RULES 6-7 PLEADINGS
AMENDMENTS
No change in nature of complaint, answer; but all pleadings
raising claims on defense will have to incorporate names of
witnesses to be presented, summary of intended testimony.
Attach also documentary and object evidence.
Joinder of Issues
Why would they want the filing of an Answer? Because
without an Answer, issues are not joined. Now, they can
proceed to pretrial and then mediation.
Reply: not required before; now, it is prohibited UNLESS there
is an actionable document attached to the Answer--here,
plaintiff can file a Reply because it is plaintiff's duty to read
that.
Two kinds of counterclaim: directed against opposing party
1. Compulsory: necessary arises from main action. Test Is
WON action would have been Instituted without main action--
If no, compulsory
2. Permissive: can be a counterclaim or be a separate
Independent action. Why allowed? To limit number of filings
In court.
Cross-claim: directed against co-party
Whether counter- or cross-, no need for LOC. The person
against whom you've made these claims, the court already
acquires jurisdiction as distinguished from a third party
complaint--here, LOC Is needed because the court has not yet
acquired juris over this person.
Why file a 3rd party complaint? To ask for contribution (i.e.
car accident--kaya kita nabunggo kasi binunggo din ako),
payment, etc.
When Is a 3rd party complaint denied? Rule 6.11
COSCO PHILIPPINES v KEMPER
FACTS
o Respondent Kemper insured the shipment of imported
frozen boneless beef (owned by Genosi, Inc.), which
was loaded at a port in Brisbane, Australia, for
shipment to Genosi, Inc. (the importer-consignee) in the
Philippines. 
o However, upon arrival at the Manila port, a portion of
the shipment was rejected by Genosi, Inc. by reason of
spoilage arising from the alleged temperature
fluctuations of petitioner's reefer containers.
o Thus, Genosi, Inc. filed a claim against both petitioner
Cosco shipping company and respondent Kemper
Insurance Company
o The claim was referred to McLarens Chartered for
investigation, evaluation, and adjustment of the claim. 
o After processing the claim documents,
McLarens Chartered recommended a settlement
of the claim in the amount of $64,492.58, which
Genosi, Inc. (the consignee-insured) accepted.
o Thereafter, respondent Kemper paid the claim of
Genosi, Inc. (the insured) in the amount of $64,492.58.
o Consequently, Genosi, Inc., through its General
Manager, Avelino S. Mangahas, Jr., executed a Loss
and Subrogation Receipt in favor of Respondent
Kemper
o Respondent Kemper then made demands upon
petitioner, but the latter failed and refused to pay the
said amount.
o Respondent Kemper filed a Complaint for Insurance
Loss and Damages against petitioner Cosco before the
RTC Manila
o Respondent alleged that despite repeated
demands to pay and settle the total amount of 
US$64,492.58, representing the value of the
 loss, petitioner failed and refused to pay the
same
o Loss and damage it sustained was due to the
fault and negligence of petitioner, specifically,
the fluctuations in the temperature of the reefer
container
o Cosco’s Answer: respondent had no capacity to sue
since it was doing business in the Philippines without
the required license
o Loss or damage sustained by the shipments, if
any, was due to causes beyond the carrier's
control and was due to the inherent nature or
insufficient packing
o During pre trail, the respective parties marked their
evidence.
o Petitioner Cosco filed a Motion to Dismiss, contending
that the same was filed by one Atty. Rodolfo A. Lat,
who failed to show his authority to sue and sign the
corresponding certification against forum shopping.
o RTC: Ruled in favor of Petitioner Cosco. Granted
MTD.  Mandatory that the certification must be
executed by the petitioner himself, and not by counsel.
o Since respondent's counsel did not have a
Special Power of Attorney (SPA) to act on its
behalf, hence, the certification against forum
shopping executed by said counsel was fatally
defective and constituted a valid cause for
dismissal of the complaint
o CA: Ruled in favor of Respondents. The required
certificate of non-forum shopping is mandatory and that
the same must be signed by the plaintiff or principal
party concerned and not by counsel; and in case of
corporations, the physical act of signing may be
performed in behalf of the corporate entity by
specifically authorized individuals. 
o actual circumstances of the case warranted the
liberal application of the rules and, as such,
ordered the remand of the case to the trial court
for further proceedings.
o MR Denied. Petition for Certiorari R45
ISSUE/S && RATIO
WON the CA erred in ruling that Atty, Rodolfo Lat was
properly authorized by Kemper to sign the certificate of
non-forum shopping- YES
o Petitioner: Respondent Kemper failed to submit any
board resolution or secretary's certificate authorizing
Atty. Lat to institute the complaint and sign the
certificate of non-forum shopping on its behalf. 
o since respondent is a juridical entity, the
signatory in the complaint must show proof of
his or her authority to sign on behalf of the
corporation
o Respondent: admitted that it failed to attach in the
complaint a concrete proof of Atty. Lat's authority to
execute the certificate of non-forum shopping on its
behalf.
o But subsequent compliance as respondent
submitted an authenticated SPA empowering
Atty. Lat to represent it in the pre-trial and all
stages of the proceedings
o We have consistently held that the certification against
forum shopping must be signed by the principal parties.
o If, for any reason, the principal party cannot sign the
petition, the one signing on his behalf must have been
duly authorized.
o With respect to a corporation, the certification against
forum shopping may be signed for and on its behalf, by
a specifically authorized lawyer who has personal
knowledge of the facts required to be disclosed in such
document
o A corporation exercises said powers through its board
of directors and/or its duly authorized officers and
agents.  authorized Atty. Lat, through a board resolution, to sign
o Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate
powers.
o In turn, physical acts of the corporation, like the signing
of documents, can be performed only by natural persons
duly authorized for the purpose by corporate by-laws or
by a specific act of the board of directors
o Philippine Airlines, Inc. v. Flight Attendants and
Stewards Association of the Philippines (FASAP) we
ruled that only individuals vested with authority by a
valid board resolution may sign the certificate of non-
forum shopping on behalf of a corporation. We also
required proof of such authority to be presented. The
petition is subject to dismissal if a certification was
submitted unaccompanied by proof of the signatory's
authority.
o In the present case, since respondent is a corporation,
the certification must be executed by an officer or
member of the board of directors or by one who is duly
authorized by a resolution of the board of directors;
otherwise, the complaint will have to be dismissed
o The lack of certification against forum shopping is
generally not curable by mere amendment of the
complaint, but shall be a cause for the dismissal of the
case without prejudice.
o The same rule applies to certifications against forum
shopping signed by a person on behalf of a corporation
which are unaccompanied by proof that said signatory
is authorized to file the complaint on behalf of the
corporation
o There is no proof that respondent, a private corporation,
the verification and certification against forum
shopping on its behalf.  Accordingly, the certification
against forum shopping appended to the complaint is
fatally defective, and warrants the dismissal of
respondent's complaint for Insurance Loss and
Damages against petitioners
o While the Court has cited instances wherein the lack of
authority of the person making the certification of non-
forum shopping was remedied through subsequent
compliance by the parties therein and for justifiable
reasons, no such exceptional circumstances are present
in this case
o There was no proof of authority submitted, even
belatedly, to show subsequent compliance with the
requirement of the law.
o Neither was there a copy of the board resolution or
secretary's certificate subsequently submitted to the trial
court that would attest to the fact that Atty. Lat was
indeed authorized to file said complaint and sign the
verification and certification against forum shopping,
nor did respondent satisfactorily explain why it failed to
comply with the rules.
 o Thus, there exists no cogent reason for the relaxation of
the rule on this matter.  Obedience to the requirements
of procedural rules is needed if we are to expect fair
results therefrom, and utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal
construction.
o Moreover, the SPA dated May 11, 2000, submitted by
respondent allegedly authorizing Atty. Lat to appear on
behalf of the corporation, in the pre-trial and all stages
of the proceedings, signed by Brent Healy, was fatally
defective and had no evidentiary value.  o
o It failed to establish Healy's authority to act in behalf of
respondent, in view of the absence of a resolution from
respondent's board of directors or secretary's certificate
proving the same.
o Jurisdiction is the power with which courts are invested
for administering justice; that is, for hearing and
deciding cases. In order for the court to have authority
to dispose of the case on the merits, it must acquire
jurisdiction over the subject matter and the parties.  o
o Courts acquire jurisdiction over the plaintiffs
upon the filing of the complaint, and to be
bound by a decision, a party should first be
subjected to the court's jurisdiction.
o Clearly, since no valid complaint was ever filed with
the RTC, Branch 8, Manila, the same did not acquire
jurisdiction over the person of respondent.
JACINTO v GUMARU
FACTS
o An NLRC Decision was rendered in favor of
respondent Eduardo Gumaru, Jr. and against petitioner
Joselito Ma. P. Jacinto and F. Jacinto Group, Inc
ordering the latter to pay
o Petitioner and F. Jacinto Group, Inc. filed an appeal
with the NLRC.
o However, the appeal was not perfected for
failure to post the proper cash or surety bond;
this was the finding of the NLRC in its
Resolution 
o Thus, the Decision became final and executory. And a
writ of execution was issued in the labor case.
Real property belonging to petitioner located in Baguio
City was levied upon, and was scheduled to be sold at
auction petitioner filed an Extremely Urgent Motion to
Lift and Annul Levy on Execution
o LA: Denied petitioner’s extremely urgent motion to lift
and annul levy on execution. Sheriff directed to
proceeed with the sale.
o NLRC: respondents-appellants’ Motion to Lift and
Annul Levy is GRANTED. Remand back to LA
Petitioner went up to the CA via Certiorari assailing the
NLRC’s resolutions
o The Petition in CA-G.R. SP No. 111098
contained a verification and certification of non-
forum shopping that was executed and signed
not by petitioner, but by his counsel Atty.
