Geronimo Quadra vs. Court of Appeals G.R. No.
147593 July right to bargain collectively and otherwise deal with each other in an
31, 2006
Facts:
Petitioner, member of the Association of Sweepstakes
Staff Personnel and Supervisors (CUGCO), was administratively
charged before the Civil Service Commission with violation of Civil
Service Law and Rules for neglect of duty and misconduct and/or
conduct prejudicial to the interest of the service. He was found guilty
and disnmissed. Petitioner filed a motion for reconsideration of the
decision of the Civil Service Commission. At the same time,
petitioner, together with ASSPS (CUGCO), filed with the CIR a
complaint for unfair labor practice against respondent PCSO and its
officers. CIR found respondent PCSO guilty of unfair labor practice
for having committed discrimination against the union and for having
dismissed petitioner due to his union activities.
Respondent PCSO complied with the decision of the CIR.
But while it reinstated petitioner to his former position and paid his
backwages, it also filed with the Supreme Court a petition for review
on certiorari. During its pendency, petitioner filed with the CIR a
"Petition for Damages." He prayed for moral and exemplary
damages, citing the following grounds: (1) the CIR has no
jurisdiction to award moral and exemplary damages; (2) the cause
of action is barred by prior judgment, it appearing that two
complaints are brought for different parts of a single cause of action;
and (3) the petition states no valid cause of action. LA and NLRC's
decision favored petitioner, but CA reversed it, holding that there
was no basis for the grant of moral and exemplary damages to
petitioner as his dismissal was not tainted with bad faith. It was the
Civil Service Commission that recommended petitioner's dismissal
after conducting an investigation. It also held that the petition
claiming moral and exemplary damages filed by petitioner after
respondent PCSO had complied with the CIR decision of
reinstatement and backwages amounted to splitting of cause of
action.
Issue: Whether or not the CIR has jurisdiction to award moral and
exemplary damages arising out of illegal dismissal and unfair labor
practice.
Ruling:
A dismissed employee is entitled to moral damages when
the dismissal is attended by bad faith or fraud or constitutes an act
oppressive to labor, or is done in a manner contrary to good morals,
good customs or public policy. Exemplary damages may be
awarded if the dismissal is effected in a wanton, oppressive or
malevolent manner. It appears from the facts that petitioner was
deliberately dismissed from the service by reason of his active
involvement in the activities of the union groups of both the rank and
file and the supervisory employees of PCSO, which unions he
himself organized and headed. Respondent PCSO first charged
petitioner before the Civil Service Commission for alleged neglect of
duty and conduct prejudicial to the service because of his union
activities. The Civil Service Commission recommended the
dismissal of petitioner. Respondent PCSO immediately served on
petitioner a letter of dismissal even before the latter could move for
a reconsideration of the decision of the Civil Service Commission.
Respondent PCSO may not impute to the Civil Service Commission
the responsibility for petitioner's illegal dismissal as it was
respondent PCSO that first filed the administrative charge against
him. As found by the CIR, petitioner's dismissal constituted unfair
labor practice. It was done to interfere with, restrain or coerce
employees in the exercise of their right to self-organization.
Unfair labor practices violate the constitutional rights of
workers and employees to self-organization, are inimical to the
legitimate interests of both labor and management, including their
atmosphere of freedom and mutual respect; and disrupt industrial
peace and hinder the promotion of healthy and stable labor-
management relations. As the conscience of the government, it is
the Court's sworn duty to ensure that none trifles with labor rights.
Jurisdictions; Court of Industrial Relations; Previously, the Court of
Industrial Relations (CIR) had no jurisdiction over claims for
damages; But in Rheem of the Philippines, Inc., et al. v. Ferrer, et
al., 19 SCRA 130 (1967), Court upholds the jurisdiction of the CIR
over claims for damages incidental to an employee’s illegal dismis-
sal.—The prevailing rule at the time that the action for unfair labor
practice and illegal dismissal was filed and tried before the CIR was
that said court had no jurisdiction over claims for damages. Hence,
petitioner, at that time, could not raise the issue of damages in the
proceedings. However, on January 27, 1967, the Supreme Court
rendered its ruling in Rheem of the Philippines, Inc., et al. v. Ferrer,
et al., 19 SCRA 130 (1967), upholding the jurisdiction of the CIR
over claims for damages incidental to an employee’s illegal
dismissal. Petitioner properly filed his claim for damages after the
declaration by the Court and before the ruling on their case became
final. Such filing could not be considered as splitting of cause of
action..
ERNESTO C. DEL ROSARIO and DAVAO TIMBER
CORPORATION v. FAR EAST BANK & DEVELOPMENT
COMPANY and PRIVATE DEVELOPMENT CORPORATION OF
THE PHILIPPINES
537 SCRA 571 (2007), SECOND DIVISION
Petitioner Davao Timber Corporation (Davao Timber) and
respondent Private Development Corporation of the Philippines
(Private Development) entered into a loan agreement under which
Private Development extended to Davao Timber a
foreign currency loan and a peso loan. The loans were secured by
real estate mortgages over six parcels of land, one of which
was registered in the name of petitioner Ernesto C. Del Rosario
(Rosario). The loan left Petitioners Davao Timber and Rosario with
a substantial amount of outstanding balance from the
aforementioned loans. Petitioners Davao Timber and Rosario then
filed a complaint against Private Development for violation of Usury
Law, annulment of contract and damages This Court
ordered Davao Timber and Rosario to pay Php 1.4 Million to Private
Development. It must also be noted that pending
the decision rendered by the Supreme Court, Private Development
assigned its rights over the receivables from Davao Timber and
Rosario. Thereafter, Davao Timber and Rosario entered into a
Memorandum of Agreement with Far East agreeing to pay and
actually paid Far East.
Thus, Davao Timber and Rosario filed a complaint (first complaint)
before the Regional Trial Court of Makati (RTC) for the recovery of
the excess payment made from Private Development and Far East.
RTC ordered Private Development to pay Davao Timber and
Rosario while the complaint against Far East was dismissed for lack
of cause of action. On appeal, the CA held that despite the
excess payment of Php 5 Million, only the amount of P965,000 from
Far East may be recovered by Davao Timber as claimed by it in the
complaint. Such decision was affirmed by this Court.
Davao Timber and Rosario then filed a complaint (second
complaint) against Far East for the recovery of the balance of the
excess payment in the amount of Php 4.335 Million before the
Regional Trial Court of Makati. The trial court dismissed the
complaint on the basis of res judicata and splitting of the cause of
action. The trial court also held that the decision in the first
complaint had already become final and executory and that the
Notice of Satisfaction of Judgment was already filed by the parties.
ISSUE:
Whether or not the complaint is dismissible on the ground of res
judicata and splitting of the case
HELD:
Section 49(b) enunciates the first rule of res judicata known as
“bar by prior judgment” or “estoppel by judgment,” which makes the
judgment rendered in the first case an absolute bar to the
subsequent action since that judgment is conclusive not only as to
the matters offered and received to sustain it but also as to any other
matter which might have been offered for that purpose and which
could have been adjudged therein. The second rule of res
judicata embodied in Section 47(c), Rule 39 is “conclusiveness of
judgment”. It refers to a situation where the judgment in the prior
action operates as an estoppel only as to the matters actually
determined or which were necessarily included therein.
The case at bar satisfies the four essential requisites of “bar by prior
judgment,” viz: (a) finality of the former judgment, (b) the court which
rendered it had jurisdiction over the subject matter and the parties,
(c) it must be a judgment on the merits, and (d) there must be,
between the first and second actions, identity of parties, subject
matter and causes of action.
There is no doubt that the judgment on appeal relative to the first
complaint was a final judgment. Not only did it dispose of the case
on the merits; it also became executory as a consequence of
the denial of Far East‘s motion for reconsideration and appeal.
Neither is there room to doubt that the judgment in the first complaint
was on the merits for it determined the rights and liabilities of the
parties.
Right or wrong, judgment bars another case based upon the same
cause of action if the same facts or evidence would sustain both,
the two actions are considered the same within the rule that the
judgment in the former is a bar to the subsequent action. In the two
cases, Davao Timber and Rosario imputed to Far East the same
alleged wrongful act of mistakenly receiving and refusing to return
an amount in excess of what was due it in violation of their right to
a refund. The same facts and evidence presented in the first
complaint were the very same facts and evidence that petitioners
presented in the second complaint.
Section 4 of Rule 2 of the Rules of Court proscribes a party from
dividing a single or indivisible cause of action into several parts or
claims and instituting two or more actions based on it. Because the
plaintiff cannot divide the grounds for recovery, he is mandated to
set forth in his first action every ground for relief which he claims to
exist and upon which he relies; he cannot be permitted to rely upon
them by piecemeal in successive actions to recover for the same
wrong or injury. It is well established, however, that a party cannot,
by varying the form of action or adopting a different method of
presentinghis case, or by pleading justifiable circumstances as
herein Davao Timber and Rosario are doing, escape the operation
of the principle that one and the same cause of action shall not be
twice litigated.
Same; Same; Same; Pleadings and Practice; It is well established
that a party cannot, by varying the form of action or adopting a
different method of presenting his case, or by pleading justifiable
circumstances, escape the operation of the principle that one and
the same cause of action shall not be twice litigated; Authorities
tend to widen rather than restrict the doctrine of res judicata on the
ground that public as well as private interest demands the ending of
suits by requiring the parties to sue once and for all in the same case
all the special proceedings and remedies to which they are
entitled.—The same facts were also pleaded by the parties in
support of their allegations for, and defenses against, the recovery
of the P4.335 million. Petitioners, of course, plead the CA Decision
as basis for their subsequent claim for the remainder of their
overpayment. It is well established, however, that a party cannot, by
varying the form of action or adopting a different method of
presenting his case, or by pleading justifiable circumstances as
herein petitioners are doing, escape the operation of the principle
that one and the same cause of action shall not be twice litigated. In
fact, authorities tend to widen rather than restrict the doctrine of res
judicata on the ground that public as well as private interest
demands the ending of suits by requiring the parties to sue once
and for all in the same case all the special proceedings and
remedies to which they are entitled.
Same; Same; Same; Same; Section 2, Rule 2 of the Rules of Court
proscribes a party from dividing a single or indivisible cause of
action into several parts or claims and instituting two or more actions
based on it—the plaintiff cannot divide the grounds for recovery and
he cannot be permitted to rely upon them by piecemeal in
successive actions to recover for the same wrong or injury.—This
rule proscribes a party from dividing a single or indivisible cause of
action into several parts or claims and instituting two or more actions
based on it. Because the plaintiff cannot divide the grounds for
recovery, he is mandated to set forth in his first action every ground
for relief which he claims to exist and upon which he relies; he
cannot be permitted to rely upon them by piecemeal in successive
actions to recover for the same wrong or injury.
Same; Same; Same; Re-litigation of matters already settled by a
court’s final judgment merely burdens the courts and the taxpayers,
creates uneasiness and confusion, and wastes valuable time and
energy that could be devoted to worthier cases.—Petitioners are
sternly reminded that both the rules on res judicata and splitting of
causes of action are based on the salutary public policy against
unnecessary multiplicity of suits—interest reipublicae ut sit finis
litium. Re-litigation of matters already settled by a court’s final
judgment merely burdens the courts and the taxpayers, creates
uneasi ness and confusion, and wastes valuable time and energy
that could be devoted to worthier cases.
PROGRESSIVE DEVELOPMENT CORPORATION, INC., Petitioner, v.
COURT OF APPEALS and WESTIN SEAFOOD MARKET,
INC., Respondents.
DECISION
BELLOSILLO, J.:
May the lessee which instituted before the Metropolitan Trial Court an
action for forcible entry with damages against its lessor file a separate suit
with the Regional Trial Court against the same lessor for moral and
exemplary damages plus actual and compensatory damages based on the
same forcible entry?chanrobles virtual lawlibrary
On grounds of litis pendencia and forum-shopping, petitioner invokes
established jurisprudence that a party cannot by varying the form of action
or adopting a different method of presenting his case evade the principle
that the same cause of action shall not be litigated twice between the same
parties or their privies. 1 Petitioner therefore prays for reversal of the
decision of the Court of Appeals dated 27 May 1995, as well as its
Resolution dated 17 January 1996 denying reconsideration, which upheld
the denial by the Regional Trial Court of petitioner’s motion to dismiss
private respondent’s damage suit.
The antecedents: On 27 May 1991 petitioner leased to private respondent
Westin Seafood Market, Inc., a parcel of land with a commercial building
thereon located at Araneta Center, Cubao, Quezon City, for a period of
nine (9) years and three (3) months, i.e., from 2 January 1989 to 30 April
1998, with a monthly rental of approximately P600,000.00. The contract
contained, among others, the following pertinent terms and
conditions:chanrob1es virtual 1aw library
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions contained in this
Contract shall be deemed as conditions, as well as covenants, and that this
Contract shall be automatically terminated and cancelled without resorting
to court action should LESSEE violate any or all said conditions, including
the payment of Rent, CUSA and other charges indicated in the FLP when
due within the time herein stipulated and in any such cases, LESSEE
hereby irrevocably appoints LESSOR, its authorized agents, employees
and/or representatives as his duly authorized attorney-in-fact, even after
the termination, expiration or cancellation of this Contract, with full power
and authority to open, enter, repossess, secure, enclose, fence and
otherwise take full and complete physical possession and control of the
leased premises and its contents without resorting to court action and/or to
summarily disconnect electrical and/or water services thereof, and that
LESSEE hereby irrevocably empowers LESSOR, his authorized agents,
employees and/or representatives to take inventory and possession of
whatever equipment, furniture, articles, merchandise, appliances, etc.,
found therein belonging to LESSEE, consignors and/or to any other
persons and to place the same in LESSOR’s warehouse or any other place
at LESSOR’s discretion for safekeeping, charging LESSEE the
corresponding storage fees therefor; that in case LESSEE fails to claim
said equipment, furniture, articles, merchandise, appliances, etc. from
storage and simultaneously liquidate any liability with LESSOR within
seven (7) days from date of said transfer to LESSOR’s warehouse,
LESSOR is likewise hereby expressly authorized and empowered by
LESSEE to dispose of said property/properties in a public sale through a
Notary Public of LESSOR’s choice and to apply the proceeds thereof to
whatever liability and/or indebtedness LESSEE may have to LESSOR plus
reasonable expenses for the same, including storage fees, and the
balance, if any, shall be turned over to LESSEE; that LESSEE hereby
expressly agrees that any or all acts performed by LESSOR, his authorized
agents, employees and/or representatives under the provisions of this
Section may not be the subject of any petition for a Writ of Preliminary
Injunction or Mandatory Injunction in court, and that LESSOR and/or his
authorized agents, employees, and/or representatives shall be free from
any civil and/or criminal liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
26. Upon the automatic termination of this lease contract, as the case may
be, LESSEE shall immediately vacate and redeliver physical possession of
the leased premises, including the keys appertaining thereto, to LESSOR
in good, clean and sanitary condition, reasonable wear and tear excepted,
devoid of all occupants, equipment, furniture, articles, merchandise, etc.,
belonging to LESSEE or to any other person except those belonging to
LESSOR; that should LESSEE fail to comply with this provision, LESSOR
is hereby given the same rights and power to proceed against LESSEE as
expressly granted in the immediately preceding section.
