Barangay Conciliation

1. Morata v. Go, 125 SCRA 444 (1983)

Petition for certiorari and prohibition with prayer for writ of prelim injunction to review the order of Judge Tomol CFI
Cebu BR11.

FACTS:
Respondent spouses Victor & Flora Go filed in the CFI of Cebu a complaint against petitioners Julius & Ma. Luisa
Morata for recovery of a sum of money plus damages amounting to Php49,400. Petitioners filed a motion to dismiss
on grounds that of failure of the complaint to allege prior availment by plaintiffs of the barangay conciliation process
required by PD1508, as well as the absence of a certification by the Lupon or Pangkat Secretary that no conciliation or
settlement had been reached by the parties. The motion was opposed by private respondents. Respondent judge
denied the said motion to dismiss. Petitioners filed a motion for recon but the same was denied.

ISSUE:
Whether or not there should be barangay conciliation.

HELD:
The Lupon has the authority to settle amicably all types of disputes involving parties who actually reside in the same
city or municipality. The law makes no distinction with respect to the classes of civil disputes that should be
compromised at the barangay level, in contradistinction to the limitation imposed upon the Lupon over criminal cases.
The fact that the city or municipal courts are forum for the nullification or execution of the settlement or arbitration
award issued by the Lupon cannot be construed as a limitation of the scope of authority of the Lupon. This merely
confers upon the city and municipal courts the jurisdiction to pass upon and resolve petitions or actions for nullification
or enforcement of settlement/arbitration awards issued by the Lupon, regardless of the amount involved or the nature
of the original dispute. But there is nothing in the context of said sections to justify the thesis that the mandated
conciliation process in other types of cases applies exclusively to said inferior courts. The conciliation process at the
barangay level is compulsory not only for cases falling under the exclusive competent of the MeTCs and MTCs, but for
actions cognizable by the RTCs as well.

2. Candido v. Macapagal, 221 SCRA 328 (1993)

FACTS:

 This is a petition for certiorari to annul and set aside of the trial court dismissing the complaint of petitioners
Emiliana and Francisca Candido against private respondent Mila Contreras on the ground of lack of
jurisdiction for petitioners' failure to comply with the mandatory barangay conciliation process required by
Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law.

 Respondents Sagraria Lozada, Jorge Candido, et al, who represented themselves to be the sole heirs of
the late Agapito Candido executed a Deed of Extra-judicial Settlement of Estate with Sale 3 covering
parcels of land owned by the latter (Agapito Candido) and sold to private respondent Mila Contreras in
whose name said properties are now registered.

 Petitioners instituted an action with the Regional Trial Court of Bulacan defendants to annul the Deed of
Extra-judicial Settlement of Estate with Sale, to cancel TCT No. 120656-M issued in the name of private
respondent and to reinstate TCT No. 223602 in the name of Agapito Candido married to Sagraria Lozada.

 Private respondent filed a Motion to Dismiss 4 on the ground that petitioners failed to comply with the
mandatory conciliation process required under P.D. No. 1508 as she resides in the same municipality with
the petitioners.

 RTC ruling: dismissed the case for lack of prior referral of the dispute before the Katarungang Pambarangay.
MFRs were denied.

 Hence, petitioners file this petition alleging grave abuse of discretion on the part of the respondent judge
dismissing private respondent in the complaint instituted by the petitioners notwithstanding the fact that the
other defendants in Civil Case No. 697-M-90 reside in different municipalities and cities.
 ISSUE: WON prior referral of the said dispute before the Katarungang Pambarangay is necessary before filing
the case to the RTC.

HELD: No. The Lupon of the barangay ordinarily has the authority to settle amicably all types of disputes involving
parties who actually reside in the same municipality, city or province.

Where the complaint does not state that it is one of the excepted cases, or it does not allege prior availment of said
conciliation process, or it does not have a certification that no conciliation or settlement had been reached by the
parties, the case could be dismissed on motion.

In the instant case, the fact that petitioners and private respondent, reside in the same municipality of
Obando, Bulacan does not justify compulsory conciliation under P.D. No. 1508 where the other co-defendants
reside in barangays of different municipalities, cities and provinces.

Petitioners can immediately file the case in court. It would not serve the purpose of the law in discouraging
litigation among members of the same barangay through conciliation where the other parties reside in
barangays other than the one where the Lupon is located and where the dispute arose.

3. Ramos v. CA, 174 SCRA 690 (1989) (old digest)

FACTS: Domingo Ramos authorized his brother Manuel to sell his share of lands owned by them in common with
their other brothers and sisters. Manuel did. Later, Domingo revoked the power of attorney and demanded an
accounting from Manuel. Manuel refused. Domingo then filed a complaint with the Punong Barangay of Pampanga,
Buhangin District, Davao City. Manuel appeared but Domingo did not come on the scheduled hearing by the Punong
Bgy. Domingo was represented, however, by his wife who said her husband wanted to avoid a direct confrontation
with his brother. She requested that the Punong Bgy issue a certification that no settlement had been reached so a
complaint could be filed in court. The Punong Bgy complied. Thereupon, Domingo sued Manuel in the RTC Davao,
also for accounting, in Civil Case No. 18560-87.Manuel moved to dismiss the complaint on the ground of non-
compliance with the requirements of PD1508. He cited the failure of the Punong Bgy to refer the dispute to the
Pangkat ng Tagapagkasundo after the unsuccessful mediation proceedings convened by him. The motion was denied
Manuel then filed with this Court a petition for certiorari which we referred to the CA. CA denied the petition. It held
that there was no need for such referral because Domingo had clearly indicated, by his refusal to appear before the
Punong Bgy, that no extrajudicial settlement was possible between him and his brother. Manuel is now before us to
question this decision.

HELD: The dispute should not have ended with the mediation proceedings before the Punong Barangay because of
his failure to effect a settlement. It was not for the Punong Barangay to say that referral to the Pangkat was no longer
necessary merely because he himself had failed to work out an agreement between the parties. The Pangkat could
have exerted more efforts and succeeded (where he had not) in resolving the dispute. If the complainant refuses to
appear before the Punong Barangay, he is barred from seeking judicial recourse for the same course of action. The
parties must appear in person without assistance of counsel, except minors and incompetents.

4. Vda. de Borromeo v. Pogoy, 126 SCRA 217 (1983)

PETRA VDA. DE BORROMEO vs. HON. JULIAN B. POGOY, Municipality/City Trial Court of Cebu City, and
ATTY. RICARDO REYES, 126 SCRA 217, G.R. No. L-63277, November 29, 1983

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

Facts:

Deceased Vito Borromeo was the original owner of the building which was leased to herein petitioner Petra Vda. De
Borromeo for P500 per month payable within the first five days of the month. The estate of the deceased is intestate.

On August 28, 1982, Atty Ricardo Reyes, administrator of the estate, served upon petitioner a letter demanding that
she pay the overdue rentals corresponding to the period from March to September (1982), and thereafter vacate the
premises. Petitioner failed to do so, thus the respondent instituted an ejectment case against the former. Petitioner
moved to dismiss for want of jurisdiction. She points out that the parties are from the same cities and as such they
must refer the dispute to the barangay Court or Lupon before going through the judicial courts. Respondent’s defense
was that it was danger of prescribing under the statute of limitations. The motion was dismissed thus this case.
Since the petitioner was unable to secure a reconsideration of said order, petitioner came to this Court through this
petition for certiorari. In both his comment and memorandum, private respondent admitted not having availed himself
of the barangay conciliation process, but justified such omission by citing paragraph 4, section 6 of PD 1508 which
allows the direct filing of an action in court where the same may otherwise be barred by the Statute of Limitations, as
applying to the case at bar.

Issue:

Whether or not referral to a Barangay Lupon is required in cases regarding an intestate estate under administration.

(Atty Famador: When can an intestate estate of a deceased person have a separate and distinct personality similar to
corporations?)

Ruling:

PD 1508 makes the conciliation process at the Barangay level a condition precedent for filing of actions in those
instances where said law applies but it is subject to certain exceptions. One of the exceptions is stated in Sec. 1, Rule
VI, Katarungang Pambarangay Rules: “Any complaint by or against corporations, partnership or juridical entities, since
only individuals shall be parties to Barangay conciliation proceedings either as complainants or respondents (Sec. 1,
Rule VI, Katarungang Pambarangay Rules);

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

In Civil Case No. R-239l5, plaintiff Ricardo Reyes is a mere nominal party who is suing in behalf of the Intestate Estate
of Vito Borromeo. while it is true that Section 3, Rule 3 of the Rules of Court allows the administrator of an estate to
sue or be sued without joining the party for whose benefit the action is presented or defended, it is indisputable that
the real party in interest in Civil Case No. R-23915 is the intestate estate under administration. Since the said estate is
a juridical person (Limjoco v. Intestate of Fragante, 80 Phil. 776) plaintiff administrator may file the complaint directly in
court, without the same being coursed to the Barangay Lupon for arbitration.

5. San Miguel v. Pundogar, 173 SCRA 704 (1989)

Facts: Petitioner San Miguel Filed a complaint for breach of contract with damages against respondent Christina Trino
before the RTC Lanao Del Norte. A certificate to file action, signed by the Barangay captain of Barangay Palao, Iligan
City, bearing the notation tthat the respondent cannot be contacted was filed along with the complaint. On january 26,
1986 the trial court rendered a decision against private respondent. Private respondent filed a petition for relief from
judgment with the trial court, alleging that the court had no jurisdiction to render its decision for failure of petitioner to
go trhough the mandatory conciliation. Private respondent argued that the certification of the Barangay Captain was
inadequate compliance with PD 1508, private respondent being a resident not of barangay palao but rather of brgy.
Cabili. The trial court presided by respondent judge, issued an order upholding private respondents contentions and
set aside the assailed decision holding that RTC acted without jurisdiction over the parties and the subject matter of
the action for failure to comply with PD 1508. A motion for reconsideration was denied.

Issues: Whether or not the lower court acquired jurisdiction for failure to comply with PD 1508

Held: Where defendant fails for one reason or another to respond to a notice to appear before the lupon, the
requirement of PD 1508 ust be regarded as having been satisfied by the plaintiff. The defendant in an action fails for
one reason or another to respond to a notice to appear before the lupon, the requirement of PD 1508 must be
regarded as having been satisfied by the plaintiff. A defendant cannot be allowed to frustrate the requirement of the
statute by her own refusal or failure to appear before the lupon and then later to assail a judgment rendered in such
action by setting up the very ground of non compliance with PD 1508. In simplest temrs, a defendant cannot be
allowed to profit by her own default. Private respondent stated that she had not receive notice to appear before the
lupon. We do not believe that the statement and suggestion should be given credence. The barangay authorities of
barangay palao must be presumed to have performed their official duties and to have acted regularly in issuing the
certificate to file action. They must be presumed to have sent a notice to private respondnet to apepar before the
Lupon.

6. Uy v. Contreras, 237 SCRA 167 (1994)

Barangay Conciliation: Uy vs. Contreras, 237 SCRA 167 (1994)
Facts

Felicidad Uy (Uy) subleased from Susanna Atayde (Atayde) half of the second floor of a building located in Makati. Uy
operated and maintained a beauty parlor there. When the sublease contract expired, an argument arose between Uy
and Atayde because the former was unable to completely remove all her movable properties from the premises. The
argument led to a scuffle between Uy, Atayde, and Atayde's employees. Six days later, Atayde and her employees
filed a complaint with the barangay captain of Valenzuela, Makati. On the scheduled confrontation between the parties
in the barangay, only Uy appeared. The confrontation was reset. Two informations for slight physical injuries were filed
against Uy with the MTC of Makati. In her counter-affidavit, Uy alleged the prematurity of filing the criminal cases
because of the undergoing of conciliation proceedings between them. She later on filed a motion to dismiss for non-
compliance with the requirement of P.D. No. 1508 on prior referral to the Lupong Tagapamayapa and pursuant to
Section 18 of the 1991 Revised Rule on Summary Procedure. She also attached the certification of the barangay
captain, attesting to the existence of an ongoing conciliation proceedings between them. MTC denied the motion to
dismiss, explaining that the offense was about to prescribe or barred by the statute of limitations anyway. The motion
for reconsideration by Uy was denied, hence the filing of Uy with the Supreme Court of the special civil action for
certiorari.

Issue

Whether or not the judge of MTC Makati gravely abused his discretion when he denied the motion to dismiss of the
petitioner, considering that the private respondents failed to comply with the mandatory requirement of P.D. 1508 as
reiterated in Sec. 412 of the Local Government Code and the 1991 Revised Rule on Summary Procedure.

Ruling

Yes. The respondent judge acted with grave abuse of discretion in refusing to dismiss the criminal cases.