Ronald Mark S. Daos
o CA: The Verification and Certification of Non-Forum
Shopping, which accompanied the petition at bar, was
executed and signed by petitioner’s counsel Atty.
Ronald Mark S. Daos, in violation of Section 5,Rule 7
of the Revised Rules of Court.
o Pursuant to Supreme Court Revised Circular
No. 28-91, the duty to certify under oath is
 strictly addressed to petitioner which in this case
is herein petitioner Joselito P. Jacinto and not
his counsel to [sic] Atty. Ronald Mark S. Daos.
Thus, to allow the delegation of said duty to
anyone would render Supreme Court Revised
Circular No. 28-91 inutile.
o Petitioner’s MR: verification signed by counsel
constitutes adequate and substantial compliance under
Sections 4 and 5, Rule 7 of the 1997 Rules of Civil
Procedure; verification is merely a formal, and not
jurisdictional, requisite such that an improper
verification or certification against forum-shopping is
not a fatal defect.
o That Petitioners submitted an affidavit
acknowledged begore Consul Cortes in Hawaii
Affidavit, where he certified that he has not
commenced any other action or proceeding, or
filed any claims involving the same issues in the
Supreme Court, Court of Appeals, or any
Division thereof, or in any other court, tribunal
or agency
o MR DENIED
ISSUE/S && RATIO
WON the CA erred in dismissing the subject petition-
MOOT
While the SC agrees with petitioner, the act of satisfying
the judgement has placed this case beyond the Court’s
review.
Jurisprudential Pronouncements
o Petitioner: If, for reasonable or justifiable reasons, a
party is unable to sign the verification and certification
against forum-shopping, he could execute a special
power of attorney authorizing his lawyer to execute the
verification and sign the certification on his behalf.
Which is exactly what petitioner did
o Petitioner next argues that there are compelling
reasons to grant his Petition for Certiorari. He
asserts that the NLRC committed grave abuse of
discretion in issuing questioned resoltions
demanding the case to the Labor Arbiter for
further proceedings on execution, claiming that
the December 6, 2004 Decision of the Labor
Arbiter had not attained finality since the NLRC
failed to furnish him with a copy 
o Respondents: dismissal of petitioner’s certiorari petition
by the CA, it is for all intents and purposes deemed to
have never been filed, and thus may not be corrected by
resorting to a Petition for Review under Rule 45.
o Verification and Certification against forum-
shopping accompanying the instant Petition was
not signed by petitioner, but by his counsel, in
consistent violation of the Court’s Circular No.
28-91 and Rule 7 of the 1997 Rules of Civil
Procedure.1âwphi1
o SC: It is true, as petitioner asserts, that if for reasonable
or justifiable reasons he is unable to sign the
verification and certification against forum shopping in
his CA Petition, he may execute a special power of
attorney designating his counsel of record to sign the
Petition on his behalf.
 
o A distinction must be made between non-compliance
with the requirement on or submission of defective
 verification, and non-compliance with the requirement
on or submission of defective certification against
forum shopping.
o As to verification, non-compliance therewith or a defect
therein does not necessarily render the pleading fatally
defective. The court may order its submission or
correction or act on the pleading if the attending
circumstances are such that strict compliance with the
Rule may be dispensed with in order that the ends of
justice may be served thereby.
o Verification is deemed substantially complied with
when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the
petition have been made in good faith or are true and
correct.
o As to certification against forum shopping, non-
compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need
to relax the Rule on the ground of "substantial
compliance" or presence of "special circumstances or
compelling reasons."
o The certification against forum shopping must be
signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as
parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or
petitioners share a common interest and invoke a
common cause of action or defense, the signature of
only one of them in the certification against forum
shopping substantially complies with the Rule.
o Finally, the certification against forum shopping
must be executed by the party-pleader, not by his
counsel. H, however, for reasonable or justifiable
reasons, the party-pleader is unable to sign, he must
execute a Special Power of Attorney designating his
counsel of record to sign on his behalf
o However, while the Court takes the petitioner's side
with regard to the procedural issue dealing with
verification and the certification against forum
shopping, it nonetheless appears that the Petition has
been overtaken by events
o Respondent informed this Court that the judgment
award has been satisfied in full. 
o The petitioner does not dispute this claim, in which
case, the labor case is now deemed ended. "It is
axiomatic that after a judgment has been fully satisfied,
the case is deemed terminated once and for all
o And "when a judgment has been satisfied, it passes
beyond review, satisfaction being the last act and the
end of the proceedings, and payment or satisfaction of
the obligation thereby established produces permanent
and irrevocable discharge; hence, a judgment debtor
who acquiesces to and voluntarily complies with the
judgment is estopped from taking an appeal therefrom."
o The satisfaction of the judgment in full has placed the
case beyond the Court's review. "Indeed, there are no
more proceedings to speak of inasmuch as these were
terminated by the satisfaction of the judgment."
NARCISO v PACIFIC TRADERS
FACTS
o Petitioners were the employees of Pacific Traders
Manufacturing Corporation (PTMC), a domestic
corporation engaged in the business of manufacturing
furniture and fixtures for export.
o They were hired on different dates from 1999 to
2002 and in various capacities such as framer,
attacher, finisher, assembler, etc.
o Tabok Workers Multi-Purpose Cooperative (TWMPC)
is a cooperative duly registered with the Cooperative
Development Authority among the purposes of which is
"to engage in job out works of rattan and wood
companies to the Pacific Rattan Manufacturing
Corporation and other manufacturing companies.
o The present controversy arose when the petitioners filed
in 2004, complaints for illegal dismissal with money
claims against PTMC and TWMPC before NLRC Cebu
o Alleged that they were regular employees of
PTMC
o Sometime in 2000, PTMC referred them to
TWMPC in view of PTMC's refusal to sign a
casual or probationary employment contract
with them.
o They claimed to have been treated indifferently by
TWMPC and were not given the proper labor benefits.
o When they reported the matter to the Department of
Labor and Employment (DOLE), TWMPC terminated
them from employment without just or authorized
cause.
o PTMC denied that the petitioners were its regular
employees and instead claimed that they were hired on
a contractual or casual basis to meet the volume of
orders from its foreign buyers which can no longer be
accommodated by its regular employees
o Petitioners were paid all the salaries and benefits
due them under the law and when their contracts
expired, they voluntarily executed "Releases and
Quitclaims."
o TWMPC confirmed that the petitioners were its
bonafide members. They agreed to work on specific
works on particular job orders contracted by TWMPC
with different companies
o TWMPC's Board of Directors contemplated to
try a "pakyaw system" instead of the per hour
system of compensation. 
o Petitioners disagreed and this eventually settled
when the petitioners verbally acquiesced to
withdraw their membership from TWMPC
provided they will be paid separation pay and
other amounts they were entitled to receive as
cooperative members. 
o Despite this verbal agreement, however, the petitioners
filed complaints before the DOLE and the NLRC
o DOLE case was later on dismissed upon an amicable
settlement between the petitioners and TWMPC.
o The complaints before the NLRC RAB-VII were
consolidated and jointly resolved by the Labor Arbiter
o LA: petitioners were not illegally dismissed. TWMPC
was directed to pay their separation pay as well as the
amount of benefits due them as members of the
cooperative. 
o Petitioners were not employees of PTMC which
was accordingly discharged from any liability
o The petitioners and TWMPC appealed to the NLRC
 o NLRC dismissed both appeals outright for failure to
attach the requisite Certificate of Non-Forum Shopping.
o Petitioners moved for the reconsideration of the
foregoing order.
o They also submitted a Motion to Admit
Certificate of Non-Forum Shopping pleading
for a liberal application of procedural rules in
the interest of substantial justice
o NLRC: Denied MR. Its Resolution became final and
executory.
o Petitioners persisted in their cause and elevated the
matter to the CA via a petition for certiorariunder Rule
65 of the Rules of Court ascribing grave abuse of
discretion to the NLRC
o CA: Dismissed the petition upon finding that the
petitioners failed to file the certificate of non-forum
shopping within the reglementary period of filing a
Memorandum of Appeal
o Petitioners failed to cite any compelling reason
which will warrant a relaxation of procedural
rules. MR Denied.