Private respondent failed to pay rentals despite several demands by
petitioner. As of 19 October 1992 the arrearages amounted to
P8,608,284.66. Admittedly, non-payment of rentals constituted breach of
their contract; thus, pursuant to the express authority granted petitioner
under the above-quoted Secs. 25 and 26 of the lease agreement, petitioner
on 31 October 1992 repossessed the leased premises, inventoried the
movable properties found within and owned by private respondent and
scheduled public auction for the sale of the movables on 19 August 1993
with notice to private Respondent.
On 26 November 1992 private respondent filed with the Metropolitan Trial
Court of Quezon City a complaint against petitioner for forcible entry with
damages and a prayer for a temporary restraining order and/or writ of
preliminary injunction. 2 The case was raffled to Branch 40 presided over
by Judge Guillermo L. Loja Jr. who issued a temporary restraining order
enjoining petitioner from selling private respondent’s properties at a public
auction.
On 9 December 1992 Judge Loja inhibited himself from trying the case and
directed its transfer to Branch 34 presided over by Judge Joselito SD
Generoso. Soon after, petitioner filed an urgent motion for the inhibition of
Judge Generoso and the immediate reraffle of the case arguing that the
summary transfer of the case to Judge Generoso was irregular as it was
not done by raffle.
The motion was granted and the case went to Branch 36 presided over by
Judge Francisco D. Villanueva. Thereafter, On 22 December 1992, at the
continuation of the hearing on the issuance of a writ preliminary mandatory
injunction, the parties agreed, among others, on the following: (a) private
respondent would deposit with the Philippine Commercial and Industrial
Bank in the name of the Metropolitan Trial Court, Branch 36, the amount of
P8,000,000.00 to guarantee the payment of its back rentals; (b) petitioner
would defer the sale of the personal properties of the Westin Seafood
Market, Inc., until a final settlement of the case had been arrived at; (c)
petitioner shall allow private respondent to retrieve all the perishable goods
from inside the leased premises like frozen meat, vegetables and fish, all
properly receipted for; (d) petitioner shall allow three (3) maintenance
personnel of private respondent to enter the premises at reasonable
working hours to maintain the restaurant equipment; and (e) the parties
shall negotiate for the restoration of the premises to private respondent,
and if no settlement be arrived at on or before January 8, 1993, the hearing
on the merits of the case shall proceed and the disposition of the amount
deposited representing the rental arrearages shall be left to the discretion
of the court.
This agreement was incorporated in the order of the court dated 22
December 1992 3 which in effect terminated for all intents and purposes
the incident on the issuance of a preliminary writ of injunction.
Private respondent did not comply with its undertaking to deposit with the
designated bank the amount representing its back rentals. Instead, with the
forcible entry case still pending with the MeTC, private respondent
instituted on 9 June 1993 another action for damages against petitioner
with the Regional Trial Court of Quezon City. The case was raffled to
Branch 101 presided over by Judge Pedro T. Santiago. 4
Petitioner filed a motion to dismiss the damage suit on the ground of litis
pendencia and forum shopping. On 2 July 1993, instead of ruling on the
motion, Judge Santiago issued an order archiving the case pending the
outcome of the forcible entry case being heard at the MeTC for the reason
that "the damages is (sic) principally anchored on whether or not the
defendants (petitioner herein) have committed forcible entry." 5 On 2
August 1993 petitioner moved for reconsideration of the order and
reiterated its motion to dismiss the suit for damages.
Before petitioner’s motion to dismiss could be resolved, private respondent
filed with the RTC on 18 August 1993 an amended complaint for damages.
On 14 September 1993 it also filed an Urgent Ex-Parte Motion for the
Issuance of a Temporary Restraining Order and Motion for the Grant of a
Preliminary Prohibitory and Preliminary Mandatory Injunction. On the very
same day, Judge Santiago issued an order (a) denying petitioner’s motion
to dismiss, (b) admitting private respondent’s amended complaint, and (c)
granting private respondent’s application for a temporary restraining order
against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action
for certiorari and prohibition on the ground that Judge Santiago acted in
excess of his jurisdiction and/or committed grave abuse of discretion
amounting to lack of jurisdiction in admitting the amended complaint of
private respondent and issuing a restraining order against petitioner; in
allowing private respondent to engage in forum shopping; and, taking
cognizance of the action for damages despite lack of jurisdiction. 6
But the Court of Appeals dismissed the petition due to the failure of
petitioner to file a motion for reconsideration of Judge Santiago’s order of
14 September 1993 which, it explained, was a prerequisite to the institution
of a petition for certiorari and prohibition. It also found that the elements of
litis pendencia were lacking to justify the dismissal of the action for
damages with the RTC because despite the pendency of the forcible entry
case with the MeTC the only damages recoverable thereat were those
caused by the loss of the use and occupation of the property and not the
kind of damages being claimed before the RTC which had no direct
relation to loss of material possession. It clarified that since the damages
prayed for in the amended complaint with the RTC were those caused by
the alleged high-handed manner with which petitioner reacquired
possession of the leased premises and the sale of private respondent’s
movables found therein, the RTC and not the MeTC had jurisdiction over
the action of damages. 7
Petitioner, aggrieved by the decision of the appellate court, filed the instant
petition for review on certiorari under Rule 45 of the Rules of Court alleging
that it erred in (a) finding that petitioner failed to avail of its plain, speedy
and adequate remedy of a prior motion for reconsideration with the RTC;
(b) ruling that the trial judge did not act with grave abuse of discretion in
taking cognizance of the action for damages and injunction despite the
pendency of the forcible entry case with the MeTC; and, (c) ruling that
private respondent did not commit forum shopping since the causes of
action before the RTC and MeTC were not identical with each other.
There is merit in the petition. While generally a motion for reconsideration
must first be filed before resorting to certiorari in order to give the lower
court an opportunity to correct the errors imputed to it 8 this rule admits of
exceptions and is not intended to be applied without considering the
circumstances of the case. 9 The filing of the motion for reconsideration
before availing of the remedy of certiorari is not sine qua non when the
issue raised is one purely of law, 10 or where the error is patent or the
disputed order is void, 11 or the questions raised on certiorari are the same
as those already squarely presented to and passed upon by the lower
court.
In its motion for dismissal of the action for damages with the RTC petitioner
raised the ground that another action for forcible entry was pending at the
MeTC between the same parties involving the same matter and cause of
action. Outrightly rejected by the RTC, the same issue was elevated by
petitioner on certiorari before the Court of Appeals. Clearly, under the
prevailing circumstance, any motion for reconsideration of the trial court
would have been a pointless exercise. 12
We now turn to the issue of whether an action for damages filed with the
Regional Trial Court by the lessee against the lessor should be dismissed
on the ground of pendency of another action for forcible entry and
damages earlier filed by the same lessee against the same lessor before
the Metropolitan Trial Court.
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.
This is consistent with the principle laid down in Sec. 1, par (e), of Rule 16
of the Rules of Court which states that the pendency of another action
between the same parties for the same cause is a ground for dismissal of
an action. Res adjudicata requires that there must be between the action
sought to be dismissed and the other action the following elements: (a)
identity of parties or at least such as representing the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and, (c) the identity in the two (2) preceding
particulars should be such that any judgment which may be rendered on
the other action will, regardless of which party is successful, amount to res
adjudicata in the action under consideration. 13
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as
amended, that a party may not institute more than one suit for a single
cause of action. Under Sec. 4 of the same Rule, if two or more suits are
instituted on the basis of the same cause of action, the filing of one or a
judgment upon the merits in any one is available as a ground for the
dismissal of the other or others. "Cause of action" is defined by Sec. 2 of
Rule 2 as the act of omission by which a party violates a right of another.
14 These premises obtaining, there is no question at all that private
respondent’s cause of action in the forcible entry case and in the suit for
damages is the alleged illegal retaking of possession of the leased
premises by the lessor, petitioner herein, from which all legal reliefs arise.
Simply stated, the restoration of possession and demand for actual
damages in the case before the MeTC and the demand for damages with
the RTC both arise from the same cause of action, i.e., the forcible entry by
petitioner into the leased premises.
A comparative study of the two (2) complaints filed by private respondent
against petitioner before the two (2) trial courts shows that not only are the
elements of res adjudicata present, at least insofar as the claim for actual
and compensatory damages is concerned, but also that the claim for
damages — moral and exemplary in addition to actual and compensatory
— constitutes splitting a single cause of action. Since this runs counter to
the rule against multiplicity of suits, the dismissal of the second action
becomes imperative.chanroblesvirtual|awlibrary
The complaint for forcible entry contains the following pertinent allegations
— Worse, defendants are threatening to sell at public auction and without the
2.01 On 02 January 1989, plaintiff entered into a contract of lease with
defendant PDC over a property designated as Ground Floor, Seafood
Market (hereinafter "Subject Premises") situated at the corner of EDSA
corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a period
of ten (10) years from 02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the
Subject Premises, plaintiff established and now operates thereon the now
famous Seafood Market Restaurant. Since then, plaintiff had been in
actual, continuous, and peaceful physical possession of the Subject
Premises until 31 October 1992.
x x x the entire duration of the contract. Hence, plaintiff has filed the present suit
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the
peaceful occupation and enjoyment of the Subject Premises to the
exclusion of all others, including defendants herein.
3.03 Defendants’ resort to strong arms tactics to forcibly wrest possession
of the Subject Premises from plaintiff and maintain possession thereof
through the use of force, threat, strategy and intimidation by the use of
superior number of men and arms amounts to the taking of the law into
their own hands.
3.04 Thus, defendants’ act of unlawfully evicting out plaintiff from the
Subject Premises it is leasing from defendant PDC and depriving it of
possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary to
public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with
their illegal acts and be ordered to vacate the Subject Premises and
restore possession thereof, together with its contents, to plaintiff.
x x x
4.07 Considering that defendants’ act of forcibly grabbing possession of
the Subject Premises from plaintiff is illegal and null and void, defendant
should be adjudged liable to plaintiff for all the aforedescribed damages
which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges
basically the same factual circumstances and issues as bases for the relief
prayed for, to wit:chanrob1es virtual 1aw library
4. On May 28,1991, plaintiff and defendant PDC entered into a Contract of
Lease for a period of ten years or from January 2, 1989 up to April 30,
1998 over a property designated as Ground Floor, Seafood Market
(hereinafter referred to as Subject Premises) situated at the corner of
EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A
copy of the lease contract is attached hereto as Annex "A" .
5. Immediately thereafter, plaintiff took over actual physical possession of
Subject Premises, and established thereon the now famous "Seafood
Market Restaurant."cralaw virtua1aw library
x x x
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the
benefit of any writ of possession or any lawful court order and with the aid
of approximately forty (40) armed security guards and policemen under the
supervision of defendant Tejam, forcibly entered the subject premises
through force, intimidation, threats and stealth and relying on brute force
and in a thunderboltish manner and against plaintiff’s will, unceremoniously
drew away all of plaintiff’s men out of the subject premises, thereby
depriving herein plaintiff of its actual, physical and natural possession of
the subject premises. The illegal, high-handed manner and gestapo like
take-over by defendants of subject premises is more particularly described
as follows: . . .
8. To date, defendants continue to illegally possess and hold the Subject
Premises, including all the multi-million improvements, fixtures and
equipment therein owned by plaintiff, all to the damage and prejudice of
plaintiff. The actuations of defendants constitute an unlawful appropriation.,
seizure and taking of property against the will and consent of plaintiff.
consent of plaintiff and without lawful authority, the multi-million fixtures
and equipment of plaintiff and at prices way below the market value
thereof. Plaintiff hereby attaches as Annex "B" the letter from defendants
dated August 6, 1993 addressed to plaintiff, informing the latter that the
former intends to sell at an auction on August 19, 1993 at 2:00 p.m.
properties of the plaintiff presently in defendants’ possession.
x x x
12. Defendant’s unlawful takeover of the premises constitutes a violation of
its obligation under Art. 1654 of the New Civil Code requiring the lessor to
maintain the lessee in peaceful and adequate enjoyment of the lease for
for the recovery of damages under Art. 1659 of the New Civil Code . . .
Restated in its bare essentials, the forcible entry case has one cause of
action, namely, the alleged unlawful entry by petitioner into the leased
premises out of which three (3) reliefs (denominated by private respondent
as its causes of action) arose: (a) the restoration by the lessor (petitioner
herein) of the possession of the leased premises to the lessee; (b) the
claim for actual damages due to the losses suffered by private respondent
such as the deterioration of perishable foodstuffs stored inside the
premises and the deprivation of the use of the premises causing loss of
expected profits; and, (c) the claim for attorney’s fees and costs of suit.
On the other hand, the complaint for damages prays for a monetary award
consisting of (a) moral damages of P500,000.00 and exemplary damages
of another P500,000.00; (b) actual damages of P20,000,000.00 and
compensatory damages of P1,000,000.00 representing unrealized profits;
and, (c) P200,000.00 for attorney’s fees and costs, all based on the alleged
forcible takeover of the leased premises by petitioner. Since actual and
compensatory damages were already prayed for in the forcible entry case
before the MeTC, it is obvious that this cannot be relitigated in the damage
suit before the RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed
considering that these sprung from the main incident being heard before
the MeTC. Jurisprudence is unequivocal that when a single delict or wrong
is committed — like the unlawful taking or detention of the property of
another — there is but one single cause of action regardless of the number
of rights that may have been violated, and all such rights should be alleged
in a single complaint as constituting one single cause of action. 15 In a
forcible entry case, the real issue is the physical possession of the real
property. The question of damages is merely secondary or incidental, so
much so that the amount thereof does not affect the jurisdiction of the
court. In other words, the unlawful act of a deforciant in taking possession
of a piece of land by means of force and intimidation against the rights of
the party actually in possession thereof is a delict or wrong, or a cause of
action that gives rise to two (2) remedies, namely, the recovery of
possession and recovery of damages arising from the loss of possession,
but only to one action. For obvious reasons, both remedies cannot be the
subject of two (2) separate and independent actions, one for recovery of
possession only, and the other, for the recovery of damages. That would
inevitably lead to what is termed in law as splitting up a cause of action. 16
In David v. de la Cruz 17 we observed —
Herein tenants have but one cause of action against their landlord, their
illegal ejectment or removal from their landholdings, which cause of action
however entitles them to two (2) claims or remedies — for reinstatement
and damages. As both claims arise from the same cause of action, they
should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of
damages may be recovered in one case and the rest, in another. 18 In
Bachrach v. Icarangal 19 we explained that the rule was aimed at
preventing repeated litigations between the same parties in regard to the
same subject of the controversy and to protect the defendant from
unnecessary vexation. Nemo debet bis vexari pro una et eadem causa.
