiz.

The title, however, was transferred to Honesimo's name only in 2007. Petitioners alleged that they only learned
of Orlando's anomalous transactions in September 1974, prompting them to cause the annotation of an adverse
claim to Orlando's title. They stressed that Honesimo is not a buyer in good faith because he acquired the
property after the notice of adverse claim had already been annotated on Orlando's title. The RTC dismissed the
complaint for failure to state a cause of action and laches for only instituting the action after 45 years. The RTC
ruled that the assailed transactions were conducted through the deceit and fraudulent scheme of Orlando, yet,
petitioners did not give details of the same. The CA denied the appeal and affirmed the findings of the RTC that
the complaint does not state a cause of action.

ISSUE: Whether or not the petitioners have a cause of action

HELD: YES. The complaint filed by petitioners is one for quieting of title, reconveyance of ownership, damages,
and attorney's fees. To make out an action to quiet title, the initiatory pleading has only to set forth allegations
showing that (1) the plaintiff has title to real property or any interest therein and (2) the defendant claims an
interest therein adverse to the plaintiffs arising from an instrument, record, claim, encumbrance, or proceeding
which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable. In
Mendizabel v. Apao where the case was one for annulment of titles, reconveyance and damages, we were also
confronted with an argument that the complaint must be dismissed because the circumstances constituting the
allegations of fraud or mistake were not stated with particularity. We ruled against this argument, holding that in
an action for reconveyance, all that must be alleged in the complaint are two facts which, admitting them to be
true, would entitle the plaintiff to recover title to the disputed land, namely, (1) that the plaintiff was the owner .of
the land or possessed the land in the concept of owner, and (2) that the defendant had illegally dispossessed
him of the land.

Manuel Uy and Sons, Inc. v. Valbueco, Inc., G.R. No. 179594,


79 Gañas, Evangeline
September 11, 2013

TOPIC: EFFECT OF FAILURE TO PLEAD

FACTS: Manuel Uy & Sons, Inc. is the owner of the subject lots in Rizal. In 1973, two Conditional Deeds of Sale
were executed by petitioner in favor of respondent. The Deeds of Conditional Sale provided that the purchase
price shall be paid in three installments with interest, that the vendee be granted a grace period of 30 days from
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date of installment, and that ownership shall not pass to the vendee until after full payment of the purchase
price.Respondent was able to pay petitioner a partial payment for the properties.

However, respondent suspended further payment as it was not satisfied with the manner petitioner complied
with its obligations under the conditional deeds of sale.

In 1978, petitioner sent respondent a letter informing respondent of its intention to rescind the conditional deeds
of sale and attaching the original copy of the respective notarial rescission. In 1994, respondent filed a Complaint
for specific performance and damages against petitioner with the RTC of Antipolo City.

However, it was dismissed without prejudice for lack of interest, as respondent's counsel failed to attend the pre-
trial conference. In 2001, respondent again filed with the RTC of Manila a Complaint for specific performance
and damages, seeking to compel petitioner to accept the balance of the purchase price for the two conditional
deeds of sale and to execute the corresponding deeds of absolute sale. The RTC dismissed the complaint.

On appeal, the Court of Appeals reversed and set aside RTC’s decision, reinstated the complaint of respondent
and directed petitioner to execute the deeds of absolute sale in favor of respondent after payment of the balance.
The Court of Appeals held that there was no evidence that the notice of cancellation by notarial act was actually
received by respondent. Further, petitioner contends that the action has prescribed and the complaint should
have been brought within 10 years from the time the right of action accrues.

ISSUE: Whether respondent is entitled to the relief granted by the Court of Appeals.

HELD: Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides: Defenses and objections not pleaded
whether in a motion to dismiss or in the answer are deemed waived. However, when it appears from the
pleadings that the court has no jurisdiction over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations,
the court shall dismiss the claim.

Upon review of the case, the Court finds that respondent had been served a notice of the notarial rescission of
the conditional deeds of sale when it was furnished with the petitioner's Answer to the first Complaint five years
before it filed this case. Consequently, respondent is not entitled to the relief granted by the Court of Appeals.
Gicano v. Gegato held that trial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; and it may do
so on the basis of a motion to dismiss or an answer which sets up such ground as an affirmative defense, or
even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or even if the
defense has not been asserted.

Also, petitioner raised the defense of prescription for the first time before this Court, and respondent had the
opportunity to oppose it in its Comment to the petition.

Hence, the Court can resolve the issue of prescription as both parties were afforded the opportunity to ventilate
their respective positions on the matter. Dino v. Court of Appeals held that even if the defense of prescription
was raised for the first time on appeal in respondent's Supplemental Motion for Reconsideration of the appellate
court's decision, this does not militate against the due process right of the petitioners.

80 Gajudo v. Traders Royal Bank, March 21, 2006 Gañas, Evangeline

TOPIC: DEFAULT

FACTS: Petitioners filed a complaint before the RTC of Quezon City against respondent for the annulment of
the extra-judicial foreclosure and auction sale made by the city sheriff of a parcel of land, the conventional
redemption, and prayed for damages and the issuance of a writ of preliminary injunction. In this case, Chua
obtained a loan from the Traders Royal Bank by a real estate mortgage of a property owned in common by Chua
and the Gajudos. They failed to settle the loan, thus, there was an extra-judicial foreclosure of the property in
which the winning bidder was the respondent bank.
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The petitioners argued that they were allowed by the bank to repurchase the property but it was sold to Ceroferr
Realty Corporation. The petitioners stated that the new defendants (CRC) they included in their amended
complaint conspired with the bank in canceling the notice of lis pendens by falsifying a letter sent to and filed
with the office of the Register of Deed of Quezon City, purportedly for the cancellation of said notice and claiming
of damages.

Summons were served on the bank but the latter failed to file their answer. Thus, the petitioners were allowed to
present ex parte to claim for damages. The petitioners contend that since the bank was declared in Default, the
evidence they presented must already be sufficient for them to obtain a favorable judgment. Respondent filed a
motion to set aside the partial decision by default but the same was denied by the trial court. Also, respondent
bank appealed the Partial Decision to the CA which ruled in their favor. Hence this petition.

ISSUE: Whether or not the Court of Appeals erred in failing to apply the provisions of Section 3, Rule 9 of the
1997 Rules of Civil Procedure [and in applying instead] the rule on preponderance of evidence under Section 1,
Rule 133 of the Rules of Court.

HELD: No. Between the two rules, there is no incompatibility that would preclude the application of either one of
them. To begin with, Section 3 of Rule 9 governs the procedure which the trial court is directed to take when a
defendant fails to file an answer. According to this provision, the court shall proceed to render judgment granting
the claimant such relief as his pleading may warrant, subject to the courts discretion on whether to require the
presentation of evidence ex parte. The same provision also sets down guidelines on the nature and extent of the
relief that may be granted. In particular, the courts judgment shall not exceed the amount or be different in kind
from that prayed for nor award unliquidated damages.

The Court explained that the proscription against the award of unliquidated damages is significant because it
means that the damages must be proved convincingly in accordance with the quantum of evidence required in
civil cases.

Regarding judgments by default, it was explained in Pascua v. Florendo that complainants are not automatically
entitled to the relief prayed for, once the defendants are declared in default. Favorable relief can be granted only
after the court has ascertained that the relief is warranted by the evidence offered and the facts proven by the
presenting party. In Pascua, this Court ruled that it would be meaningless to require presentation of evidence if
every time the other party is declared in default, a decision would automatically be rendered in favor of the non-
defaulting party and exactly according to the tenor of his prayer. This is not contemplated by the Rules nor is it
sanctioned by the due process clause.

81 Lina v. CA, 135 SCRA 637 Gañas, Evangeline

TOPIC: DEFAULT

FACTS: Private respondent Northern Motors, Inc. filed with the then Court of First Instance of Rizal (Pasig) a
case for sum of money with damages. Petitioner Alex Lina was served with summons together with a copy of
the complaint. When no answer or motion to dismiss was filed by petitioner, private respondent Northern Motors,
Inc., filed a motion to declare him in default.

The motion was set for hearing. Petitioner filed his opposition to the aforesaid motion inviting attention to the fact
that he had filed a motion for extension of time to file responsive pleading within the reglementary period.
Respondent judge issued an order declaring defendant (herein petitioner) in default and allowing plaintiff (herein
private respondent) to adduce its evidence ex parte. Defendant (petitioner) filed his answer to the complaint.
Respondent court rendered its decision in favor of plaintiff (herein private respondent). Petitioner filed a motion
to set aside decision.

Thereafter, Respondent judge issued an order denying petitioner's motion to set aside decision. Petitioner filed
with the then Court of Appeals a petition for certiorari/prohibition, which was denied in its decision.

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ISSUE/s:
1. Whether or not the order of default was issued in grave abuse of discretion amounting to lack of jurisdiction.
- No
2. Whether or not certiorari is proper in a case where judgment by default was rendered without an order of
default being furnished petitioner and where meritorious defenses exist, which are for the trial court to
evaluate and which evaluation was not done in this case. - No

HELD: The Supreme Court agrees with respondent appellate court’s affirmance of the questioned order of the
trial court. The granting of additional time within which to file an answer to a complaint is a matter largely
addressed to the sound decision of the trial court.