ISSUE/S && RATIO
WON the CA erred in strictly applying the requirement of
the certificate of non-forum shopping despite the presence
of highly exceptional cases- NO
o The findings of the NLRC are generally binding and
should be treated with finality. The CA only looks at
the facts to determine if a tribunal, board or officer
exercising judicial or quasi-judicial functions acted
without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of
jurisdiction in appreciating the facts.
o Hence, in ruling on the correctness of the CA's review
of the NLRC decision, this Court is confined to a
review of the case solely on pure questions of law.
o The petitioners aver that the CA should have granted
their petition for certiorari and relaxed the NLRC Rules
of Procedure because on page 53 of their memorandum
on appeal is the caption "Verification and
Certification."
o However, the counsel for the petitioners
inadvertently deleted the paragraphs intended
for the certification of non-forum shopping.
o They assert that they were in a hurry in
preparing the memorandum due to the very
limited time of 10 days to file the same.
o They proffer these as justifiable causes for their
non-compliance with the NLRC Rules of
Procedure and submit that their belated filing of
the certificate in their motion for reconsideration
was substantial compliance
o Outright dismissal of their appeal on a mere
technicality would seriously impair the orderly
administration of justice
o The petitioners' arguments are devoid of merit. The
subsequent compliance with the requirement does not
excuse a party's failure to comply therewith in the first
instance.
o While the Court, in certain cases, has excused non-
compliance with the requirement to submit a certificate
of non-forum shopping, such liberal posture has always
been grounded on special circumstances or compelling
reasons which made the strict application of the rule
clearly unjustified or inequitable
o Here, the reasons cited by the petitioners for their
failure to attach the certificate in their appeal
memorandum can hardly be considered as special
circumstances or compelling reasons to warrant a
liberal application of the rules of procedure.
o Moreover, based on the facts of the case, a strict
application of a technical rule will not prejudice the
administration of justice in view of the petitioners'
unmeritorious claims.
o It is true that in labor cases, technical rules are not
necessarily fatal and they can be liberally applied.
However, this principle can only operate if, all things
being equal, any doubt or ambiguity would be resolved
in favor of labor. Should the case be substantively
unmeritorious, technicalities and limitations in
procedural rules must be fully enforced
o The claims advanced by the petitioners failed to yield
substantive merit. First, their money claims have
already been amicably settled and paid in the
concurrent labor case they filed before the DOLE. The
Quitclaim and Release signed by the petitioners show
that they already received payment for their claims
from TWMPC and PTMC.
o Second, the LA correctly ruled that the petitioners'
allegations did not bear out a case for illegal dismissal.
The alleged termination from employment was merely
presumed by the petitioners from their disagreement
with TWMPC when the latter announced its plans to
shift to a "pakyaw system" of compensation  Province of Negros Oriental.
o In fine, in the absence of justifiable and compelling
reasons, a liberal application of procedural rules is not
warranted in this case.
o The Court thus agrees with the CA that no grave abuse
of discretion is attributable to the NLRC when it found
no justification to excuse the absence of a certificate of
non-forum shopping in the petitioners' memorandum on
appeal.
VILLACAR TRANSIT v CATUBIG
FACTS
o Petitioner Villacar is engaged in the business of
transportation and the franchise owner of a Ceres
Bulilit bus with Plate No. T-0604-1348.
o Quirino C. Cabanilla (Cabanilla) is employed as a
regular bus driver of petitioner
o Respondent Jocelyn Catubig’s  Quintin Catubig, Jr.
(Catubig), was on his way home from Dumaguete City
riding in tandem on a motorcycle with his employee,
Teddy Emperado (Emperado)
o While approaching a curve at kilometers 59 and 60,
Catubig tried to overtake a slow moving ten-wheeler
cargo truck by crossing-over to the opposite lane, which
was then being traversed by the Ceres Bulilit bus driven
by Cabanilla, headed for the opposite direction.
o When the two vehicles collided, Catubig and Emperado
were thrown from the motorcycle.  Catubig died on the
spot where he was thrown, while Emperado died while
being rushed to the hospital.
o Cabanilla was charged with reckless imprudence
resulting in double homicide before the MCTC
o PI Resolution:  dismissing the criminal charge against
Cabanilla.  It found that Cabanilla was not criminally
liable for the deaths of Catubig and Emperado, because
 there was no negligence, not even contributory, on
Cabanilla's part.
o Respondnet Jocelyn filed a complaint for damages
against petitioner for the death of her husband
o Petitioner is civilly liable because the latter's
employee driver, Cabanilla, was reckless and
negligent in driving the bus which collided with
Catubig's motorcycle.
o Petitioner: Proximate cause of the vehicular collision,
which resulted in the deaths of Catubig and Emperado,
was the sole negligence of Catubig when he
imprudently overtook another vehicle at a curve
o Petitioner asked for the dismissal of
respondent's complaint for not being verified
and/or for failure to state a cause of action, as
there was no allegation that petitioner was
negligent in the selection or supervision of its
employee driver
Evidence of Respondent
o Investigation proper: PO2 Elnas conducted an
investigation of the collision incident.  According to
PO2 Elnas, the bus was running fast, at a speed of 100
kilometers per hour, when it collided w the motorcycle
o Cadimas personally witnessed the collision of
the bus and the motorcycle. Cadimas signaled
the said bus to halt but it was running fast.
o A photographer who took photos of the incident, and
the doctor who’s conducted the post mortem
examination of Catubig’s body was also presented.
o Respondent's documentary exhibits consisted of her and
Catubig's Marriage Contract dated August 21, 1982,
their two children's Certificate of Live Births, Catubig's
College Diploma dated March 24, 1983, the list and
receipts of the expenses for Catubig's burial, the sketch
of the collision site prepared by PO2 Elnas, the excerpts
from the police blotter, the photographs of the collision
and the Post Mortem Report on Catubig's cadaver
prepared by Dr. Baldado.
o RTC: admitted all evidence of respondent
Evidence of petitioner
o Maypa is the Administrative Assistnat (now manager)
at the Dumaguete branch of petitioner
o While he was still an Administrative Assistant,
Maypa was responsible for the hiring of
personnel including drivers and conductors.
o Maypa further testified that the company
employs a rigorous screening process for the
potential drivers they hire.
o He admitted that at the time of his appointment
as Administrative Assistant at the Dumaguete
branch, Cabanilla was already an employee
driver of petitioner.
o Maypa related that Cabanilla had been put on
preventive suspension following the vehicular
accident on January 27, 1994 involving the bus
Cabanilla was driving and the motorcycle
carrying Catubig and Emperado
o Following an internal investigation of said
accident conducted by petitioner, Cabanilla was
declared not guilty of causing the same, for he
had not been negligent.
o RTC admitted evidence.
o RTC: Proximate cause of the collision of the bus and
motorcycle was the negligence of the driver of the
motorcycle, Catubig
 o Convinced through the testimony of Maypa, the that the allegations therein are true and correct
Administrative and Personnel Manager of the of her personal knowledge or based on authentic
Dumaguete branch of petitioner, that petitioner records."
had exercised due diligence in the selection and o Petitioner cited jurisprudence in which the Court
supervision of its employee drivers, including ruled that a pleading lacking proper verification
Cabanilla. is treated as an unsigned pleading, which
o CA:  Both Catubig and Cabanilla were negligent in produces no legal effect under Section 3, Rule 7
driving their respective vehicles.  of the Rules of Court.
o Catubig, on one hand, failed to use reasonable o At the outset, we find no procedural defect that would
care for his own safety and ignored the hazard have warranted the outright dismissal of respondent's
when he tried to overtake a truck at a curve. complaint.
o Cabanilla, on the other hand, was running his o Respondent filed her complaint for damages against
vehicle at a high speed of 100 kilometers per petitioner on July 19, 1995, when the 1964 Rules of
hour.  Court was still in effect
o Brushed aside the defense of petitioner that it o On July 1, 1997, the new rules on civil procedure took
exercised the degree of diligence exacted by law effect.  The foregoing provision was carried on, with a
in the conduct of its business. Maypa was not in few amendments, as Rule 7, Section 4 of the 1997
a position to testify on the procedures followed o The 1997 Rules of Court, even prior to its amendment
by petitioner in hiring Cabanilla as an employee by A.M. No. 00-2-10, clearly provides that a pleading
driver  lacking proper verification is to be treated as an
o Hence this R45 unsigned pleading which produces no legal effect. 
However, it also just as clearly states that except
ISSUE/S && RATIO when otherwise specifically required by law or rule,
WON the complaint for damages shall be dismissed pleadings need not be under oath, verified or
because of respondent’s failure to verify the same- NO. accompanied by affidavit." 
o No such law or rule specifically requires that
Lack of Verification is NOT jurisdictional. respondent's complaint for damages should have
o Petitioner: Respondent’s complaint for damages should been verified.
be dismissed for the latter's failure to verify the same.  o Although parties would often submit a joint verification
o The certification against forum shopping and certificate against forum shopping, the two are
attached to the complaint, signed by respondent, different
is not a valid substitute for respondent's o Pajuyov CA: A party's failure to sign the certification
verification that she "has read the pleading and against forum shopping is different from the party's
 failure to sign personally the verification.  The
certificate of non-forum shopping must be signed by the
party, and not by counsel. The certification of counsel
renders the petition defective.
o On the other hand, the requirement on
verification of a pleading is a formal and not a
jurisdictional requisite.  It is intended simply to
secure an assurance that what are alleged in the
pleading are true and correct and not the product
of the imagination or a matter of speculation,
and that the pleading is filed in good faith. The
party need not sign the verification.  A party's
representative, lawyer or any person who
personally knows the truth of the facts alleged in
the pleading may sign the verification
o In the case before us, we stress that as a general rule, a
pleading need not be verified, unless there is a law or
rule specifically requiring the same.  assurance that matters which are alleged are done in
o Examples of pleadings that require verification are: (1) all
pleadings filed in civil cases under the 1991 Revised Rules on
Summary Procedure; (2) petition for review from the Regional
Trial Court to the Supreme Court raising only questions of law
under Rule 41, Section 2; (3) petition for review of the decision of
the Regional Trial Court to the Court of Appeals under Rule 42,
Section 1; (4) petition for review from quasi-judicial bodies to the
Court of Appeals under Rule 43, Section 5; (5) petition for review
before the Supreme Court under Rule 45, Section 1; (6) petition for
annulment of judgments or final orders and resolutions under Rule
47, Section 4; (7) complaint for injunction under Rule 58, Section
4; (8) application for preliminary injunction or temporary
restraining order under Rule 58, Section 4; (9)  application for
appointment of a receiver under Rule 59, Section 1; (10)
application for support pendente lite under Rule 61, Section 1; (11)
petition for certiorari against the judgments, final orders or
resolutions of constitutional commissions under Rule 64, Section
2; (12) petition for certiorari, prohibition, and mandamus under
Rule 65, Sections 1 to 3; (13) petition for quo warranto under Rule
66, Section 1; (14) complaint for expropriation under Rule 67,
Section 1; (15) petition for indirect contempt under Rule 71,
Section 4, all from the 1997 Rules of Court; (16) all complaints or
petitions involving intra-corporate controversies under the Interim
Rules of Procedure on Intra-Corporate Controversies; (17)
complaint or petition for rehabilitation and suspension of payment
under the Interim Rules on Corporate Rehabilitation; and (18)
petition for declaration of absolute nullity of void marriages and
annulment of voidable marriages as well as petition for summary
proceedings under the Family Code.