What then is the effect of the dismissal of the other action? Since the rule
is that all such rights should be alleged in a single complaint, it goes
without saying that those not therein included cannot be the subject of
subsequent complaints for they are barred forever. 20 If a suit is brought
for a part of a claim, a judgment obtained in that action precludes the
plaintiff from bringing a second action for the residue of the claim,
notwithstanding that the second form of action is not identical with the first
or different grounds for relief are set for the second suit. This principle not
only embraces what was actually determined, but also extends to every
matter which the parties might have litigated in the case. 21 This is why the
legal basis upon which private respondent anchored its second claim for
damages, i.e., Art. 1659 in relation to Art. 1654 of the Civil Code, 22 not
otherwise raised and cited by private respondent in the forcible entry case,
cannot be used as justification for the second suit for damages. We note,
not without some degree of displeasure, that by filing a second suit for
damages, private respondent was not only able to press a claim for moral
and exemplary damages which by its failure to allege the same in its suit
before the MeTC foreclosed its right to sue on it, but it was also able to
obtain from the RTC, by way of another temporary restraining order, a
second reprieve from an impending public auction sale of its movables
which it could not anymore secure from the MeTC before which the matter
of the issuance of a preliminary writ of injunction was already
closed.chanrobles.com : virtual law library
The foregoing discussions provide sufficient basis to petitioner’s charge
that private respondent and its counsel in the trial courts committed forum
shopping. In Crisostomo v. Securities and Exchange Commission 23 we
ruled —
There is forum-shopping whenever, as a result of an adverse opinion in
one forum, a party seeks a favorable opinion (other than by appeal
or certiorari) in another. The principle applies . . . with respect to suits filed
in the courts . . . in connection with litigations commenced in the court . . .
in anticipation of an unfavorable . . . ruling and a favorable case where the
court in which the second suit was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v. National
Labor Relations Commission 24 that there is forum shopping when the
actions involve the same transactions, the same essential facts and
circumstances. The reason behind the proscription of forum shopping is
obvious. This unnecessarily burdens our courts with heavy caseloads,
unduly taxes the manpower and financial resources of the judiciary and
trifles with and mocks our judicial processes, thereby adversely affecting
the efficient administration of justice. This condemnable conduct has
prompted the Court to issue circulars 25 ordering among others that a
violation thereof shall be cause for the dismissal of the case or cases
without prejudice to the taking of appropriate action against the counsel or
party concerned.
The records ineluctably show that the complaint lodged by private
respondent with the Regional Trial Court of Quezon City contained no
certification of non-forum shopping. When petitioner filed a motion to
dismiss the case raising among others the ground of forum shopping it
pointed out the absence of the required certification. The amended
complaint, as well as the second and third amended complaints, attempted
to rectify the error by invariably stating that there was no other action
pending between the parties involving the same causes of action although
there was actually a forcible entry case pending before the MTC of Quezon
City. By its admission of a pending forcible entry case, it is obvious that
private respondent was indulging in forum shopping. While private
respondent conveniently failed to inform the RTC that it had likewise
sought damages in the MTC on the basis of the same forcible entry, the
fact remains that it precisely did so, which stratagem was being duplicated
in the second case. This is a compelling reason to dismiss the second
case.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the
Court of Appeals dated 27 September 1995 and the Order of the Regional
Trial Court of Quezon City dated 24 September 1993 are REVERSED and
SET ASIDE. The Regional Trial Court of Quezon City is directed to dismiss
Civil Case No. Q93-16409, "Westin Seafood Market, Inc. v. Progressive
Development Corporation, Et Al.," and the Metropolitan Trial Court of
Quezon City to proceed with the proper disposition of Civil Case No. 6589,
"Westin Seafood Market, Inc. v. Progressive Development Corporation, Et
Al.," with dispatch considering the summary nature of the case. Treble
costs against private Respondent.
SO ORDERED.ch
CGR CORPORATION, et al. v. ERNESTO L. TREYES, JR. 522
SCRA 765 (2007)
The recoverable damages in forcible entry and detainer cases refer
to “rents” or “the reasonable compensation for the use and
occupation of the premises” or “fair rental value of the property” and
attorney’s fees and costs. CGR Corporation, owned by Herman M.
Benedicto and Alberto R. Benedicto, leased several hectares of
public land, mostly consisting of fishponds, in Negros
Occidental. Ernesto L. Treyes, Jr., with his men, forcibly entered the
leased properties and barricaded the entrance to the fishponds, set
up a barbed wire fence along the road going to CRG Corporation‘s
fishponds, and harvested several tons of milkfish, fry and
fingerlings. CGR filed with the Municipal Trial Court (MTC) in Sagay
City separate complaints for Forcible Entry with Temporary
Restraining Order with Preliminary Injunction and Damages and
reserved a separate civil action. The MTC found Treyes and his
men guilty of forcible entry. CGR filed a separate complaint alleging
therein that he suffered damages for the actions of Treyes during
and after the forcible entry. A claim for additional damages which
arose from incidents occurring after the dispossession by Treyes of
the premises was thereafter prayed for. The MTC awarded the
claims of CGR.
ISSUE:
Whether or not additional damages can be awarded resulting from
events that took place after Treyes left the property
HELD:
The Court held that the ―rents‖ or the ―reasonable compensation
for the use of the premises or the fair rental value of the property
and attorney‘s fees may be recovered through a separate action
while the forcible entry case is pending. The recoverable damages
in forcible entry and detainer cases refer to ―rents‖ or ―the
reasonable compensation for the use and occupation of the
premises‖ or ―fair rental value of the property‖ and attorney‘s fees
and costs. There is no basis for the MTC to award actual, moral,
and exemplary damages in view of the settled rule that in ejectment
cases, the only damage that can be recovered is the fair rental value
or the reasonable compensation for the use and occupation of the
property. Considering that the only issue raised in ejectment is that
of rightful possession, damages which could be recovered are those
which the plaintiff could have sustained as a mere possessor, or
those caused by the loss of the use and occupation of the property,
and not the damages which he may have suffered but which have
no direct relation to his loss of material possession. Other damages
must thus be claimed in an ordinary action. As reflected in the
allegations in the complaint for damages of CGR et al., it had to do
with Treyes‘ alleged harvesting and carting away several tons of
milkfish and other marine products in their fishponds, ransacking
and destroying of a chapel built by CGR Corporation, and stealing
religious icons and even decapitating the heads of some of them,
after the act of dispossession had occurred. Restated in its bare
essentials, the forcible entry case has one cause of action, namely,
the alleged unlawful entry by petitioner into the leased premises out
of which three (3) reliefs arose: (a) the restoration by the lessor of
the possession of the leased premises to the lessee, (b) the claim
for actual damages due to the losses suffered by private respondent
such as the deterioration of perishable foodstuffs stored inside the
premises and the deprivation of the use of the premises causing
loss of expected profits; and, (c) the claim for attorney‘s fees and
costs of suit. CGR Corporation‘s filing of an independent action for
damages other than those sustained as a result of their
dispossession or those caused by the loss of their use and
occupation of their properties could not thus be considered as
splitting of a cause of action.
Remedial Law; Forcible Entry; Damages; The only form of
damages that may be recovered in an action for forcible entry is the
fair rental value or the reasonable compensation for the use and
occupation of the property; Other damages must be claimed in an
ordinary action.—The 2006 case of Dumo v. Espinas, 480 SCRA 56
(2006), reiterates the long-established rule that the only form of
damages that may be recovered in an action for forcible entry is the
fair rental value or the reasonable compensation for the use and
occupation of the property: Lastly, we agree with the CA and the
RTC that there is no basis for the MTC to award actual, moral, and
exemplary damages in view of the settled rule that in ejectment
cases, the only damage that can be recovered is the fair rental value
or the reasonable compensation for the use and occupation of the
property. Considering that the only issue raised in ejectment is that
of rightful possession, damages which could be recovered are
those which the plaintiff could have sustained as a mere possessor,
or those caused by the loss of the use and occupation of the
property, and not the damages which he may have suffered but
which have no direct relation to his loss of material possession. x x
x (Emphasis and italics supplied; citations omitted) Other damages
must thus be claimed in an ordinary action.
Same; Same; Res Judicata; Res judicata may not apply because
the court in a forcible entry case has no jurisdiction over claims for
damages other than the use and occupation of the premises and
attorney’s fees.—Surely, one of the elements of litis pendentia—
that the identity between the pending actions, with respect to the
parties, rights asserted and reliefs prayed for, is such that any
judgment rendered on one action will, regardless of which is
successful, amount to res judicata in the action under
consideration—is not present, hence, it may not be invoked to
dismiss petitioners’ complaint for damages. Res judicata may not
apply because the court in a forcible entry case has no jurisdiction
over claims for damages other than the use and occupation of the
premises and attorney’s fees.
Same; Same; Same; Petitioners’ filing of an independent action for
damages other than those sustained as a result of their
dispossession or those caused by the loss of their use and
occupation of their properties could not be considered as splitting of
a cause of action.—Petitioners’ filing of an independent action for
damages other than those sustained as a result of their
dispossession or those caused by the loss of their use and
occupation of their properties could not thus be considered as
splitting of a cause of action.
REMEDIO V. FLORES, petitioner,
vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO
BINONGCAL & FERNANDO CALION, respondents.
Lucio A. Dixon for respondent F. Calion.
FERIA, J.:
The Court rules that the application of the totality rule under Section
33(l) of Batas Pambansa Blg. 129 and Section 11 of the Interim
Rules is subject to the requirements for the permissive joinder of
parties under Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or against whom
any right to relief in respect to or arising out of the same transaction
or series of transactions is alleged to exist, whether jointly, severally,
or in the alternative, may, except as otherwise provided in these
rules, join as plaintiffs or be joined as defendants in one complaint,
where any question of law or fact common to all such plaintiffs or to
all such defendants may arise in the action; but the court may make
such orders as may be just to prevent any plaintiff or defendant from
being embarrassed or put to expense in connection with any
proceedings in which he may have no interest.
Petitioner has appealed by certiorari from the order of Judge Heilia
S. Mallare-Phillipps of the Regional Trial Court of Baguio City and
Benguet Province which dismissed his complaint for lack of
jurisdiction. Petitioner did not attach to his petition a copy of his
complaint in the erroneous belief that the entire original record of
the case shall be transmitted to this Court pursuant to the second
paragraph of Section 39 of BP129. This provision applies only to
ordinary appeals from the regional trial court to the Court of Appeals
(Section 20 of the Interim Rules). Appeals to this Court by petition
for review on certiorari are governed by Rule 45 of the Rules of
Court (Section 25 of the Interim Rules).
However, the order appealed from states that the first cause of
action alleged in the complaint was against respondent Ignacio
Binongcal for refusing to pay the amount of P11,643.00
representing cost of truck tires which he purchased on credit from
petitioner on various occasions from August to October, 1981; and
the second cause of action was against respondent Fernando
Calion for allegedly refusing to pay the amount of P10,212.00
representing cost of truck tires which he purchased on credit from
petitioner on several occasions from March, 1981 to January, 1982.
On December 15, 1983, counsel for respondent Binongcal filed a
Motion to Dismiss on the ground of lack of jurisdiction since the
amount of the demand against said respondent was only
P11,643.00, and under Section 19(8) of BP129 the regional trial
court shall exercise exclusive original jurisdiction if the amount of
the demand is more than twenty thousand pesos (P20,000.00). It
was further averred in said motion that although another person,
Fernando Calion, was allegedly indebted to petitioner in the amount
of P10,212.00, his obligation was separate and distinct from that of
the other respondent. At the hearing of said Motion to Dismiss,
counsel for respondent Calion joined in moving for the dismissal of
the complaint on the ground of lack of jurisdiction. Counsel for
petitioner opposed the Motion to Dismiss. As above stated, the trial
court dismissed the complaint for lack of jurisdiction.
Petitioner maintains that the lower court has jurisdiction over the
case following the "novel" totality rule introduced in Section 33(l) of
BP129 and Section 11 of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or causes of action
between the same or different parties, embodied in the same
complaint, the amount of the demand shall be the totality of the
claims in all the causes of action, irrespective of whether the causes
of action arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the jurisdiction of the
court is dependent on the amount involved, the test of jurisdiction
shall be the aggregate sum of all the money demands, exclusive
only of interest and costs, irrespective of whether or not the separate
claims are owned by or due to different parties. If any demand is for
damages in a civil action, the amount thereof must be specifically
alleged.
Petitioner compares the above-quoted provisions with the pertinent
portion of the former rule under Section 88 of the Judiciary Act of
1948 as amended which reads as follows:
... Where there are several claims or causes of action between the
same parties embodied in the same complaint, the amount of the
demand shall be the totality of the demand in all the causes of
action, irrespective of whether the causes of action arose out of the
same or different transactions; but where the claims or causes of
action joined in a single complaint are separately owned by or due
to different parties, each separate claim shall furnish the
jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule,
the totality rule was reduced to clarity and brevity and the
jurisdictional test is the totality of the claims in all, not in each, of the
causes of action, irrespective of whether the causes of action arose
out of the same or different transactions.
This argument is partly correct. There is no difference between the
former and present rules in cases where a plaintiff sues a defendant
on two or more separate causes of action. In such cases, the
amount of the demand shall be the totality of the claims in all the
causes of action irrespective of whether the causes of action arose
out of the same or different transactions. If the total demand
exceeds twenty thousand pesos, then the regional trial court has
jurisdiction. Needless to state, if the causes of action are separate
and independent, their joinder in one complaint is permissive and
not mandatory, and any cause of action where the amount of the
demand is twenty thousand pesos or less may be the subject of a
separate complaint filed with a metropolitan or municipal trial court.
On the other hand, there is a difference between the former and
present rules in cases where two or more plaintiffs having separate
causes of action against a defendant join in a single complaint.
Under the former rule, "where the claims or causes of action joined
in a single complaint are separately owned by or due to different
parties, each separate claim shall furnish the jurisdictional test"
(Section 88 of the Judiciary Act of 1948 as amended, supra). This
was based on the ruling in the case of Vda. de Rosario vs. Justice
of the Peace, 99 Phil. 693. As worded, the former rule applied only
to cases of permissive joinder of parties plaintiff. However, it was
also applicable to cases of permissive joinder of parties defendant,
as may be deduced from the ruling in the case of Brillo vs. Buklatan,
thus:
Furthermore, the first cause of action is composed of separate
claims against several defendants of different amounts each of
which is not more than P2,000 and falls under the jurisdiction of the
justice of the peace court under section 88 of Republic Act No, 296.
The several claims do not seem to arise from the same transaction
or series of transactions and there seem to be no questions of law
or of fact common to all the defendants as may warrant their joinder
under Rule 3, section 6. Therefore, if new complaints are to be filed
in the name of the real party in interest they should be filed in the
justice of the peace court. (87 Phil. 519, 520, reiterated in Gacula
vs. Martinez, 88 Phil. 142, 146)
Under the present law, the totality rule is applied also to cases where
two or more plaintiffs having separate causes of action against a
defendant join in a single complaint, as well as to cases where a
plaintiff has separate causes of action against two or more
defendants joined in a single complaint. However, the causes of
action in favor of the two or more plaintiffs or against the two or more
defendants should arise out of the same transaction or series of
transactions and there should be a common question of law or fact,
as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of
permissive joinder of parties may be illustrated by the two cases
which were cited in the case of Vda. de Rosario vs. Justice of the
Peace (supra) as exceptions to the totality rule. In the case of
Soriano y Cia vs. Jose (86 Phil. 523), where twenty-nine dismissed
employees joined in a complaint against the defendant to collect
their respective claims, each of which was within the jurisdiction of
the municipal court although the total exceeded the jurisdictional
amount, this Court held that under the law then the municipal court
had jurisdiction. In said case, although the plaintiffs' demands were
separate, distinct and independent of one another, their joint suit
was authorized under Section 6 of Rule 3 and each separate claim
furnished the jurisdictional test. In the case of International Colleges,
Inc. vs. Argonza (90 Phil. 470), where twenty-five dismissed
teachers jointly sued the defendant for unpaid salaries, this Court
also held that the municipal court had jurisdiction because the
amount of each claim was within, although the total exceeded, its
jurisdiction and it was a case of permissive joinder of parties plaintiff
under Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they
do not fall under the Labor Code) would be under the jurisdiction of
the regional trial court. Similarly, in the abovecited cases of Brillo vs.