In this case, it was two (2) days before the expiration of the fifteen-day reglementary period given to defendant
to file his responsive pleading when petitioner moved for an extension of twenty (20) days to file his answer.
Upon motion of private respondent and over the objection of petitioner, respondent judge issued an order
declaring petitioner in default.

Under the Rules of Court, the remedies available to a defendant in the Court of First Instance (now
Regional Trial Court) are:
a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under
oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident,
mistake or excusable neglect, and that he has a meritorious defense (Sec. 3, Rule 18);
b) If the judgment has already been rendered when the defendant discovered the default, but before the same
has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory, he may file a
petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law,
even if no petition to set aside the order of default has been presented by him. (Sec. 2, Rule 41).

Petitioner in this case did not avail himself of any of the above remedies. Instead, he went to the appellate court
on certiorari/prohibition.

Lui Enterprises v. Zuellig Pharma Corp., G.R. No. 193494,


82 Reyes, Yna Adrielle
March 12, 2014

TOPIC: RULE 9, SEC.3, ROC; DEFAULT

FACTS: Lui Enterprises and Zuellig Pharma Corporation entered into a 10-year contract of lease over a parcel
of land in Davao City. Claiming to be the new owner of the leased property, the Philippine Bank of
Communications (PBC) asked Zuellig Pharma to pay rent directly to it. Lui Enterprises, however, insisted on its
right to collect the leased property’s rent. Due to the conflicting claims of Lui Enterprises and PBC over rental
payments, Zuellig Pharma filed a complaint for interpleader with the RTC.

PBC filed its answer to the complaint. On the other hand, Lui Enterprises filed a motion to dismiss 4 days after
the 15-day period to file an answer. The RTC denied Lui Enterprises’ motion to dismiss and declared it in default.
One year after the issuance of the order of default, Lui Enterprises filed a motion to set aside order of default on
the ground of excusable negligence. Lui Enterprises argued that its failure to file a motion to dismiss on time was
caused by the negligence of its former counsel. This negligence was allegedly excusable because they were
prejudiced and prevented from fairly presenting their case.

ISSUE: Whether Lui Enterprises’ motion to set aside order of default on the ground of excusable negligence
must be denied?

HELD: the SC held in the affirmative. After declaration of default but before the court renders judgment, the
defendant may file, under oath, a motion to set aside order of default. The defendant must properly show that
his or her failure to answer was due to fraud, accident, mistake or excusable negligence. (Rule 9, Sec. 3, (b),
ROC) The defendant must also have a meritorious defense. In this case, Lui Enterprises had discovered its
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default before the RTC rendered judgment. Thus, it timely filed a motion to set aside order of default, raising the
ground of excusable negligence. However, excusable negligence is "one which ordinary diligence and prudence
could not have guarded against." The circumstances should be properly alleged and proved. Here, Lui
Enterprises’ failure to answer within the required period is inexcusable. In its motion to set aside order of default,
Lui Enterprises blamed its counsel for the late filing of the answer without offering any excuse for the late filing.
This is not excusable negligence under Rule 9, Sec. 3, (b), ROC. Thus, the RTC did not err in refusing to set
aside the order of default.

The general rule is that courts should proceed with deciding cases on the merits and set aside orders of default
as default judgments are "frowned upon." As much as possible, cases should be decided with both parties "given
every chance to fight their case fairly and in the open, without resort to technicality."

However, the basic requirements of Rule 9, Sec. 3, (b), ROC must first be complied with. The defendant’s motion
to set aside order of default must satisfy three conditions:
 First is the time element. The defendant must challenge the default order before judgment.
 Second, the defendant must have been prevented from filing his answer due to fraud, accident, mistake
or excusable negligence.
 Third, he must have a meritorious defense. As discussed, Lui Enterprises never explained why its counsel
failed to file the motion to dismiss on time. It just argued that courts should be liberal in setting aside orders
of default.

Even assuming that it had a meritorious defense, Lui Enterprises must first show that its failure to answer was
due to fraud, accident, mistake or excusable negligence. This, Lui Enterprises did not do.

Arquero v. CA, G.R. No. 168053, September 21, 2011, 658


83 Reyes, Yna Adrielle
SCRA 70

TOPIC: RELIEF FROM AN ORDER OF DEFAULT

FACTS: Congress approved Republic Act (RA) No. 6765, or "An Act Integrating Certain High Schools in the City
of Puerto Princesa and in the Province of Palawan with the Palawan National School" Under the law, PNS shall
be considered the "mother unit" and the Palawan Integrated National Schools (PINS) should benefit from a
centralized curriculum planning to eliminate duplication of functions and efforts relative to human resource
development for the province.

The law also provides that the PINS shall be headed by a Vocational School Superintendent (VSS) who shall be
chosen and appointed by the Secretary of DepEd. However, no VSS was appointed. Instead, then PNS Principal
Eugenio J. dela Cuesta was designated and after his retirement, Rebecca T. Arquero (petitioner) took over both
positions. The Secretary of DepEd withdrew the designation of Arquero as OIC of the PINS and designated
Norma Brillantes as the new VSS. Arquero filed the Petition for Quo Warranto before the RTC. Respondents
(DepEd & Brilliantes) failed to file their Answer. Hence, the RTC declared respondents in default and Arquero
was allowed to present her evidence ex parte. On appeal, the CA reversed and set aside the RTC decision.
Petitioner insists that respondents could not have appealed the RTC decision having been declared in default.
She explains that the only issue that could have been raised is a purely legal question, therefore, the appeal
should have been filed with the Court and not with the CA.

ISSUE: whether the appeal should have been filed with the Supreme Court and not with the CA

HELD: The Supreme Court held that the appeal was correctly filed in the CA. The remedies of a party declared
in default are (as held in Martinez vs Republic):
a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under
oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident,
mistake or excusable neglect, and that he has meritorious defenses; (Sec. 3, Rule 18)
b) If the judgment has already been rendered when the defendant discovered the default, but before the same
has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;

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c) If the defendant discovered the default after the judgment has become final and executory, he may file a
petition for relief under Section 2 of Rule 38;
d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law,
even if no petition to set aside the order of default has been presented by him. (Sec. 2, Rule 41)

The fourth remedy, that of appeal, is anchored on Section 2, Rule 41 of the 1964 Rules. Even after the deletion
of that provision under the 1997 Rules, the Supreme Court held that a defaulted defendant may appeal from the
judgment rendered against him (the Lina Doctrine).

Undoubtedly, a defendant declared in default retains the right to appeal from the judgment by default on the
ground that the plaintiff failed to prove the material allegations of the complaint, or that the decision is contrary
to law, even without need of the prior filing of a motion to set aside the order of default except that he does not
regain his right to adduce evidence. The appellate court, in turn, can review the assailed decision and is not
precluded from reversing the same based solely on the evidence submitted by the plaintiff.

Benedicto-Muñoz v. Cacho-Olivarez, G.R. No. 179121,


84 Reyes, Yna Adrielle
November 9, 2015

TOPIC: RULE 11; AMENDED AND SUPPLEMENTAL COMPLAINT

FACTS: Ma. Angeles Cacho-Olivarez claimed that Jose and Mark Cuaycong (the Cuaycong brothers), salesmen
in securities, had engaged in fraudulent activities with the knowledge of the stock market brokerage firms,
resulting in the loss of their investments. The Cuaycong brothers and the respondents manifested to the RTC
that they had amicably settled their differences and entered into a Compromise Agreement. Respondents agreed
to drop the Cuaycong brothers as defendants in consideration of the payment of Php 7,040,645 (the actual
damages).

The RTC conducted a clarificatory hearing where respondents manifested their intention to pursue the case
against the remaining defendants. The RTC dropped the Cuaycong brothers from the Original Complaint and
directed respondents to file an amended complaint that would clarify the "different and separable acts" committed
by the remaining defendants which respondents asserted were "independent of the liability of the Cuaycongs."
Holding that the Cuaycong brothers were indispensable parties sued with the other defendants, under a common
cause of action, the RTC dismissed the Amended and Supplemental Complaint. CA reversed the decision of the
RTC.

ISSUE: whether the amended and supplemental complaint must be dismissed

HELD: the Supreme Court reversed the decision of the CA and held that the amended and supplemental
complaint must be dismissed. The dismissal of the case as against the Cuaycong brothers benefits the other
defendants. The Original Complaint and the Amended and Supplemental Complaint allege the same cause of
action against the Cuaycong brothers and the petitioners, that is: stock market fraud. The Amended and
Supplemental Complaint failed to allege "different and separable acts" committed by the remaining defendants
independent of the acts and omissions of Cuaycong. It also dropped the Cuaycongs as defendants (but referred
to them as “erstwhile defendants”) as well as the cause of action for actual damages.

It added an enumeration of the provisions of the Securities Regulation Code. But beyond these, it retained
essentially the same factual allegations and narration of the Original Complaint. Each of the petitioners
performed an indispensable act that aided the illegal activities of the Cuaycong brothers, without which the latter
would not be able to successfully consummate their fraudulent scheme. Since the Cuaycong brothers and the
petitioners, as indispensable parties, had played various interconnected roles that led to the singular injury and
loss of the respondents, their liabilities cannot be separately determined.