It may thus be observed that the revised Katarungang Pambarangay law has at least three new significant features, to
wit:

a) It increased the authority of the lupon in criminal offenses from those punishable by imprisonment not exceeding
thirty days or a fine not exceeding P200.00 in P.D. No. 1508 to those offenses punishable by imprisonment not
exceeding one year or a fine not exceeding P5,000.00.

b) As to venue, it provides that disputes arising at the workplace where the contending parties are employed or at the
institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or
institution is located.

c) It provides for the suspension of the prescriptive periods of offenses during the pendency of the mediation,
conciliation, or arbitration process.

While P.D. No. 1508 has been repealed by the Local Government Code of 1991, the jurisprudence built thereon
regarding prior referral to the lupon as a pre-condition to the filing of an action in court remains applicable because its
provisions on prior referral were substantially reproduced in the Code.

Pursuant to paragraph (a), Section 412 of the Local Government Code, respondent Judge Contreras should have
granted the motion to dismiss the criminal cases. He cannot justify its denial by taking refuge under Section 6 of P.D.
No. 1508 (more properly, Section 412(b)(4) of the Local Government Code of 1991) which states that the parties may
go directly to court where the action is about to prescribe. This is because, as earlier stated, pursuant to paragraph
(c), Section 410 of the Code, the prescriptive period was automatically suspended for a maximum period of sixty days
from 23 April 1993 when the private respondents filed their complaints with the lupon of Valenzuela, Makati.

Moreover, having brought the dispute before the lupon of Barangay Valenzuela, Makati, the private respondents are
estopped from disavowing the authority of the body which they themselves had sought. Their act of trifling with the
authority of the lupon by unjustifiably failing to attend the scheduled mediation hearings and instead filing the
complaint right away with the trial court cannot be countenanced for to do so would wreak havoc on the barangay
conciliation system.

7. Gegare v. CA, 177 SCRA 471 (1989)

This case involves a small piece of land. The decision was to cut it into 2 between the parties. Petitioner wants the
whole lot while the private respondent if happy with his half.
FACTS:
A 270sq.mtr lot situated in GenSan was titled in the name of Paulino Elma. A reversion case was filed by the Republic
against Paulino and the lot was reverted to the mass of public domain subject to disposition and giving preferential
right to its actual occupant, Napoleon Gegare. Both petitioner and private respondent filed an application for the lot in
the Board of Liquidators (Board). Board resolved to dispose the lot in favor of petitioner by way of a negotiated sale.
Private respondent protested against the application of petitioned, then Board denied the said protest.

A request for recon of private respondent was referred by the Board to Artemio Garlit, liquidator-designee, GenSan
Branch for verification and investigation. After which, Garlit submitted a report to the Manila Ofc recommending
division of the lot to the parties. Nevertheless, the Board denied the protest because the case had already been
decided by the court. However, a MfR filed by private respondent was favorably considered by the Board. Board
directed the chief of LASEDECO to investigate the occupancy and area of the lot. Findings were that only private
respondent was the actual occupant so the LASEDECO chief recommended the division of the property. Both parties
appealed to the Ofc of the President but both appeals were dismiss.

A MfR filed by petitioner was denied on 29may84 Private respondent paid for the value of ½ of the lot and applied for
the issuance of a patent. Patent was issued to ½ portion of the lot. Petitioner was also adviced to file his application
and pay his portion. Petitioner filed an action for “Annulment and Cancellation of Partition” and/or to Declare them Null
and Void” against private respondent and the Board. Private respondent filed MtD the complaint on the grounds et al
…(5) lack of conciliation efforts pursuant to sec6 PD1508. The motion was granted. Petitioner MfR thereof to which an
opposition was filed by private respondent. MfR was granted and private respondent was required to file his
responsive pleading. Private respondent filed his answer. On 24 july 1986, private respondent asked for a prelim
hearing of the grounds for the MtD in his affirmative defenses. This was denied. Private respondent filed a petition for
certiorari and prohibition in the CA questioning the said orders of the trial court. CA granted the petition, declaring the
questioned orders null and void, and directing the trial court to dismiss the civil case for lack of jurisdiction. MfR filed
by petitioner was denied. Thus, the herein petition.

ISSUE:
Whether or not there should be a barangay conciliation.

HELD:
Conciliation process at the Barangay level is a condition precedent for the filing of a complaint in Court. Non-
compliance with that condition precedent could effect the sufficiency of the plaintiff's cause of action and make his
complaint vulnerable to dismissal on the ground of lack of cause of action or prematurity. Pending the first mediation,
no case could be validly filed with the courts. Filing of complaint with the lupon suspends the prescriptive period for 60
days at most. Rogie: Filing a complaint with the lupon signifies that you want to conciliate or mediate. Since filing a
case in court would signify that you want to litigate and not mediate. Therefore the conciliation should be finished
before one can file a case in court. Escolin: Labor cases are exempt from Barangay Conciliation proceedings because
the labor court has its own experts at arriving at an amicable settlement.

8. Galube v. Laureta, 157 SCRA 627 (1988)

Topic: Brgy Conciliation
Conciliation process at the Brgy level is a condition precedent for the filing of a complaint in court.

G.R. No. 71091 January 29, 1988

HENRY GALUBA, 
vs.
SPOUSES ALFREDO
FERNAN, J.:
FACTS:
Alfredo and Revelina Laureta ceded to petitioner all their rights and interests over a house and lot located in Quezon
Hill, Baguio City for P70,000. Petitioner paid the Lauretas P50,000 with the balance payable later.
When P18,000 of the balance remained unpaid, the parties brought the matter before the barangay
On February 10, 1984, the parties entered into an amicable settlement whereby they agreed that the P18,000 would
be paid in monthly installments starting April, 1984 and that non-compliance therewith would "mean execution in
accordance with the Barangay Law." 1
On July 17, 1984, Petitioner filed in the office of the barangay captain of Victoria Village an unsworn complaint for the
annulment of the amicable settlement. He alleged therein that his consent to said settlement had been vitiated by
mistake or fraud and therefore, the amicable settlement should be annulled and a new one entered into by the
parties. 2
Meanwhile, the inferior court issued the writ after the Lauretas filed in the Municipal Trial Court of Baguio City, Branch
IV, a motion for the issuance of a writ of execution based on the amicable settlement. Petitioner filed in the Regional
Trial Court of Baguio City a complaint for the annulment of the amicable settlement with prayer for a writ of preliminary
injunction and/ or restraining order. 3
The lower court denied the prayer for the issuance of a restraining order and/or writ of preliminary injunction.
The Lauretas filed a motion to dismiss the complaint on the ground of lack of jurisdiction over the nature of the action.
Petitioner contended that the lower court had jurisdiction over the case because he had named as defendants
therein the municipal trial court and the sheriff of Baguio City and hence, the complaint fell under the
exceptions in Section 2 [21 of P.D. 1508].
The Court noted the fact that petitioner failed to repudiate the amicable settlement within the 10-day period
provided for in Section 11 of P.D. 1508 as the parties entered into said amicable settlement on February 10, 1984
and yet it was only on July 27, 1984 when petitioner repudiated it through an unsworn complaint for its annulment.
ISSUE: Whether the Regional Trial Court has jurisdiction to annul an amicable settlement arrived at by the parties
through the mediation of the Lupong Tagapayapa, in the absence of a repudiation of said amicable settlement within
the 10-day period provided for in Section 11 of Presidential Decree No. 1508.
HELD: NO.
Section 6 of P.D. 1508 is mandatory in character
SEC. 6. Conciliation pre-condition to filing of complaint.—No complaint, petition action or proceeding
involving any matter within the authority of the Lupon as provided in Section 2 hereof shall be filed or
instituted in court or any other government office of adjudication unless there has been a confrontation
of the parties before the Lupon Chairman or the Pangkat and no conciliation or settlement has been
reached as certified by the Lupon Secretary or the Pangkat Secretary, attested by the Lupon or
Pangkat Chairman, or unless the settlement has been repudiated. However, the parties may go
directly to court in the following cases:
[1] Where the accused is under detention;
[2] Where a person has otherwise been deprived of personal liberty calling for habeas
corpus  proceedings;
[3] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of
personal property and support pendente lite; and
[4] Where the action may otherwise be barred by the Statute of Limitations
Once the parties have signed an amicable settlement, any party who finds reasons to reject it must do so in
accordance with Section 13 of P.D. 1508 which states:
SEC. 13. Repudiation. — Any party to the dispute may, within ten [10] days from the date of the
settlement, repudiate the same by filing with the Barangay Captain a statement to that effect
sworn to before him, where the consent is vitiated by fraud, violence or intimidation. Such
repudiation shall be sufficient basis for the issuance of the certification for filing of a complaint,
provided for in Section 6, hereof.
Pursuant to P.D. 1508, Section 12, Rule VI of the  Katarungang Pambarangay  Rules which were promulgated "for the
amicable settlement of disputes at the barangay level, without judicial recourse," also provides that "[f]ailure to
repudiate the settlement or the arbitration agreement within the time limits respectively set [in Section 10 thereof],
shall be deemed a waiver of the right to challenge on said grounds," i.e., fraud, violence or intimidation.
Any party, therefore, who fails to avail himself of the remedy set forth in Section 13 must face the consequences of the
amicable settlement for he can no longer file an action in court to redress his grievances arising from said settlement.
It should be emphasized that under Section 11 of said law, "[t]he amicable settlement and arbitration award shall have
the force and effect of a final judgment of a court upon the expiration of the ten [10] days from the date thereof unless
repudiation of the settlement has been made or a petition for nullification of the award has been filed before the proper
city or municipal court."
Hence, the lower court correctly held that P.D. 1508 does not provide for a judicial procedure for the annulment of an
amicable settlement because the remedy of repudiation supplants the remedy of a court annulment. An aggrieved
party may only resort to a court action after he has repudiated the settlement in accordance with Section 13 as
Section 6 clearly states that repudiation is a pre-condition to the filing of a complaint regarding any matter within the
authority of the Lupong Tagapayapa. It should be clarified, however, that the "petition for nullification" mentioned in
Section 11 refers to an arbitration award pursuant to Section 7 of the same law and not to an amicable settlement.
The primordial objective of P.D. 1508 is to reduce the number of court litigations and prevent the deterioration of the
quality of justice which has been brought about by the indiscriminate filing of cases in the courts. To allow court
actions assailing unrepudiated  amicable settlements would exacerbate congestion of court dockets. This is repugnant
to the spirit of P.D. 1508.
Having failed to repudiate the amicable settlement within the ten-day period, petitioner is left with no recourse but to
abide by its terms. He, therefore, acted correctly when he eventually fully satisfied his obligation pursuant to the
amicable settlement, thereby, rendering his case moot and academic.
ACCORDINGLY, the petition for review on certiorari is hereby DENIED. Costs against the petitioner.

JURISDICTION

2. Ortigas v. Herrera, 120 SCRA 89 (1983)

ORTIGAS & COMPANY, LIMITED PARTNERSHIP vs. JUDGE JOSE B. HERRERA, 120 SCRA 89, G.R. No. L-
36098, January 21, 1983

Facts:

Petitioner and private respondent entered into an agreement whereby for and in consideration of P55,430, the former
agreed to sell to the latter a parcel of land with a special condition that should private respondent as purchaser
complete the construction including the painting of his residential house on said lot within two years, petitioner, as
owner, has agreed to refund to private respondent the amount of P10.00 per square meter.

When the aforesaid special condition was fulfilled, private respondent accordingly notified in writing the petitioner of
the same and requested for his refund amounting to P4,820.

Upon failure of petitioner to pay his obligation, private respondent filed a complaint for sum of money and damages
with the City Court of Manila, against petitioner. A motion to dismiss was filed by petitioner on grounds of lack of
jurisdiction, failure of the complaint to state a cause of action and improper venue. City Court Judge Jose B. Herrera in
his order held in abeyance the resolution on the motion until after the trial of the case on the merits.

A reconsideration of the said order having been denied, petitioner filed with the Court of First Instance of Manila, a
special civil action for certiorari and prohibition with preliminary injunction. A motion to dismiss was filed by private
respondent, and on November 17, 1972, the petition was dismissed on the ground that the claim of private respondent
in his complaint, being less than P10,000, is within the exclusive jurisdiction of the city court.

Petitioner thus filed the present petition and argues among others that: (a) as detriment from the allegations of the
complaint, the action is for specific performance of contract; and (b) actions in which the subject of litigation is not
capable of pecuniary estimation such as complaints for specific performance of contract are exclusively cognizable by
the Court of First Instance.

Issues:

1. Whether or not the case is for the collection of a sum of money.

2. Whether or not the city court has jurisdiction to hear and decide the case on its merits

Ruling:

1. NEGATIVE. The action involved in this case is one for specific performance and not for a sum of money and
therefore incapable of pecuniary estimation, because what private respondent seeks is the performance of petitioner's
obligation under a written contract to make a refund but under certain specific conditions still to be proven or
established. In a case for the recovery of a sum of money, as the collection of a debt, the claim is considered capable
of pecuniary estimation because the obligation to pay the debt is not conditioned upon any specific fact or matter. But
when a party to a contract has agreed to refund to the other party a sum of money upon compliance by the latter of
certain conditions and only upon compliance therewith may what is legally due him under the written contract be
demanded, the action is one not capable of pecuniary estimation. The payment of a sum of money is only incidental
which can only be ordered after a determination of certain acts the performance of which being the more basic issue
to be inquired into.