Buklatan and Gacula vs. Martinez (supra), if the separate claims
against the several defendants arose out of the same transaction or
series of transactions and there is a common question of law or fact,
they would now be under the jurisdiction of the regional trial court.
In other words, in cases of permissive joinder of parties, whether as
plaintiffs or as defendants, under Section 6 of Rule 3, the total of all
the claims shall now furnish the jurisdictional test. Needless to state
also, if instead of joining or being joined in one complaint separate
actions are filed by or against the parties, the amount demanded in
each complaint shall furnish the jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional
test is subject to the rules on joinder of parties pursuant to Section
5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and that,
after a careful scrutiny of the complaint, it appears that there is a
misjoinder of parties for the reason that the claims against
respondents Binongcal and Calion are separate and distinct and
neither of which falls within its jurisdiction.
WHEREFORE, the order appealed from is affirmed, without
pronouncement as to costs.
SO ORDERED.
EVANGELISTA VS. SANTIAGO
G.R. No. 157447. April 29, 2005
Principle laid down by SC:
Lack of legal capacity to sue means that the plaintiff is not in the
exercise of his civil rights, or does not have the necessary
qualification to appear in the case, or does not have the character
or representation he claims. On the other hand, a case is
dismissible for lack of personality to sue upon proof that the
plaintiff is not the real party-in-interest, hence grounded on failure to
state a cause of action. The term "lack of capacity to sue" should
not be confused with the term "lack of personality to sue." While the
former refers to a plaintiff’s general disability to sue, such as on
account of minority, insanity, incompetence, lack of juridical
personality or any other general disqualifications of a party, the latter
refers to the fact that the plaintiff is not the real party- in-interest.
Correspondingly, the first can be a ground for a motion to dismiss
based on the ground of lack of legal capacity to sue; whereas the
second can be used as a ground for a motion to dismiss based on
the fact that the complaint, on the face thereof, evidently states no
cause of action.
Facts: This case is about the complaint for the declaration of
nullity of Original Certificate of Title No. 670 and all other titles
emanating therefrom. The subject property is a vast tract of lands
where the petitioners alleged that they occupied and possessed
such parcels. The whole property covered by OCT No. 670 was
issued pursuant to Decree No. 1024 in favor of Isabel Manahan
Santiago the mother of herein respondent. Petitioners filed with the
trial court, on 29 April 1996, an action for declaration of nullity of
respondent’s certificates of title on the basis that OCT No. 670 was
fake and spurious and also Petitioners came by information that
respondent was planning to evict them from the Subject Property.
Two of the petitioners had actually received notices to vacate.
Respondent filed his Answer with Prayer for Preliminary Hearing on
the Affirmative Defenses. Respondent claimed that the petitioners
had no legal capacity to file the Complaint, and thus, the Complaint
stated no cause of action. Since OCT No. 670 was genuine and
authentic on its face, then OCT No. 670 and all of respondent’s land
titles derived therefrom, are incontrovertible, indefeasible and
conclusive against the petitioners and the whole world.
Furthermore, He pointed out that any action against his certificates
of title already prescribed, especially with regard to OCT No. 670,
which was issued in 1913 or more than 83 years prior to the filing of
the Complaint by the petitioners.
During said hearing, petitioners presented their lone witness,
Engineer Placido Naval, a supposed expert on land registration
laws. In response to questions from Honorable Judge Francisco C.
Rodriguez of the trial court, Engineer Naval answered that a parcel
of land titled illegally would revert to the State if the Torrens title was
cancelled, and that it was the State, through the Office of the
Solicitor General, that should file for the annulment or cancellation
of the title. Respondent, on the other hand, did not present any
evidence but relied on all the pleadings and documents he had so
far submitted to the trial court.
RTC dismissed the case ruling that plaintiffs were not the lawful
owners of the land subject of this case, for they did not comply with
PD 892, the said plaintiffs do not have the legal standing to bring
before this Court the instant complaint. Defendants title especially
so with the mother title OCT 670 was entered and issued in 1913 or
more than Eighty Three (83) years ago, the same not having been
questioned by any party. Only now that it is being questioned, but
sad to say, plaintiffs who are on the offensive and relying on their
lone expert witness, instead of bolstering their case, unwittingly
sealed their fate.
The MR of the petitioner are likewise dismissed. The CA affirmed
the decision of RTC. Hence the reason of this petition.
Issue: 1. Whether or not the Petitioner has the
capacity to sue
2. Whether an action for quieting of title, specifically where
petitioners are in possession of subject land, can be subject of
prescription.
Held: No. According to Article 477 of the Civil Code,
the plaintiff, in an action to remove a cloud on or to quiet title, must
have legal or equitable title to, or interest in, the real property which
is the subject matter of the action. Petitioners failed to establish in
their Complaint that they had any legal or equitable title to, or
legitimate interest in, the Subject Property so as to justify their right
to file an action to remove a cloud on or to quiet title.
Even as this Court agrees with the petitioners that
their action was one for removal of a cloud on or quieting of title, it
does arrive at the same conclusion as the trial court and the Court
of Appeals that petitioners had no personality to file the said action,
not being the parties-in-interest, and their Complaint should be
dismissed for not stating a cause of action.
Therefore, without legal or equitable title to the Subject Property, the
petitioners lacked the personality to file an action for removal of a
cloud on, or quieting of, title and their Complaint was properly
dismissed for failing to state a cause of action. In view of the
dismissal of the case on this ground, it is already unnecessary for
this Court to address the issue of prescription of the action.
Actions; Pleadings and Practice; Motions to Dismiss; Words and
Phrases; That “the plaintiff has no legal capacity to sue” and “the
pleading asserting the claim states no cause of action” are two
different grounds for a motion to dismiss or are two different
affirmative defenses; Lack of legal capacity to sue means that the
plaintiff is not in the exercise of his civil rights, or does not have the
necessary qualification to appear in the case, or does not have the
character or representation he claims; A case is dismissible for lack
of personality to sue upon proof that the plaintiff is not the real party-
in-interest, hence grounded on failure to state a cause of action.—
Before anything else, it should be clarified that “the plaintiff has no
legal capacity to sue” and “the pleading asserting the claim states
no cause of action” are two different grounds for a motion to dismiss
or are two different affirmative defenses. Failure to distinguish
between “the lack of legal capacity to sue” from “the lack of
personality to sue” is a fairly common mistake. The difference
between the two is explained by this Court in Columbia Pictures,
Inc. v. Court of Appeals: Among the grounds for a motion to dismiss
under the Rules of Court are lack of legal capacity to sue and that
the complaint states no cause of action. Lack of legal capacity to
sue means that the plaintiff is not in the exercise of his civil rights,
or does not have the necessary qualification to appear in the case,
or does not have the character or representation he claims. On the
other hand, a case is dismissible for lack of personality to sue upon
proof that the plaintiff is not the real party-in-interest, hence
grounded on failure to state a cause of ac tion. The term “lack of
capacity to sue” should not be confused with the term “lack of
personality to sue.” While the former refers to a plaintiff’s general
disability to sue, such as on account of minority, insanity,
incompetence, lack of juridical personality or any other general
disqualifications of a party, the latter refers to the fact that the
plaintiff is not the real party-in-interest. Correspondingly, the first can
be a ground for a motion to dismiss based on the ground of lack of
legal capacity to sue; whereas the second can be used as a ground
for a motion to dismiss based on the fact that the complaint, on the
face thereof, evidently states no cause of action.
Same; Same; Same; The affirmative defense that the Complaint
states no cause of action, similar to a motion to dismiss based on
the same ground, requires a hypothetical admission of the facts
alleged in the Complaint; In resolving whether or not a Complaint
states a cause of action, the trial court should limit itself to examining
the sufficiency of the allegations in the Complaint.—The affirmative
defense that the Complaint stated no cause of action, similar to a
motion to dismiss based on the same ground, requires
a hypothetical admission of the facts alleged in the Complaint. In
the case of Garcon v. Redemptorist Fathers, this Court laid down
the rules as far as this ground for dismissal of an action or affirmative
defense is concerned: It is already well-settled by now that, in a
motion to dismiss a complaint based on lack of cause of action, the
question submitted to the court for determination is the sufficiency
of the allegations of fact made in the complaint to constitute a cause
of action, and not on whether these allegations of fact are true, for
said motion must hypothetically admit the truth of the facts alleged
in the complaint; that the test of the sufficiency of the facts alleged
in the complaint is whether or not, admitting the facts alleged, the
court could render a valid judgment upon the same in accordance
with the prayer of said complaint. Stated otherwise, the insufficiency
of the cause of action must appear in the face of the complaint in
order to sustain a dismissal on this ground, for in the determination
of whether or not a complaint states a cause of action, only the facts
alleged therein and no other matter may be considered, and the
court may not inquire into the truth of the allegations, and find them
to be false before a hearing is had on the merits of the case; and it
is improper to inject in the allegations of the complaint facts not
alleged or proved, and use these as basis for said motion. In
resolving whether or not the Complaint in the present case stated a
cause of action, the trial court should have limited itself to examining
the sufficiency of the allegations in the Complaint. It was proscribed
from inquiring into the truth of the allegations in the Complaint or the
authenticity of any of the documents referred or attached to the
Complaint, since these are deemed hypothetically admitted by the
respondent. The trial court evidently erred in making findings as to
the authenticity of the Deeds of Assignment executed by Ismael
Favila in favor of petitioners on 15 April 1994 and 02 June 1994; and
questioning the existence and execution of the Special Power of
Attorney in favor of said Ismael Favila by his siblings on 25 February
1965. These matters may only be resolved after a proper trial on the
merits.
Domingo vs. Carague 456 SCRA 450 , April 15, 2005
FACTS:
This case was a petition for certiorari is the legality of a
resolution No. of the Commission on Audit (COA) providing for
Organizational Restructuring Plan. The petitioners alleged therein
that this Plan is intrinsically void for want of an enabling law which
gives that COA to undertake the same and providing for the
necessary standards, conditions, restrictions, limitations,
guidelines, and parameters. Petitioners further alleged COA
committed grave abuse of discretion amounting to lack or excess of
jurisdiction. Respondents, through the Office of the Solicitor General
(OSG), countered that petitioners have no legal standing to file the
present petition since they have not shown "a personal stake in the
outcome of the case" or an actual or potential injury that can be
redressed by our favorable decision. In essence, it is alleged that
the petitioners are not a party in interest, but the petitioners claim
otherwise by reason that the matter is of public concern. The said
Organizational Restructuring Plan is not just a mere reorganization
but a revamp or overhaul of the COA, with a "spillover effect" upon
its audit performance. This will have an impact upon the rest of the
government bodies subject to its audit supervision, thus, should be
treated as a matter of transcendental importance.
ISSUE: Whether petitioners have the legal standing to institute
the instant petition.
HELD: The Supreme Court decided, NO.It stated that:
(Locus Standi)
There was no showing that they had any direct and personal
interest in the COA Organizational Restructuring Plan. There was
also of an admission that "they do not seek any affirmative relief nor
impute any improper or improvident act against the respondents"
and "are not motivated by any desire to seek affirmative relief from
COA or from respondents that would redound to their personal
benefit or gain." Hence, the petitioners do not have any legal
standing to file the instant suit. This case was decided by the
Supreme Court En Banc.He who is directly affected and whose
interest is immediate and substantial has the standing to sue. A
party must show a personal stake in the outcome of the case or
an injury to himself that can be redressed by a favorable
decision in order to warrant an invocation of the court
Same; Same; Locus Standi; Where the petitioners have not shown
any direct and personal interest in the COA Organizational
Restructuring Plan, where there is no indication that they have
sustained or are in imminent danger of sustaining some direct injury
as a result of its implementation, they do not have any legal standing
to file a suit questioning the legality of said Plan.—Here, petitioners
have not shown any direct and personal interest in the COA
Organizational Restructuring Plan. There is no indication that they
have sustained or are in imminent danger of sustaining some direct
injury as a result of its implementation. In fact, they admitted that
“they do not seek any affirmative relief nor impute any improper or
improvident act against the respondents” and “are not motivated by
any desire to seek affirmative relief from COA or from respondents
that would redound to their personal benefit or gain.” Clearly, they
do not have any legal standing to file the instant suit.
OPOSA vs. FACTORAN G.R. No. 101083. July 30, 1993 - -
Digested Case
LANDMARK CASE: In 1990, 44 children, through their parents,
sought to make the DENR Secretary stop issuing licenses to cut
timber, invoking their right to a healthful environment. They brought
the case in the name of all the children in the Philippines and in the
name of the generations yet unborn!
FACTS:
The petitioners, all minors, sought the help of the Supreme Court to
order the respondent, then Secretary of DENR, to cancel all existing
Timber License Agreement (TLA) in the country and to cease and
desist from receiving, accepting, processing, renewing or approving
new TLAs. They alleged that the massive commercial logging in the
country is causing vast abuses on rain-forest.They further asserted
that the rights of their generation and the rights of the generations
yet unborn to a balanced and healthful ecology. Plaintiffs further
assert that the adverse and detrimental consequences of continued
and deforestation are so capable of unquestionable demonstration
that the same may be submitted as a matter of judicial notice. This
notwithstanding, they expressed their intention to present expert
witnesses as well as documentary, photographic and film evidence
in the course of the trial.
ISSUE:
Whether or not the petitioners have a locus standi.
HELD:
The SC decided in the affirmative. Locus standi means the right of
the litigant to act or to be heard.Under Section 16, Article II of the
1987 constitution, it states that: The state shall protect and advance
the right of the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature. Petitioners, minors assert
that they represent their generation as well as generation yet
unborn. We find no difficulty in ruling that they can, for themselves,
for others of their generation and for the succeeding generations,
file a class suit. Their personality to sue in behalf of the succeeding
generations can only be based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology
is concerned. Such a right, as hereinafter expounded considers the
“rhythm and harmony of nature”. Nature means the created world in
its entirety. Such rhythm and harmony indispensably include, inter
alia, the judicious disposition, utilization, management, renewal and
conservation of the country’s forest, mineral, land, waters fisheries,
wildlife, off- shore areas and other natural resources to the end that
their exploration, development and utilization be equitably
accessible to the present as well as future generations. Needless to
say, every generation has a responsibility to the next to preserve
that rhythm and harmony for the full enjoyment of a balanced and
healthful ecology. Put a little differently, the minor’s assertion of their
right to a sound environment constitutes, at the same time, the
performance of their obligation to ensure the protection of that right
for the generations to come. This landmark case has been ruled as
a class suit because the subject matter of the complaint is of
common and general interest, not just for several but for ALL
CITIZENS OF THE PHILIPPINES.