Further, the approved Compromise Agreement between the respondents and the Cuaycong brothers operates
as res judicata. To have the effect of res judicata, a compromise between parties must meet two (2) tests. First,
the new litigation must involve the same subject matter and second, the issue should be between the same
parties. These two elements are present in this case. Though the compromise was effected in the former suit,
61
they have the same subject matter or object, which is the payment of the claims sought by respondents. There
is also identity of parties in both cases. Absolute identity of parties is not required, substantial identity of
parties suffices. The principle of res judicata may not be evaded by the expedient of adding or eliminating some
parties to the first and second action.

Gagoomal v. Villacorta, G.R. No. 1092813, January 18, 2012,


85 Santiago, Melody R.
663 SCRA 444

FACTS: Albert Zenarosa was a registered owner of parcel of land in Ayala Alabang Village. The land was
mortgaged in BPI on June 1990. Subdequently, he also ontain a loan of $300,000 from RAM Holdings
corporation secured by a second mortgage over the property and promisorry note. Zenarosa authorized RAM to
sell the property in case of his failure to pay. He failed to pay prompting RAM to file a complaint for collection of
sum of money with damages against him and BPI. RAM sold the property to New Summit International Inc.
Represented by Gagoomal. Zenarosa redeemed the foreclosed property from BPI on March 2003 and sold the
property to a certain Patricia Tab. Lorenzo on the other hand filed for the recovery of aum of money, the case
filed obtained a favoravle decision which became final and executory. Zenarosa's failure to redeem the property
from Lorenzo, the title over the subject property was consolidated in the latter's name. In the present case, the
annotation of RAM of the lis pendens was inproper because the case filed by RAM against Zenarosa was purely
personal action.

ISSUE: Whether or not the respondents do not have a rightful claim to the property.

RULING: A writ of possession is an order by which the sheriff is commanded to a place a person in possession
of a real or personla property. The sec 3r of rule 39 states the deed and possession tobe given at the expiration
of redemption period. Upon the expiration of the right of redemption, the purchaser or redemptioner shall be
substituted to and acquire all the rights, title and interest and claim of judgment obligor to the property as of the
time of levy. The possession of the proprtt shall be given to the purchaser or last redemptioner by the same
officer u less a third party is actually holding the property adversely to the judgment obligor.

Homeowners Savings and Loan Bank v. Felonia, G.R. No.


86 Santiago, Melody R.
189477, February 26, 2014

FACTS: Felonia and De Guzman are owners of parcel of land. They mortgaged the land to Delgado in 1990 but
instead of executing a real estate mortgage, the parties executed a deed of absolute sale with a right of
repurchase. In 1991, Felonia and De Guzman filed an action for reformation of contract which was subsequently
granted. In 1995, while the reformatuon case was still pending, Delgado filed a petition of consolidation of
ownership of property sold with an option to repurchase and issuance of new certificate of title. This was granted
to Delgado.

An annotation was made HSLB foreclosed the property and eventually purchase it. In 2000, CA reversed the
decision of the RTC regarding the consolidation case of Delgado and declared Felonja and De Guzman as
absolute owners of the said property.

ISSUE: Whether or not the HSLB is entitled to the annotation of their mortgage lien in the TCT 402

RULING: Supreme Court ruled that the HSLB is no longer entitled to have its mortgage lien annotated in TCT
402. In the case at bar, since at the time the subject property was mortgaged, there was yet no annotated notice
of lis pendens, it can be concluded that HSLB is mortgagee in good faith. In the case, HSLB is not a purchaser
in good faith is defined as one who buys a property without notice that some other person has a right to or
interest.

At the time HSLB purchased the subject property, the notice of lis pendens was already annotated on the title.
Therefore, there is no doubt that at the time appellant purchase the subject property, it was aware of pending
litigation concerning the same property thus the title is the outcome of the litigation.

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J. Casim Construction Supplies, Inc. v. Registrar of Deeds of
87 Santiago, Melody R.
Las Piñas, G.R. No. 168655, July 2, 2010

FACTS: J. Casim Construction Supplies represented by Rogelio C. Casim, a duly organized domestic
corporation with TCT No. 49936, covering a 10,715-square meter land was registered. It was acquired through
Deed of Absolute Sale. The mother title is TCT No. 30459 was cancelled and TCT No. 49936 was issued in its
stead.

The petitioner filed with the RTC of Las Piñas City an original petition for the cancellation of the notice of lis
pendens, as well as of all the other entries of involuntary encumbrances annotated on the original copy of TCT
No. 49936. Petitioner claimed that its owner's duplicate copy of the TCT was clean at the time of its delivery and
that it was surprised to learn later on that the original copy of its TCT, on file with the Register of Deeds, contained
several entries which all signified that the covered property had been subjected to various claims. With regards
to the cancellation, the alleged that the notice of lis pendens was a forgery judging from the inconsistencies in
the inscriber's signature. The Intestate Estate of Bruneo F. Casim intervened and filed a Comment/Opposition
in which it contend that the RTC of Las Piñas did not have jurisdiction over the present action, because the
matter of canceling a notice of lis pendens lies within the jurisdiction of the court before which the main action
referred to in the notice is pending.

The trial court ruled that it did not have jurisdiction over the action, resolved to dismiss the petition and declared
that the action must have been filed before the same court and in the same action in relation to which the
annotation of the notice of lis pendens had been sought. Anent the allegation that the entries in the TCT were
forged, the trial court pointed out that not only did petitioner resort to the wrong forum to determine the existence
of forgery, but also that forgery could not be presumed merely from the alleged non-chronological entries in the
TCT but instead must be positively proved. In this connection, the trial court noted petitioner's failure to name
exactly who had committed the forgery, as well as the lack of evidence on which the allegation could be based.

ISSUE: Whether or not the RTC of Las Piñas City has jurisdiction in an original action to cancel the notice of lis
pendens annotated on the subject title as an incident in a previous case

RULING: The petition is utterly unmeritorious. Lis pendens which literally means pending suit refers to the
jurisdiction, power or control which a court acquires over the property involved in a suit, pending the continuance
of the action, and until final judgment. A notice of lis pendens, once duly registered, may be cancelled by the trial
court before which the action involving the property is pending. This power is said to be inherent in the trial court
and is exercised only under express provisions of law. Accordingly, Section 14, Rule 13 of the 1997 Rules of
Civil Procedure authorizes the trial court to cancel a notice of lis pendens where it is properly shown that the
purpose of its annotation is for molesting the adverse party, or that it is not necessary to protect the rights of the
party who caused it to be annotated. The RTC of Las Piñas City, Branch 253 has committed no reversible error
in issuing the assailed Resolution and Order dismissing for lack of jurisdiction the petition for cancellation of
notice of lis pendens filed by petitioner, and in denying reconsideration.

Siman, Don Johnson


88 Valderama v. Arguelles, G.R. No. 223660, April 2, 2018
Dela Chica

TOPIC: Rule 13: Filing and Service of Pleadings, Judgments and Other Papers. Section 14. Notice of lis
pendens.

FACTS: Sonia Arguelles and Lorna Arguelles (respondents) filed a petition to cancel adverse claim involving a
parcel of land. In their petition, respondents alleged Conchita Amongo Francia (sister of petitioner) freely and
voluntarily executed an absolute deed of sale in favor of respondents. The subject property was subsequently
registered in the names of respondents.

On November 14, 2007, Conchita filed an affidavit of adverse claim. On January 24, 2008, Conchita died. As
registered owners of the subject property, respondents prayed for the cancellation of the adverse claim in the
petition subject of this controversy.
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On February 10, 2010, petitioner and Tarcila Lopez (Tarcila), as full- blooded sisters of Conchita, filed an
opposition to the petition. In light of the respondent's filing of the complaint, petitioner and Tarcila filed a notice
of lis penden. On November 21, 2013, respondents filed a manifestation and motion praying for the outright
cancellation of the adverse claim on the ground that petitioner's subsequent filing of notice of lis pendens
rendered the issue moot and academic.

After an exchange of several pleadings between the parties, the RTC issued a Resolution ordering the
cancellation of the adverse claim. Petitioner and Tarcila filed a motion for reconsideration but the same was
denied. Aggrieved, petitioner and Tarcila appealed to the CA. The CA found no error in RTC's cancellation of
the adverse claim

ISSUE: Whether the subsequent annotation of a notice of lis pendens on a certificate of title renders the case
for cancellation of adverse claim on the same title moot and academic.

HELD: No. A subsequent annotation of a notice of lis pendens on a certificate of title does not necessarily render
a petition for cancellation of adverse claim on the same title moot and academic

A notice of lis pendens is a mere incident of an action which does not create any right nor lien. It may be cancelled
without a court hearing. In contrast, an adverse claim constitutes a lien on a property.

Further, upholding the right of an opposing party to the outright cancellation of adverse claim on the sole basis
of a subsequent notice of lis pendens on the same title would not achieve any sound purpose. It may even
encourage a party to not avail the remedy of annotation of a notice of lis pendens if an adverse claim was already
registered and annotated in the same party's favor. Furthermore, such ruling would result to a situation where
the subject case of the notice of lis pendens may be dismissed on grounds not attributable to the adverse
claimant. An example of which is, as pointed out by the petitioner, deliberate forum-shopping of the other party
who filed the related case. Thus, the adverse claimant will be left with no other remedy in law to protect his or
her rights.