o In contrast, all complaints, petitions, applications, and
other initiatory pleadings must be accompanied by a
certificate against forum shopping
o It is not disputed herein that respondent's complaint for
damages was accompanied by such a certificate.
o In addition, verification, like in most cases required by
the rules of procedure, is a formal, not jurisdictional,
requirement, and mainly intended to secure an
good faith or are true and correct and not of mere
speculation. 
o When circumstances warrant, the court may simply
order the correction of unverified pleadings or act on it
and waive strict compliance with the rules in order that
the ends of justice may thereby be served
ABBOT LABORATOPRIES v ALCARAZ
FACTS
o Abbott caused the publication in a major broadsheet
newspaper of its need for a Medical and Regulatory
Affairs Manager Regulatory Affairs Manager
o Alcaraz - who was then a Regulatory Affairs and
Information Manager at Aventis Pasteur Philippines,
 Incorporated (another pharmaceutical company like
Abbott) – showed interest and submitted her application
o Abbott formally offered Alcaraz the abovementioned
position which was an item under the company’s
Hospira Affiliate Local Surveillance Unit (ALSU)
department
o Abbott’s offer sheet it was stated that Alcaraz was to
be employed on a probationary basis
o She accepted the said offer and received an electronic
mail (e-mail) from Abbott’s Recruitment Officer,
petitioner Teresita C. Bernardo (Bernardo), confirming
the same.
o Alcaraz signed an employment contract which stated,
inter alia, that she was to be placed on probation for a
period of six (6) months
o During Alcaraz’s pre-employment orientation,
petitioner Allan G. Almazar (Almazar), Hospira’s
Country Transition Manager, briefed her on her duties
and responsibilities as Regulatory Affairs Manager
o Petitioner Maria Olivia T. Yabut-Misa (Misa), Abbott’s
Human Resources (HR) Director, sent Alcaraz an e-
mail which contained an explanation of the procedure
for evaluating the performance of probationary
employees and further indicated that Abbott had only
one evaluation system for all of its employees
o Abbott’s PPSE procedure mandates that the job
performance of a probationary employee should be
formally reviewed and discussed with the employee at
least twice: first on the third month and second on the
fifth month from the date of employment.
o These performance standards should be discussed in
detail with the employee within the first two (2) weeks
on the job
o During the course of her employment, Alcaraz noticed
that some of the staff had disciplinary problems. Thus,
she would reprimand them for their unprofessional
behavior such as non-observance of the dress code,
moonlighting, and disrespect of Abbott officers.
However, Alcaraz’s method of management was
considered by Walsh to be "too strict."
o Alcaraz approached Misa to discuss these concerns and
was told to "lie low" and let Walsh handle the matter.
Misa even assured her that Abbott’s HRD would
support her in all her management decisions
o Alcaraz was called to a meeting with Walsh and
Terrible (her former HR Director) where she was
informed that she failed to meet the regularization
standards for the position of Regulatory Affairs
Manager.
o Walsh and Terrible requested Alcaraz to tender her
resignation, else they be forced to terminate her
services. She was also told that, regardless of her
choice, she should no longer report for work and was
asked to surrender her office identification cards. She
requested to be given one week to decide on the same,
but to no avail
o Alcaraz told her administrative assistant, Claude
Gonzales (Gonzales), that she would be on leave for
that day. However, Gonzales told her that Walsh and
Terrible already announced to the whole Hospira ALSU
staff that Alcaraz already resigned due to health reasons
o Walsh, Almazar, and Bernardo personally handed to
Alcaraz a letter stating that her services had been
terminated
o The letter detailed the reasons for Alcaraz’s termination
– particularly, that Alcaraz: (a) did not manage her time
 effectively; (b) failed to gain the trust of her staff and to
build an effective rapport with them; (c) failed to train
her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on
case processing and article review which were
necessary for the proper performance of her duties.
o Alcaraz felt that she was unjustly terminated from her
employment and thus, filed a complaint for illegal
dismissal and damages against Abbott and its officers,
namely, Misa, Bernardo, Almazar, Walsh, Terrible, and
Feist
o She should have already been considered as a
regular and not a probationary employee given
Abbott’s failure to inform her of the reasonable
standards for her regularization upon her
engagement as required under Article 295 of the
Labor Code
o while her employment contract stated that she
was to be engaged on a probationary status, the
same did not indicate the standards on which her
regularization would be based.
o Petitioners: Alcaraz was validly terminated from her
probationary employment given her failure to satisfy
the prescribed standards for her regularization which
were made known to her at the time of her engagement
o LA: dismissed Alcaraz’s complaint for lack of merit.
Termination of her probationary employment was
justified
o LA rejected Alcaraz’s argument that she was not
informed of the reasonable standards to qualify
as a regular employee considering her
admissions that she was briefed by Almazar on
her work during her pre-employment orientation
meeting and that she received copies of Abbott’s
Code of Conduct and Performance Modules
which were used for evaluating all types of
Abbott employees.
o NLRC: Annulled LA decision. Finding respondents
Abbot and individual respondents to have committed
illegal dismissal
o Immediately reinstate complainant to her former
position without loss of seniority rights
immediately and pay backwages
o No evidence showing that Alcaraz had been
apprised of her probationary status and the
requirements which she should have complied
with in order to be a regular employee.
o Abbott’s Code of Conduct and Performance
Modules was not equivalent to her being
actually informed of the performance standards
upon which she should have been evaluated on.
o Pending Resolution of the FIRST CA decision
o Alcaraz moved for the execution of the NLRC’s
Decision before the LA, which petitioners
strongly opposed.
o LA Denied.
o NLRC Reversed.
o Due to this, Petitioner filed SECOND certiorari with the
CA assailing the propriety of the execution of the
NLRC decion
o CA 1st petition: affirmed the ruling of the NLRC and
held that the latter did not commit any grave abuse of
discretion in finding that Alcaraz was illegally
dismissed.
 o It observed that Alcaraz was not apprised at the
start of her employment of the reasonable
standards under which she could qualify as a
regular employee
o It also found that Abbott was unable to prove
that there was any reasonable ground to
terminate Alcaraz’s employment
o MR Denied.
o CA 2nd petition: NLRC was correct in upholding the
execution of the NLRC Decision
o MR
o While the petitioners’ motion for reconsideration of the
CA’s 2nd Resolution was pending, Alcaraz again moved
for the issuance of a writ of execution before the LA
o Petitoners through a Memorandum of Appeal stated that
the implementation of the LA’s order would render its
motion for reconsideration moot and academic
o Eventually, the MR was denied the 2 nd CA decision
attained finality for having failed to file an appeal.
Hence, as it stands, only the issues in the First CA
petition are left to be resolved.
ISSUE/S && RATIO
WON petitioners are guilty of forum shopping- NOT
GUILTY OF FORUM SHOPPING
o Alcaraz: petitioners were guilty of forum shopping
when they filed the 2nd CA Petition pending the
resolution of their motion for reconsideration of the 1 st
CA’s Decision
o At the outset, it is noteworthy to mention that the
prohibition against forum shopping is different from a
violation of the certification requirement under Section
5, Rule 7 of the Rules of Court
o Sps, Ong v CA: Compliance with the certification
against forum shopping is separate from and
independent of the avoidance of the act of forum
shopping itself. There is a difference in the treatment
between failure to comply with the certification
requirement and violation of the prohibition against
forum shopping not only in terms of imposable
sanctions but also in the manner of enforcing them.  
o Lack of Certification constitutes sufficient cause for the
dismissal without prejudice to the filing of the
complaint or initiatory pleading upon motion and after
hearing
o While the violation of the prohibition against forum
shopping is a ground for summary dismissal thereof and
for direct contempt
o As to the first, forum shopping takes place when a
litigant files multiple suits involving the same parties,
either simultaneously or successively, to secure a
favorable judgment. It exists where the elements of litis
pendentia are present, namely: (a) identity of parties, or
at least such parties who represent the same interests in
both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts;
and (c) the identity with respect to the two preceding
particulars in the two (2) cases is such that any
judgment that may be rendered in the pending case,
regardless of which party is successful, would amount
to res judicata in the other case
o In this case, records show that, except for the element
of identity of parties, the elements of forum shopping
do not exist.
o Evidently, the First CA Petition was instituted to
question the ruling of the NLRC that Alcaraz was
 illegally dismissed. On the other hand, the Second CA
Petition pertains to the propriety of the enforcement of
the judgment award pending the resolution of the First
CA Petition and the finality of the decision in the labor
dispute between Alcaraz and the petitioners.
o Based on the foregoing, a judgment in the Second CA
Petition will not constitute res judicata insofar as the
First CA Petition is concerned.
o Thus, considering that the two petitions clearly
cover different subject matters and causes of action,
there exists no forum shopping.