Remedial Law; Actions; Class Suit; The subject matter of the
complaint is of common and general interest not just to several, but
to all citizens of the Philippines; All the requisites for the filing of a
valid class suit under Section 12 Rule 3 of the Revised Rules of
Court are present.—Petitioners instituted Civil Case No. 90-777 as
a class suit. The original defendant and the present respondents did
not take issue with this matter. Nevertheless, We hereby rule that
the said civil case is indeed a class suit. The subject matter of the
complaint is of common and general interest not just to several, but
to all citizens of the Philippines. Consequently, since the parties are
so numerous, it becomes impracticable, if not totally impossible, to
bring all of them before the court. We likewise declare that the
plaintiffs therein are numerous and representative enough to ensure
the full protection of all concerned interests. Hence, all the requisites
for the filing of a valid class suit under Section 12, Rule 3 of the
Revised Rules of Court are present both in the said civil case and
in the instant petition, the latter being but an incident to the former.
Same; Same; Same; Same; Petitioners’ personality to sue in behalf
of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and
healthful ecology is concerned.—This case, however, has a special
and novel element. Petitioners minors assert that they represent
their generation as well as generations yet unborn. We find no
difficulty in ruling that they can, for themselves, for others of their
generation and for the succeeding generations, file a class suit.
Their personality to sue in behalf of the succeeding generations can
only be based on the concept of intergenerational responsibility
insofar as the right to a balanced and healthful ecology is
concerned. Such a right, as hereinafter expounded, considers the
“rhythm and harmony of nature.”
Same; Same; Same; Same; Same; The minors’ assertion of their
right to a sound environment constitutes at the same time the
performance of their obligation to ensure the protection of that right
for the generation to come.—Needless to say, every generation has
a responsibility to the next to preserve that rhythm and harmony for
the full enjoyment of a balanced and healthful ecology. Put a little
differently, the minors’ assertion of their right to a sound
environment constitutes, at the same time, the performance of their
obligation to ensure the protection of that right for the generations
to come.
Constitutional Law; The complaint focuses on one specific
fundamental legal right; The right to a balanced and healthful
ecology.—The complaint focuses on one specific fundamental legal
right—the right to a balanced and healthful ecology which, for the
first time in our nation’s constitutional history, is solemnly
incorporated in the fundamental law.
Same; Same; The right to a balanced and healthful ecology carries
with it the correlative duty to refrain from impairing the
environment.—The right to a balanced and healthful ecology carries
with it the correlative duty to refrain from impairing the environment.
Same; Same; The right of the petitioners to a balanced and healthful
ecology is as clear as the DENR’s duty to protect and advance the
said right.—Thus, the right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as clear as the
DENR’s duty—under its mandate and by virtue of its powers and
functions under E.O. No. 192 and the Administrative Code of
1987—to protect and advance the said right.
Same; Political Question; The political question doctrine is no
longer the insurmountable obstacle to the exercise of judicial power
or the impenetrable shield that protects executive and legislative
actions from judicial inquiry or review.—The foregoing considered,
Civil Case No. 90-777 cannot be said to raise a political question.
Policy formulation or determination by the executive or legislative
branches of Government is not squarely put in issue. What is
principally involved is the enforcement of a right vis-a-vis policies
already formulated and expressed in legislation. It must,
nonetheless, be emphasized that the political question doctrine is
no longer the insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects executive and
legislative actions from judicial inquiry or review.
Same; Contracts; Non-impairment Clause; A timber license is not a
contract, property or a property right protected by the due process
clause of the Constitution.—Needless to say, all licenses may thus
be revoked or rescinded by executive action. It is not a contract,
property or a property right protected by the due process clause of
the Constitution.
Same; Same; Same; Same; The granting of license does not create
irrevocable rights, neither is it property or property rights.—A license
is merely a permit or privilege to do what otherwise would be
unlawful, and is not a contract between the authority, federal, state,
or municipal, granting it and the person to whom it is granted; neither
is it property or a property right, nor does it create a vested right; nor
is it taxation’ (37 C.J. 168). Thus, this Court held that the granting of
license does not create irrevocable rights, neither is it property or
property rights.
Same; Same; Same; Same; Timber licenses are not contracts, the
non-impairment clause cannot be invoked.—Since timber licenses
are not contracts, the non-impairment clause, cannot be invoked.
Same; Same; Same; Same; Same; The non-impairment clause
must yield to the police power of the state.—In short, the non-
impairment clause must yield to the police power of the state.
FELICIANO, J., Concurring Opinion:
Constitutional Law; The protection of the environment including the
forest cover of our territory is of extreme importance for the
country.—I vote to grant the Petition for Certiorari because the
protection of the environment, including the forest cover of our
territory, is of extreme importance for the country.
Domingo v. Scheer
FACTS:
This is a petition for review under Rule 45, of the decision of the
Court of Appeals granting the respondent’s petition for certiorari and
prohibition annulling the order of arrest issued by petitioner, and
permanently enjoining her from deporting the respondent from the
Philippines. The appellate court reversed the Summary Deportation
Order of the Board of Commissioners.
 Respondent Scheer is a native of Germany, who was
eventually granted a permanent resident status in the Philippines.
He eventually married here and started a family as well as a
business in Palawan. Vice Consul Hippelein informed the Philippine
Ambassador to Germany that the respondent had police records
and financial liabilities in Germany. The DFA receive from the
German Embassy in Manila that the respondent is wanted in
Germany, and requested to turn over his German passport to the
Embassy. Thereafter BOC issued a Summary Deportation Order
dated September 27, 1997. It was stated that the deportation shall
be held in abeyance pending respondent’s case and he shall remain
in the custody of the bureau. In issuing this the BOC relied on the
statements of the German Vice Consul on the speculation that it is
improbable that the respondent will be issued a new passport, the
warrant of arrest for insurance fraud and alleged illegal activities in
Palawan. Respondent nevertheless stayed in the Philippines after
airing his side to then BID Commissioner Verceles, the latter giving
him time to apply for a clearance and a new passport. Scheer
eventually filed an Urgent Motion for Reconsideration stating that
his right to due process was violated, for there was no notice or
chance to be heard before the issuance of the deportation order.
Eventually the criminal case for physical injuries against the
respondent was dismissed, and he was issued a passport. He
informed Commissioner Verceles about this matter and reiterated
the cancellation of the order, but the Commissioner did not respond.
Thereafter Commissioner Domingo assumed office and on June 6,
2002, she ordered the apprehension of the respondent who was
held in custody awaiting deportation. Shocked, respondent sought
remedy with the CA, during the hearing of which the Solicitor
General suggested that the respondent leave the country first then
just re-apply. A decision was reached in favor of Scheer,
permanently enjoining Domingo from continuing the deportation,
thus this petition.
ISSUE(S):
1. Whether or not the BOC was an indispensable party to the
case.
2. Whether or not respondent’s arrest and detention was
premature, unwarranted and arbitrary.
HELD:
1. Yes – but not enough to invalidate the petition.
Petitioner argues that the respondent must have impleaded BOC as
the respondent, and not Commissioner Domingo alone. The
Summary Deportation Order was issued by the BOC as a whole and
Domingo is just but one Commissioner so the petitioner argues that
the action may be dismissed. The court ruled that it agrees with the
petitioner that the BOC was an indispensable party to the
respondent’s petition in the CA. However, the non-joinder of
indispensable parties is not a ground for the dismissal of an
action. Parties may be added as ordered by the court and if the
petitioner refuses to implead an indispensable party, then the
petition may be dismissed. In the case at bar, CA did not require to
implead BOC as the respondent so it does not warrant the dismissal
of respondent’s petition. The court may choose to amend the
processes and the pleadings by substituting as party-plaintiff the
real party-interest, but the court also has the power to avoid delay
in the disposition of cases and it may just be unnecessary to still
choose to implead BOC. The OSG has already represented the
petitioner in instant proceedings thus the BOC cannot claim that it
was not afforded the opportunity to be in court. Proceedings may be
to facilitate justice but they do not constitute the thing itself and they
may be relaxed in certain cases.
2. Yes.
The Court ruled that BOC committed grave abuse of discretion in
causing the arrest and detention of the respondent. Aliens may be
deported from the Philippines only on grounds and in the proper
manner provided by the Constitution. The United Nations
Declaration on Human Rights grants every person rights, and that
no one shall be subjected to arbitrary arrest, detention or exile. BOC
ordered respondent’s deportation without even conducting
summary deportation proceedings, but merely relied on the
speculation of the German Embassy and the Vice Consul that it is
improbable that the respondent will be issued a new passport,
warranting the deportation. The respondent was not afforded any
hearing at all, and not given the opportunity to put up a defense for
himself, thus violating his right to due process. A deportation
proceeding may not be a criminal action, but since it affects the
liberty of a person, the right to due process of a respondent must be
respected. Even six years after the motion for reconsideration of the
respondent which was still not attended to, out of nowhere and
arbitrarily the agents were ordered to arrest him. Even after being
issued a new passport and even securing clearances from the PNP
and NPA, the BOC still proceeded with the deportation. BOC is
required to resolve the motion of the respondent first, giving him the
chance to be heard and present his evidence. The petitioner put up
the defense that they cannot review cases decided before the
change of members, but since it is the same government entity, they
have the authority to review past cases. In addition, the court finds
the contention of the OSG for the respondent to leave the country
then just re-apply again ridiculous when there is no legal
impediment for the respondent to continue his stay in the country.
Actions; Pleadings and Practice; Parties; Indispensable
Parties; The absence of an indispensable party renders all
subsequent actions of the court null and void.—Section 7, Rule 3 of
the Rules of Court, as amended, requires indispensable parties to
be joined as plaintiffs or defendants. The joinder of indispensable
parties is mandatory. Without the presence of indispensable parties
to the suit, the judgment of the court cannot attain real
finality.Strangers to a case are not bound by the judgment rendered
by the court.The absence of an indispensable party renders all
subsequent actions of the court null and void. Lack of authority to
act not only of the absent party but also as to those present. The
responsibility of impleading all the indispensable parties rests on the
petitioner/plaintiff.
Same; Same; Same; Same; Non-Joinder; The non-joinder of
indispensable parties is not a ground for the dismissal of an
action.—However, 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. If the petitioner/plaintiff
refuses to implead an indispensable party despite the order of the
court, the latter may dismiss the complaint/petition for the
petitioner/plaintiff’s failure to comply therefor.The remedy is to
implead the non-party claimed to be indispensable. In this case, the
CA did not require the respondent (petitioner therein) to implead the
BOC as respondent, but merely relied on the rulings of the Court
in Vivo v. Arca and Vivo v. Cloribel. The CA’s reliance on the said
rulings is, however, misplaced. The acts subject of the petition in the
two cases were those of the Immigration Commissioner and not
those of the BOC; hence, the BOC was not a necessary nor even
an indispensable party in the aforecited cases.
Same; Same; Purpose; There is nothing sacred about processes or
pleadings, their forms or contents—their sole purpose is to facilitate
the application of justice to the rival claims of contending parties.—
There is nothing sacred about processes or pleadings, their forms
or contents. Their sole purpose is to facilitate the application of
justice to the rival claims of contending parties. They were created,
not to hinder and delay, but to facilitate and promote, the
administration of justice. They do not constitute the thing itself,
which courts are always striving to secure to litigants. They are
designed as the means best adapted to obtain that thing. In other
words, they are a means to an end. When they lose the character
of the one and become the other, the administration of justice is at
fault and courts are correspondingly remiss in the performance of
their obvious duty.
CONSTANTE AMOR DE CASTRO VS CA
GR NO. 115838
JULY 18, 2002
FACTS:
Private respondent Artigo sued petitioners Constante and
Amor De Castro to collect the unpaid balance of his broker’s
commission from the De Castros.
The appellants, De Castros, were co-owners of 4 lots in
Cubao, Quezon City. The appellee, Artigo, was authorized by
appellants to act as real estate broker in the sale of these properties
for the amount of P23,000,000.00, 5% of which will be given to the
agent as commission. Appellee first found the Times Transit
Corporation and 2 lots were sold. In return, he received P48,893.76
as commission.
Appellee apparently felt short changed because according
to him, his total commission should be P352,500.00 which is 5% of
the agreed price of P7,050,000.00 paid by Times Transit
Corporation to appellants for the 2 lots and that it was he who
introduced the buyer to appellants and unceasingly facilitated the
negotiation which ultimately led to the consummation of the sale.
Hence, he sued to collect the balance of P303,606.24 after having
received P48,893.76 in advance.
Appellants argued that appellee is selfishly asking for more
than what he truly deserved as commission to the prejudice of other
agents who were more instrumental to the consummation of the sale
and that there were more or less 18 others who took active efforts.
The De Castros argued that Artigo’s complaint should have
been dismissed for failure to implead all the co owners of the 2 lots.
. The De Castros contend that failure to implead such indispensable
parties is fatal to the complaint since Artigo, as agent of all the four
co-owners, would be paid with funds co-owned by the four co-
owners.
It was shown also that Constante Amor De Castro signed
the authorization of Artigo as owner and representative of the co-
owners.
ISSUE:
Whether or not the complaint merits dismissal for failure to
implead other co-owners as indispensable parties
HELD:
No. The De Castros’ contentions are devoid of legal basis.
The CA explained that it is not necessary to implead the co-owners
since the action is exclusively based on a contract of agency
between Artigo and Constante. The rule on mandatory joinder of
indispensable parties is not applicable to the instant case.
Constante signed the note as owner and as representative
of the other co-owners. Under this note, a contract of agency was
clearly constituted between Constante and Artigo. Whether
Constante appointed Artigo as agent, in Constante’s individual or
representative capacity, or both, the De Castros cannot seek the
dismissal of the case for failure to implead the other co-owners as
indispensable parties. The De Castros admit that the other co-
owners are solidarily liable under the contract of agency, citing
Article 1915 of the Civil Code, which reads:
Art. 1915. If two or more persons have appointed an agent for a
common transaction or undertaking, they shall be solidarily liable to
the agent for all the consequences of the agency.
The solidary liability of the four co-owners, however, militates
against the De Castros’ theory that the other co-owners should be
impleaded as indispensable parties.
When the law expressly provides for solidarity of the obligation, as
in the liability of co-principals in a contract of agency, each obligor
may be compelled to pay the entire obligation. The agent may
recover the whole compensation from any one of the co-principals,
as in this case.
Indeed, Article 1216 of the Civil Code provides that a creditor may
sue any of the solidary debtors. This article reads:
Art. 1216. The creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has
not been fully collected.
Civil Law; Actions; Parties; The joinder of indispensable parties is
mandatory and courts cannot proceed without their presence.—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 joinder of indispensable
parties is mandatory and courts cannot proceed without their
presence. Whenever it appears to the court in the course of a
proceeding that an indispensable party has not been joined, it is the
duty of the court to stop the trial and order the inclusion of such
party.