The RTC erred in ordering the cancellation of the petitioner's adverse claim on the mere basis of a subsequent
annotation of a notice of lis pendens on the same certificate of title.

Siasoco v. CA and IGLESIA NI CRISTO, G.R. No. 132753, Siman, Don Johnson
89
February 15, 1999 Dela Chica

TOPIC: Rule 10, Rules of Court. Amended and Supplemental Pleadings

FACTS: Petitioners were the registered owners of nine parcels of land located in Montalban, Rizal. In December
1994, they began to offer the subject properties for sale. Subsequently, Iglesia ni Cristo (INC) negotiated with
the petitioners, but the parties failed to agree. In their letter dated January 8, 1997, petitioners claimed that since
INC had not really accepted the offer, they had already "contracted" with Carissa for the sale of the said
properties "due to the absence of any response to their offer from INC."

Maintaining that a sale had been consummated, INC demanded that the corresponding deed be executed in its
favor. Petitioners refused. On January 14, 1997, INC filed a civil suit for specific performance and damages
against petitioners and Carissa Homes and Development & Properties, Inc.

Later on INC filed an Amended Complaint, dropping Carissa Homes as one of the defendants and changing the
nature of the case to a mere case for damages. Petitioners filed a Motion to Strike Out Amended Complaint,
contending that the complaint cannot be amended without leave of court, since a responsive pleading has been
filed.

ISSUE: Whether or not the admission of INC's Amended Complaint was proper.

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HELD: Yes. It is clear that plaintiff (herein private respondent) can amend its complaint once, as a matter of
right, before a responsive-pleading is filed.Contrary to the petitioners' contention, the fact that Carissa had
already filed its Answer did not bar private respondent from amending its original Complaint once, as a matter of
right, against herein petitioners. Indeed, where some but not all the defendants have answered, plaintiffs may
amend their Complaint once, as a matter of right, in respect to claims asserted solely against the non-answering
defendants, but not as to claims asserted against the other defendants.

The rationale for the aforementioned rule is in Section 3, Rule 10 of the Rules of Court, which provides that
after a responsive pleading has been filed, and an amendment may be rejected when the defense is substantially
altered.

In the present case, petitioners failed to prove that they were prejudiced by private respondent's Amended
Complaint. True, Carissa had already filed its own Answer. Petitioners, however, have not yet filed any.
Moreover, they do not allege that their defense is similar to that of Carissa. On the contrary, private respondent's
claims against the latter and against petitioners are different. Against petitioners, whose offer to sell the subject
parcels of land had allegedly been accepted by private respondent, the latter is suing for specific performance
and damages for breach of contract. Although private respondent could no longer amend, as a matter of right,
its Complaint against Carissa, it could do so against petitioners who, at the time, had not yet filed an answer.
The amendment did not prejudice the petitioners or delay the action.It simplified the case and tended to expedite
its disposition. The Amended Complaint became simply an action for damages, since the claims for specific
performance and declaration of nullity of the sale have been deleted. WHEREFORE, the Petition is hereby
DENIED. Costs against petitioners.

Citystate Savings Bank v. Aguinaldo, G.R. No. 200018, April Siman, Don Johnson
90
6, 2015 Dela Chica

TOPIC: Rule 10, Rules of Court. Amended and Supplemental Pleadings

FACTS: Aguinaldo claimed that he is the owner and possessor of land. He discovered that Rolando Mojica, Jr.
(Mojica) had fraudulently obtained a certificate of title in the latter's name.

Thereupon, Aguinaldo filed a complaint for the nullification which is granted by the RTC. However, before
Aguinaldo discovered the existence of TCT No. 142492, Mojica had already executed a real estate mortgage
over the subject property in favor of Citystate Savings Bank, Inc. (Citystate). When Mojica was unable to pay
said loan, Citystate extrajudicially foreclosed the property and was declared the highest bidder in the public
auction. Aguinaldo filed a Complaint for annulment of title with the RTC-Branch 274. against Citystate.

After the parties have presented their respective evidence, but before the presentation of rebuttal evidence,
Aguinaldo filed a Motion to Admit Amended Complaint claiming that Citystate sold the subject property to Syndica
Phil Corporation (Syndica). In the Amended Complaint. Aguinaldo impleaded Syndica as Citystate's co-
defendant.

On May 24, 2010, the RTC-Branch 274, issued an Order's denying the motion to admit Aguinaldo's amended
complaint on the ground that the amendments substantially altered the cause of action and will only delay the
resolution of the case. Aguinaldo filed a petition for certiorari with the CA imputing grave abuse of discretion on
the part of the RTC. CA granted the petition is GRANTED. Hence, this petition. Citystate raises the following
issue:

ISSUE: Whether or not a proposed amended complaint shall be admitted.

HELD: Yes. Under Section 3. Rule 10 of the Rules of Court and jurisprudence It is well-settled that amendment
of pleadings is favored and should be liberally allowed in the furtherance of justice in order to determine every
case as far as possible on its merits without regard to technicalities. This principle is generally recognized in
order that the real controversies between the parties are presented, their rights determined and the case decided
on the merits without unnecessary delay to prevent circuity of action and needless expense. The amended
complaint effected no change in the cause of action, defense, or theory of the case since it remained to be an
65
action for the nullity of a title that was erroneously issued in another's name. While additional reliefs were sought
in the amended complaint, these are merely remedies to which [Aguinaldo] is entitled as a result of the
supervening events which rendered the relief sought in the original complaint inadequate. In any case, a
substantial alteration in the cause of action or defense is not a bar to amend the original complaint so long as
the amendment is not meant for delay. Therefore, petition of Citystate is denied.

91 Dela Cruz v. Concepcion, October 11, 2012 Songco, Ken Felix C

FACTS: On March 25, 1996, petitioners entered into a Contract to Sell with respondent involving a house and
lot in Antipolo City for a 2 million consideration.

Respondent made the following payments, to wit:


(1) 500,000 by way of downpayment;
(2) 500,000 on May 30, 1996;
(3) 500,000 paid on January 22, 1997; and
(4) 500,000 bounced check dated June 30, 1997 which was replaced.

Thus, Respondent was able to pay the 2 million total obligation.

Before respondent issued the 500,000 replacement check, she told petitioners that based on the computation of
her accountant as of July 6, 1997, her unpaid obligation which includes interests and penalties was only 200,000.
Petitioners agreed with respondent. Despite repeated demands, petitioners failed to collect the amounts they
claimed. Hence, the complaint for sum of money with damages filed with the RTC of Antipolo Rizal. In her answer
with Compulsory counterclaim and during the presentation of evidence, respondent presented a receipt
purportedly indicating payment of the remaining balance of 200,000 to Losloso who allegedly received the same
on behalf of petitioners.

On March 8, 2014, the RTC rendered a decision in favor of respondent. On appeal, the CA affirmed the decision
with modification by deleting the award of moral damages and attorney's fees in favor of respondent. Aggrieved,
petitioners come before the Court in this petition for review on certiorari under Rule 45.

ISSUE: Whether it was proper to dismiss the complaint based on the ground that the defendant fully paid the
claims of plaintiff

RULING: Yes. When the issue is tried without the objection of the parties, it should be treated with all respects
as if it had been raised in the pleadings. On the other hand, when there is an objection, the evidence may be
admitted where its admission will not prejudice him.

Thus, while respondent judicially admitted in her answer that she only paid 2 million and that she still owed
petitioners 200,000, respondent claimed later and in fact, submitted an evidence to show that she already paid
the whole amount of her unpaid obligation. It is noteworthy what when respondent presented evidence of
payment, petitioners did not object thereto.

To be sure, petitioners were given ample opportunity to refute the fact of and present evidence to prove payment.

92 Diona v. Balangue, G.R. No. 173559, January 7, 2013 Songco, Ken Felix C

FACTS: On March 2, 1991, resposdents obtained a load from the petioner payable in six months and secured
by real estate mortgage over a property in Valenzuela. When the debt bacame due, respondents failed to pay
not withstanding demand. Thus, petitioner filed with the RTC a complaint. Respondents were served with
summons thru respondent Balangue. With the assistance of Atty. Coroza of the PAO, they filed a Motion to
Extend Period to Answer. Despite the requested extension, however, respondents failed to file any responsive
pleadings. Thus, upon motion of the petitioner, the RTC declared them in default and allowed petitioner to present
her evidence ex parte.

66
ISSUE: Whether or not the CA committed grave and serious error of law when it granted respondents petition
for annulment for judgement.

RULING: It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess of what is being
sought by the party. They cannot also grant a relief without first ascertaining the evidence presented in support
thereof. Due process considerations require that judgments must conform to and be supported by the pleadings
and evidence presented in court. In Development Bank of the Philippines v. Teston, this Court expounded that:

Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of
relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with
respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must
provide the measure of recovery is to prevent surprise to the defendant.

Notably, the Rules is even more strict in safeguarding the right to due process of a defendant who was declared
in default than of a defendant who participated in trial. For instance, amendment to conform to the evidence
presented during trial is allowed the parties under the Rules. But the same is not feasible when the defendant is
declared in default because Section 3(d), Rule 9 of the Rules of Court comes into play and limits the relief that
may be granted by the courts to what has been prayed for in the Complaint.