WON petitioners violated the certification requirement
under Section 5, Rule 7 of the Rules of Court- NO
Since the issues were dissimilar in both petitions, there was
no obligation to disclose. Anyways, the 2nd resolution
already attained finality. MOOT. SPS SY v WESTMONT BANK
o Alcaraz: petitioners violated the certification FACTS
requirement under Section 5, Rule 7 of the Rules of
Court by not disclosing the fact that it filed the June 16,
2010 Memorandum of Appeal before the NLRC in the
instant petition.
o In this regard, Section 5(b), Rule 7 of the Rules of
Court requires that a plaintiff who files a case should
provide a complete statement of the present status of
any pending case if the latter involves the same issues
as the one that was filed. If there is no such similar
pending case, Section 5(a) of the same rule provides
that the plaintiff is obliged to declare under oath that to
the best of his knowledge, no such other action or claim
is pending.
o Records show that the issues raised in the instant
petition and those in the June 16, 2010 Memorandum of
Appeal filed with the NLRC likewise cover different
subject matters and causes of action. In this case, the
validity of Alcaraz’s dismissal is at issue whereas in the
said Memorandum of Appeal, the propriety of the
issuance of a writ of execution was in question.
o Thus, given the dissimilar issues, petitioners did not
have to disclose in the present petition the filing of their
June 16, 2010 Memorandum of Appeal with the NLRC.
o In any event, considering that the issue on the propriety
of the issuance of a writ of execution had been resolved
in the Second CA Petition – which in fact had already
attained finality – the matter of disclosing the June 16,
2010 Memorandum of Appeal is now moot and
academic.
o The present case stemmed from a Complaint for Sum of
Money, filed by respondent Westmont
Bank (Westmont),  now United Overseas Bank
Philippines (UOBP),  against petitioners Spouses
Ramon Sy and Anita Ng, Richard Sy, Josie Ong,
William Sy, and Jackeline de Lucia (petitioners) before
the RTC
o Westmont alleged petitioners, doing business under the
trade name of Moondrops General
Merchandising (Moondrops), obtained a loan in the
amount of P2,429,500.00, evidenced by Promissory
Note
o Barely a month after, petitioners obtained another loan
from Westmont Bank in the amount of P4,000,000.00,
evidenced by another Promissory Note
o Disclosure Statements on the Loan/Credit
Transactionsw ere signed by the parties. Earlier, a
Continuing Suretyship Agreement was executed
between Westmont and petitioners for the purpose of
securing any future indebtedness of Moondrops.
o Westmont averred that petitioners defaulted in the
payment of their loan obligations.
o It sent a Demand Letter, to petitioners, but it was
unheeded. Hence, Westmont filed the subject
complaint.
o Petitoners: Ramon Sy and Richard Sy applied for a
loan with Westmont Bank, through its bank manager
William Chu Lao (Lao).  Westmont were valid and binding
o According to them, Lao required them to sign
blank forms of promissory notes and disclosure
statements and promised that he would notify
them immediately regarding the status of their
loan application
o Lao informed Ramon Sy and Richard Sy that their
application was disapproved
o He, however, offered to help them secure a loan
through Amado Chua (Chua), who would lend
them the amounts of P2,500,000.00 and
P4,000,000.00, both payable within three (3)
months.
o Ramon Sy and Richard Sy accepted Lao's offer and
received the amounts of P2,429,500.00 and
P3,994,000.00 respectively, as loans from Chua.
Petitioners claimed that they paid Chua the total amount
of their loans.
o Petitioners insisted that their loan applications from
Westmont were denied and it was Chua who lent them
the money. Thus, they contended that Westmont could
not demand the payment of the said loans.
o RTC: in favor of Westmont
o It held that Westmont's cause of action was
based on PN 5280 and PN 5285, the promissory
notes executed by petitioners
o Petitioners admitted the genuineness and due
execution of the said actionable documents
because they failed to make a specific denial
in the answer.
o amon Sy never took any steps to have the
promissory notes cancelled and annulled, which
led to the conclusion that their obligations to
o Petitioner’s MR: arguing that it had sufficiently denied
the genuineness and due execution of the promissory
notes in their answer.
o RTC repeated that petitioners were deemed to have
admitted the genuineness and due execution of the
actionable documents
o CA: Affirmed RTC
o It wrote that petitioners failed to specifically
deny the genuineness and due execution of the
promissory notes in their answer before the trial
court.
o CA ruled that under Section 8, Rule 8 of the
Rules of Court (Section 8 of Rule 8),  the
genuineness and due execution of the
promissory notes were deemed admitted by
petitioners. 
 o It added that the admission of the said
actionable documents created a prima facie case
in favor of Westmont which dispensed with the
necessity of presenting evidence that petitioners
actually received the loan proceeds. T
ISSUE/S && RATIO
WON CA erred when it ruled that Sps. Sy, for having
failed to specifically deny the actionable documents under
oath admitted to its genuineness and due execution- YES
THERE WAS SUBSTAMNTIAL COMPLIANCE WITH
R8S8. SC relaxed rules of procedure
o Petitioners argue that: they specifically denied the
allegations of Westmont under oath in their answer
filed before the RTC
o although they signed blank forms of promissory
notes, disclosure statements and continuing
suretyship agreements, they were informed that
their loan application were denied these should
be considered as sufficient compliance with
Section 8 of Rule 8
o Westmont Bank failed to prove the existing loan
obligations; and the original copy of the
promissory notes were never presented in court.
o This Court initially denied the petition for failure to
show any reversible error in the challenged decision
and resolution of the CA. But granted Patitioner’s MR
o In its Entry of Appearance with
Compliance/Manifestation, UOBP, formerly Westmont,
informed the Court that all their interests in the present
litigated case were already transferred to the Philippine
Deposit Insurance Corporation (PDIC).
o PDIC: CA correctly ruled that petitioners failed to
specifically deny the actionable documents in their
answer and were deemed to have admitted the
genuieness and due execution
o PDIC underscored that the specific denial meant
that the defendant must declare under oath that
he did not sign the document or that it was
otherwise false or fabricate
o Whenever an action or defense is based upon a written
instrument or document, the substance of such
instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may
with like effect be set forth in the pleading
o The said instrument or document is called an actionable
document and Section 8 of Rule 8 provides the proper
method for the adverse party to deny its genuineness
and due execution
o Accordingly, to deny the genuineness and due
execution of an actionable document: (1) there must be
a specific denial in the responsive pleading of the
adverse party; (2) the said pleading must be under oath;
and (3) the adverse party must set forth what he claims
to be the facts
o Failure to comply with the prescribed procedure results
in the admission of the genuineness and due execution
of the actionable document.
o The reason for the rule is to enable the adverse party to
know beforehand whether he will have to meet the issue
of genuineness or due execution of the document during
trial.
o In fine, although Section 8 of Rule 8 provides for a
precise method in denying the genuineness and due
execution of an actionable document and the dire
consequences of its non-compliance, it must not be
applied with absolute rigidity.
o What should guide judicial action is the principle
that a party-litigant is to be given the fullest
opportunity to establish the merits of his complaint
or defense rather than for him to lose life, liberty,
honor, or property on technicalities.
o In the present case, the actionable documents attached
to the complaint of Westmont were PN 5280 and PN
5285. The CA opined that petitioners failed to
specifically deny the genuineness and due execution of
the said instruments because nowhere in their answer
did they "specifically deny" the genuineness and due
execution of the said documents.
o After a judicious study of the records, the Court finds
that petitioners sufficiently complied with Section 8 of
Rule 8 and grants the petition.
Petitioners specifically denied the genuineness and due
execution of the promissory notes
o The answer of petitioner readily shows that they did not
spell out the words "specifically deny the genuineness
and due execution of the promissory notes."
o Nevertheless, when the answer is read as whole, it can
be deduced that petitioners specifically denied the
paragraphs of the complaint regarding the
promissory notes.
o More importantly, petitioners were able to set forth
what they claim to be the facts, which is a crucial
element under Section 8 of Rule 8.
o In particular, they alleged that although Ramon Sy and
Richard Sy signed blank forms of promissory notes and
disclosure statements, they were later informed that
their loans were not approved. Such disapproval led
them to seek loans elsewhere, through Lao and Chua,
but definitely not with the bank anymore
o Verily, petitioners asserted throughout the entire
proceedings that the loans they applied from Westmont
were disapproved, and that they never received the loan
proceeds from the bank.
o Stated differently, they insisted that the promissory
notes and disclosure statement attached to the
complaint were false and different from the
documents they had signed. 
o These significant and consistent denials by petitioners
sufficiently informed Westmont beforehand that it
would have to meet the issue of genuineness or due
execution of the actionable documents during trial
o Accordingly, petitioners substantially complied with
Section 8 of Rule 8.
o Although their answer did not indicate the exact words
contained in the said provision, the questionable loans
and the non-delivery of its proceeds compel the Court
to relax the rules of procedure in the present case.