Same; Same; Same; Solidarity does not make a solidary obligor an
indispensable party in a suit filed by the creditor.—Thus, the Court
has ruled in Operators Incorporated vs. American Biscuit Co.,
Inc. that—“x x x solidarity does not make a solidary obligor an
indispensable party in a suit filed by the creditor.Article 1216 of the
Civil Code says that the creditor ‘may proceed against anyone of
the solidary debtors or some or all of them simultaneously.’ ”
Same; Same; Same; When the law expressly provides for solidarity
of the obligation, as in the liability of co-principals in a contract of
agency, each obligor may be compelled to pay the entire
obligation.—When the law expressly provides for solidarity of the
obligation, as in the liability of coprincipals in a contract of agency,
each obligor may be compelled to pay the entire obligation. The
agent may recover the whole compensation from any one of the co-
principals, as in this case.
Same; Contracts; Agency; A contract of agency which is not
contrary to law, public order, public policy, morals or good custom
is a valid contract, and constitutes the law between the parties.—A
contract of agency which is not contrary to law, public order, public
policy, morals or good custom is a valid contract, and constitutes
the law between the parties. The contract of agency entered into by
Constante with Artigo is the law between them and both are bound
to comply with its terms and conditions in good faith.
Uy v CA
Facts of the Case:
Bases Conversion Development Authority (BCDA), Pool Formation
Trust Agreement (PFTA), PNB and Public Estates Authority (PEA)
entered into an agreement to implement the Heritage Memorial
Park. BCDA was the Project Owner and tasked to sell Heritage
Park Investment Certificates to buyers. As trustee, PNB is given the
legal and beneficial title to hold the certificates. The certificate
holders organized themselves into a non-stock, non-profit
corporation, Heritage Park Management Corp. (HPMC).
Now, PEA and Uy’s business (Edison Dev’t and
Construction) executed a Landscaping and Construction
Agreement whereby the business will do all the landscaping and the
construction of a terrasoleum. Since there was delay in the
construction, the Heritage Park Executive Committee terminated the
construction contracts so HPMC assumed all the duties and
responsibilities of PEA.
Uy filed a complaint against PEA before the Construction Industry
Arbitrary Commission (CIAC) where it sought to recover payments
for the construction already done in the project. The CIAC awarded
monetary claims to Uy and a Notice of Garnishment was served on
HPMC.
HPMC then filed a petition for Injunction/Prohibition before the CA
on the ground that the CIAC had no jurisdiction since HPMC was
not impleaded as a party in the case before CIAC. HPMC contended
it is an indispensable party since it holds the certificates, any claim
against PEA is a claim against all parties who contributed funds to
the project. Uy’s contention is that HPMC is not a party-in-interest
since it was only a mere trustee of the funds and would not be
directly benefited or injured by the outcome of the case.
Issue:
Whether or not HPMC is a real party-in-interest or an
indispensable party.
Held:
Indispensable party. An indispensable party is one whose
interest will be affected by court’s action in litigation and without
whom there can be no final determination of the case. A party’s
interest in the subject matter and in the relief sought are so
intertwined that his legal presence as a party to the proceeding is
an absolute necessity.
According to the provisions of PFTA, PEA would turn over
to HPMC all the contracts relating to Heritage Park. At the time of
the filing of the CIAC case, PEA already assigned its interests to
HPMC and therefore, no longer a party-in-interest. HPMC now
stands to be benefited/injured in the suit. Since HPMC was not
impleaded, there cannot be an effective, complete and equitable
resolution of the dispute.
Notes on indispensable parties:
*Does CIAC have jurisdiction? YES. Both parties agree to submit
the dispute for arbitration. However, CIAC should’ve dismissed the
case on the grounds that HPMC was not impleaded. Indispensable
parties must be joined as either plaintiffs or defendants. When they
are not joined, it is the duty of the court to stop trial and order its
inclusion.
*The responsibility of impleading all the indispensable parties lies
on the plaintiff. Defendant has no tight to compel.
Parties; 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.—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. * * * Apparently, as of the date of the filing of the
CIAC Case, PEA is no longer a party-in-interest. Instead, it is now
private respondent HPMC, as the assignee, who stands to be
benefited or injured by the judgment in the suit. In its absence, there
cannot be a resolution of the dispute of the parties before the court
which is effective, complete or equitable. We thus reiterate that
HPMC is an indispensable party.
Same; Indispensable parties must be joined either as plaintiffs or
defendants.—Indispensable parties must be joined either as plain
tiffs or defendants. Whenever it appears to the court in the course
of a proceeding that an indispensable party has not been joined, it
is the duty of the court to stop the trial and to order the inclusion of
such party. The absence of an indispensable party renders all
subsequent actuations 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.
Same; The responsibility of impleading all the indispensable parties
rests on the plaintiff.—The responsibility of impleading all the
indispensable parties rests on the plaintiff. The defendant does not
have the right to compel the plaintiff to prosecute the action against
a party if he does not wish to do so, but the plaintiff will have to suffer
the consequences of any error he might commit in exercising his
option.
Arbitration; The jurisdiction of the Construction Industry Arbitration
Commission (CIAC) over the parties is dependent on the agreement
and consent of the parties to the construction contract, to submit
their dispute for arbitration.—Does CIAC have jurisdiction over the
dispute? Section 4 of Executive Order No. 1008 is pertinent. It
provides that the jurisdiction of the CIAC over the parties is
dependent on the agreement and consent of the parties to the
construction contract, to submit their dispute for arbitration. Absent
such consent, the CIAC cannot validly proceed against a party for
lack of jurisdiction.
Laperal Development Corporation vs. CA
223 SCRA 261
Facts: In a civil case before the CFI, Atty. Filoteo Banzon sought
recovery of attorney’s fees from Oliverio Laperal, Laperal Dev’t
Corp, and Imperial Dev’t Corp. for professional services he rendered
for 10 cases.
On April 8, 1983, the case was decided on the basis of a
Compromise Agreement voluntarily and waiving all other claims of
money against the defendants. On May 19, 1987, Banzon filed a
complaint against Oliverio Laperal , Laperal Dev’t Corp, Imperial
Dev’t Corp, Sunbeams Convenience Foods and Vicente Acsay for
the annulment of the portion of the Compromise Agreement;
collection of attorney’s fees for his services in the cases
abovementioned; for the recovery of what was adjudged payablr to
him as attorney’s fees by Ascario Tuazon and the payment of
nominal damages and attorney’s fees.
In the RTC of Quezon City, the case was dismissed on the
grounds that the the TC had no jurisdiction to annul the agreement
as approved by an equal and coordinate court, and that the
agreement already covered the plaintiff’s professional services in
the aforementioned cases. On appeal, the decision was affirmed on
the issue of jurisdiction. The CA held that the attorney’s fees were
due the private respondents in the cases of Laperal Dev’t vs.
Tuazon and Tuazon vs. Maglalanga and Republic vs. Sunbeams.
The undetaking clearly covered the case of Laperal Dev’t vs.
Tuazon which was still pending in the CA at the time of the
agreement.
 Banzon’s claim for attorney’s fees was among those
enumerated in his complaint against Oliverio Laperal, Laperal Dev’t
Corp, and Imperial Dev’t and Sunbeams referred to in the complaint
as “Mr. Laperals” Corp. was not joined by name as a party-
defendant. The private respondent believed that Oliverio Laperal,
being the president of the company, was directly obligated to him.
Issue: Should a party be joined as a party-defendant in order that
the judgment could legally affect it?
Ruling: A corporation is clothed with a personality separate and
distinct from that of the persons composing it. It may not generally
be held liable for the personal indebtedness of its stockholders or
those of the entities connected with it. A stockholder cannot be
made to answer for any of its financial obligations even if he should
be its president. There is no evidence that Sunbeams and Laperal
are one and the person. While it is true that Laperal is a stockholder,
director and officer of Sunm[beams, that status does not make him
answerable for the liabilities of the said corporation.
Sunbeams should have been joined as a party-defendant in
order that the judgment of the lower court could legally affect it. But
even if it was not impleaded, the court could still validly proceed with
the case because Sunbeams was not an indispensable party but
only a proper party. A proper party is one which ought to be a party
if complete relief is to be accorded as between those already
parties. A party is indispensable if no final determination can be had
of an action unless it is joined either as plaintiff or defendant.
Sunbeams was not a party to this agreement and so could not be
affected by it.
Corporation Law; A corporation is clothed with a personality
separate and distinct from that of the persons composing it.—It is
settled that a corporation is clothed with a personality separate and
distinct from that of the persons composing it. It may not generally
be held liable for the personal indebtedness of its stockholders or
those of the entities connected with it. Conversely, a stockholder
cannot be made to answer for any of its financial obligations even if
he should be its president.
Remedial Law; Civil Procedure; Proper Party; A proper party is one
which ought to be a party if complete relief is to be accorded as
between those already parties.—Sunbeams should have been
joined as a party-defendant in order that the judgment of the lower
court could legally affect it. But even if it was not impleaded, the
court could still validly proceed with the case because Sunbeams
was not an indispensable party but only a proper party. A proper
party is one which ought to be party if complete relief is to be
accorded as between those already parties. A party is indispensable
if no final determination can be had of an action unless it is joined
either as plaintiff or defendant.
De La Cruz vs Joaquin : 162788 : July 28, 2005
FACTS: The case originated from a Complaint for the recovery of
possession and ownership, the cancellation of title, and damages,
filed by Pedro Joaquin against petitioners in the RTC. The RTC
ruled in favor of respondent ordering herein petitioners to reconvey
the property upon his payment. Petitioners assert that the RTC’s
Decision was invalid for lack of jurisdiction claiming that respondent
died during the pendency of the case and there being no substitution
by the heirs, the trial court allegedly lacked jurisdiction over the
litigation.
ISSUE: WON the trial court lost jurisdiction over the case upon the
death of Pedro Joaquin?
HELD: NO. When a party to a pending action dies and the claim is
not extinguished, the Rules of Court require a substitution of the
deceased. The procedure is specifically governed by Section 16 of
Rule 3. The rule on the substitution of parties was crafted to protect
every party’s right to due process. The estate of the deceased party
will continue to be properly represented in the suit through the duly
appointed legal representative. A formal substitution by heirs is not
necessary when as in the present case, they themselves voluntarily
appear, participate in the case, and present evidence in defense of
the deceased. These actions negate any claim that the right to due
process was violated. The records of the present case contain a
“Motion for Substitution of Party Plaintiff” filed before the CA. The
rule on the substitution by heirs is not a matter of jurisdiction, but a
requirement of due process. Thus, when due process is not
violated, as when the right of the representative or heir is recognized
and protected, noncompliance or belated formal compliance with
the Rules cannot affect the validity of a promulgated decision. Mere
failure to substitute for a deceased plaintiff is not a sufficient ground
to nullify a trial court’s decision. The alleging party must prove that
there was an undeniable violation of due process.
Remedial Law; Parties; Substitution of Party; When a party to a
pending action dies and the claim is not extinguished, the Rules of
Court require a substitution of the deceased.—When a party to a
pending action dies and the claim is not extinguished, the Rules of
Court require a substitution of the deceased. The procedure is
specifically governed by Section 16 of Rule 3.
Same; Same; Same; The rule on the substitution of parties was
crafted to protect every party’s right to due process.—The rule on
the substitution of parties was crafted to protect every party’s right
to due process. The estate of the deceased party will continue to be
properly represented in the suit through the duly appointed legal
representative. Moreover, no adjudication can be made against the
successor of the deceased if the fundamental right to a day in court
is denied.
Same; Same; Same; Court has nullified not only trial proceedings
conducted without the appearance of the legal representatives of
the deceased, but also the resulting judgments.—The Court has
nullified not only trial proceedings conducted without the
appearance of the legal representatives of the deceased, but also
the resulting judgments. In those instances, the courts acquired no
jurisdiction over the persons of the legal representatives or the heirs
upon whom no judgment was binding.
Same; Same; Same; Formal substitution by heirs is not necessary
when they themselves voluntarily appear, participate in the case,
and present evidence in defense of the deceased.—This general
rule notwithstanding, a formal substitution by heirs is not necessary
when they themselves voluntarily appear, participate in the case,
and present evidence in defense of the deceased. These actions
negate any claim that the right to due process was violated.
Same; Same; Same; Strictly speaking, the rule on the substitution
by heirs is not a matter of jurisdiction, but a requirement of due
process; Mere failure to substitute for a deceased plaintiff is not a
sufficient ground to nullify a trial court’s decision; Alleging party must
prove that there was an undeniable violation of due process.—
Strictly speaking, the rule on the substitution by heirs is not a matter
of jurisdiction, but a requirement of due process. Thus, when due
process is not violated, as when the right of the representative or
heir is recognized and protected, noncompliance or belated formal
compliance with the Rules cannot affect the validity of a
promulgated decision. Mere failure to substitute for a deceased
plaintiff is not a sufficient ground to nullify a trial court’s decision.
The alleging party must prove that there was an undeniable violation
of due process.
Same; Actions; Forum Shopping; Forum shopping is the institution
of two or more actions or proceedings involving the same parties for
the same cause of action, either simultaneously or successively, on
the supposition that one or the other court would make a favorable
disposition; Willful and deliberate violation of the rule against it is a
ground for the summary dismissal of the case; it may also constitute
direct contempt of court.—Forum shopping is the institution of two
or more actions or proceedings involving the same parties for the
same cause of action, either simultaneously or successively, on the
supposition that one or the other court would make a favorable
disposition. Forum shopping may be resorted to by a party against
whom an adverse judgment or order has been issued in one forum,
in an attempt to seek a favorable opinion in another, other than by
an appeal or a special civil action for certiorari. Forum shopping
trifles with the courts, abuses their processes, degrades the
administration of justice, and congests court dockets. Willful and
deliberate violation of the rule against it is a ground for the summary
dismissal of the case; it may also constitute direct contempt of court.
Diaz vs. Adiong, March 5, 1993
Facts:
1. On July 6, 1991, the Mindanao Kris, published in Cotabato
City, published a news article entitled “Toll of Corruption”
which exposed alleged anomalies by key officials in the
Regional Office of DENR;
2. Public officials alluded instituted a separate civil and
criminal actions arising from libel before City Prosecutor
Office and Regional Trial Court in Marawi City against
petitioner;
3. The City Prosecutor’s Office dismissed the criminal case
complaint for lack of jurisdiction since the said complaint
should be filed in Cotabato City;
4. As for the civil complaint it was docketed in the RTC of
Marawi City, and that the defendant had filed their
respective answers w/ counterclaim;
5. Diaz moved for the dismissal of the case on the ground of
lack of jurisdiction, it was their contention that the case
should be filed in RTC of Cotabato since it is where the
private 1. respondents who are all public officers held their
office, similarly the libelous publication was published in
that place
Issue: WON, RTC Marawi City has jurisdiction over the said case
Held: No, not one of the respondents held office in Marawi City
1. An offended party who is at the same time a public official
can only institute an action arising from libel in 2 venues:
the place where he holds office and place where the
alleged libelous articles were published;
2. The venue is improperly laid. However, unless and until the
defendant objects to the venue in a motion to dismiss prior
to a responsive pleading, the venue cannot be truly be said
to have been improperly laid, since the venue though
technically wrong may yet be considered acceptable to the
parties for whose convenience the rules on venue had
been devised;
3. In this case, Diaz, should have timely challenged the venue
in Marawi City in a motion to dismiss, pursuant to Sec 4,
Rule 4 of the Rules of Court. Unfortunately, petitioner had
already submitted himself to the jurisdiction of the TC when
he filed his Answer to the Complaint with Counterclaim. His
motion to dismiss was therefore belatedly filed and could
no longer deprive the trial court of jurisdiction to hear and
decide the said case;
4. While objections to venue in civil actions arising from libel
can be waived; it does not after all, involve a question of
jurisdiction. Indeed, the laying of venue is procedural rather
than substantive. Venue relates to trial and not to
jurisdiction.