The raison d’être in limiting the extent of relief that may be granted is that it cannot be presumed that the
defendant would not file an Answer and allow himself to be declared in default had he known that the plaintiff
will be accorded a relief greater than or different in kind from that sought in the Complaint. No doubt, the reason
behind Section 3(d), Rule 9 of the Rules of Court is to safeguard defendant’s right to due process against
unforeseen and arbitrarily issued judgment. This, to the mind of this Court, is akin to the very essence of due
process. It embodies "the sporting idea of fair play" and forbids the grant of relief on matters where the defendant
was not given the opportunity to be heard thereon.

In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the
pleadings and the evidence on record. The Real Estate Mortgage executed by the parties does not include any
provision on interest. When petitioner filed her Complaint before the RTC, she alleged that respondents borrowed
from her "the sum of FORTY-FIVE THOUSAND PESOS (₱45,000.00), with interest thereon at the rate of 12%
per annum" and sought payment thereof. She did not allege or pray for the disputed 5% monthly interest. Neither
did she present evidence nor testified thereon. Clearly, the RTC’s award of 5% monthly interest or 60% per
annum lacks basis and disregards due process. It violated the due process requirement because respondents
were not informed of the possibility that the RTC may award 5% monthly interest. They were deprived of
reasonable opportunity to refute and present controverting evidence as they were made to believe that the
complainant petitioner was seeking for what she merely stated in her Complaint.

Neither can the grant of the 5% monthly interest be considered subsumed by petitioner’s general prayer for
"other reliefs and remedies just and equitable under the premises x x x." To repeat, the court’s grant of relief is
limited only to what has been prayed for in the Complaint or related thereto, supported by evidence, and covered
by the party’s cause of action. Besides, even assuming that the awarded 5% monthly or 60% per annum interest
was properly alleged and proven during trial, the same remains unconscionably excessive and ought to be
equitably reduced in accordance with applicable jurisprudence.

Onstott v. Upper Tagpos Neighborhood Association, G.R. No.


93 Songco, Ken Felix C
221047, September 14, 2016

FACTS: Albert, an American citizen, was the registered owner of a parcel of land situated in the Province of
Rizal. Due to non- payment of realty taxes, the Provincial Government of Rizal sold the subject property at public
auction to Amelita A. De Serra, the highest bidder, as evidenced by the Certificate of Sale dated June 29, 2004.
Respondent UTNAI, an association representing the actual occupants of the subject property, subsequently
redeemed the same from De Sena.

Thereafter, UTNAI filed a complaint for cancellation and for the issuance of a new title in its name before the
RTC against Albert and Federico M. Cas, the Register of Deeds for the Province of Rizal. It alleged, among
67
others, that it became the owner of the subject property upon redemption thereof from De Sena and that,
consequently, it must be issued a new title. Moreover, Albert was an American citizen who, under Philippine law,
is not allowed to own a parcel of land in the Philippine.

Efforts to serve summons upon Albert proved futile as he was not a resident of the Philippines. Thus, summons
was served through publication. Nonetheless, Albert still failed to file his answer. Hence, upon the motion of
UTNAI, Albert was declared in default and UTNAI was allowed to present evidence ex parte.

Herein petitioner Michael Onstott, claiming to be the legitimate son of Albert with a certain Josephine Arrastia
Onstott filed a Petition for Relief from Judgment, alleging that UTNAI, in its complaint, impleaded only Albert,
notwithstanding knowledge of the latter's death.

ISSUE: Whether or not the CA erred in directing the issuance of a title in favor of UTNAI notwithstanding the
lack of jurisdiction over the person of Albert, the registered owner of the subject property who has been dead
prior to the institution of UTNAI'S complaint.

RULING: Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the other hand,
jurisdiction over the defendants in a civil case is acquired either through the service of summons upon them or
through their voluntary appearance in court and their submission to its authority. In Philippine Commercial
International Bank v. Spouses Dy Hong Pi, t was ruled that "[a]s a general proposition, one who seeks an
affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this rule that we
have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default with motion for reconsideration, is considered
voluntary submission to the court's jurisdiction.

In this case, records show that Albert, the defendant in UTNAI's complaint, died in the United States of America
in 2004. Thus, on the strength of his right as Albert's compulsory heir who has an interest in the subject property,
Michael filed the Petition for Relief before the RTC, assailed the proceedings therein for failure to implead him
and his mother, Josephine, as an indispensable party, and sought affirmative relief, i.e., the reversal of the RTC's
March 30, 2009 Decision and the reinstatement of OCT No. (-2645-) M-556. The RTC, holding that its own
Decision never attained finality for failure to publish the same, treated the Petition for Relief as a motion for
reconsideration and after due proceedings, ruled upon its merits.

Sansio Philippines Inc. v. Mogol Jr., G.R. No. 177007, July


94 Sy, Exequiel
14, 2009

FACTS: Petitioner Sansio Philippines, Inc. filed a Complaint for Sum of Money and Damages against respondent
spouses Mogol before the MeTC of Manila. MeTC of Manila served the summons and the copy of the complaint
on respondent spouses Mogol at the courtroom of the MeTC as they were waiting for the scheduled hearing of
the criminal cases for violations of BP 22. After being informed of the summons and the complaint, respondent
spouses Mogol referred the same to their counsel, who was also present in the courtroom. The counsel of
respondent spouses Mogol took hold of the summons and the copy of the complaint and read the same.
Thereafter, he pointed out to the process server that the summons and the copy of the complaint should be
served only at the address that was stated in both documents, i.e., at Lucena City, and not anywhere else. The
counsel of respondent spouses Mogol apparently gave back the summons and the copy of the complaint to the
process server and advised his clients not to obtain a copy and sign for the same.

The MeTC of Manila ruled that Section 6, Rule 14 of the ROC does not specify where service is to be effected
and validly served with summons and a copy of the complaint. For failing to file any responsive pleading, a
Motion to Declare [Respondents] in Default filed by petitioner was declared to be meritorious. Respondent
spouses filed a Petition for Certiorari, Prohibition and/or Injunction before the RTC of Manila. Respondent
spouses insisted there was no valid service of summons per return of the process server,. The RTC of Manila
issued an Order dismissing the petition. It held that Section 6, Rule 14 of the ROC does not mandate that
summons be served strictly at the address provided by the plaintiff in the complaint. Petitioner filed an MR
thereon, but the same was denied by the CA in the assailed Resolution

68
ISSUE: Whether or not there was a valid service of summons to the respondent spouses

HELD: YES, in the instant case, the Court finds that there was already a valid service of summons in the persons
of respondent spouses Mogol. The act of the counsel of respondent spouses Mogol of receiving the summons
and the copy of the complaint already constituted receipt on the part of his clients, for the same was done with
the latter’s behest and consent. Already accomplished was the operative act of “handing” a copy of the summons
to respondent spouses in person. Thus, jurisdiction over the persons of the respondent spouses Mogol was
already acquired by the MeTC of Manila. That being said, the subsequent act of the counsel of respondent
spouses of returning the summons and the copy of the complaint to the process server was no longer
material.Section 6, Rule 14 of the ROC does not require that the service of summons on the defendant in person
must be effected only at the latter’s residence as stated in the summons. On the contrary, said provision is crystal
clear that, whenever practicable, summons shall be served by handing a copy thereof to the defendant; or if he
refuses to receive and sign for it, by tendering it to him. Nothing more is required

The constitutional requirement of due process exacts that the service be such as may be reasonably expected
to give the notice desired. Once the service provided by the rules reasonably accomplishes that end, the
requirement of justice is answered; the traditional notions of fair play are satisfied and due process is served.

Atiko Trans Inc. and Cheng Lie Navigation Co. Ltd. v.


95 Prudential Guarantee and Assurance Inc., G.R. No. 167545, Sy, Exequiel
August 17, 2011

Facts: Prudential filed a case for sum of money against Cheng Lie Navigation and Atiko Trans, Inc. Cheng Lie
is a foreign shipping company doing business in the Philippines thru its duly authorized shipagent Atiko Trans
Inc. which is a domestic corporation duly established and created under the laws of the Philippines. The
summons upon Cheng Lie and Atiko was received by Atiko's cashier, Cristina Figueroa. Both corporations did
not file an Answer. After the MeTC rendered its judgment by default, Atiko filed a Notice of Appeal and later a
Memorandum of Appeal arguing that the MeTC did not acquire jurisdiction over its person as the summons was
received by its cashier, Cristina Figueroa. Cheng Lie also filed its own Memorandum of Appeal maintaining that
the MeTC never acquired jurisdiction over its person. The RTC affirmed the decision of the MeTC.

Issue: Whether or not the MeTC acquire jurisdiction over Cheng Lie and Atiko?

Held: The MeTC acquired jurisdiction over Atiko but not over Cheng Lie. When the defendant is a domestic
corporation, service of summons may be made only upon the persons enumerated in Section 11, Rule 14 of the
Rules of Court. However, jurisdiction over the person of the defendant can be acquired not only by proper service
of summons but also by defendants voluntary appearance without expressly objecting to the courts jurisdiction.

1. When Atiko filed its Notice of Appeal, Memorandum of Appeal, Motion for Reconsideration to the RTC, and
Petition for Review, it never questioned the jurisdiction of the MeTC over its person. The filing of these pleadings
seeking affirmative relief amounted to voluntary appearance and, hence, rendered the alleged lack of jurisdiction
moot.