2. NEGATIVE. JURISDICTION IS LODGED TO CFI (now RTC).

Although private respondent's complaint in the court a quo is designated as one for a sum of money and damages, an
analysis of all the factual allegations of the complaint patently shows that what private respondent seeks is the
performance of petitioner's obligation under the written contract to make the refund of the rate of P10 per square
meter or in the total amount of P4,820, but only after proof of having himself fulfilled the conditions that will give rise to
petitioner's obligation, a matter clearly incapable of pecuniary estimation and thus fall under CFI’s Jurisdiction (now
the RTC).

3. Primero v. IAC, 156 SCRA 435 (1987)

Primero
156 SCRA 435

Facts: Primero instituted proceedings against DM transit corporation with the Labor arbiters of the Department of
Labor, for illegal dismissal and for recovery of backwages and reinstatement. After due investigation, the Labor Arbiter
rendered judgment ordering DM to pay complainant Primero P2000 as separation pay. The judgment was affirmed by
the NLRC and later by the secretary of labor. The jurisdiction over such claims was however removed by PD 1367
which provided that labor arbiters shall not entertain claims for moral or other forms of damages. Afterwards, primero
brought suit against DM in the CFI of Rizal seeking recovery of damages caused not only by the breach of his
employment but also by oppresive and inhuman and consequently tortious, acts of his employer and its officers
antecedent and subsequent to his dimissal from employment without just cause. The trial court rendered judgment
dismissing the complaint on the ground of lack of jurisdiction for the reason that at the time that the complaint was filed
the labor code as amended conferred exclusive, original jurisdiction over claims for moral or other damages, not on
ordinary courts but on labor arbiters. This judgment was affirmed by the Intermediate appellate court. This is the
judgment now subject of the present petition for review on certiorari.

Issue: Whether or not the court erred in holding that the claim for moral or other damages is vested not on ordinary
courts but on labor arbiters.

Held: Actually we reiterate in this decision the doctrine already laid down in other cases to the effect that the grant of
jurisdiction to the Labor arbiter by Article 217 of the Labor Code is sufficiently comprehensive to include claims for
moral and exemplary damages sought to be recovered from an employer by an employee upon the theory of his
illegal dismissal. Ruling to the contrary are deemed abandoned or modified accordingly. The petition is dismissed.

4. Trade Union of the Philippines vs. Coscolluela, 140 SCRA 302 (1985)

Facts

The petition seeks to enjoin the public respondent from further proceeding in Civil Case No. 10905 of the Regional
Trial Court of Makati, Metro Manila.

Petitioner union filed a notice of strike with the Ministry of Labor and Employment against Super Garments
Manufacturing Corporation on May 12, 1985. Super Garments and Rustan Commercial Corporation have separate
compartments in the same building at Malugay and Mayapis streets. It is called the Yupangco building.

It is alleged by the petitioner union that goods of Super Garments were spirited out of its strike-bound premises thru
Rustan’s warehouse. Whereupon, the union picketed not only Super Garments but also Rustan. As a result Rustan
filed Civil Case No. 10905 before the respondent judge for injunction and damages thru the PECABAR law office and
petition No. 971 with the National Labor Relations Commission also to enjoin the union from picketing its premises.

Petitioner union claims that respondent judge has no jurisdiction to issue an injunction because the case is a labor
dispute, that the prerogative belongs to the Minister of Labor and Employment. Upon the other hand, private
respondent Rustan says that the respondent judge has jurisdiction because there is no labor dispute between it and
the union even as it went to the National Labor Relations Commission to seek identical relief.

Issue
Whether or not respondent judge has jurisdiction to issue an injunction.

Ruling

At this stage there appears to be no labor dispute between the petitioner and the private respondent for which reason
the latter was justified in seeking relief in respondent judge’s court. The unfair labor complaint filed by petitioner union
on July 12, 1985 does not prove a labor relationship. By the same token it was improper for the private respondent to
have filed Case No. 971 with the National Labor Relations Commission.

In the light of the foregoing, the Petition is DISMISSED for lack of merit and the temporary restraining order issued on
September 23, 1985 is hereby LIFTED. However, private respondent Rustan Commercial Corporation is directed to
withdraw its case before the National Labor Relations Commission.

6. Cabrera v. Tiano, 8 SCRA 542 (1963)

TOPIC: JURISDICTION

G.R. No. L-17299             July 31, 1963

JOSEFINA POTESTAS CABRERA and CRESENCIA POTESTAS OMULON, plaintiffs-appellees, 

vs.
MARIANO T. TIANO, defendant-appellant.

PAREDES, J.:

FACTS:

Under date of June 20, 1957, in action for "Partition and Recovery of Real Estate, with Damages" was filed by
Josefina and Cresencia against Tiano.

In the complaint, it was alleged that petitioners were entitled to a portion of the land, since Josefina did not
sign the sale and Crescencia was a minor at the time petitioners’ father sold the land to the defendant; that
defendant Tiano had usurped the portions belonging to them, to their damage and prejudice in the amount of
P7,000.00, which consisted of their share in the produce of the property, during the period of defendant's
possession.

In answer, defendant claimed that the plaintiffs herein knew of the sale and that he was not aware of any defect in the
title of his vendors. As a Special Defense, defendant alleged that he was the absolute owner of the land by acquisitive
prescription of ten (10) years, from the date of purchase.

The court a quo rendered the following judgment —WHEREFORE, premises considered, the court hereby renders
judgment declaring that the plaintiffs are entitled each to 1/8 of the property in question.

The trial court in the same decision, commissioned the Deputy Provincial Sheriff, to partition the property in question
and render a report within 30 days. Defendant moved for a reconsideration of the decision, contending that
prescription had already set in, and his (defendant's) title, had become irrevocable, and that the award of damages
had no factual and legal basis. The motion for reconsideration was denied on March 5, 1960. The Commissioner's
report, partitioning the property was submitted on April 11, 1960. Defendant perfected his appeal on May 9, 1960, and
on May 14, 1960, the same was given due course and elevated to this Court.

In claiming that prescription had taken place, defendant insisted that the period should be counted from the date
the summons was served on him, which was on July 2, 1957. It was agreed, however, that the complaint for
the recovery of the land in question was presented on June 20, 1957, and the summons was sent out the
following day.

The Civil Code, provides that—

 The prescription of actions is interrupted when they are filed before the court, when there is a written extra-
judicial demand by the creditors, and when there is any written acknowledgment of the debt of the debtor. (Art.
1155)

Defendant-appellant claims that he had already acquired full ownership of the property in question because the
judicial summons, which could civilly interrupt his possession (Art. 1123, N.C.C.), was received by him only on July 2,
1957 and the sale in question was made on July 2, 1947.

ISSUE:

1. WON the defendant acquired the property by acquisitive prescription?

2. WON the SC have the authority to decide as to questions of fact?

HELD:

1. NO. Conceding, for the purposes of argument, that the article cited is applicable, still appellant cannot avail
himself of acquisitive prescription, for the simple reason that no finding was made by the trial court that his
possession from the time of the sale (July 2, 1947), was with just title, in good faith, in the concept of an
owner, public, peaceful, adverse and uninterrupted (Arts. 1117 & 1118, N.C.C.).

Good faith is a question of fact which must be proved (Art. 1127, N.C.C.). For the purposes of acquisitive prescription,
just title must also be proved, it is never presumed (Art. 1131, N.C.C.). The factual requisite of adverse possession do
not appear in the stipulation of facts and the trial court did not make findings to this effect.

2. NO. (relevant sa remedial law):These circumstances could and/or should have been ventilated, had
the appeal been taken to the Court of Appeals. Defendant, however, having chosen to appeal the
decision directly to this Court, he is deemed to have waived questions of fact and raised only
questions of law. There being no factual finding by the lower court of the presence of the requisites of
acquisitive prescription this Court has to reject, as did the trial court, said defense. Moreover, on July 2,
1957, when the summons was received, the ten (10) years necessary for acquisitive prescription had not yet
elapsed. In fact, said period terminated on that very day.1äwphï1.ñët

As to the award of damages, We find Ourselves devoid of ample authority to review the same, since it involves
appreciation of facts. It cannot be denied, as found by the lower court, that plaintiffs herein are entitled to a
share in the land. Verily, they should also share in the produce, which, admittedly, was enjoyed by the defendant-
appellant herein.

WHEREFORE, the decision appealed from should be, as it is hereby affirmed. Costs against appellant in both
instances.

7. Sun Insurance v. Asuncion, 170 SCRA 274 (1989)

Sun Insurance v. Asuncion, 170 SCRA 274 (1989)

FACTS: Petitioner Sun Insurance filed a complaint with the Makati RTC for the consignation of a premium refund on a
fire insurance policy with prayer for the judicial declaration of its nullity against private respondent Manuey Uy Po
Tiong. Private respondent was declared in default for failure to file the required answer within the reglementary
period.
Private respondent filed a compliant in the Quezon City RTC for the refund of premiums and the issuance of a writ of
preliminary attachment. Only the amount of P210 was paid by private respondent as docket fee which prompted
petitioner to raise objection. Upon order of the SC, the case was assigned to a different branch due to under-
assessment of docket fees.
The case was thereafter assigned to Judge Asuncion who required the parties to comment on the Clerk of Court’s
letter-report signifying her difficulty in complying with the SC Resolution since the pleadings filed by private respondent
did not indicate the exact amount sought to be recovered.
Private respondent filed a Re-Amended complaint stating therein a claim of not less than 10M as actual compensatory
damages in the prayer. However, the body of the amended complaint alleges actual and compensatory damages and
atty’s fees in the total amount of about P44,601,623.70
Judge Asuncion issued another Order admitting the second amended complaint and stating that the same constituted
proper compliance with the SC Resolution. Petitioner filed a petition for Certiorari with the CA questioning the order of
Judge Asuncion. Private respondent filed a supplemental complaint alleging an additional claim of P20M as damages
bringing the total claim to P64,601,623.70. CA denied petition and granted writ of prelim attachment.
HELD: 1) It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed
docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of
the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within
a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2) Permissive
counterclaims, third party claims and similar pleadings, shall not be considered filed until and unless the filing fee
prescribed therefore is paid. The court may also allow payment of said fee within a reasonable time but also in no
case beyond its applicable prescriptive or reglementary period. 3) If the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment.
Escolin: There are some compulsory counterclaim that needs payment of docket fees, and some which does not.

8. Hodges v. CA, GR 87617, 184 SCRA (1990)

JOE HODGES, petitioner, vs. COURT OF APPEALS, HEIRS OF LEON P. GELLADA, plaintiff-appellee in Civil

Case No. 6512, ROMEO MEDIODIA, plaintiff-appellant in Civil Case No. 6513, and HEIRS OF FERNANDO
MIRASOL, plaintiff-appellee in Civil Case No. 6516, respondents.
G.R. No. 87617               April 6, 1990
Facts:
Three practicing lawyers filed separate actions for damages against petitioner for alleged defamatory statements
claiming damages in the form of moral damages, damage to their law practice, exemplary and temperate damages.
Petitioner (then defendant) questioned the jurisdiction of the courts over these cases pointing out that the court cannot
acquire jurisdiction over the case unless the corresponding docket fee is paid.

In the present petition, in the case of Gellada vs. Hodges the total amount of the claim for damages is about
P460,000.00, the estimated docket fee due is P770.00 but what was paid only was P32.00. Despite the order of the
trial court on August 31, 1972 and another order ten years later, that is on March 11, 1982, requiring plaintiff to pay the
correct docket fee, Gellada paid the amount of P168.00 Thus his total payment amounts to just P200.00, which is still
much less than the amount of P770.00 due.

Similarly in Mediodia vs. Hodges where the claim is approximately P360,000.00 and the appropriate filing fee would
be about P570.00, the plaintiff paid only P32.00 upon filing the complaint. After the two aforesaid order of the trial
court were issued, Mediodia paid on September 5, 1982 the amount of P168.00 bringing his payment to a total of
P200.00 which is also much less than the amount of P570.00 due for docket fee.

In the case of Mirasol vs. Hodges, the total claim is for P410,000.00 and the amount of filing fee due is P670.00.
Mirasol paid only P32.00 upon filing the complaint. He did not pay any additional sum even after the two orders of the
court had been issued.

Issue:

WON the trial court acquired jurisdiction over the subject matter in the given three cases due to the failure to pay in full
the prescribed docket fees.