Remedial Law; Venue; An offended party who is at the same time a
public official can only institute an action arising from libel in two (2)
venues: the place where he holds office and the place where the
alleged libelous articles were printed and first published.—From the
foregoing provision, it is clear that an offended party who is at the
same time a public official can only institute an action arising from
libel in two (2) venues: the place where he holds office, and the
place where the alleged libelous articles were printed and first
published.
Same; Same; Same; Unless and until the defendant objects to the
venue in a motion to dismiss prior to a responsive pleading, the
venue cannot truly be said to have been improperly laid.—
Consequently, it is indubitable that venue was improperly laid.
However, unless and until the defendant objects to the venue in a
motion to dismiss prior to a responsive pleading, the venue cannot
truly be said to have been improperly laid since, for all practical
intents and purposes, the venue though technically wrong may yet
be considered acceptable to the parties for whose convenience the
rules on venue had been devised.
Same; Same; Same; Same; Well-settled is the rule that improper
venue may be waived and such waiver may occur by laches.—His
motion to dismiss was therefore belatedly filed and could no longer
deprive the trial court of jurisdiction to hear and decide the instant
civil action for damages. Well-settled is the rule that improper venue
may be waived and such waiver may occur by laches.
Same; Same; Same; Same; Same; Objections to venue in civil
actions arising from libel may be waived, it does not after all involve
a question of jurisdiction.—Withal, objections to venue in civil
actions arising from libel may be waived; it does not, after all, involve
a question of jurisdiction. Indeed, the laying of venue is procedural
rather than substantive, relating as it does to jurisdiction of the court
over the person rather than the subject matter. Venue relates to trial
and not to jurisdiction.
Same; Same; Same; Same; Objections to improper venue must be
made in a motion to dismiss before any responsive pleading is
filed.—Finally, Sec. 1 of Rule 16 provides that objections to
improper venue must be made in a motion to dismiss before any
responsive pleading is filed. Responsive pleadings are those which
seek affirmative relief and set up defenses. Consequently, having
already submitted his person to the jurisdiction of the trial court,
petitioner may no longer object to the venue which, although
mandatory in the instant case, is nevertheless waivable. As such,
improper venue must be seasonably raised, otherwise, it may be
deemed waived.
Nocum vs. Lucio Tan
G.R. No. 145022
Facts:
Respondent Lucio Tan filed a complaint against reporter Armand
Nocum, Capt. Florendo Umali, ALPAP and Inquirer with the
Regional Trial Court of Makati, , seeking moral and exemplary
damages for the alleged malicious and defamatory imputations
contained in a news article.
The Regional Trial Court of Makati issued an order dismissing the
complaint without prejudice of the ground on improper venue.

Aggrieved by the dismissal of the complaint, respondent Lucio Tan
filed an Omnibus Motion seeking reconsideration of the dismissal
and admission of the amended complaint. In par. 2.01.1 of the
amended complaint, it is alleged that 'This article was printed and
first published in the City of Makati, and in par. 2.04.1, that 'This
caricature was printed and first published in the City of Makati (p.
55, id.).
The lower court, after having the case dismissed for improper
venue, admitted the amended complaint and deemed set aside the
previous order of dismissal
The petitioners appealed the RTC decision to the CA which denied
the same.
Issue:
Whether or not the lower court acquire jurisdiction over the civil case
upon the filing of the original complaint for damages?
Rulings:
Yes. It is settled that jurisdiction is conferred by law based on the
facts alleged in the complaint since the latter comprises a concise
statement of the ultimate facts constituting the plaintiff's causes of
action. [11] In the case at bar, after examining the original complaint,
we find that the RTC acquired jurisdiction over the case when the
case was filed before it. From the allegations thereof, respondent's
cause of action is for damages arising from libel, the jurisdiction of
which is vested with the RTC. Article 360 of the Revised Penal Code
provides that it is a Court of First Instance [12] that is specifically
designated to try a libel case.
Petitioners are confusing jurisdiction with venue. A former
colleague, the Hon. Florenz D. Regalado, [14] differentiated
jurisdiction and venue as follows: (a) Jurisdiction is the authority to
hear and determine a case; venue is the place where the case is to
be heard or tried; (b) Jurisdiction is a matter of substantive law;
venue, of procedural law; (c) Jurisdiction establishes a relation
between the court and the subject matter; venue, a relation between
plaintiff and defendant, or petitioner and respondent; and, (d)
Jurisdiction is fixed by law and cannot be conferred by the parties;
venue may be conferred by the act or agreement of the parties.
In the case at bar, the additional allegations in the Amended
Complaint that the article and the caricature were printed and first
published in the City of Makati referred only to the question of venue
and not jurisdiction. These additional allegations would neither
confer jurisdiction on the RTC nor would respondent's failure to
include the same in the original complaint divest the lower court of
its jurisdiction over the case.
Remedial Law; Actions; Jurisdictions; It is settled that jurisdiction is
conferred by law based on the facts alleged in the complaint since
the latter comprises a concise statement of the ultimate facts
constituting the plaintiff’s causes of action.—It is settled that
jurisdiction is conferred by law based on the facts alleged in the
complaint since the latter comprises a concise statement of the
ultimate facts constituting the plaintiff's causes of action. In the case
at bar, after examining the original complaint, we find that the RTC
acquired jurisdiction over the case when the case was filed before
it. From the allegations thereof, respondent’s cause of action is for
damages arising from libel, the jurisdiction of which is vested with
the RTC. Article 360 of the Revised Penal Code provides that it is a
Court of First Instance that is specifically designated to try a libel
case.
Same; Same; Same; Venue; Jurisdiction and Venue
distinguished.—Petitioners are confusing jurisdiction with venue. A
former colleague, the Hon. Florenz D. Regalado, differentiated
jurisdiction and venue as follows: (a) Jurisdiction is the authority to
hear and determine a case; venue is the place where the case is to
be heard or tried; (b) Jurisdiction is a matter of substantive law;
venue, of procedural law; (c) Jurisdiction establishes a relation
between the court and the subject matter; venue, a relation between
plaintiff and defendant, or petitioner and respondent; and, (d)
Jurisdiction is fixed by law and cannot be conferred by the parties;
venue may be conferred by the act or agreement of the parties.
Same; Same; Same; Same; The term “jurisdiction” in Article 360 of
the Revised Penal Code construed as referring to the place where
actions for libel shall be filed or “venue.”—In Laquian v. Baltazar,
this Court construed the term “jurisdiction” in Article 360 of the
Revised Penal Code as referring to the place where actions for libel
shall be filed or “venue.”
Same; Same; Same; Same; Rules on the venue of the criminal and
civil actions in written defamations.—In Escribano v. Avila, pursuant
to Republic Act No. 4363, we laid down the following rules on the
venue of the criminal and civil actions in written defamations. 1.
General rule: The action may be filed in the Court of First Instance
of the province or city where the libelous article is printed and first
published or where any of the offended parties actually resides at
the time of the commission of the offense. 2. If the offended party is
a public officer with office in Manila at the time the offense was
committed, the venue is Manila or the city or province where the
libelous article is printed and first published. 3. Where an offended
party is a public official with office outside of Manila, the venue is
the province or the city where he held office at the time of the
commission of the offense or where the libelous article is printed
and first published. 4. If an offended party is a private person, the
venue is his place of residence at the time of the commission of the
offense or where the libelous article is printed and first published.
The common feature of the foregoing rules is that whether the
offended party is a public officer or a private person, he has always
the option to file the action in the Court of First Instance of the
province or city where the libelous article is printed or first published.
Same; Same; Same; Same; Objections to venue in Civil Action
arising from libel may be waived since they do not involve a question
of jurisdiction; In Criminal Actions, it is fundamental that venue is
jurisdictional it being an essential element of jurisdiction.—It is
elementary that objections to venue in CIVIL ACTIONS arising from
libel may be waived since they do not involve a question of
jurisdiction. The laying of venue is procedural rather than
substantive, relating as it does to jurisdiction of the court over the
person rather than the subject matter. Venue relates to trial and not
to jurisdiction. It is a procedural, not a jurisdictional, matter. It relates
to the place of trial or geographical location in which an action or
proceeding should be brought and not to the jurisdiction of the court.
It is meant to provide convenience to the parties, rather than restrict
their access to the courts as it relates to the place of trial. In contrast,
in CRIMINAL ACTIONS, it is fundamental that venue is jurisdictional
it being an essential element of jurisdiction.
PHILIPPINE BANKING CORPORATION, petitioner,
vs.
HON. SALVADOR S. TENSUAN, Judge of Regional Trial Court
of Makati, National Capital Judicial Region, Branch 146;
CIRCLE FINANCIAL CORPORATION, AVELINO E. DEATO, JR.,
MIGUEL F. VIOLAGO, BENJAMIN F. SANTIAGO, SOCORRO R.
GOMEZ, NERISSA T. GLORIA, FILEMON C. MARQUEZ,
DOMINGO SANTIAGO AND HILARIO P. LOPEZ, respondents.
Tomargo, Luzano & Associates for petitioner.
Edgardo V. Cruz for private respondents.
FELICIANO, J.:
In this Petition for Review on Certiorari, petitioner asks us to review
and set aside the Order of Judge Salvador A. Tensuan dated 3
August 1992, dismissing petitioner's complaint in Civil Case No. 91-
2220 entitled "Philippine Banking Corporation vs. Circle Financial
Corporation, et al."
Petitioner Philippine Banking Corporation (hereafter "Bank") is a
commercial banking corporation with principal office at Makati,
Metro Manila. Petitioner Bank instituted a complaint for collection of
a sum of money, with a prayer for preliminary attachment, at the
Regional Trial Court of Makati. It appears from the allegations of the
Bank's complaint that respondent Circle Financial Co. (hereafter
"Circle"), sometime in 1983 and 1984, through its representatives,
obtained several loans aggregating P1,000,000.00 from petitioner.
Respondent Circle, for value received, delivered to petitioner Bank
four (4) promissory notes, each of which contained the stipulation
that:
I/We hereby expressly submit to the jurisdiction of the courts of
Valenzuela any legal action which may arise out of this promissory
note.
As security for the re-payment by respondent Circle of the sums
loaned by petitioner Bank, eight (8) individuals, who were impleaded
as defendants in the complaint — namely, Avelino Deato, Miguel
Violago, Benjamin Santiago, Socorro Gomez, Nerissa Gloria,
Filemon Marquez, Domingo Santiago and Hilario Lopez — executed
a Continuing Surety Agreement and undertook to
pay jointly and severally respondent Circle's obligations. Only five
(5) out of eight (8) individual obligors are respondents in present
case, namely: Domingo Santiago, Hilario Lopez, Avelino Deato,
Benjamin P. Santiago and Socorro Gomez.
On their due dates, Circle failed to pay its obligations under the
promissory notes. Thereupon, petitioner Bank demanded payment
from the eight (8) individual sureties conformably with their promises
contained in the Continuing Surety Agreement; the individual
obligors, however, also failed to pay.
Petitioner moved for issuance of a writ of preliminary attachment,
alleging that respondent Circle had become insolvent and had been
placed under receivership by the Central Bank. The trial judge
granted the motion and issued a writ of preliminary attachment. The
sheriff's return indicated, however, that no properties belonging to
the respondent Circle and the individual obligors could be found.
Per sheriff's return, summons was served upon Domingo
Santiago, 1 Hilario P. Lopez, 2 Avelino Deato, 3 Benjamin P.
Santiago, 4 and Socorro Gomez. 5 The sheriff failed to serve
summons on (a) Miguel Violago, who had died; (b) Nerissa T.
Gloria 6 and Filemon Marquez, 7 whose whereabouts were
unknown; and (c) Circle, which had ceased to engage in business
at the address given by petitioner and could not be located.
A motion to dismiss was filed by the respondents (Circle and the five
[5] individual sureties served with summons) and averred that the
venue of the action was improperly laid since an agreement had
fixed the venue of actions arising from the promissory notes in
Valenzuela, Metro Manila, only. Respondents called the trial court's
attention to the stipulation contained in the promissory note,
quoted in limine.
Acting upon respondent's motion, respondent Judge Tensuan
issued the challenged Order which read as follows:
Acting on defendant's motion to dismiss on grounds of improper
venue in relation with actionable promissory notes which stipulate
that the parties "expressly submit to the jurisdiction of the Courts of
Valenzuela, Metro Manila any legal action which may arise", and,
Finding said motion to be impressed with merit consistent with
Sec. 13, Rule 14 of the Rules of Court as well as in line with the
doctrinal rule in Bautista vs. Hon. Juan de Borja, et al. (18 SCRA
474) that the proper venue for an action is that stipulated in a
document "in case of any litigation herefrom or in connection
herewith" upon a rationale that had the parties intended to reserve
the right to choose venue under Section 2 (b), Rule 4 of the Rules
of Court, such reservation should have been reflected in the
document as against the rationale in Polytrade Corporation vs.
Blanco (30 SCRA 187) which should allow choice of venue where
an actionable document does not set forth qualifying or restrictive
words in point, and
In order to more clearly define the parameters of the rule on proper
venue vis-a-vis a clear perception that a stipulation to "expressly
submit to the jurisdiction of the Courts of Valenzuela, Metro Manila"
amount to unequivocal agreement to sue and be sued in
Valenzuela, Metro Manila.
WHEREFORE, premises considered and finding the motion to be
meritorious, same is hereby granted and the above-entitled case is
accordingly dismissed. Without pronouncement as to costs.
SO ORDERED.8
Petitioner moved for reconsideration of the above Order of the trial
court, without success.
Hence, this Petition.
We consider that the Petition is meritorious.
It is settled in this jurisdiction that the parties, by written agreement,
may change or transfer the venue of an action from one province to
another. 9 We have many times sustained the validity and
enforceability of contractual stipulations concerning venue, it is, of
course, the tenor of their agreement which is of critical relevance.
The relevant task, in other words, is determining the intent of the
parties as manifested in the words employed by them and, where
such words are less than clear, in other recognized indicators of the
will of the contracting parties.
Petitioner Bank contends that the stipulation contained in the
promissory notes is merely an agreement to add the courts of
Valenzuela to the tribunals to which the parties may resort.