o Law and jurisprudence grant to courts the prerogative to
relax compliance with procedural rules of even the most
mandatory character, mindful of the duty to reconcile
both the need to put an end to litigation speedily and the
parties' right to an opportunity to be heard
FILIPINAS TEXTILE v CA
FACTS
o State Investment House Inc. (SIHI) instituted
a Complaint for the collection of the sum of
₱3,118,949.75, with interest, penalties, exemplary
damages, attorneys fees and costs of suit against herein
petitioners Filtex and Villanueva.
o In its Complaint, SIHI alleged that sometime in 1983,
Filtex applied for domestic letters of credit to finance
the purchase of various raw materials for its textile
business
o Finding the application to be in order, SIHI issued on
various dates domestic letters of credit authorizing
Indo-Philippine Textile Mills, Inc. ("Indo-Phil"),
Texfiber Corporation ("Texfiber"), and Philippine
Polyamide Industrial Corporation ("Polyamide") "to
value" on SIHI such drafts as may be drawn by said
corporations against Filtex
o Filtex used these domestic letters of credit to cover its
purchase of various textile materials from Indo-Phil,
Texfiber and Polyamide.
o Upon the sale and delivery of the merchandise,
Indo-Phil, Texfiber and Polyamide issued
several sight draft payable to the order of SIHI
o Allegedly by way of inducement upon SIHI to issue the
aforesaid domestic letters of credit and "to value" the
sight drafts issued by Indo-Phil, Texfiber and
Polyamide, Villanueva executed a comprehensive
surety agreement whereby he guaranteed, jointly and
severally with Filtex, the full and punctual payment at
maturity to SIHI of all the indebtedness of Filtex.
o The essence of the comprehensive surety
agreement was that it shall be a continuing
surety until such time that the total outstanding
obligation of Filtex to SIHI had been fully
settled.
o In order to ensure the payment of the sight drafts
aforementioned, Filtex executed and issued to SIHI
several trust receipts covering the merchandise sold
o Because of Filtex's failure to pay its outstanding
obligation despite demand, SIHI filed a Complaint
praying that the petitioners be ordered to pay, jointly
and severally, the principal amount of ₱3,118,949.75,
plus interest and penalties, attorney's fees, exemplary
damages, costs of suit and other litigation expenses.
o Filtex: interposed special and affirmative
defenses, i.e., the provisions of the trust receipts, as
well as the comprehensive surety agreement, do not
reflect the true will and intention of the parties, full
payment of the obligation, and lack of cause of action
o Villanueva: interposed the same special and affirmative
defenses and added that the comprehensive surety
agreement is null and
o void and damages and attorney's fees are not legally
demandable.
o The petitioners, however, failed to specifically deny
under oath the genuineness and due execution of the
actionable documents upon which the Complaint was
based.
o RTC: Filtex and Villanueva jointly and severally liable
to SIHI.
o Petitoners Appeal
o Letters of credit, sight drafts, trust receipts and
comprehensive surety agreement upon which
the Complaint is based are inadmissible in
evidence supposedly because of non-payment of
 documentary stamp taxes as required by the
Internal Revenue Cod
o CA:  debunked the petitioners' contention that the
letters of credit, sight drafts, trust receipts and
comprehensive surety agreement are inadmissible in
evidence ruling that the petitioners had "in effect,
admitted the genuineness and due execution of said
documents because of their failure to have their answers
placed under oath, the complaint being based on
actionable documents in line with Section 7, Rule 8 of
the Rules of Court."
ISSUE/S && RATIO
WON petitioners admitted to the genuineness of the
actionable documents for their failure to deny under the
oath the genuineness- YES
o Petitoners: Appellate court should not have admitted in
evidence the letters of credit, sight drafts, trust receipts
and comprehensive surety agreement for lack of the
requisite documentary stamps thereon. They
hypothesized that their implied admission of the
genuineness and due execution of these documents for
failure to specifically deny the same under oath should
not be equated with an admission in evidence of the
documents and an admission of their obligation.
o Answer with Counterclaim and answer of Filtex and
Villanueva, respectively, did not contain any specific
denial under oath of the letters of credit, sight drafts,
trust receipts and comprehensive surety agreement upon
which SIHI's Complaint was based, thus giving rise to
the implied admission of the genuineness and due
execution of these documents.
o Under Sec. 8, Rule 8 of the Rules of Court, when an
action or defense is founded upon a written instrument,
copied in or attached to the corresponding pleading as
provided in the preceding section, the genuineness and
due execution of the instrument shall be deemed
admitted unless the adverse party, under oath,
specifically denies them, and sets forth what he claims
to be the facts.
o Admission of the genuineness and due execution of a
document means that the party whose signature it bears
admits that he voluntarily signed the document or it was
signed by another for him and with his authority; that at
the time it was signed it was in words and figures
exactly as set out in the pleading of the party relying
upon it; that the document was delivered; and that any
formalities required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are
waived by him.
o As correctly pointed out by SIHI, Filtex was the issuer
and acceptor of the trust receipts and sight drafts,
respectively, while the letters of credit were issued upon
its application. On the other hand, Villanueva signed
the comprehensive surety agreement. Thus, being
among the parties obliged to pay the documentary
stamp taxes, the petitioners are estopped from claiming
that the documents are inadmissible in evidence for
non-payment thereof.
o Interestingly, the petitioners questioned the
admissibility of these documents rather belatedly, at the
appeal stage even.
o The rule is well-settled that points of law, theories,
issues and arguments not adequately brought to the
attention of the trial court need not, and ordinarily will
 not, be considered by a reviewing court as they cannot
be raised for the first time on appeal because this would
be offensive to the basic rules of fair play, justice and
due process.
o Hence, the petitioners can no longer dispute the
admissibility of the letters of credit, sight drafts, trust
receipts and comprehensive surety agreement.
However, this does not preclude the petitioners from
impugning these documents by evidence of fraud,
mistake, compromise, payment, statute of limitations,
estoppel and want of consideration.
SY TIONG v SY CHIM
FACTS
o These consolidated petitions involving the same parties.
although related, dwell on different issues.
Criminal. G.R. No. 174168. Filed by Sps. Sy
Violation of the Corporation Code Inspection of
books AND Violation of the RPC on falsification and
perjury)
o Four criminal complaints were filed Spouses Sy against
Sy Tiong Shiou, et al before the City Prosecutor’s
Office in Manila
o Two of the complaints, were for alleged violation of
Section 74 in relation to Section 144 of the Corporation
Code.  Court of Appeals through a R65 petition for certiorari,
o Spouses Sy averred that they are stockholders
and directors of Sy Siy Ho & Sons, Inc. (the
corporation) who asked Sy Tiong Shiou, et al.,
officers of the corporation, to allow them to
inspect the books and records of the business on
three occasions to no avail. 
o In a letter, Sy Tiong Shiou, et al. denied the
request, citing civil and intra-corporate cases
pending in court
o In the two other complaints, Sy Tiong Shiou was
charged with falsification and perjury
o Sy Tiong Shiou executed under oath the 2003
General Information Sheet (GIS) wherein he
falsely stated that the shareholdings of the
Spouses Sy had decreased despite the fact that
they had not executed any conveyance of their
shares
o Sy Tiong Shiou, et al.: Issues involved in the civil case
for accounting and damages was a prejudicial question
to the criinal complaints (hence, this should be
suspended)
o Investigating Prosecutor: issued a resolution
recommending:
o The suspension of the criminal complaints for
violation of the Corporation Code
o The dismissal of the criminal complaints for
falsification and perjury against Sy Tiong Shiou
o This was approved by the Reviewing Prosecutor
o MR Denied. Pet. For Review before the DOJ, denied
the resolution. Denied MR
o The Spouses Sy elevated the DOJ's resolutions to the
imputing grave abuse of discretion on the part of the
DOJ
o CA: Granted Petition.
o Directed the City Prosecutor's Office to file the
appropriate informations against Sy Tiong
 Shiou, et al. of the Corporation Code and of the
RPC.  QUESTION TO THE CRIMINAL CASE
o Civil case for accounting and damages cannot
be deemed prejudicial to the maintenance or
prosecution of a criminal action for violation
of the Corporation Code since a finding in the
civil case that respondents mishandled or
misappropriated the funds would not be
determinative of their guilt or innocence in the
criminal complaint.  both pending and there exists in the former an issue
o Criminal complaints for falsification and/or
perjury should not have been dismissed on the
ground of prejudicial question because the
accounting case is unrelated and not necessarily
determinative of the success or failure of the
falsification or perjury charges
o Court ordered the consolidation of G.R. No. 179438
with G.R. No. 174168.
o Sy Tiong Shiou, et al.: findings of the DOJ in affirming,
modifying or reversing the recommendations of the
public prosecutor cannot be the subject
of certiorari or review of the Court of Appeals
because the DOJ is not a quasi-judicial body within
the purview of Section 1, Rule 65 of the Rules of Court
o Adherence to the Court of Appeals' ruling that
the accounting case is unrelated to, and not
necessarily determinative of the success of, the
criminal complaint for falsification and/or
perjury would unnecessarily indict petitioner Sy
Tiong Shiou for the said offenses he may not
have committed but only because of an outcome
unfavorable to him in the civil action.
o SC: THE CIVIL CASE IS NOT A PREJUDICIAL
o As correctly found by the Court of Appeals, the DOJ
gravely abused its discretion when it suspended the
hearing of the charges for violation of the Corporation
Code on the ground of prejudicial question and when it
dismissed the criminal complaints.