Ruling:

As early as Lazaro vs.  Endencia, this Court held that an appeal is not deemed perfected if the appellate court docket
fee is not fully paid. In Lee vs. Republic, this Court ruled that a declaration of intention to be a Filipino citizen produced
no legal effect until the required filing fee is paid. In Malimit vs. Degamo, We held that the date of payment of the
docket fee must be considered the real date of filing of a petition for quo warranto and not the date it was mailed.
In Magaspi vs.  Ramolete, the well-settled rule was reiterated that a case is deemed filed only upon payment of the
docket fee regardless of the actual date of its filing in court. 

In Manchester, this rule was emphasized when this Court stated "The court acquires jurisdiction over any case only
upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby
vest jurisdiction in the court, much less the payment of the docket fee based on the amount sought in the amended
pleading.

The rule in Manchester was relaxed in Sun Insurance vs. Hon. Maximiano Asuncion, whereby this Court declared that
the trial court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive
or reglementary period. Nevertheless, in Sun Insurance, this Court reiterated the rule that it is the payment of the
prescribed docket fee that vests the court with Jurisdiction over the subject matter of nature of the case. 

No doubt, the trial court did not acquire jurisdiction over the subject matter in said three (3) cases due to the failure to
pay in full the prescribed docket fee. Thus, the entire proceedings undertaken in said cases are null and void. The
plaintiffs in said cases are practicing lawyers who are expected to know this mandatory requirement in the filing of any
complaint or similar pleading. Their non-payment of the prescribed docket fee was deliberate and inexcusable.

9. Spouses de Leon v CA, 287 SCRA (1998)

Spouses De Leon
287 scra 94

Facts: Private respondents filed in the RTC of Quezon City a complaint for annulment or rescission of a contract of
sale of two parcels of land against petitioners. Upon the filing of the complaint the clerk of court required private
respondents to pay docket and legal fees in the total amount of P610. Petitioners moved for the dismissal of the
complaint on the ground that the trial court did not acquire jurisdiction over the case by reason of private respondents
nonpayment of the correct amount of the docket fees. Petitioners contended that in addition to the fees already paid
based on the claim for P100,000 for attorneys fees, private respondents should have paid docket fees in the amount
of P21,640 based on the alleged value fo the two parcels of land. Private respondents filed opposition to the motion to
dismiss, The trial court denied petitioners motion to dismiss but required private respondents to pay the amount of
docket fees based on the estimated value of the parcels of land in litigation as stated in the complaint. Private
respondets filed a motion for reconsideration but was denied. They brought the matter to the CA which rendered a
decision annulling the orders of the trial court. The appellate court held that an action for rescission or annulment of
contract is not susceptible of pecuniary estimation and therefore, the docket fees should not be based on the value of
the real property, subject matter of the contract sought to be annulled or rescinded.

Issue: WON is assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract
of sale, the value of the real property subject matter of the contract should be used as basis as one which is not
capable of pecuniary estimation

Held: Conformably with this discussion of actions where the value of the case cannot be estimated the court held that
an action for recession of contract is one which cannot be estimated and therefore the docket fee for its filing should
be the flat amount of P200. 00 as then fixed in the former rule 141. We hold that Judge dalisay did not err in
considering as basically one for recission or annulment of contarct which is not suspectible of pecuniary estimation.
Consequently, the fee for docketing fee it is P200 an amount already paid by plaintiff now respondent Matilda Lim.
Thus, although eventually the result maybe the recovery of land, it is the natrue of the action as one for rescission of
contract which is controlling. The CA correctly applied these cases to the present one. Wherefore, the decision of the
CA is affirmed.

10. Manuel v. Alfeche, 259 SCRA 475

Jurisdiction: Manuel vs. Alfeche, 259 SCRA 475 (1996)

Facts

On January 9, 1992, the City Prosecutor of the City of Roxas filed with the Regional Trial Court, 6th Judicial Region,
Branch 15, Roxas City an Information for libel. After trial, the respondent judge rendered the assailed Decision finding
three of the accused guilty and acquitting a fourth. However, “(t)he civil indemnity by way of moral damages (was)
dismissed for lack of jurisdiction” on the ground that petitioner did not pay the filing fees therefor. Reconsideration
having been denied, petitioner filed this instant petition for review.

Issue

Whether or not the offended party should recover moral damages.

Ruling

The ruling that “when the amount of damages is not so alleged in the complaint or information filed in court, the
corresponding filing fees need not be paid and shall simply ‘constitute a first lien on the judgment, except in an award
for actual damages’” was actually intended to apply to a situation wherein either (i) the judgment awards a claim not
specified in the pleading, or (ii) the complainant expressly claims moral, exemplary, temperate and/or nominal
damages but has not specified ANY amount at all, leaving the quantification thereof entirely to the trial court’s
discretion, and NOT to a situation where the litigant specifies some amounts or parameters for the awards being
sought, even though the different types of damages sought be not separately or individually quantified. To hold
otherwise, the result would be to permit litigants to continue availing of one more loophole in the rule on payment of
filing fees, and would not serve to attain the purpose of the revised Sec. 1 of Rule 111, which is to discourage the
gimmick of libel complainants of using the fiscal’s office to include in the criminal information their claim for
astronomical damages in multiple millions of pesos without paying any filing fees.

For utter lack of merit, the petition is DISMISSED.

Cause of action

1. Citizen Surety v. Melencio-Herrera, 38 SCRA 369 (1971)

Citizen Surety v. Melencio-Herrera, 38 SCRA 369 (1971)

FACTS: Spouses Dacanay were indebted to Citizens’ Surety Insurance. As security, the Dacanays mortgaged a
parcel of land in Baguio. Since they were not able to pay said debt, the said lot was sold in a foreclosure sale.
However, proceeds of the sale were insufficient to satisfy said debt. Thus Citizens’ Surety filed a complaint with the
Manila CFI, seeking to recover the balance, plus 10% thereof as atty’s fees, and other costs.
At petitioner’s request, respondent Judge caused summons to be made by publication in the Phils Herald. But despite
the publication and deposit of a prepaid copy of the complaint at the Manila Post Office, defendants did not appear
within the period of 60 days from last publication, as required by the summons.
Plaintiff then asked that defendants be declared in default; but instead, respondent Judge asked it to show cause why
the action should not be dismissed, the suit being in personam and the defendants not having appeared. Respondent
Judge dismissed the case despite plaintiff’s argument that the summons by publication was sufficient and valid under
sec16 Rule14 RRC.
HELD: Where the action is in personam (e.g. action for deficiency judgment), the Court could not validly acquire
jurisdiction on a non-appearing defendant, absent a personal service of summons. Without such personal service, any
judgment on a non-appearing defendant would be violative of due process. Summons by publication cannot confer
upon the court jurisdiction over said defendants, who does not voluntarily submit himself to the authority of the court.
The proper recourse for a creditor is to locate properties, real or personal, of the resident defendant debtor and cause
them to be attached, in which case, the attachment converts the action into a proceeding in rem or quasi in rem and
the summons by publication may then accordingly be deemed valid and effective. The case should not be dismissed
but should be held pending in the court's archives, until plaintiff succeeds in determining the whereabouts of the
defendants' person or properties and causes valid summons to be served personally or by publication.
Escolin: Citizen Surety could not have availed of summons by publication because this provision applies only to
actions in rem or quasi in rem. He should have invoked Rule 57, Sec. 1 (f) to convert the action into quasi in rem
Section 1. Grounds upon which attachment may issue. — At the commencement of the action or at any time
before entry of judgment, a plaintiff or any proper party may have the property of the adverse party attached
as security for the satisfaction of any judgment that may be recovered in the following cases:

(f) In an action against a party who does not reside and is not found in the Philippines, or on whom summons
may be served by publication.(1a)

2. Backrach Motor v. Icarañgal, 68 Phil 287 (1939)

G.R. No. L-45350             May 29, 1939

BACHRACH MOTOR CO., INC., plaintiff-appellant, 

vs.
ESTEBAN ICARAÑGAL and ORIENTAL COMMERCIAL CO., INC., defendants-appellees.

MORAN, J.:

Facts:

Defendant Icarañgal, with one Jacinto Figueroa, for value received, executed in favor of the plaintiff, Bachrach Motor
Co., Inc., a promissory note for one thousand six hundred fourteen pesos (P1,614), and in security for its payment,
executed a real estate mortgage on a parcel of land in Pañgil, Laguna.
Thereafter, defendant defaulted in the payment of the agreed monthly installments; wherefore, plaintiff instituted in the
Court of First Instance of Manila an action for the collection of the amount due on the note.

Judgment was there rendered for the plaintiff BACHRACH MOTOR.

The other defendant herein, Oriental Commercial Co., Inc., interposed a third-party claim, alleging that by virtue of a
writ of execution issued in civil case No. 88253 of the municipal court of the City of Manila, the property which was
the subject of the mortgage and which has been levied upon by the sheriff, had already been acquired by it at
the public auction on May 12, 1933.

By reason of this third-party claim, the sheriff desisted from the sale of the property and, in consequence thereof, the
judgment rendered in favor of the plaintiff remained unsatisfied. Whereupon, plaintiff instituted an action to
foreclose the mortgage. The trial court dismissed the complaint and, from the judgment thus rendered plaintiff took the
present appeal.

ISSUE: Whether or not plaintiff-appellant is barred from foreclosing the real estate mortgage after it has elected to sue
and obtain a personal judgment against the defendant-appellee on the promissory note for the payment of which the
mortgage was constituted as a security.

HELD: Yes.

Section 708 of our Code of Civil Procedure which provides that:

a creditor holding a claim against the deceased, secured by a mortgage or other collateral security, has to
elect between enforcing such security or abandoning it by presenting his claim before the committee
and share it in the general assets of the estate.

Under this provision, It has been uniformly held by this court that, if the plaintiff elects one of the two remedies thus
provided, he waives the other, and if he fails, he fails utterly. (Veloso vs.Heredia, 33 Phil., 306; Cf. Osorio vs. San
Agustin, 25 Phil., 404.)

The same rule applies under the Insolvency Law. There is indeed no valid reason for not following the same
principle of procedure in ordinary civil actions. With the substitution of the administrator or executor in place of the
deceased, or of the assignee or receiver in place of the insolvent debtor, the position of the parties plaintiff and
defendant in the litigation is exactly the same in special or insolvency proceedings as in ordinary civil actions.

SPLITTING A SINGLE CAUSE OF ACTION:

As we have heretofore stated, the creditor's cause of action is NOT ONLY SINGLE BUT INDIVISIBLE, although the
agreements of the parties, evidenced by the note and the deed of mortgage, may give rise to different remedies.
(Frost vs. Witter, 132 Cal., 421.) The cause of action should not be confused with the remedy created for its
enforcement. And considering, as we have shown, that one of the two remedies available to the creditor is as
complete as the other, he cannot be allowed to pursue both in violation of those principles of procedure intended to
secure simple, speedy and unexpensive administration of justice.

We hold, therefore, that, in the absence of express statutory provisions, a mortgage creditor may institute against the
mortgage debtor either a personal action for debt or real action to foreclose the mortgage.

In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can
by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring personal action
will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged
property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property,
an unsatisfied judgment thereon would still give him the right to sue for a deficiency judgment, in which case,
all the properties of the defendant, other than the mortgaged property, are again open to him for the
satisfaction of the deficiency.

In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to
the pursuit of one or the other remedy are purely accidental and are all under his right of election.
Thus, in Santos vs. Moir (36 Phil., 350, 359), we said: "It is well recognized that a party cannot split a single
cause of action into parts and sue on each part separately. A complaint for the recovery of personal property with
damages for detention states a single cause of action which cannot be divided into an action for possession and one
for damages; and if suit is brought for possession only a subsequent action cannot be maintained to recover the
damages resulting from the unlawful detention."

The same doctrine is stated in Lavarro vs. Labitoria (54 Phil., 788), wherein we said that "a party will not be
permitted to split up a single cause of action and make it a basis for several suits" and that a claim for
partition of real property as well as improvements constitutes a single cause of action, and a complaint for
partition alone bars a subsequent complaint for the improvements.

The rule against splitting a single cause of action is intended "to prevent repeated litigation between the same
parties in regard to the same subject of controversy; to protect defendant from unnecessary vexation; and to
avoid the costs and expenses incident to numerous suits." (1 C.J., 1107) It comes from that old maxim nemo
bedet bis vexare pro una et eadem cause (no man shall be twice vexed for one and the same cause). (

For non-payment of a note secured by mortgage, the creditor has a single cause of action against the debtor.
This single cause of action consists in the recovery of the credit with execution of the security. In other words, the
creditor in his action may make two demands, the payment of the debt and the foreclosure of his mortgage. But both
demands arise from the same cause, the non-payment of the debt, and, for that reason, they constitute a
single cause of action. Though the debt and the mortgage constitute separate agreements, the latter is subsidiary to
the former, and both refer to one and the same obligation. Consequently, there exists only one cause of action for
a single breach of that obligation. Plaintiff, then, by applying the rule above stated, cannot split up his single cause
of action by filing a complaint for payment of the debt, and thereafter another complaint for foreclosure of the
mortgage. If he does so, the filing of the first complaint will bar the subsequent complaint. By allowing the creditor to
file two separate complaints simultaneously or successively, one to recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him plural redress for a single breach of contract at so much cost to the
courts and with so much vexation and oppression to the debtor.