2. SEC. 12. Service upon foreign private juridical entity. When the defendant is a foreign private juridical entity
which has transacted business in the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or, if there be no such agent, on the government official designated by law
to that effect, or on any of its officers or agents within the Philippines.

No summons was served upon Cheng Lie in any manner prescribed above. It should be recalled that Atiko was
not properly served with summons as the person who received it on behalf of Atiko, cashier Cristina Figueroa,
is not one of the corporate officers enumerated in Section 11 of Rule 14 of the Rules of Court. The MeTC acquired
jurisdiction over the person of Atiko not thru valid service of summons but by the latters voluntary appearance.
Thus, there being no proper service of summons upon Atiko to speak of, it follows that the MeTC never acquired
jurisdiction over the person of Cheng Lie. Where service of summons upon the defendant principal is coursed
thru its co-defendant agent, and the latter happens to be a domestic corporation, the rules on service of summons
upon a domestic private juridical entity must be strictly complied with. Otherwise, the court cannot be said to
69
have acquired jurisdiction over the person of both defendants. And insofar as the principal is concerned, such
jurisdictional flaw cannot be cured by the agent’s subsequent voluntary appearance.

De Pedro v. Romasan Development Corp. NM Rothschild &


96 Sons (Australia) Ltd. v. Lepanto Consolidated Mining Co., Sy, Exequiel
G.R. No. 175799, November 28, 2011

FACTS: Lepanto Consolidated Mining Company filed with the Regional Trial Court of Makati City a Complaint
against NM Rothschild & Sons (Australia) Limited praying for a judgment declaring the loan and hedging
contracts between the parties void for being contrary to Article 2018 of the Civil Code of the Philippines and for
damages. Upon respondent’s motion, the trial court authorized respondent’s counsel to personally bring the
summons and Complaint to the Philippine Consulate General in Sydney, Australia for the latter office to effect
service of summons on petitioner.

Petitioner filed a Special Appearance with Motion to Dismiss praying for the dismissal of the Complaint on the
grounds that the court has not acquired jurisdiction over the person of petitioner due to the defective and improper
service of summons. The trial court issued an Order denying the Motion to Dismiss providing that there was a
proper service of summons through the Department of Foreign Affairs that the defendant has neither applied for
a license to do business in the Philippines, The trial court also held that the Complaint sufficiently stated a cause
of action.

Petitioner sought redress via a Petition for Certiorari with the Court of Appeals, alleging that the trial court
committed grave abuse of discretion in denying its Motion to Dismiss. The Court of Appeals rendered the assailed
Decision dismissing the Petition for Certiorari. Hence, petitioner filed the present petition assailing the Decision
and Resolution of the Court of Appeals.

ISSUE: Whether or not the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction
in the denial of the Motion to Dismiss on account of its failure to acquire jurisdiction over the person of the
defendant.

HELD: No, The Court therefore rule that petitioner, by seeking affirmative reliefs from the trial court, is deemed
to have voluntarily submitted to the jurisdiction of said court.

A party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after
obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. Consequently, the trial court
cannot be considered to have committed grave abuse of discretion amounting to lack or excess of jurisdiction in
the denial of the Motion to Dismiss on account of failure to acquire jurisdiction over the person of the defendant.
Section 15, Rule 14, however, is the specific provision dealing precisely with the service of summons on a
defendant which does not reside and is not found in the Philippines.

Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a defendant who
is a non-resident and is not found in the country may be served with summons by extraterritorial service,
to wit:
(1) When the action affects the personal status of the plaintiffs;
(2) When the action relates to, or the subject of which is property, within the philippines, in which the defendant
claims a lien or an interest, actual or contingent;
(3) When the relief demanded in such action consists, wholly or in part, in excluding the defendant from any
interest in property located in the philippines; and
(4) When the defendant non-resident's property has been attached within the philippines.

In these instances, service of summons may be effected by (a) personal service out of the country, with leave of
court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient.

The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the parties
void with a prayer for damages. It is a suit in which the plaintiff seeks to be freed from its obligations to the
defendant under a contract and to hold said defendant pecuniarily liable to the plaintiff for entering into such
70
contract. It is therefore an action in personam, unless and until the plaintiff attaches a property within the
Philippines belonging to the defendant, in which case the action will be converted to one quasi in rem.

A.M. No. 11-3-6-SC: new rule on service of summons on


97 Esquilona, Veniflor
foreign juridical entities

AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON SERVICE UPON FOREIGN
PRIVATE JURIDICAL ENTITY.

As amended, said provision of the Rules of Court now reads:

SEC. 12. Service upon foreign private juridical entity. — When the defendant is a foreign private juridical
entity which has transacted business in the Philippines, service may be made on its resident agent designated
in accordance with law for that purpose, or, if there be no such agent, on the government official designated by
law to that effect, or on any of its officers or agents within the Philippines.

If the foreign private juridical entity is not registered in the Philippines or has no resident agent, service
may, with leave of court, be effected out of the Philippines through any of the following means:
a) By personal service coursed through the appropriate court in the foreign country with the assistance of the
Department of Foreign Affairs;
b) By publication once in a newspaper of general circulation in the country where the defendant may be found
and by serving a copy of the summons and the court order by-registered mail at the last known address of
the defendant;
c) By facsimile or any recognized electronic means that could generate proof of service; or
d) By such other means as the court may in its discretion direct.

98 Imelda Imee Marcos Manotoc v. CA, 499 SCRA 21 Esquilona, Veniflor

Topic: Substituted Service of Summons: Rule 14

FACTS: The trial court issued a Summon addressed to petitioner at Alexandra Homes, E2 Room 104, at No. 29
Meralco Avenue, Pasig City. The Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky
de la Cruz, an alleged caretaker of petitioner at the condominium unit. When petitioner failed to file her Answer,
the trial court declared her in default. Petitioner, filed a Motion to Dismiss on the ground of lack of jurisdiction of
the trial court over her person due to an invalid substituted service of summons.

The grounds to support the motion were: (1) the address of defendant indicated in the Complaint (Alexandra
Homes) was not her dwelling, residence, or regular place of business as provided in Section 8, Rule 14 of the
Rules of Court; (2) the party (de la Cruz), who was found in the unit, was neither a representative, employee,
nor a resident of the place; (3) the procedure prescribed by the Rules on personal and substituted service of
summons was ignored; (4) defendant was a resident of Singapore.

Trial court rejected Manotoc’s Motion to Dismiss.

ISSUE: Whether there was a valid substituted service of summons on petitioner for the trial court to acquire
jurisdiction.

HELD: No. The Court ruled that before resorting to substituted service, a plaintiff must demonstrate an
effort in good faith to locate the defendant through more direct means. Respondent Trajano failed to
demonstrate that there was strict compliance with the requirements of the then Section 8, Rule 14 (now Sec 7,
Rule 14 of the Rules of Civil Procedure)

Sec 8 Rule 14 of the old Revised Rules of Court provides for the requirements for a valid substituted services
which must be faithfully, strictly and fully complied with:
(1) Impossibility of Prompt Personal Service
71
(2) Specific Details in the Return
(3) A Person of Suitable Age and Discretion
(4) A Competent Person in Charge.

In this case, there was an absence of material data on the serious efforts to serve the Summons on petitioner
Manotoc in person. There is no clear valid reason cited in the Return why those efforts proved inadequate, to
reach the conclusion that personal service has become impossible or unattainable. Furthermore, apart from the
allegation of petitioner’s address in the Complaint, it has not been shown that private respondent Trajano or
Sheriff Cañelas, who served such summons, exerted extraordinary efforts to locate petitioner.

Constantino Pascual v. Lourdes Pascual, G.R. 171916


99 Esquilona, Veniflor
December 4, 2009

Topic: Substituted Service of Summons: Rule 14

FACTS: Petitioner filed a Complaint for Specific Performance with Prayer for Issuance of Preliminary Mandatory
Injunction with Damages before the RTC of Malolos, Bulacan. The undersigned Process Server of the Honorable
Court allegedly served the original summons and copy of the Complaint to the respondent on three separate
occasions but failed to do so because respondent was not at her house.

On the fourth attempt, only the respondent’s housemaid was present. The undersigned left a copy of the same
to the latter who is at the age of reason but refused to sign the same. Thereafter, the undersigned returned the
service of summons duly served for information and guidance of the Honorable Court.

Due to failure of the respondent to file a responsive pleading, the RTC declared respondent in default.
Respondent then filed a Motion to Set Aside Order of Default with the argument of non-service of summons upon
her, but such motion was denied. Aggrieved, respondent filed a motion before the CA to which the CA ruled in
favor of the respondent.

However, petitioner insists that there was a valid substituted service of summons and that there should be a
presumption of regularity in the performance of official functions. He points out that the absence in the officer's
return of a statement about the impossibility of personal service does not conclusively prove that the service was
invalid

ISSUE: Whether or not there was a proper and valid substituted service of summons.

HELD: No. In a case where the action is in personam and the defendant is in the Philippines, the service of
summons may be done by personal or substituted service as laid out in Sections 6 and 7 of Rule 14 of the
Revised Rules of Court. A plain and simple reading of the said provisions indicates that personal service of
summons should and always be the first option, and it is only when the said summons cannot be served
within a reasonable time can the process server resort to substituted service.

(See Manotoc Vs CA for the requirements of a valid substituted service of summons).