Petitioner thus insists that the venue stipulation set out in the notes
did not restrict or limit the permissible venue of actions arising out
of those notes to the courts of Valenzuela, to the exclusion of all the
other courts recourse to any one of which is authorized or permitted
under the Rules of Court. Thus, venue was properly laid by
petitioner Bank in the place where its principal offices are
located: i.e., Makati, Metropolitan Manila.
Private respondents, in opposition, aver that the words used in the
stipulation here involved are clear and unambiguous. A promise to
submit to the jurisdiction of a specific court, without an express
reservation of the right to resort to one or more of the tribunals
otherwise accessible under the Rules of Court, is an agreement
definitely fixing the permissible venue in only one place, i.e.,
Valenzuela, to the exclusion of other competent courts.
A careful reading of the terms of the stipulation — "I/We
hereby expressly submit to the jurisdiction of the courts of
Valenzuela any legal action which may arise out of this promissory
note" — shows that the stipulation does not require the laying of
venue in Valenzuela exclusively or mandatorily. The plain or
ordinary import of the stipulation is the authorizing of, or permission
to bring, suit in Valenzuela; there is not the slightest indication of an
intent to bar suit in other competent courts.
Permissive stipulations like the one here considered have invariably
received judicial approval and we have declared that either of the
parties is authorized to lay venue of an action in the court named in
the stipulation. The stipulation her does not purport to deprive either
party of it right to elect, or option to have resort to, another
competent court as expressly permitted by Section 2(b) of Rule 4 of
the Rules of Court, should such party choose to initiate a suit. The
stipulation here merely operated to confer or confirm a right upon a
party to elect recourse to the courts of Valenzuela or, alternatively,
to go before any of the tribunals envisaged by the rules on
venue, i.e., the courts of Makati, Quezon City and Bulacan. 10
In principle, the stipulation on venue here involved must be
distinguished from stipulations which purport
to require or compel the parties to lay venue of an action in a
specified place, and in that particular place only. The latter
type of venue stipulation must clearly indicate, through qualifying
and restrictive words, that the parties deliberately intended to
exclude causes or actions from the operation of the ordinary
permissive rules on venue, 11 and that they intended contractually
to designate a specific venue to the exclusion of any other court also
competent and accessible to the parties under the ordinary rules on
the venue of actions. Stipulations of this exclusionary nature may,
under certain circumstances, be characterized as unreasonable or
as contrary to public policy 12 and, accordingly, not judicially
enforceable.
In practice, the task, as noted earlier, of this Court when confronted
with issues of this kind is always basically that of contract
interpretation. In the case at bar, neither qualifying nor restrictive
words (e.g., "must," "only" or "exclusively") were employed which
could yield an intent on the part of the parties mandatorily to restrict
the venue of actions arising out of the promissory notes to the courts
of Valenzuela only. Private respondents suggest that the use of
words "any legal action" expressed a supposed agreement to bar
actions before any court other than a Valenzuela court. We do not
agree, for we see no necessary or customary connection between
the words "any legal action" and an intent strictly to limit permissible
venue to the Valenzuela courts. Intent so to establish an inflexible
restriction of otherwise permissible venue to one single place is not
lightly to be presumed or inferred from stipulations which, like that
here before us, include no qualifying or exclusionary terms. Express
reservation of the right to elect venue under the ordinary rules was,
accordingly, unnecessary in the case at bar.
Such is the thrust of the great bulk of the caselaw of this Court where
this issue was directly raised and discussed.
In Polytrade Corporation v. Blanco, 13 the stipulation on venue there
involved read:
The parties agree to sue and be sued in the courts of Manila
The Court, in upholding that stipulation and ruling that venue had
been properly laid in the then Court of First Instance of Bulacan (the
place of defendant's residence), speaking through Mr. Justice
Sanchez, said:
. . . An accurate reading, however, of the stipulation, "The parties
agree to sue and be sued in the Courts of Manila," does not preclude
the filing of suits in the residence of plaintiff or 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.
We cannot read into that clause that plaintiff and defendant bound
themselves to file suits with respect to the last two transactions in
question only or exclusively in Manila. For, that agreement did not
change or transfer venue. It simply is permissive. The parties solely
agreed to add the courts of Manila as tribunals to which they may
resort. They did not waive their right to pursue remedy in the courts
specifically mentioned in Section 2 (b) of Rule 4. Renuntiatio non
praesumitir. 14 (Emphasis supplied)
In Nicolas v. Reparations Commission, 15 the stipulation on venue
provided that:
All legal actions arising out of this contract . . . may be brought in
and submitted to the jurisdiction of the proper courts in the City of
Manila. 16
This Court read the above stipulation as merely permissive, relying
upon and reinforcing Polytrade:
. . . the venue in personal actions is fixed for the convenience of the
plaintiff and his witnesses and to promote the ends of justice. We
cannot conceive how the interests of justice may be served by
confining the situs of the action to Manila, considering that the
residences or offices of all the parties, including the situs of the acts
sought to be restrained or required to be done, are all within the
territorial jurisdiction of Rizal.
While the parties have agreed to submit their dispute to the
jurisdiction of the Manila courts, there is nothing in the language
used . . . which clearly shows that the intention of the parties was to
limit the venue of the action to the City of Manila only. Such
agreements should be construed reasonably and should not be
applied in such a manner that it would work more to the
inconvenience of the parties without promoting the ends of
justice. 17 (Emphasis supplied)
In Lamis Enterprises v. Lagamon, 18 the promissory note sued on
had the following stipulation:
In case of litigation, jurisdiction shall be vested in the courts of
Davao City. 19
The collection suit was instituted in the then Court of First Instance
of Tagum, Davao. The Supreme Court rejected the defense of
improper venue and held:
. . . it is alleged that the proper venue for Civil Case No. 1395 should
be Davao City where the plaintiff resides and as stipulated in the
promissory note dated February 26, 1979 and in the chattel
mortgage dated February 27, 1979. However, the respondent judge
found that Maningo has not only legal residence but also physical
and actual residence in Busaon, Tagum, Davao and we are not
inclined to disturb this finding. Anent the claim that Davao City had
been stipulated as the venue, suffice it to say that a stipulation as to
venue does not preclude the filing of suits in the residence of plaintiff
or defendant under Section 2(b), Rule 4, Rules of Court, in the
absence of qualifying or restrictive words in the agreement which
would indicate that the place named is the only venue agreed upon
by the parties. The stipulation did not deprive Maningo of his right to
pursue remedy in the court specifically mentioned in Section 2(b) of
Rule 4, Rules of Courts, Renuntiatio non praesumitir. . .
. 20 (Emphasis supplied)
In Western Minolco v. Court of Appeals, 21 the clause on venue
read:
The parties stipulate that the venue of the actions referred to in
Section 12.01 [Article XII of the Agreement] shall be in the City of
Manila.
The initial action was commenced in the Court of First Instance of
Baguio and Benguet. This Court took the occasion to reiterate once
more the Polytrade doctrine:
. . . In any event, it is not entirely amiss to restate the doctrine
that stipulations in a contract, which specify a definite place for the
institution of an action arising in connection therewith, do not, as a
rule, supersede the general rules on the matter set out in Rule 4 of
the Rules of Court, but should be construed merely as an
agreement on an additional forum, not as limiting venue to the
specified place. 22 (Emphasis supplied)
It is not necessary top pretend that the decisions of the Supreme
Court have been absolutely consistent in this regard. There have
been a few decisions — notably Bautista v. de Borja 23 and Hoechst
Philippines v. Torres 24 — which are not easy to reconcile with the
line of cases beginning with Polytrade discussed above. It is useful
therefore to make clear that to the extent Bautista and Hoechst
Philippines are inconsistent with Polytrade (an en banc decision
later in time than Bautista) and subsequent cases
reiterating Polytrade, Bautista and Hoechst Philippines have been
rendered obsolete by the Polytrade line of cases.
We note, finally, that no one of the private respondents has claimed
to have been put to undue hardship or inconvenience as a result of
the institution of the action in Makati. Venue relates to the trial and
touches more upon the convenience of the parties rather than upon
the substance or merits of the
case. 25
WHEREFORE, the Petition for Review on Certiorari is hereby
GRANTED DUE COURSE and the Orders dated 3 August 1992 and
28 August 1992 of public respondent Judge Salvador S. Tensuan
are hereby REVERSED and SET ASIDE. The case is hereby
REMANDED to the court of origin for resolution on the merits, with
all deliberate dispatch. No pronouncements as to costs.
SO ORDERED.
DACOYCOY V. IAC G.R. # 74854
FACTS
 On March 22, 1983, Dacoycoy, a resident of Balanti,
Cainta, Rizal, filed before the Rizal RTC, a complaint
against private respondent de Guzman praying for the
annulment of 2 deeds of sale involving a parcel of riceland
in Barrio Estanza, Lingayen, Pangasinan, the surrender of
the produce thereof and damages for private respondent's
refusal to have said deeds of sale set aside upon
petitioner's demand.
 On May 25, 1983, before summons could be served on de
Guzman, the RTC Executive Judge issued an order
requiring counsel for petitioner to confer with respondent
trial judge on the matter of venue. After said conference,
the RTC dismissed the complaint on the ground of
improper venue.
o It found, based on the allegations of the complaint,
that petitioner's action is a real action as it sought not
only the annulment of the aforestated deeds of sale
but also the recovery of ownership of the subject
parcel of riceland located in Pangasinan, outside its’
territorial jurisdiction.
 Petitioner appealed to the IAC, which affirmed the order of
dismissal of his complaint.
ISSUE
 W/N the trial court may motu proprio dismiss a complaint
on the ground of improper venue?? NO
HELD
 The motu proprio dismissal of petitioner's complaint by the
RTC on the ground of improper venue is plain error,
attributable to its inability to distinguish between
jurisdiction and venue.
 Questions or issues relating to venue of actions are
basically governed by Rule 4 of the Revised Rules of
Court. It is said that the laying of venue is procedural
rather than substantive. It relates to the jurisdiction of
the court over the person rather than the subject
matter. Provisions relating to venue establish a
relation between the plaintiff and the defendant and
not between the court and the subject matter. Venue
relates to trial not to jurisdiction, touches more of the
convenience of the parties rather than the substance of the
case.
 Jurisdiction treats of the power of the court to decide a
case on the merits; while venue deals on the locality, the
place where the suit may be had.
 In Luna vs. Carandang, we emphasized:
1. A Court of First Instance has jurisdiction over suits
involving title to, or possession of, real estate
wherever situated in the Philippines, subject to the
rules on venue of actions;
2. Rule 4, Section 2, of the Rules of Court requiring
that an action involving real property shall be
brought in the Court of First Instance of the province
where the land lies is a rule on venue of actions,
which may be waived expressly or by implication.
 In the instant case, even granting for a moment that the
action of petitioner is a real action, respondent trial court
would still have jurisdiction over the case, it being a
regional trial court vested with the exclusive original
jurisdiction over "all civil actions which involve the
title to, or possession of, real property, or any interest
therein . . ." in accordance with Section 19 (2) of Batas
Pambansa Blg. 129. With respect to the parties, there is
no dispute that it acquired jurisdiction over the
plaintiff Dacoycoy, the moment he filed his complaint
for annulment and damages. Respondent trial court
could have acquired jurisdiction over the defendant
either by his voluntary appearance in court and his
submission to its authority, or by the coercive power
of legal process exercised over his person.
o Although petitioner contends that, he requested the
City Sheriff of Olongapo City or his deputy to serve the
summons on de Guzman at his residence, it does not
appear that said service had been properly effected or
that private respondent had appeared voluntarily in
court or filed his answer to the complaint. At this stage,
respondent trial court should have required petitioner
to exhaust the various alternative modes of service of
summons under Rule 14 of the Rules of Court, i.e.,
personal service under Section 7, substituted service
under Section 8, or service by publication under
Section 16 when the address of the defendant is
unknown and cannot be ascertained by diligent
inquiry.
o Dismissing the complaint on the ground of improper
venue is certainly not the appropriate course of action
at this stage of the proceeding, particularly as venue,
in inferior courts as well as in the CFI (now RTC), may
be waived expressly or impliedly. Where defendant
fails to challenge timely the venue in a motion to
dismiss as provided by Section 4 of Rule 4 of the
Rules of Court, and allows the trial to be held and
 a decision to be rendered, he cannot on appeal or
in a special action be permitted to challenge
belatedly the wrong venue, which is deemed
waived.

 Thus, unless and until the defendant objects to the

venue in a motion to dismiss, the venue cannot be
truly said to have been improperly laid, as for all
practical intents and purposes, the venue, though
technically wrong, may be acceptable to the parties for
whose convenience the rules on venue had been devised.
The trial court cannot pre-empt the defendant's
prerogative to object to the improper laying of the
venue by motu proprio dismissing the case.

IAC decision is reversed and set aside. The complaint before

the RTC is revived and reinstated.

Civil Procedure; Jurisdiction; Venue; Jurisdiction treats of the power

of the court to decide a case on the merits, while venue deals on the
locality, the place where the suit may be had.—Questions or issues
relating to venue of actions are basically governed by Rule 4 of the
Revised Rules of Court. It is said that the laying of venue is
procedural rather than substantive. It relates to the jurisdiction of the
court over the person rather than the subject matter. Provisions
relating to venue establish a relation between the plaintiff and the
defendant and not between the court and the subject matter. Venue
relates to trial not to jurisdiction, touches more of the convenience
of the parties rather than the substance of the case. Jurisdiction
treats of the power of the court to decide a case on the merits; while
venue deals on the locality, the place where the suit may be had.

Same; Same; Same; Where a defendant fails to challenge timely

the venue in a motion to dismiss, and allows the trial to be held and
a decision to be rendered, he cannot appeal or belatedly challenge
the wrong venue.—Dismissing the complaint on the ground of
improper venue is certainly not the appropriate course of action at
this stage of the proceeding, particularly as venue, in inferior courts
as well as in the courts of first instance (now RTC), may be waived
expressly or impliedly. Where defendant fails to challenge timely the
venue in a motion to dismiss as provided by Section 4 of Rule 4 of
the Rules of Court, and allows the trial to be held and a decision to
be rendered, he cannot on appeal or in a special action be permitted
to challenge belatedly the wrong venue, which is deemed waived.

Same; Same; Same; Courts; Actions; Dismissal of; The trial court
cannot pre-empt the defendant’s prerogative to object to the
improper laying of the venue by motu proprio dismissing the case.—
Thus, unless and until the defendant objects to the venue in a
motion to dismiss, the venue cannot be truly said to have been
improperly laid, as for all practical intents and purposes, the venue,
though technically wrong,

may be acceptable to the parties for whose convenience the rules

on venue had been devised. The trial court cannot pre-empt the
defendant’s prerogative to object to the improper laying of the venue
by motu proprio dismissing the case. Indeed, it was grossly
erroneous for the trial court to have taken a procedural short-cut by
dismissing motu proprio the complaint on the ground of improper
venue without first allowing the procedure outlined in the Rules of
Court to take its proper course. Although we are for the speedy and
expeditious resolution of cases, justice and fairness take primary
importance. The ends of justice require that respondent trial court
faithfully adhere to the rules of procedure to afford not only the
defendant, but the plaintiff as well, the right to be heard on his cause.