3.Industrial Finance Corp. v. Apostol, 177 SCRA 521 (1989) (old digest)

Industrial Finance Corp. v. Apostol, 177 SCRA 521 (1989)

FACTS: Spouses Padilla bought on credit 3 units of Isuzu trucks from Industrial Transport & Equipment. They
executed a prom note for the balance of the purchase price. This was secured by a chattel mortgage of said trucks
and, as additional collateral, a real estate mortgage on their land.
The Padillas failed to pay several installments on the prom note, the assignee Industrial Finance Corp. (IFC) sued
them in the CFI for the recovery of the unpaid balance including attys fees. CFI ruled on 16Apr75 in favor of IFC. On
appeal, CA sustained the CFI’s ruling except for modification of attys fees from 25% to 12% of the balance.
Meanwhile on 09Sep71 private respondents Juan and Honorata Delmendo filed a complaint against IFC, as principal
party, and the Padillas, as formal parties, in respondent CFI. The Delmendos alleged that they were the transferees
of the real property which was mortgaged earlier by the Padillas to Ind’l Transport. The Delmendos prayed for the
cancellation of the mortgaged lien annotated of the TCT and the delivery to them by petitioner of the owner’s copy of
said title with damages and attys fees, considering that IFC waived its rights over the mortgage when it instituted a
personal action against the Padillas for collection of sum of money.
IFC moved for the dismissal of the complaint, contending that is has not waived its right over the mortgage lien. The
Delmendos filed a motion for summay judgment which the CFI granted. CFI ruled in favor of the Delmendos. IFC
filed a MfR which was denied. Hence this petition.

HELD: A mortgage creditor may elect to waive his security and instead bring an ordinary action to collect with the right
to execute on all the properties of the debtor, including the subject-matter of the mortgage. If he fails in the collection
suit, he can not thereafter foreclose on the mortgage.
Escolin: In case of splitting of a single cause of action, the ground for dismissal is res judicata.
Escolin: If there is one cause of action but two remedies, the plaintiff should have pleaded alternative remedies in his
complaint.

4.Agustin v. Bacalan, 135 SCRA 340 (1985) (old digest)

Agustin v. Bacalan, 135 SCRA 340 (1985)
Facts: Administrator of estate-lessor files a case for ejectment before the City Courts against the lessee. Lessee files
counterclaim in excess of the City Court’s jurisdiction. City Court decides for plaintiff. On appeal, CFI rules for
defendant and grants him damages. This became final. Plaintiff files separate for nullifying the CFI decision on the
ground that the damages awarded was beyond the jurisdiction of the City Court.

Held: A counterclaim not presented in the lower court can not be entertained on appeal. Defendant is deemed to have
waived his counterclaim in excess of the City Court’s jurisdiction. It is as though it has never been brought before City
Court. It may not be entertained on appeal. The amount of judgment, therefore, obtained by the defendant-appellee on
appeal, cannot exceed the jurisdiction of the court in which the action began. Since the trial court did not acquire
jurisdiction over the defendant's counterclaim in excess of the jurisdictional amount, the appellate court, likewise,
acquired no jurisdiction over the same by its decisions or otherwise. When court transcends the limits prescribed for it
by law and assumes to act where it has no jurisdiction, its adjudications will be utterly void and of no effect either as
an estoppel or otherwise. The excess award of the CFI is therefore null and void. Action to declare nullity of award is
proper. The award not in excess stands.

The defendant's counterclaim for damages is GRANTED to the extent of TEN THOUSAND (P10,000.00) PESOS. The
grant of SIX THOUSAND (P6,000.00) PESOS in excess of such amount is hereby declared NULL and VOID, for
having been awarded beyond the jurisdiction of the court.
Escolin: A compulsory counterclaim beyond the jurisdiction of the court can be filed as a separate action.

5. Maceda v. CA, 176 SCRA (1989)

Maceda vs. CA
176 scra 440

Facts: A leased property originally belonged to the spouses Monserrat, a maternal aunt of the petiton. After the
spouses emigrated to the US they leased their house and lot in San Juan to the petitioner. As the house was old and
run down, petitioner proposed to have it repaired and renovated subject to reimbursement of expenses but maceda
introduced more improvements. Atty Zapata informed the petitioner that the properly has been sold to pablo Zubiri .
He was asked to vacate it. Maceda insisted on being reimbursed for his improvements. An ejectment suit was filed
against Maceda in the MTC of san juan metro manila. In his answer to complaint, amceda set up a counterclaim for
the value of improvements. The MTC ordered him to vacate the premises and pay the plaintiff P2000 per month as
compensation. Both parties appealed to the RTC, which set aside the inferior courts decision. It dismissed the
ejectment complaint and ordered to pay Maceda P182, 000 for his necessary and useful improvements. The CA
rendered a decision, modifying the decision. The CA denied Maceda's claim for reimbursement of the cost of his
improvements. It ruled that the MTC lacked jurisdiction over the claim which exceeds P20,000. In his petition for
review of that decision, Maceda assails the setting aside of the money judgment or award for his improvements.

Issue: WON the lower court erred in holding that the new owners need of the premises is a legitimate ground for the
judicial ejectment of the lessee.

Held: Maceda's petition has no merit. The CA correctly ruled that the MTC did not have original jurisdiction over his
counterclaim as it exceeds P20,000. Correspondingy, the RTC did not have appellate jurisdiction over the claim. The
decision of the MTC of san juan awarding him P158,000 on his counterclaim, and that of the RTC raising the award to
P182, 200 were invalid for lack of jurisdiction. The jurisdiction of the Metropolitan trial court in a civil action for sum of
money is limited to a demand that does not exceed twenty thousand pesos exclusive of interest and cost but inclusive
of damages of whatever kind; A counterclaim beyond that jurisdictional limit may be pleaded only by way of defense
but not to obtain an affirmative relief. Jusrisdiction cannot be appropriated by a court no matter how well intentioned it
is, even in pursuit of the clearest substantial right, such as collection of judgment debt. Jurisdiction is determined by
the law in force at the time of the commencement of the action.
While it is true that under BP 8777 a lesseee may not be ejected on account of the sale or mortgage of the
leased premises, the new owners need of the premises for the construction of dwellings for its employees, coupled
with the lessees failure to pay the rentals since Dec. 1981 are to our mind, a legitimate ground for the judicial
ejectment of the lessee. Wherefore, dismissal of his counterclaim for the value of improvements is affirmed.

6. Bayang v. CA, 148 SCRA 91 (1987)

Cause of Action: Bayang vs. CA, 148 SCRA 91 (1987)

Facts
Bayang sued Biong for Quieting of Title with damages in 1969, which resulted in a ruling in his favor in 1978. In 1978,
Bayang sued Biong again but this time for the income earned from the land while it was still in the latter’s possession
from 1970 to 1978.

Issue

Whether or not the second case is barred by the first.

Ruling

The subject matter in the two cases are essentially the same as the income is only a consequence or accessory of the
disputed property. The claim for income from the land is incidental to, and should have been raised by Bayang in his
earlier claim for ownership of the land. As the filing of the two cases constitute splitting of the cause of action, the
second case is barred by the first. Also, for about seven years, the petitioner made no move at all to amend his
complaint to include a claim for the income supposedly received by private respondent during that period. He did not
make the proper claim at the proper time and in the proper proceeding. Whatever right he might have had is now
deemed waived because of his negligence.

PARTIES

1. Juasing Hardware v. Mendoza, 115 SCRA 783 (1982) (old digest)

Juasing Hardware v. Mendoza, 115 SCRA 783 (1982)

FACTS Juasing Hardware, single proprietorship owned by Ong Bon Yong, filed a complaint for the collection of a sum
of money against Pilar Dolla. The case proceeded to pre-trial and trial. After plaintiff presented its evidence and
rested its case, defendant filed a Motion for Dismissal of Action (Demurrer to Evidence) praying that the action be
dismissed for the plaintiff’s lack of capacity to sue. Defendant in said Motion contended that plaintiff Juasing is a
single prop, not a corp or partnership duly registered in accordance with law and therefor is not a juridical person with
legal capacity to bring an action in court. Juasing filed an Opposition and moved for the admission of an Amended
Complaint. CFI Judge dismissed the case and denied admission of Amended Complaint.

HELD Correction of the designation of the plaintiff (from name of sole proprietorship to name of individual owner) is
merely formal, not substantial, and hence may be corrected at any stage of the action.

2. Chang Kai Shek v. CA, 172 SCRA 389 (1989)

FACTS:

Fausta F. Oh worked at the Chiang Kai Shek School since 1932 for a continuous period of almost 33 years. And now,
out of the blue, and for no apparent or given reason, this abrupt dismissal.

Oh sued. She demanded separation pay, social security benefits, salary differentials, maternity benefits and moral and
exemplary damages. 1 The original defendant was the Chiang Kai Shek School but when it filed a motion to dismiss
on the ground that it could not be sued, the complaint was amended. 2 Certain officials of the school were also
impleaded to make them solidarily liable with the school.

As a school, the petitioner was governed by Act No. 2706 as amended by C.A. No. 180, which provided as follows:

Unless exempted for special reasons by the Secretary of Public Instruction, any private school or
college recognized by the government shall be incorporated under the provisions of Act No.
1459 known as the Corporation Law, within 90 days after the date of recognition, and shall file
with the Secretary of Public Instruction a copy of its incorporation papers and by-laws.

The Court of First Instance of Sorsogon dismissed the complaint. 

ISSUE:
 Whether or not a school that has not been incorporated may be sued by reason alone of its long continued
existence and recognition by the government,

HELD:

It is true that Rule 3, Section 1, of the Rules of Court clearly provides that "only natural or juridical persons
may be parties in a civil action." It is also not denied that the school has NOT been incorporated. However, this
omission should not prejudice the private respondent in the assertion of her claims against the school.

Having been recognized by the government, it was under obligation to incorporate under the Corporation Law within
90 days from such recognition. It appears that it had not done so at the time the complaint was filed
notwithstanding that it had been in existence even earlier than 1932. The petitioner cannot now invoke its own
non-compliance with the law to immunize it from the private respondent's complaint.

There should also be no question that having contracted with the private respondent every year for thirty two years
and thus represented itself as possessed of juridical personality to do so, the petitioner is now estopped from
denying such personality to defeat her claim against it. According to Article 1431 of the Civil Code, "through
estoppel an admission or representation is rendered conclusive upon the person making it and cannot be
denied or disproved as against the person relying on it."

As the school itself may be sued in its own name, there is no need to apply Rule 3, Section 15, under which the
persons joined in an association without any juridical personality may be sued with such association. Besides, it has
been shown that the individual members of the board of trustees are not liable, having been appointed only
after the private respondent's dismissal. 6

It is easy to imagine the astonishment and hurt she felt when she was flatly and without warning told she was
dismissed. There was not even the amenity of a formal notice of her replacement, with perhaps a graceful expression
of thanks for her past services. She was simply informed she was no longer in the teaching staff. To put it bluntly, she
was fired.

For the wrongful act of the petitioner, the private respondent is entitled to moral damages.  14 As a proximate result of
her illegal dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even besmirched reputation
as an experienced teacher for more than three decades. We also find that the respondent court did not err in awarding
her exemplary damages because the petitioner acted in a wanton and oppressive manner when it dismissed her. 15

WHEREFORE, the petition is DENIED. The appealed decision is AFFIRMED except for the award of separation pay,
which is reduced to P2,880.00. All the other awards are approved. Costs against the petitioner.

This decision is immediately executory.

3. Commissioner of Customs v. KMK Gani, 182 SCRA 591 (1990)

G.R. No. 73722 February 26, 1990

THE COMMISSIONER OF CUSTOMS, petitioner,
vs. K.M.K. GANI, INDRAPAL & CO., and the HONORABLE COURT OF TAX APPEALS, respondents.
Armando S. Padilla for private respondent.

FACTS

This is a review of the decision of the Court of Tax Appeals disposing as follows:

WHEREFORE. the subject ten (10) cartons of articles are hereby released to the carrying airline for immediate
transshipment to the country of destination under the terms of the contract of carriage. No costs.