o A prejudicial question comes into play generally in a
situation where a civil action and a criminal action are
which must be preemptively resolved before the
criminal action may proceed since howsoever the issue
raised in the civil action is resolved would be
determinative juris et de jure of the guilt or innocence
of the accused in the criminal case.
o The reason behind the principle of prejudicial question
is to avoid two conflicting decisions.
o It has two essential elements: (a) the civil action
involves an issue similar or intimately related to the
issue raised in the criminal action; and (b) the resolution
of such issue determines whether or not the criminal
action may proceed.
o The civil action for accounting and damages, Civil Case
No. 03-106456 pending before the RTC Manila, Branch
46, seeks the issuance of an order compelling the
Spouses Sy to render a full, complete and true
accounting of all the amounts, proceeds and fund paid
to, received and earned by the corporation since 1993
and to restitute it such amounts, proceeds and funds
which the Spouses Sy have misappropriated
o The criminal cases, on the other hand, charge that the
Spouses Sy were illegally prevented from getting inside
company premises and from inspecting company
 records, and that Sy Tiong Shiou falsified the entries in
the GIS, specifically the Spouses Sy's shares in the
corporation.
o Surely, the civil case presents no prejudicial question to
the criminal cases since a finding that the Spouses Sy
mishandled the funds will have no effect on the
determination of guilt in the complaint for violation of
Section 74 in relation to Section 144 of the Corporation
Code
o The civil case concerns the validity of Sy Tiong Shiou's
refusal to allow inspection of the records, while in the
falsification and perjury cases, what is material is the
veracity of the entries made by Sy Tiong Shiou in the
sworn GIS
o Anent the issue of probable cause, the Court also finds
that there is enough probable cause to warrant the
institution of the criminal cases
o The Court agrees with the Court of Appeals' holding,
citing the case of Fabia v. Court of Appeals, that the
doctrine of primary jurisdiction no longer precludes the
simultaneous filing of the criminal case with the
corporate/civil case
o Moreover, the Court finds that the City of Manila is the
proper venue for the perjury charges, the GIS having
been subscribed and sworn to in the said place.  o
Criminal G. R. No. 179438.Filed by: Corporation against
Sps. Sy
(Violation of RPC on Robbery and Amended Complaint for
Accounting and Damages)
o Juanita Tan, treasurer of Sy Siy Ho & Sons, Inc. (the
corporation), submitted a letter o the corporation's
Board of Directors stating that the control, supervision
and administration of all corporate funds were exercised
by Spouses Sy, corporate president and assistant
treasurer, respectively. 
o Juanita Tan disclosed that Felicidad Chan Sy did
not make cash deposits to any of the
corporation's banks thus the total bank
remittances for the past years were less than
reflected in the corporate financial statements,
accounting books and records
o The children of the Spouses Sy allegedly stole from the
corporation cash, postdated checks and other important
documents.
o After the incident, the Spouses Sy allegedly transferred
residence and ceased reporting to the corporation.
o Thereupon, the corporation filed a criminal complaint
for robbery against the Spouses Sy before the City
Prosecutor's Office of Manila.
o Sy Tiong Shiou, corporate Vice President and General
Manager, called a special meeting 3 to fill up the
positions vacated by the Spouses Sy.
o Sy Tiong Shiou was subsequently elected as the new
president and his wife, Juanita Tan, the new Vice
President
Meanwhile, the corporation, through Romer S. Tan,
filed its Amended Complaint for Accounting and
Damages against the Sps. Sy before then RTC Manila
praying for a complete and true accounting of all the
amounts paid to, received and earned by the company
since 1993 and for the restitution of the said amount.
o Sps Sy: Sy Chim was a mere figurehead and Felicidad
Chan Sy merely performed clerical functions, as it was
Sy Tiong Shiou and his spouse, Juanita Tan, who have
 been authorized by the corporation's by-laws to
supervise, control and administer corporate funds, and
as such were the ones responsible for the unaccounted
funds
o Assailed the meetings called by Sy Tiong Shiou
on the grounds that the same were held without
notice to them and without their participation, in
violation of the by-laws. The Spouses Sy also
pursued their counter-claim for moral and
exemplary damages and attorney's fees.
o Spouses Sy filed their Motion for Leave to File
Third-Party Complaint, praying that their
attached Third Party Complaint be allowed and
admitted against Sy Tiong Shiou and his
spouse.  the third-party complaint without prejudice to
o Spouses Sy accused Sy Tiong Shiou and Juanita
Tan as directly liable for the corporation's claim
for misappropriating corporate funds
o RTC: granted the motion for leave to file the third-party
complaint, and forthwith directed the issuance of
summons against Sy Tiong Shiou and Juanita Tan
o Counsel allegedly discovered that Sy Tiong Shiou and
Juanita Tan were not furnished with the copies of
several pleadings, as well as a court order, which
resulted in their having been declared in default for
failure to file their answer to the third-party complaint
o Thus, they opted not to file a motion for
reconsideration anymore and instead filed a
petition for certiorari before the Court of
Appeals.
o CA: Set aside RTC order admitting the 3rd party
complaint
o The appellate court declared that a third-party
complaint is not allowed under the Interim
Rules of Procedure Governing Intra-Corporate
Controversies Under R.A. No. 8799  it not being
included in
o the exclusive enumeration of allowed pleadings under
Section 2, Rule 2 thereof. 
o Respondent judge committed a manifest error
amounting to lack of jurisdiction in admitting
the third-party complaint and in summarily
declaring Sy Tiong Shiou and Juanita Tan in
default for failure to file their answer within the
purported reglementary period
o The trial court was further ordered to dismiss
any action that the corporation may separately
file against Sy Tiong Shiou and Juanita Tan.
ISSUE/S && RATIO
WON the CA erred when it ruled that a 3 rd party complaint
is NOT allowed- YES
THRID PARTY COMPLAINT SHOULD BE ALLOWED
o The conflicting provisions of the Interim Rules of
Procedure for Inter-Corporate Controversie
o Rule 1, Sec. 8. Prohibited pleadings
o Rule 2, Sec.2. Pleadings allowed
o There is a conflict, for while a third-party complaint is
not included in the allowed pleadings, neither is it
among the prohibited ones.
o evertheless, this conflict may be resolved by following
the well-entrenched rule in statutory construction, that
every part of the statute must be interpreted with
 reference to the context, i.e., that every part of the
statute must be considered together with the other parts,
and kept subservient to the general intent of the whole
enactment.
o Statutes, including rules, should be construed in the
light of the object to be achieved and the evil or
mischief to be suppressed and they should be given
such construction as will advance the object, suppress
the mischief and secure the benefits intended.  proceedings governed by the Interim Rules, and the
o Otherwise stated, the spirit, rather than the letter of a
law determines its construction; hence, a statute, as in
the rules in this case, must be read according to its spirit
and intent.
o This spirit and intent can be gleaned from Sec. 3, Rule 1
of the Interim Rules, which reads:
o Sec. 3. Construction. These Rules shall be
liberally construed in order to promote their
objective of securing a just, summary, speedy
and inexpensive determination of every action
or proceeding
o Now, a third-party complaint is a claim that a defending
party may, with leave of court, file against a person not
a party to the action, called the third-party defendant,
for contribution, indemnity, subrogation or any other
relief, in respect of his opponent's claim.  defendant, although the third-party defendant's liability
o It is actually a complaint independent of, and separate
and distinct from the plaintiff's complaint.
o In fact, were it not for Rule 6, Section 11 of the Rules
of Court, such third-party complaint would have to be
filed independently and separately from the original
complaint by the defendant against the third-party
defendant.
o Jurisprudence is consistent in declaring that the purpose
of a third-party complaint is to avoid circuitry of action
and unnecessary proliferation of law suits and of
disposing expeditiously in one litigation all the matters
arising from one particular set of facts.
o It thus appears that the summary nature of the
allowance of the filing of third-party complaints is
premised on one objective the expeditious disposition
of cases. 
o The logic and justness of this conclusion are rendered
beyond question when it is considered that Sy Tiong
Shiou and Juanita Tan are not complete strangers to the
litigation as in fact they are the moving spirit behind the
filing of the principal complaint for accounting and
damages against the Spouses Sy.ςηαñr
o The Court also rules that the third-party complaint of
the Spouses Sy should be admitted.
o A prerequisite to the exercise of such right is that some
substantive basis for a third-party claim be found to
exist, whether the basis be one of indemnity,
subrogation, contribution or other substantive right. The
bringing of a third-party defendant is proper if he would
be liable to the plaintiff or to the defendant or both for
all or part of the plaintiff's claim against the original
arises out of another transaction.
o The defendant may implead another as third-party
defendant: (a) on an allegation of liability of the latter
to the defendant for contribution, indemnity,
subrogation or any other relief; (b) on the ground of
 direct liability of the third-party defendant to the
plaintiff; or (c) the liability of the third-party defendant
to both the plaintiff and the defendant
o A third-party complaint must allege facts which prima
facieshow that the defendant is entitled to contribution,
indemnity, subrogation or other relief from the third-
party defendant.
o The complaint alleges that the Spouses Sy, as officers
of the corporation, have acted illegally in raiding its
corporate funds, hence they are duty bound to render a
full, complete and true accounting of all the amounts,
proceeds and funds paid to, received and earned by the
corporation since 1993 and to restitute to the
corporation all such amounts, proceeds, and funds
which they took and misappropriated for their own use
and benefit, to the damage and prejudice of the plaintiff
and its stockholders.