Herein, the Court ruled that: The Return of Summons shows no effort was actually exerted and no positive step
taken by either the process server or petitioners to locate and serve the summons personally on respondents.

At best, the Return merely states the alleged whereabouts of respondents without indicating that such
information was verified from a person who had knowledge thereof. Certainly, without specifying the details
of the attendant circumstances or of the efforts exerted to serve the summons, a general statement that
such efforts were made will not suffice for purposes of complying with the rules of substituted service
of summons.

72
The presumption of regularity in the performance of public functions does not apply in cases where
there is an absence of even the barest compliance with the procedure for a substituted service of
summons outlined in the Rules of Court.

100 Yuk Ling Ong v. Co., G.R. No. 206653, February 25, 2015 Viran, Archimedes John

Topic: Rule 14 / Substituted service of summons

Facts: Petitioner, filed a petition for review on certiorari seeking to reverse and set aside the decision of CA for
denying her petition for annulment of judgment made by the RTC for declaring her marriage with the Respondent
void ab initio. Petitioner claimed that she was never notified of the cases filed against her and that the process
server failed to do a valid substituted service of summons upon her. Thus, acquiring no jurisdiction over her
person.

Issue: WON the RTC acquired jurisdiction over the person of the petitioner?

Held: NO. The RTC did not acquire jurisdiction over the person of the petitioner for the failure of validly serving
summons upon her. Jurisdiction over the defendant is acquired either upon a valid service of summons or the
defendant's voluntary appearance in court. If the defendant does not voluntarily appear in court, jurisdiction can
be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the
Rules of Court.

In the case, the summons in Civil Case No. 02-030629 was issued on July 29, 2002. In his server’s return, the
process server resorted to substituted service of summons on August 1, 2002. Surprisingly, the process server
immediately opted for substituted service of summons after only two (2) days from the issuance of the summons.
Also, the server’s return failed to meet the requirements of a valid substituted service of summons as thoroughly
discussed in the case of Manotoc v. CA, to wit: (1) Impossibility of Prompt Personal Service -there must be
several attempts by the sheriff to personally serve the summons within a reasonable period of one month which
eventually resulted in failure to prove impossibility of prompt service. "Several attempts" means at least three (3)
tries, preferably on at least two different dates. In addition, the sheriff must cite why such efforts were
unsuccessful; (2) Specific Details in the Return -The sheriff must describe in the Return of Summons the facts
and circumstances surrounding the attempted personal service. The efforts made to find the defendant and the
reasons behind the failure must be clearly narrated in detail in the Return. The date and time of the attempts on
personal service, the inquiries made to locate the defendant, the name/s of the occupants of the alleged
residence or house of defendant and all other acts done, though futile, to serve the summons on defendant must
be specified in the Return to justify substituted service; (3) A Person of Suitable Age and Discretion -The sheriff
must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age,
what the recipient's relationship with the defendant is, and whether said person comprehends the significance
of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the
defendant of said receipt of summons.

Given that the meticulous requirements in Manotoc were not met, the Court is not inclined to uphold the CA's
denial of the petition for annulment of judgment for lack of jurisdiction over the person of petitioner because there
was an invalid substituted service of summons. The decision of the RTC must be declared null and void.

Chu v. Mach Asia Trading Corp., G.R. No. 184333, April 1,


101 Viran, Archimedes John
2013

FACTS: Petitioner Sixto N. Chu purchased on installment one (1) Hitachi Excavator, one (1) motorgrader and
one (1) payloader from the Respondent who is engaged in importing dump trucks and heavy equipments.
Petitioner made down payments with the balance payable in 12 monthly installments through postdated checks.
However, upon presentment of the checks for encashment, they were dishonored by the bank either by reason
of “closed account,” “drawn against insufficient funds,” or “payment stopped.” Respondent filed a complaint
before the RTC of Cebu City for sum of money, replevin, attorney’s fees and damages against the petitioner.

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The RTC issued an Order allowing the issuance of a writ of replevin on the subject heavy equipments. Sheriff
Cortes proceeded at petitioner’s given address for the purpose of serving the summons, together with the
complaint, writ of replevin and bond.

However, the Sheriff failed to serve the summons personally upon the petitioner, since the latter was not there.
The Sheriff then resorted to substituted service by having the summons and the complaint received by Rolando
Bonayon, a security guard of the petitioner. Petitioner failed to file any responsive pleading. Upon motion the
RTC issued an Order declaring defendant in default and, thereafter, allowed respondent to present its evidence
ex parte. The RTC rendered a decision against the petitioner. On appeal, the CA affirmed the RTC Decision.

ISSUE: WON substituted service of summons to the security guard considered valid as to acquire jurisdiction
over the person of Petitioner?

HELD: NO. As a rule, summons should be personally served on the defendant. It is only when summons cannot
be served personally within a reasonable period of time that substituted service may be resorted to. Section 7,
Rule 14 of the Rules of Court provides:
“SEC. 7. Substituted service. – If, for justifiable causes, the defendant cannot be served within a reasonable time
as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the
defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant’s office or regular place of business with some competent person in charge thereof.”

It is to be noted that in case of substituted service, there should be a report indicating that the person who
received the summons in the defendant’s behalf was one with whom the defendant had a relation of confidence,
ensuring that the latter would actually receive the summon. Clearly, it was not shown that the security guard who
received the summons in behalf of the petitioner was authorized and possessed a relation of confidence that
petitioner would definitely receive the summons. This is not the kind of service contemplated by law.

Thus, service on the security guard could not be considered as substantial compliance with the requirements of
substituted service. The service of summons is a vital and indispensable ingredient of due process. As a rule, if
defendants have not been validly summoned, the court acquires no jurisdiction over their person, and a judgment
rendered against them is null and void. Since the RTC never acquired jurisdiction over the person of the
petitioner, the judgment rendered by the court could not be considered binding upon him for being null and void.

102 Ang v. Chinatrust, G.R. No. 200693, April 18, 2016 Viran, Archimedes John

FACTS: Respondent filed a money claim with an application for the issuance of writ of preliminary attachment
against the petitioners. A summons was issued against them. The process server of the court together with the
assisting sheriff and the plaintiff’s counsel and its representative served the summons upon the petitioners, thru
Mr. Ricky Ang but refused to sign the original copy thereof. and the receptionist of the said firm informed that the
other defendants have not yet arrived, and it would be better if we will return in the afternoon. That in the
afternoon on even date, said processes were served thru Ms. MELINDA ANG, Corporate Secretary of defendant
NATION PETROLEUM CORPORATION and instructed Ms. Charlotte Magpayo, Administrative Assistant of the
said corporation to receive the same.

That despite diligent efforts to locate the whereabouts of the other defendants MARIO ANG, NENA ANG,
RENATO ANG, PAULINE ANG, GUILLERMO SY, ALISON ANG-SY and NELSON ANG outside the premises
of their office, considering that said process server and his group were not allowed to enter, substituted service
was made by leaving their respective court processes at their office or regular place of business through the
same Ms. Charlotte Magpayo by affixing the “receiving stamp” of Nation Petroleum and her notation, as shown
in the original copy of summons. The petitioners entered a special appearance with a motion to dismiss the case
for lack of jurisdiction. The RTC denied the motion contending that RTC had jurisdiction over the person of the
accused as there was a valid substituted service of summons. Petitioners raised it to CA but CA denied.

ISSUE: WON there was a valid substituted service of summons.

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HELD: NO. A serving officer’s failure to comply with the elements provided in MAnotoc results in the court’s
failure to acquire jurisdiction over the person of the defendant. However, proof that the defendant actually
received the summons in a timely manner or his failure to deny the same (which amounts to voluntary
appearance) would satisfy the requirements of due process.

The constitutional requirement of due process requires that the service be such as may be reasonably expected
to give the notice desired. Once the service reasonably accomplishes that end, the requirement of justice is
answered, traditional notions of fair play are satisfied, and due process is served. In the present case, the return
failed to establish the impossibility of prompt personal service. While defendants are expected to avoid and
evade service of summons, a serving officer is likewise expected to be resourceful persevering, canny, and
diligent in serving the process on a defendant.

With respect to petitioner Ricky Ang, we sustain the lower courts’ conclusion that he was personally served
summons. Personal service may be effected by handing a copy of the summons to the defendant in person or,
if he refuses to receive and sign for it, by tendering it to him. The return indicates that Ricky Ang personally
received a copy of the summons and the complaint despite his refusal to sign the original copy. This constitutes
valid tender of the summons and the complaint.

Interlink Movie Houses, Inc. v. CA, G.R. No. 203298,


103 Navarro, Bryan Christopher
January 17, 2018

TOPIC: RULE 14

FACTS: Petitioner Interlink Movie Houses filed before the R TC a complaint for sum of money and damages
against respondents Expressions Stationery ShopInter for the latter's unpaid rentals and damages resulting from
its alleged breach of their lease contract.

In the service of summons, Sheriff Benedict R. Muriel served it at the defendant company’s office.Interlink then
filed a motion to declare herein respondents in default for their failure to file their answer. Respondents entered
a special appearance alleging that the service of the summons was defective and, as such, the RTC did not
acquire jurisdiction over them.