SO ORDERED. 1

The pertinent facts may be summarized thus:

On September 11, 1982, two (2,) containers loaded with 103 cartons of merchandise covered by eleven (11) airway
bills of several supposedly Singapore-based consignees arrived at the Manila International Airport on board Philippine
Air Lines (PAL) Flight PR 311 from Hongkong. The cargoes were consigned to these different entities: K.M.K. Gani
(hereafter referred to as K.M.K.) and Indrapal and Company (hereafter referred to as INDRAPAL), the private
respondents in the petition before us; and Sin Hong Lee Trading Co., Ltd., AAR TEE Enterprises, and C. Ratilal all
purportedly based in Singapore.

ISSUE
WON private respondents failed to establish their personality to sue in a representative capacity, hence making their
action dismissable,

RULING
YES.

The law is clear: "No foreign corporation transacting business in the Philippines without a license, or its successors or
assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative
agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under Philippine laws." 7

However, the Court in a long line of cases has held that a foreign corporation not engaged in business in the
Philippines may not be denied the right to file an action in the Philippine courts for an isolated transaction. 8

Therefore, the issue on whether or not a foreign corporation which does not have a license to engage in business in
this country can seek redress in Philippine courts boils down as to whether it is doing business or merely entered into
an isolated transaction in the Philippines.

The fact that a foreign corporation is not doing business in the Philippines must be disclosed if it desires to sue in
Philippine courts under the "isolated transaction rule." Without this disclosure, the court may choose to deny it the right
to sue. 9

In the case at bar, the private respondents K.M.K. and INDRAPAL aver that they are "suing upon a singular and
isolated transaction." But they failed to prove their legal existence or juridical personality as foreign corporations.

4. Merrill Lynch v. CA, 211 SCRA 824 (1992)

Merrill Lynch v. CA, 211 SCRA 824 (1992)
Facts: ML FUTURES, operating in the United States, had indeed done business with the Lara Spouses in the
Philippines over several years, had done so at all times through Merrill Lynch Philippines, Inc. (MLPI), a corporation
organized in this country, and had executed all these transactions without ML FUTURES being licensed to so transact
business here, and without MLPI being authorized to operate as a commodity futures trading advisor. The Laras did
transact business with ML FUTURES through its agent corporation organized in the Philippines. The last transaction
executed by ML FUTURES in the Laras's behalf had resulted in a loss amounting to US $160,749.69; that in relation
to this loss, ML FUTURES had credited the Laras with the amount of US$75,913.42 — which it (ML FUTURES) then
admittedly owed the spouses — and thereafter sought to collect the balance, US$84,836.27, but the Laras had
refused to pay on the ground that the plaintiff has no legal capacity to sue.
Issue: WON ML FUTURES may sue in Philippine Courts to establish and enforce its rights against said spouses, in
light of the undeniable fact that it had transacted business in this country without being licensed to do so.

WON the Lara Spouses are now estopped to impugn ML FUTURES' capacity to sue them in the courts of the forum.

Held: The defendant is estopped to deny the capacity of the foreign corporation to sue, having dealt with the
corporation.

G.R. No. 97816 July 24, 1992

MERRILL LYNCH FUTURES, INC., petitioner, vs. HON. COURT OF APPEALS, and the SPOUSES PEDRO M.
LARA and ELISA G. LARA, respondents.

Facts: On 23 November 1987, Merrill Lynch futures, Inc. (ML FUTURES) filed a complaint with the Regional Trial
Court at Quezon City against the Spouses Pedro M. Lara and Elisa G. Lara for the recovery of a debt and interest
thereon, damages, and attorney's fees. In its complaint ML FUTURES described itself as (a) "a non-resident foreign
corporation, not doing business in the Philippines, duly organized and existing under and by virtue of the laws of the
state of Delaware, U.S.A.;" as well as (b) a 'futures commission merchant' duly licensed to act as such in the futures
markets and exchanges in the United States, . . . essentially functioning as a broker (executing) orders to buy and sell
futures contracts received from its customers on U.S. futures exchanges."
In its complaint ML FUTURES alleged:

(1) that on 28 September 1983 it entered into a Futures Customer Agreement with the spouses (Account 138-12161),
in virtue of which it agreed to act as the latter's broker for the purchase and sale of futures contracts in the U.S.;

(2) that pursuant to the contract, orders to buy and sell futures contracts were transmitted to ML FUTURES by the
Lara Spouses "through the facilities of Merrill Lynch Philippines, Inc., a Philippine corporation and a company
servicing ML Futures' customers;"

(3) that from the outset, the Lara Spouses "knew and were duly advised that Merrill Lynch Philippines, Inc. was not a
broker in futures contracts," and that it "did not have a license from the Securities and Exchange Commission to
operate as a commodity trading advisor (i.e., "and entity which, not being a broker, furnishes advice on commodity
futures to persons who trade in futures contracts");

(4) that in line with the above mentioned agreement and through said Merill Lynch Philippines, Inc., the Lara Spouses
actively traded in futures contracts, including "stock index futures" for four years or so, i.e., from 1983 to October,
1987, there being more or less regular accounting and corresponding remittances of money (or crediting or debiting)
made between the spouses and ML FUTURES;

(5) that because of a loss amounting to US $160,749.69 incurred in respect of 3 transactions involving "index futures,"
and after setting this off against an amount of US $75,913.42 then owing by ML FUTURES to the Lara Spouses, said
spouses became indebted to ML FUTURES for the ensuing balance of US $84,836.27, which the latter asked them to
pay; and

(6) that the Lara Spouses however refused to pay this balance, "alleging that the transactions were null and void
because Merrill Lynch Philippines, Inc., the Philippine company servicing accounts of ML Futures, had no license to
operate as a "commodity and/or financial futures broker."

On the foregoing essential facts, ML FUTURES prayed (1) for a preliminary attachment against the spouses'
properties "up to the value of at least P2,267,139.50," and (2) for judgment, after trial, sentencing the spouses to pay
ML FUTURES: (a) the Philippine peso equivalent of $84,836.27 at the applicable exchange rate on date of payment,
with legal interest from the date of demand until full payment; (b) exemplary damages in the sum of at least
P500,000,00; and (c) attorney's fees and expenses of litigation as may be proven at the trial. Preliminary attachment
issued ex parte on 2 December 1987, and the spouses were duly served with summons. The spouses filed a motion
to dismiss dated 18 December 1987 on the grounds that (1) ML FUTURES had "no legal capacity to sue" and (2) its
"complaint states no cause of action since it is not the real party in interest." On 12 January 1988, the Trial Court
promulgated an Order sustaining the motion to dismiss, directing the dismissal of the case and discharging the writ of
preliminary attachment. It later denied ML FUTURES's motion for reconsideration, by Order dated 29 February 1988.
ML FUTURES appealed to the Court of Appeals. In its own decision promulgated on 27 November 1990, the Court of
Appeals affirmed the Trial Court's judgment. Its motion for reconsideration having been denied, ML FUTURES
appealed to the Supreme Court on certiorari.

Issue:

Whether – in light of the fact that the Laras were fully aware of its lack of license to do business in the Philippines,
and in relation to those transactions had made payments to, and received money from it for several years –the Lara
Spouses are estopped to impugn ML FUTURES capacity to sue them in the courts of the forum.

Held:

The Laras received benefits generated by their business relations with ML FUTURES. Those business relations,
according to the Laras themselves, spanned a period of 7 years; and they evidently found those relations to be of
such profitability as warranted their maintaining them for that not insignificant period of time; otherwise, it is reasonably
certain that they would have terminated their dealings with ML FUTURES much, much earlier. In fact, even as regards
their last transaction, in which the Laras allegedly suffered a loss in the sum of US$160,749.69, the Laras nonetheless
still received some monetary advantage, for ML FUTURES credited them with the amount of US $75,913.42 then due
to them, thus reducing their debt to US $84,836.27. Given these facts, and assuming that the Lara Spouses were
aware from the outset that ML FUTURES had no license to do business in this country and MLPI, no authority to act
as broker for it, it would appear quite inequitable for the Laras to evade payment of an otherwise legitimate
indebtedness due and owing to ML FUTURES upon the plea that it should not have done business in this country in
the first place, or that its agent in this country, MLPI, had no license either to operate as a "commodity and/or financial
futures broker." Considerations of equity dictate that, at the very least, the issue of whether the Laras are in truth liable
to ML FUTURES and if so in what amount, and whether they were so far aware of the absence of the requisite
licenses on the part of ML FUTURES and its Philippine correspondent, MLPI, as to be estopped from alleging that fact
as a defense to such liability, should be ventilated and adjudicated on the merits by the proper trial court.

5. USA v. Reyes, 219 SCRA 192 (1993)

USA vs. Reyes

219 scra 192
Topic: Parties

Facts: This is a petition for certiorari and prohibition. Private respondent Montoya is an american citizen who at the
time material to this case, was employed an identification checkter at the US Navy exchange. Petitioner is likewise an
americal citizen who was the acitivity exchange manager at JUSMAG headquarters. As a consequence whereby her
body and belonging were search after she had bought some items from the retail store of the NEX JUSMAG while she
was already at the parking area Montoya filed a complaint with the RTC of her residence – cavite – against Bradford
for damages due to the oppressive and discriminatory acts committed by the latter in excess of her authority as store
manager of the NEX JUSMAG. She then prayed for judgment ordering bradford to pay her P500,000 as moral
damages, P100,000 as exemplary damages and reasonable attorney's fees plus the costs of the suit. Bradford
together with the government of US filed a motion to dismiss in support of the motion, petitoners claimed that
JUSMAG composed of an army, Navy and Airgroup had been establisehd under the Philippine US agreement. Thus
Bradford oders to have purchases of all employees checked was made in the exercise of her duties as Manager.
Montoya filed a motion for preliminary attachment on the ground that Bradford was about to depart from the country
and was in the process of removing and or disposing of her properties and filed her opposition to the motion to
dismiss. The trial court resolved both motion to dismiss and the motion for preliminary attachment decreeing the
issuance of a writ of attachment and directing the sheriff to serve the writ immediately. Bradford received a copy of the
decision and she and the public petitioner filed with this court a petiton for restraining order which sought to have the
trial court decision vacated and to prevent the execution of the same. In the meantime, since there was no MR was
filed, the order directing an entry of final judgment was made.

Issues: WON the trial court committed grave abuse of discretion in denying the motion to dismiss based on effect that
the suit against the public petitoiner, a foreign sovereign immune from suit.

Held: Despite the fact that public petitioner was not impleaded as a defendant, it nevertheless joined bradford in the
motion to dismiss without however first having obtained leave of court to intervene therein. This was a procedural
lapse, if not downright improper legal tack. Since it was not impleaded as an original party, the public petitioner could
on its own volition join in the case by intervening therein. The grant of intervention is discretionary upon the court and
may be allowed only upon a prior motion for leave with notice to all the parties in the action. Of course, montoya could
have also impleaded the public petitioner as an additional defendant by amending the complaint if she so believed that
the latter is an indispensable or necessary party.

The filing of the instant petition and the knowledge thereof by the trial court did not prevent th elatter from proceeding
with Civil case no. 224 – 87. It is elementary that the mere pendency of a special civil actioin for certiorari,
commenced in relation to a case pending before a lower court, does not interrupt the course of the latter when there is
no writ of injunction restraining it.

6. Flores v. Mallare-Philips, 144 SCRA 377 (1986)

Topic: Parties
Case: Flores vs. Mallare-Phillipps

Facts

Flores sued the resps for the collection of sum of money with the RTC
The first cause of action alleged in the complaint was against Ignacio Binongcal for refusing to pay the amount
of P11,643 representing cost of truck tires which he purchased on credit from Flores on various occasions from
August to October, 1981;
 The second cause of action was against resp Fernando Calion for allegedly refusing to pay the amount of
P10,212 representing cost of truck tires which he purchased on credit from pet on several occasions from March,
1981 to January, 1982.
Binongcal filed a MTD on the ground of lack of jurisdiction since the amount of the demand against said resp
was only P11,643.00, and under Section 19(8) of BP129 the RTC shall exercise exclusive original jurisdiction if the
amount of the demand is more than P20K.
Although another person, Fernando Calion, was allegedly indebted to pet in the amount of P10,212.00, his
obligation was separate and distinct from that of the other resp. Calion joined in moving for the dismissal of the
complaint.
RTC dismissed the complaint.

Issue

Whether or not the trial court correctly ruled on the application of the permissive joinder of parties.

Ruling

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.

Section 33(l) of BP129

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

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 WON 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.

Former rule under Section 88 of the Judiciary Act of 1948

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.

Under the present law, the two cases would be under the jurisdiction of the RTC. Similarly, Brillo vs. Buklatan and
Gacula vs. Martinez, 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 RTC.

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.

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 resps Binongcal and Calion are separate and
distinct and neither of which falls within its jurisdiction.

8.Mansion Biscuit v. CA, 250 SCRA 195 (1995)

MANSION BISCUIT CORPORATION, vs CA.

FACTS:
*Sometime in 1981 Ty Teck Suan, president of Edward Ty Brothers Corporation, ordered numerous cartons of nutri-
wafer biscuits from Mansion Biscuit Corporation.

*Ty Teck with Siy Gui as co-signor issued four postdated checks to to Ang Cho Hong, president of Mansion in the
amount of P100,000.00 each before the delivery of the goods they ordered.

*Accordingly, Mansion Biscuit Corporation delivered the goods. However, all the checks issued were dishonored.

*Hence, a case was filed against Ty Teck Suan for violation of BP 22 or the bouncing checks law.

*Ty Teck Suan pleaded not guilty and ordered to file a motion to dismiss by way of demurrer of evidence based on the
following grounds, but in relation to the topic - (a) the subject checks were issued merely to guarantee or secure
fulfillment of the agreement with the complainant which the court ruled in some cases to be neither estafa nor a
violation of BP.

* In the same order of dismissal, Judge Capulong found that accused Siy Gui's liability had not been established by
the prosecution as it appeared that he had no personal transactions with the complainant although he was a co-
signatory in the second batch of four checks.18 

* Meanwhile, petitioner Mansion Biscuit Corporation filed another appeal to the Court of Appeals, docketed as CA-
G.R. CV No. 16580, this time assailing the trial court's ruling absolving defendants from civil liability in the criminal
cases. Petitioner contended that the acquittal of the accused in the criminal cases did not necessarily extinguish their
civil liability, citing Padilla v. Court of Appeals,24 People v. Jalandoni,25 Maximo v.  Gerochi, Jr.26 and People
v. Relova.27

ISSUE: WON Ty Teck and Siy Gui are proper parties in this case.

HELD:

We rule in the negative.

The civil liability for non-payment of the nutri-wafer biscuits delivered by petitioner to the Edward Ty Brothers
Corporation cannot be enforced against the private respondents because the said civil liability was not the personal
liability of Ty Teck Suan to Mansion Biscuit Corporation, rather, it was the contractual liability of Edward Ty Brothers
Corporation, of which Ty Teck Suan was president, to Mansion Biscuit Corporation. This is borne out by the records of
the case. The information in Criminal Cases Nos. 5598-V-83 and 5599-V-83 filed against Ty Teck Suan and Siy Gui
reveal that the checks were issued "in payment of the cartons of nutri-wafer biscuits purchased from the Mansion
Biscuit Corporation, represented by Ana Cho Hong, president thereof, by Edward Ty Brothers Corporation thru said
accused Ty Teck Suan."33 Moreover, petitioner itself admitted that the contract was executed by and between Edward
Ty Brothers Corporation, represented by its president, Ty Teck Suan, and Mansion Biscuit Corporation, 34 likewise
represented by its president, Ang Cho Hong. This was correctly observed by respondent Court of Appeals in its
assailed decision and we quote:

The civil liability which the complainant seeks to enforce is the unpaid value of the nutri-van biscuits
which were allegedly ordered by Ty Teck Suan from complainant and delivered by the latter between
12 November 1981 and the first week of January 1982. It is apparent from the record, however, that
this civil liability is not the personal liability of Ty Teck Suan to private complainant Ang Cho Hong. It is
the contractual liability of Edward Ty Brothers Corporation of which Ty Teck Suan was president, to
Mansion Biscuit Corporation, of which Ang Cho Hong was president. This is clear from the Statement
of Facts in plaintiffs-appellant brief, the relevant and pertinent portions of which read:

Sometime in 1981, Teck Suan, as president of Edward Ty Brothers Corporation ordered numerous

cartons of nutri-van biscuits from Mansion Biscuit Corporation. As payment for these goods, Ty Teck
Suan issued four (4) postdated checks amounting P404,980.00. These checks were delivered to
Mr.Ang Cho Hong, President of Mansion biscuit corporation  sometime during the first week of
November, 1981 (p. 17, tsn of March 14, 1984). (at p. 10 of Brief, Emphasis ours.)

xxx xxx xxx

 These goods were received by Ty Teck Suan, through Edward Ty Brothers
Corporation as its Consignees, and this was evidenced by the different receipts that
have been issued by Edward Ty Brothers Corporation and its Consignees . . ., as well
as by the "authority to deliver" documents issued by Edward Ty Brothers
Corporation . . . and signed by one Elizabeth Ty Kho, the daughter of Ty Teck Suan
(p. 24, tsn of June 13, 1984). (at pp. 11-12, ibid) Likewise, the informations uniformly
state that the checks were "in payment of cartons of Nutri-Wafers biscuit purchased
from the Mansion Biscuit Corporation, represented by Ang Cho Hong, President
thereof, by the Edward Ty Brothers Corporation thru said accused Ty Teck Suan . . .

It is quite obvious from the foregoing that Ty Teck Suan did not purchase the biscuits for himself but
for Edward Ty Brothers Corporation in his capacity as its president. Neither did Ang Cho Hong sell
and deliver the biscuits in his personal capacity but for and in behalf of Mansion Biscuits Corporation
of which he was president. The issue of the civil liability of Edward Ty Brothers Corporation to
Mansion Biscuits Corporation arising from the contract of purchase and sale between them could not
have been and was not litigated and resolved in the criminal case inasmuch as they were not parties
therein. A separate civil action must be instituted by Mansion Biscuits Corporation against Edward Ty
Brothers Corporation to enforce the contract between them. 35

10. Imson v. CA, 239 SCRA 58 (1994)

FACTS:

The case at bench arose from a vehicular collision on December 11, 1983, involving petitioner's Toyota Corolla and a
Hino diesel truck registered under the names of private respondents FNCB Finance Corporation and Holiday Hills
Stock and Breeding Farm Corporation.

On January 6, 1984, petitioner filed with the RTC Baguio City 1 a Complaint for Damages2 Sued were private
respondents as registered owners of the truck; truck driver Felix B. Calip, Jr.; the beneficial owners of the truck,
Gorgonio Co Adarme, Felisa T. Co (also known as Felisa Tan), and Cirilia Chua Siok Bieng, and the truck insurer,
Western Guaranty Corporation.

The Complaint prayed that defendants be ordered to pay, jointly and severally, two hundred seventy thousand pesos
(P270,000.00) as compensatory damages, fifty thousand pesos (P50,000.00) each as moral and exemplary damages,
and attorney's fees, litigation expenses, and cost of suit. 8

On May 29, 1987, however, petitioner and defendant insurer, entered into a compromise agreement.

In consequence of the compromise agreement, the trial court dismissed the Complaint for Damages against Western
Guaranty Corporation on June 16, 1987. 8  It argued that since they are all indispensable parties under a common
cause of action, the dismissal of the case against defendant insurer must result in the dismissal of the suit
against all of them.

The trial court denied the motion.

Private respondent Holiday Hills Stock and Breeding Farm Corporation assailed the denial order through a Petition
for Certiorari, Prohibition and Mandamus  With Restraining Order filed with respondent Court of Appeals.

ISSUE: RESPONDENT COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE
DEFENDANTS IN CIVIL CASE NO. 248-R ARE INDISPENSABLE PARTIES;

HELD:

There is merit to the petition,.

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. 13 In his absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.14

Conversely, a party is not indispensable to the suit if his interest in the controversy or subject matter is
distinct and divisible from the interest of the other parties and will not necessarily be prejudiced by a judgment
which does complete justice to the parties in court.15

 He is not indispensable if his presence would merely permit complete relief between him and those already parties to
the action, or will simply avoid multiple litigation.16

It is true that all of petitioner's claims in Civil Case No. 248-R is premised on the wrong committed by defendant truck
driver. Concededly, the truck driver is an indispensable party to the suit. The other defendants, however, cannot be
categorized as indispensable parties. They are merely proper parties to the case. Proper parties have been
described as parties whose presence is necessary in order to adjudicate the whole controversy, but whose
interests are so far separable that a final decree can be made in their absence without affecting them. 17 It is
easy to see that if any of them had not been impleaded as defendant, the case would still proceed without prejudicing
the party not impleaded. Thus, if petitioner did not sue Western Guaranty Corporation, the omission would not cause
the dismissal of the suit against the other defendants. Even without the insurer, the trial court would not lose its
competency to act completely and validly on the damage suit. The insurer, clearly, is not an indispensable party in
Civil Case No. 248-R.

11. Casenas v. Rosales, 19 SCRA 463 (1967)

Casenas v. Rosales, 19 SCRA 463 (1967)

Facts:
Arañas and Caseñas filed a complaint for specific performance and enforcement of their alleged right under a certain
deed of sale, and damages against the spouses Rosales. After answer has been filed and before trial, counsel for
plaintiffs informed the trial court that plaintiff Arañas and defendant Rosales had both died. The lower court directed
the surviving plaintiff, Caseñas, to amend the complaint to effect the necessary substitution of parties thereon.
Caseñas failed to do this, so the TC dismissed the case. The dismissal became final. Thereafter, Caseñas filed
another complaint against the widow Rosales and heirs of the late Rosales "to quiet, and for reconveyance of, title to
real property, with damages." This suit referred itself to the very same property litigated in the previous dismissed
case. and asserted exactly the same allegations as those made in the former complaint. Defendants filed MTD on
ground of res judicata. TC dismissed the case.
Issue:
WON amendment of the complaint was proper in case of death of the party/parties
Held:
No.
When certain of the parties died and due notice thereof was given to the trial court, it devolved on the said court to
order, not the amendment of the complaint, but the appearance of the legal representatives of the deceased. An order
to amend the complaint, before the proper substitution of parties has been effected, is void and imposes upon the
plaintiff no duty to comply therewith to the end that an order dismissing the said complaint, for such non-compliance,
would similarly be void.
Escolin: where the defendant dies pending the case, the duty of the court is to order the substitution of the defendant,
not to order the amendment of the complaint to implead the heirs of the defendant
de Leon: In Mina, the court ordered the amendment of the complaint to implead an indispensable party. The order was
proper, hence failure to comply was a valid ground for dismissal of the complaint. In Casenas, the court ordered the
amendment of the complaint to implead the heirs of a deceased party. The order was improper because the proper
procedure was to substitute. Hence failure to comply was not a valid ground for dismissal of the complaint.

VENUE

1. Fortune Motors v. CA, 178 SCRA 564 (1989)

Fortune Motors
178 scra 564
Topic: Venue
Facts: This is a petition for review on certiorari seeking the reversal of the decision of the CA. Private respondent
Metropolitan Bank extended various loan to petitioner fortune motors. For failure to pay the loans, the respondent
initated foreclosure proceedings. Petitioner fortune motors filed a complaint for annulment of extrajudicial foreclosure.
Private respondent bank filed a motion to dismiss the complaint on the ground that the venue of action was improperly
laid in manila for the realty covered by the real estate mortgage is situated in Makati, therefore the action to annul the
foreclosure sale should be filed in the RTC of Makati. The lower court issued an order reserving the resolution of the
bank's motion to dismiss until after the trial on the merits. Respondent bank field a petition for certiorari and
prohibition in the CA and was granted. Hence, this petiton for review on certiorari.

Issues: WON petitioners action for annulment of the real estate mortgage extrajudicial foreclosure sale of fortunre
building is a personal action or a real action for venue purposes.

Held: In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec. 2 of Rule 4, a real action
is an action affecting title to real property, or for the recovery of possession, or for the partition or condemnation of, or
foreclosure of a mortgage on real property. Real action or actions affecting title to, or for the recovery of possession, or
for the partition or condemnation of, or foreclosure of mortgage on real property, must be instituted in the CFI of the
province where the property or any part thereof lies. Personal actions upon the other hand, maybe instituted in the CFI
where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff
resides, at the election of the plaintiff. Since an extra judicial foreclosure of real property results in a conveyance of the
title of the property sold to the highest bidder at the sale, an action to annul the foreclosure sale is necessarily an
action affecting the title of the property sold. It is therefore a real action which should be commenced and tried in th
eprovince where the property or part thereof lies.