RTC denied Interlink's motion to declare defendants in default. The trial court agreed that the summons was not
served in accordance with Section 11, Rule 14 of the Rules of Court rendering such service defective.
Again in the Sheriff’s return, an order of issuance of summons was delivered to the respondents through a certain
Amee Ochotorina, who introduced herself as a secretary.

Interlink filed another motion to declare defendants in default. To this motion, respondent again entered a special
appearance and alleged that the second service of the summons was still defective because Ochotorina did not
work for nor was connected with the office of the president of Expressions.

The RTC granted the motion to declare defendants in default and allowed Interlink to present evidence ex parte.
The trial court was convinced that there was sufficient compliance with the rules on service of summons to a
juridical entity considering that the summons was received by the assistant/secretary of the president.

ISSUE: Whether the trial court acquired jurisdiction over the persons of the respondents

RULING: No. There was no valid service of summons. It is settled that jurisdiction over a defendant in a civil
case is acquired either through service of summons or through voluntary appearance in court and submission to
its authority. In the absence of service or when the service of summons upon the person of the defendant is
defective, the court acquires no jurisdiction over his person, and a judgment rendered against him is null and
void.

In actions in personam, such as collection for a sum of money and damages, the court acquires jurisdiction over
the person of the defendant through personal or substituted service of summons.
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104 De los Reyes v. Ramnani, G.R. No. 169135, June 18, 2010 Navarro, Bryan Christopher

TOPIC: RULE 15

FACTS: A judgment debt is enforced by the levy and sale of the debtor’s property. The trial court rendered a
decision in favor of respondent Josephine Anne B. Ramnani. Thereafter, a writ of execution was issued by the
trial court. Branch Sheriff Pedro T. Alarcon conducted a public bidding and auction sale over the property covered
by Transfer Certificate of Title during which respondent was the highest bidder. Consequently, a certificate of
sale was executed in her favor on even date.

Respondent filed a motion (subject motion) for the issuance of an order directing the sheriff to execute the final
certificate of sale in her favor. Petitioner opposed on the twin grounds that the subject motion was not
accompanied by a notice of hearing and that the trial court’s October 11, 1977 Decision can no longer be
executed as it is barred by prescription.

The trial court ruled that the prescription for the issuance of a writ of execution is not applicable in this case.

ISSUE: Whether the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction
in taking cognizance of the fatally defective motion.

RULING: No. Decision was not timely executed because of respondent’s failure to secure the final certificate of
sale within 10 years from the entry of said judgment. This is erroneous. It is not disputed that shortly after the
trial court rendered the aforesaid judgment, respondent moved for execution which was granted by the trial court.
The subject property was sold on execution sale. Respondent emerged as the highest bidder, thus, a certificate
of sale was executed by the sheriff in her favor on the same day.

Although the certificate of sale was annotated on the transfer certificate title, petitioner did not exercise his right
to redeem the subject property within one year from said registration. Thus, what remains to be done is the
issuance of the final certificate of sale which was, however, not promptly accomplished at that time due to the
demise of the trial court’s sheriff.

Decision was already enforced when the subject property was levied and sold on June 6, 1978 which is within
the five-year period for the execution of a judgment by motion under Section 6, Rule 39 of the Rules of Court.

105 Ramos v. Teves, A.M. No. P-12-3061, June 27, 2012 Navarro, Bryan Christopher

TOPIC: RULE 15

FACTS: Atty. Edward Anthony B. Ramos filed a complaint for money in his client’s behalf in which complaint he
sought the ex parte issuance of a writ of preliminary attachment.

Since the MTCC already served summons on the defendant but did not yet act on his ex parte request for
preliminary attachment, Atty. Ramos went to the court personally file an urgent ex parte motion to resolve the
pending incident. But respondent Reynaldo S. Teves, the branch clerk of court, refused to receive the motion for
the reason that it did not bear proof of service on the defendant. Atty. Ramos explained that ex parte motions
did not require such service. A heated argument between Atty. Ramos and Teves ensued, prompting the
presiding judge who heard it to intervene and direct the clerk in charge of civil cases to receive the ex parte
motion.

Atty. Ramos charged Teves before the Office of the Court Administrator (OCA) with arrogance and discourtesy
in refusing to receive his motion despite his explanation. Teves claimed that he was neither arrogant nor
discourteous and that his argument with Atty. Ramos had been cordial and professional. Citing Rule 19 of the
Rules of Court, Teves asserted that he acted correctly in refusing to accept Atty. Ramos non pro forma motion
for failure to furnish the adverse party with a copy of the notice of hearing.
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ISSUE: Whether the branch clerk of court may refuse to receive a pleading that does not conform with the
requirements of the Rules of Court.

RULING: No. Clearly Teves erred in refusing to receive Atty. Ramos motion on the ground that it did not bear
proof of service on the defendant. Unless specifically provided by the rules, clerks of court have no authority to
pass upon the substantive or formal correctness of pleadings and motions that parties file with the court.
Compliance with the rules is the responsibility of the parties and their counsels.And whether these conform to
the rules concerning substance and form is an issue that only the judge of the court has authority to determine.

The duty of clerks of courts to receive pleadings, motions, and other court-bound papers is purely ministerial.
Although they may on inspection advise the parties or their counsels of possible defects in the documents they
want to file, which may be regarded as part of public service, they cannot upon insistence of the filing party refuse
to receive the same.

106 Pojas v. Gozo-Dadole, 192 SCRA 575 Manalili, Mart

TOPIC: RULE 15

FACTS: Private respondents filed with the RTC a complaint for recovery of possession against herein petitioner.
Respondent judge, after trial, in her decision of March 1, 1986, ruled in favor of private respondents. The said
decision was received by petitioner's counsel on April 15, 1986. Petitioner's motion for reconsideration was
denied in the Order of May 8, 1986 for failure to mention the day the motion is to be resolved, which was
considered violative of Section 5, Rule 15 of the New Rules of Court and therefore, a mere scrap of paper. His
second motion for reconsideration dated April 25, 1986 was denied in respondent judge's order of June 20, 1986
for lack of merit.

On July 2, 1986, petitioner, after receipt of said order of June 20, 1986, on July 1, 1986 filed a Notice of Appeal;
but the same was denied in an order dated July 15, 1986, for being filed out of time on the ground that the motion
for reconsideration which the Court ruled as pro-forma did not stop the running of the 15-day period to appeal.

ISSUE: Whether or not the public respondent judge acted in grave abuse of discretion amounting to lack or in
excess of jurisdiction in denying petitioner's Notice of Appeal.

RULING: NO Section 4 of Rule 15 of the Rules of Court requires that not of motion be served by the movant on
all parties concerned at least three (3) days before its hearing. Section 5 of the same Rule provides that the
notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the motion.
A motion which does not meet the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is considered
a worthless piece of paper which the clerk has no right to receive and the court has no authority to act upon.
Service of copy of a motion containing notice of the time and place of hearing of said motion is a mandatory
requirement and the failure of the movant to comply with said requisites renders his motion fatally defective.

Hence, petitioner's motion for reconsideration filed on April 23, 1986 which failed to mention the day the motion
is asked to be resolved, is a mere scrap of paper, being violative of Section 5, Rule 15 of the Rules of Court, and
as such, did not stop the running of the period of appeal. Without such notice, the motion is pro-forma, and
hence, does not suspend the running of the period of appeal.

107 Victory Liner Inc. v. Malinias, G.R. No. 151170, May 29, 2007 Manalili, Mart

TOPIC: RULE 15

FACTS: This case finds its origin from a vehicular collision between a bus owned by petitioner Victory Liner, Inc.
and an Isuzu Truck used by respondent Michael Malinias. A complaint for sum of money and damages was
instituted by respondent against petitioner and the bus driver. The MTC rendered judgment in favor of
respondent. Petitioner filed a Motion for Reconsideration. The Notice of Hearing therein stated: "Please submit
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the foregoing Motion for Reconsideration for hearing before the Honorable Court at a schedule and time
convenient to this Honorable Court and the parties." The MTC ruled that the notice did not conform with the
mandatory requirements of Section 5, Rule 15 of the 1997 Rules of Civil Procedure, and that the motion was
thus a mere scrap of paper which did not suspend the period to appeal. Accordingly, the MTC declared that its
earlier judgment dated 13 January 1998 had become final and executory. What then followed was a series of
unsuccessful attempts by petitioner to have the lower courts set aside or stay the now-final judgment against it.
What the petitioner undertook instead was to pursue the notice of appeal, despite the unequivocal statement in
the MTC Order of 23 February 1998 that "the Judgment [sought to be reconsidered] has now become final and
executor.

ISSUE: Whether or not the judgement has already become final and executory.

RULING: A motion without a notice of hearing is pro forma, a mere scrap of paper that does not toll the period
to appeal, and upon the expiration of the 15-day period, the questioned order or decision becomes final and
executory. The rationale behind this rule is plain: unless the movant sets the time and place of hearing, the court
will be unable to determine whether the adverse party agrees or objects to the motion, and if he objects, to hear
him on his objection, since the rules themselves do not fix any period within which he may file his reply or
opposition.

Not only did the defect render the motion for reconsideration itself unworthy of reconsideration, it more crucially
failed to toll the period to appeal. While the period of appeal shall be interrupted by a timely motion for
reconsideration, the MTC deemed, with legal basis, that the motion interposed by petitioner could not have been
deemed filed and should instead be treated as "a mere scrap of paper.

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