2. Docoycoy v. CA, 195 SCRA 641 (1991)

G.R. No. 74854 April 2, 1991

JESUS DACOYCOY, petitioner, vs. HON. INTERMEDIATE APPELLATE COURT, HON. ANTONIO V. BENEDICTO,
Executive Judge, Regional Trial Court, Branch LXXI, Antipolo, Rizal, and RUFINO DE GUZMAN, respondents.
On March 22, 1983, petitioner Jesus Dacoycoy, a resident of Balanti, Cainta, Rizal, filed before the Regional Trial
Court, Branch LXXI, Antipolo, Rizal, a complaint against private respondent Rufino de Guzman praying for the
annulment of two (2) deeds of sale involving a parcel of riceland situated 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 private respondent as defendant therein, 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 trial court dismissed the complaint on the ground of improper venue. 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 Estanza,
Lingayen, Pangasinan, which is outside the territorial jurisdiction of the trial court.
Petitioner appealed to the Intermediate Appellate Court, now Court of Appeals, which in its decision of April 11, 1986, 1
affirmed the order of dismissal of his complaint.
In this petition for review, petitioner faults the appellate court in affirming what he calls an equally erroneous finding of
the trial court that the venue was improperly laid when the defendant, now private respondent, has not even answered
the complaint nor waived the venue.
Petitioner claims that the right to question the venue of an action belongs solely to the defendant and that the court or
its magistrate does not possess the authority to confront the plaintiff and tell him that the venue was improperly laid,
as venue is waivable. In other words, petitioner asserts, without the defendant objecting that the venue was improperly
laid, the trial court is powerless to dismiss the case motu proprio.
Private respondent, on the other hand, maintains that the dismissal of petitioner's complaint is proper because the
same can "readily be assessed as (a) real action." He asserts that "every court of justice before whom a civil case is
lodged is not even obliged to wait for the defendant to raise that venue was improperly laid. The court can take judicial
notice and motu proprio dismiss a suit clearly denominated as real action and improperly filed before it. . . . the
location of the subject parcel of land is controlling pursuant to Sec. 2, par. (a), Rule 4 of the New Rules of Court . . .
Issue:
WON the order to dismiss by the trial court was improperly laid due to incorrect venue was proper.
Held:
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. 4
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.5
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.11
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 propriothe
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.

3. Fortune Motors v. CA, 178 SCRA 564 (1989)

Fortune Motors
178 scra 564
Topic: Venue
Facts: This is a petition for review on certiorari seeking the reversal of the decision of the CA. Private respondent
Metropolitan Bank extended various loan to petitioner fortune motors. For failure to pay the loans, the respondent
initated foreclosure proceedings. Petitioner fortune motors filed a complaint for annulment of extrajudicial foreclosure.
Private respondent bank filed a motion to dismiss the complaint on the ground that the venue of action was improperly
laid in manila for the realty covered by the real estate mortgage is situated in Makati, therefore the action to annul the
foreclosure sale should be filed in the RTC of Makati. The lower court issued an order reserving the resolution of the
bank's motion to dismiss until after the trial on the merits. Respondent bank field a petition for certiorari and
prohibition in the CA and was granted. Hence, this petiton for review on certiorari.

Issues: WON petitioners action for annulment of the real estate mortgage extrajudicial foreclosure sale of fortunre
building is a personal action or a real action for venue purposes.

Held: In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec. 2 of Rule 4, a real action
is an action affecting title to real property, or for the recovery of possession, or for the partition or condemnation of, or
foreclosure of a mortgage on real property. Real action or actions affecting title to, or for the recovery of possession, or
for the partition or condemnation of, or foreclosure of mortgage on real property, must be instituted in the CFI of the
province where the property or any part thereof lies. Personal actions upon the other hand, maybe instituted in the CFI
where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff
resides, at the election of the plaintiff. Since an extra judicial foreclosure of real property results in a conveyance of the
title of the property sold to the highest bidder at the sale, an action to annul the foreclosure sale is necessarily an
action affecting the title of the property sold. It is therefore a real action which should be commenced and tried in th
eprovince where the property or part thereof lies.

4. Clavecilla Radio v. Antillon, 19 SCRA 379 (1967)

Topic: Venue
Case: Clavecilla Radio System vs. Hon. Agustin Antillon

Facts

New Cagayan Grocery (NECAGRO) filed a complaint for damages against Clavecilla Radio system. They alleged that
Clavecilla omitted the word “NOT” in the letter addressed to NECAGRO for transmittal at Clavecilla Cagayan de Oro
Branch.

NECAGRO alleged that the omission of the word “not” between the word WASHED and AVAILABLE altered the
contents of the same causing them to suffer from damages.
Clavecilla filed a motion to dismiss on the ground of failure to state a cause of action and improper venue.

City Judge of CDO denied the MTD. Clavecilla filed a petition for prohibition with preliminary Injunction with the CFI
praying that the City Judge be enjoined from further proceeding with the case because of improper venue.

CFI – dismissed the case and held that Clavecilla may be sued either in Manila (principal office) or in CDO (branch
office).

Clavecilla appealed to the SC contending that the suit against it should be filed in Manila where it holds its principal
office.

Issue

Whether or not the present case against Clavecilla should be filed in Manila where it holds its principal office.

Ruling

YES.

It is clear that the case from damages is based upon a written contract. Under paragraph (b)(3) Section 1 Rule 4 of the
New Rules of Court, when an action is not upon a written contract, then the case should be filed in the municipality
where the defendant or any of the defendant resides or maybe served upon with summons. In corporation law, the
residence of the corporation is the place where the principal office is established. Since Clavecilla’s principal office is
in Manila, then the suit against it may properly be filed in the City of Manila. As stated in Evangelista vs. Santos, the
laying of the venue of an action is not left to the plaintiff’s caprice because the matter is regulated by the Rules of
Court.

6. Lizares v. Calauag, 4 SCRA 746 (1962)

FACTS:

Appeal by certiorari from a decision of the Court of Appeals dismissing the petition of Dr. Antonio A. Lizares & Co.,
Inc., for a writ of prohibition because the venue of the case was improperly laid.

Flaviano Cacnio instituted a Civil Case at the Court of First Instance of Rizal, Quezon City Branch against
Lizares(petitioner).

Cacnio alleged that in 1955 he bought from petitioner on installment, Lot 4, Block 1 of the Sinkang Subdivision in
Bacolod City, hence making a downpayment and the balance to be paid in 10 yearly installments with interest per
year. Cacnio received from Lizares a demand for payment of P7,324.69 representing arrears in the payment of
installments up 1960 plus regular and overdue interest as well as land taxes. (ultimately, mga utang2x ug interest nga
wa mabayran.)

Cacnio issued payment but Lizares refused the tender of payment.

Hence Cacnio filed a case and ask for damages for “compensatory damages plus attorney’s fees.

On July 5, 1960, Lizares moved to dismiss the complaint upon the ground that "venue is improperly laid," for the action
affects the title to or possession of real property located in Bacolod City, which was the subject matter of a contract,
between petitioner and Cacnio, made in said City.

The motion having been denied by the Court of First Instance of Rizal, Quezon City Branch, by an order of July 9,
1960, upon the ground that the action was in personam, petitioner filed with the Court of Appeals a petition, praying
that said order be set aside and that a writ of prohibition be issued commanding respondent Hon. Hermogenes
Caluag, as Judge of said Court, to desist from taking cognizance of said Civil Case. In due course, the Court of
Appeals rendered a decision on October 27, 1960, dismissing said petition. Hence, this appeal by certiorari taken by
petitioner herein. 
ISSUE: The issue is whether or not the main case falls under section 3 of Rule 5 of the Rules of Court, reading: 

"Actions affecting title to, or for recovery of possession, or for partition or condemnation of, or foreclosure of
mortgage on, real property, shall be commenced and tried in the province where the property or any part
thereof lies." 

HELD:

According to SC: We are unable to share such view. Although the immediate remedy sought by Cacnio is to compel
petitioner to accept the tender of payment allegedly made by the former, it is obvious that this relief is merely the first
step to establish Cacnio's title to the real property adverted to above. Moreover, Cacnio's complaint is a means
resorted to by him in order that he could retain the possession of said property. In short, venue in the main case was
improperly laid and the Court of First Instance of Rizal, Quezon City Branch, should have granted the motion to
dismiss. 1äwphï1.ñët

8.Diaz v. Adiong, 219 SCRA 631 (1993)

TOPIC: VENUE

G.R. No. 106847. March 5, 1993.

PATRICIO P. DIAZ vs. JUDGE SANTOS B. ADIONG

1. REMEDIAL LAW; ACTIONS; VENUE OF LIBEL CASE WHERE OFFENDED PARTY IS AN PUBLIC OFFICIAL. —
From the provision of Article 360, third paragraph of the Revised Penal Code as amended by R.A. 4363, 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.

2. ID.; ID.; IMPROPER VENUE; MUST BE RAISED IN A NOTION TO DISMISS PRIOR TO A RESPONSIVE
PLEADING. — 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.

3. WAIVED IN CASE AT BAR BY FILING ANSWER. —

4. RELATES TO TRIAaL AND NOT TO JURISDICTION.

FACTS:

The Mindanao Kris, a newspaper of general circulation in Cotabato City, published in its front page the news article
captioned "6-Point Complaint Filed vs. Macumbal," and in its Publisher's Notes the editorial, "Toll of Corruption," which
exposed alleged anomalies by key officials in the Regional Office of the Department of Environment and Natural
Resources. 3

The public officers alluded to instituted separate criminal and civil complaints arising from the libel before the City
Prosecutor's Office and the Regional Trial Court in Marawi City.

The City Prosecutor's Office dismissed the criminal case.

Petitioner Diaz moved for the dismissal of the action for damages on the ground that the trial court did not
have jurisdiction over the subject matter. He vehemently argued that the complaint should have been filed in
Cotabato City and not in Marawi City.

Petitioner Diaz contends that the civil action for damages could not be rightfully filed in Marawi City as none of the
private respondents, who are all public officers, held office in Marawi City; neither were the alleged libelous news
items published in that city. Consequently, it is petitioner's view that the Regional Trial Court in Marawi City has no
jurisdiction to entertain the civil action for damages.

ISSUES:

1. WON the RTC of Marawi City has jurisdiction over the case.

2. WON improper venue may be waived.

HELD: NO.

1. Firstly, Not one of the respondents then held office in Marawi City. Indeed, private respondents do not
deny that their main place of work was not in Marawi City, although they had sub-offices therein.

Secondly, it is admitted that the libelous articles were published and printed in Cotabato City. Thus,
respondents were limited in their choice of venue for their action for damages only to Cotabato City
where Macumbal, Lanto and Abedin (defendants) had their office and Lanao del Norte where Indol
worked. Marawi City is not among those where venue can be laid.

The third paragraph of Art. 360 of the Revised Penal Code, as amended by R.A. No. 4363, specifically requires that —

"The criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall be
filed simultaneously or separately with the Court of First Instance (now Regional Trial Court) 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: Provided, however, that where one of the offended parties is a
public officer . . . (who) does not hold office in the City of Manila, the action shall be filed in the Court of First
Instance (Regional Trial Court) of the province or city where he held office at the time of the commission of the offense
or where the libelous article is printed and first published and in case one of the the offended parties is a private
individual, the action shall be filed in the Court of First Instance of the province or city where he actually resides at
the time of the commission of the offense or where the libelous matter is printed and first published . . . . "
(emphasis supplied)

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.

2. 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. 9

 Petitioner Diaz then, as defendant in the court below, should have timely challenged the venue laid 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 trial court 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 instant civil action for damages. Well-settled is the rule

 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.

 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.
WHEREFORE, for lack of merit, the Petition for Certiorari is DISMISSED and the Temporary Restraining Order
heretofore issued is LIFTED.

9. Sweetlines v. Teves, 83 SCRA 361 (1978)

SWEET LINES VERSUS TEVES

Facts: This is a Cagayan de Oro case which involves Sweet Lines, a shipping company with the head office in Cebu.
The respondent Teves is the former City Fiscal of Davao City, former Mayor and became judge of CFI of Cagayan de
Oro City.
There was a group of passenger who rode on the Sweet Lines bound for Cebu City. During the trip, they were given a
crude treatment by the officers of the vessel. When they came back in Cagayan de Oro City, they filed a suit for
damages against Sweet Lines. They file the case in the former CFI, now RTC, of Cagayan de Oro City because the
plaintiffs are residents of Cagayan de Oro City.
Sweet Lines filed a motion to dismiss questioning the venue of the action because in the ticket issued by Sweet Lines,
it is stipulated that “…in case of a civil action arising from the contract of carriage, the venue of the action shall be the
City of Cebu ONLY and in no other place.” So there is a restrictive word. Obviously the lawyers of Sweet Lines knew
about Polytrade because they moved to dismiss the case citing this case.
Judge Teves denied the motion to dismiss the case despite the stipulation. According to him, it is unfair. If I will
dismiss the case based on this stipulation, the aggrieved parties will be discouraged in going to Cebu. It is very
expensive and they will be inconvenienced. But, if the case will go on in Cagayan de Oro, it will not inconvenienced
Sweet Lines because they have their branch office, their manager and their own lawyer.

Held: Although venue may be changed or transferred by agreement of the parties in writing, such an agreement will
not be held valid where it practically negates the action of the claimants. Considering the expense and trouble a
passenger residing outside of Cebu City would incur to prosecute a claim in the Cebu City, he would most probably
decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. On the other
hand, Sweetlines has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of
these places. Hence, the filing of the suit in residence of plaintiff, as was done in the instant case, will not cause
inconvience to, much less prejudice Sweetlines. The stipulation, if enforced, will be subversive of the public good or
interest, since it will frustrate in meritorious cases, actions of passenger claimants outside of Cebu City, thus placing
Sweetlines company at a decided advantage over said persons, who may have perfectly legitimate claims against it.
The said condition should, therefore, be declared void and unenforceable, as contrary to public policy