o On the other hand, in the third-party complaint, the
Spouses Sy claim that it is Sy Tiong Shiou and Juanita
Tan who had full and complete control of the day-to
day operations and complete control and custody of the
funds of the corporation, and hence they are the ones
liable for any shortfall or unaccounted difference of the
corporation's cash account.
o Thus, Sy Tiong Shiou and Juanita Tan should render a
full, complete and true accounting of all the amounts,
proceeds, funds paid to, received and earned by the
corporation since 1993, including the amount attributed
to the Spouses Sy in the complaint for accounting and
damages.  ₱217,235.36 bill, ECI demanded payment from her.
o The allegations in the third-party complaint impute
direct liability on the part of Sy Tiong Shiou and
Juanita Tan to the corporation for the very same claims
which the corporation interposed against the Spouses
Sy. It is clear therefore that the Spouses Sy's third-party
complaint is in respect of the plaintiff corporation's
claims, and thus the allowance of the third-party
complaint is warranted
EQUITABLE v CAPISTRANO
FACTS
o Petitioner Equitable Cardnetwork, Inc. (ECI) alleged in
its complaint that in respondent Josefa B. Capistrano
(Mrs. Capistrano) applied for membership at the Manila
Yacht Club (MYC)
o Since the MYC and ECI had a credit card sponsorship
agreement in which the Club would solicit for ECI
credit card enrollment among its members and
dependents, Mrs. Capistrano allegedly applied for
and was granted a Visa Credit Card by ECI.
o ECI further alleged that Mrs. Capistrano authorized her
daughter, Valentina C. Redulla (Mrs. Redulla), to claim
from ECI her credit card and ATM application form
o Mrs. Redulla signed the acknowledgment
receipt on behalf of her mother, Mrs.
Capistrano.
o After Mrs. Capistrano got hold of the card, she
supposedly started using it.
o Mrs. Redulla personally issued a ₱45,000.00 check as
partial payment of Mrs. Capistrano’s account with ECI.
But Mrs. Redulla’s check bounced upon deposit.
o Because Mrs. Capistrano was unable to settle her
 
o But she refused to pay, prompting ECI to file on
February 30, 1998 a collection suit against her before
RTC Cebu
o Mrs. Capistrano Answer: denied ever applying for
MYC membership and ECI credit card
o That Mrs. Redulla was not her daughter; and
that she never authorized her or anyone to claim
a credit card for her
o Assuming she applied for such a card, she never
used it.
o Mrs. Redulla posed as Mrs. Capistrano and
fooled ECI into issuing the card to her.
o Mrs. Capistrano asked the court to hold ECI
liable to her for moral and exemplary damages,
attorney’s fees, and litigation expenses.
o RTC: having failed to deny under oath the genuineness
and due execution of ECI’s actionable documents that
were attached to the complaint, Mrs. Capistrano
impliedly admitted the genuineness and due execution
of those documents.
o In effect she admitted:
o applying for membership at the MYC
o accomplishing the MYC membership information sheet
which contained a request for an ECI Visa card
o holding herself liable for all obligations incurred in the
use of such card
o authorizing Mrs. Redulla to receive the Visa card issued
in her name;
o applying for an ATM Card with ECI;  the actionable documents attached to the complaint - YES
o using the credit card in buying merchandise worth
₱217,235.36 as indicated in the sales slips.
o When an action is founded upon written
documents, their genuineness and due execution
shall be deemed admitted unless the defendant
specifically denies them under oath and states
what he claims to be the facts.
o A mere statement that the documents were
procured by fraudulent representation does not
raise any issue as to their genuineness and due
execution
o The RTC reasoned that she did not, in her
verification, deny signing those documents or
state that they were false or fabricat
o Mrs. Capistrano failed to present strong and
convincing evidence that her signatures on the
document had been forged
o CA: Reversed the trial court’s decision and dismissed
ECI’s complaint.
o Although Mrs. Capistrano’s answer was
somewhat infirm, still she raised the issue of the
genuineness and due execution of ECI’s
documents during trial by presenting evidence
that she never signed any of them.
o Since ECI failed to make a timely objection to
its admission, such evidence cured the
vagueness in her answer. Further, the CA ruled
that Mrs. Capistrano sufficiently proved by
evidence that her signatures had been forged.
ISSUE/S && RATIO
WON Mrs. Capistrano was able to make a specific denial of
The denial on the ground of “without sufficient knowledge”
made by Mrs. Caspistrano were insufficient
BUT STILL EFFECTIVELY MADE. Defect was cured by
her quick assertion in her special and affirmative defenses
when she denied transactions with ECI.

o CA was CORRECT in ordering dismissal.
o There was no waiver by ECI by its failure to timely
object to the evidence by Capistrano.
o An answer to the complaint may raise a negative
defense which consists in defendant’s specific denial of
the material fact that plaintiff alleges in his complaint,
which fact is essential to the latter’s cause of action
o Specific denial has three modes. Thus:
o The defendant must specify each material allegation
of fact the truth of which he does not admit and
whenever practicable set forth the substance of the
matters on which he will rely to support his denial;
o When the defendant wants to deny only a part or a
qualification of an averment in the complaint, he must
specify so much of the averment as is true and
material and deny the remainder; and
o When the defendant is without knowledge and
information sufficient to form a belief as to the truth of
a material averment made in the complaint, he shall so
state and this shall have the effect of a denial.
o But the rule that applies when the defendant wants to
contest the documents attached to the claimant’s
complaint which are essential to his cause of action is
found in Section 8, Rule 8 of the Rules of Court, which
provides
o R8S8: xxx execution of the instrument shall be deemed
admitted unless the adverse party, under oath,
specifically denies them, and sets forth what he claims
to be the facts; but the requirement of an oath does not
apply when the adverse party does not appear to be a
party to the instrument or when compliance with an
order for an inspection of the original instrument is
refused.
o ECI’s allegations: Mrs. Capistrano applied through
Mrs. Redulla for a credit card and that the former used
it to purchase goods on credit yet Mrs. Capistrano
refused to pay ECI for them.
o Mrs. Capistrano: Denied these allegations "for lack of
knowledge" as to their truth.
o This mode of denial is by itself obviously ineffectual
since a person must surely know if he applied for a
credit card or not, like a person must know if he is
married or not.
o A person’s denial for lack of knowledge of things
that by their nature he ought to know is not an
acceptable denial.
o In any event, the CA ruled that, since ECI did not object
on time to Mrs. Capistrano’s evidence that her
signatures on the subject documents were forged, such
omission cured her defective denial of their genuineness
and due execution. The CA’s ruling on this point is
quite incorrect
o True, issues not raised by the pleadings may be tried
with the implied consent of the parties as when one of
them fails to object to the evidence adduced by the
other concerning such unimpleaded issues.
o But the CA fails to reckon with the rule that a party’s
admissions in the course of the proceedings, like an
admission in the answer of the genuineness and true
execution of the plaintiff’s actionable documents, can
 only be contradicted by showing that defendant made
such admission through palpable mistake.
o Here, Mrs. Capistrano never claimed palpable
mistake in the answer she filed.
o It is of no moment that plaintiff ECI failed to object to
Mrs. Capistrano’s evidence at the trial that the subject
documents were forgeries
o Notwithstanding the above, the Court holds that the CA
correctly ordered the dismissal of ECI’s action since,
contrary to the RTC’s finding, Mrs. Capistrano
effectively denied the genuineness and due execution
of ECI’s actionable documents.  suffering from senility at the time in question
o True, Mrs. Capistrano denied ECI’s actionable
documents merely "for lack of knowledge" which
denial, as pointed out above, is inadequate since by
their nature she ought to know the truth of the
allegations regarding those documents.
o But this inadequacy was cured by her quick
assertion that she was also denying the allegations
regarding those actionable documents "for the
reasons as stated in her special and affirmative
defenses."
o In the "Special and Affirmative Defenses" section of
her answer, Mrs. Capistrano in fact denied ECI’s
documented allegations that she applied for a credit
card, was given one, and used it.  o This was based on a loan obtained by respondent from
o Neither the RTC nor the CA can ignore Mrs.
Capistrano’s above additional reasons denying ECI’s
allegations regarding its actionable documents. Such
reasons form part of her answer.
o Parenthetically, it seems that, when Mrs. Capistrano
denied the transactions with ECI "for lack of
knowledge," it was her way of saying that such
transactions took place without her knowing. 
o And, since Mrs. Capistrano in fact verified her claim
that she had no part in those transactions, she in effect
denied under oath the genuineness and due execution of
the documents supporting them. For this reason, she is
not barred from introducing evidence that those
documents were forged.
o Evidence for the defense shows that it was not likely for
Mrs. Capistrano to have applied for a credit card since
she was already 81 years old, weak, bedridden, and
o What is more, she had been staying in Cagayan
de Oro under the care of his son Mario; whereas
she made the alleged cash advances and
purchases using the credit card in different malls
in Cebu City, Bohol, and Muntinlupa City
PERMANENT SAVINGS v VALARDE
FACTS
o In a complaint for sum of money filed before the RTC
Manila petitioner Permanent Savings and Loan Bank
sought to recover from respondent Mariano Velarde,
the sum of ₱1,000,000.00 plus accrued interests and
penalties
petitioner bank, evidenced by the following: (1)
promissory note (2) loan release sheet and (3) loan
disclosure statement
o Petitioner bank, represented by its Deputy Liquidator
after it was placed under liquidation, sent a letter of
demand to respondent demanding full payment of the
loan.
 o Despite receipt of said demand letter,respondent failed
to settle his account.
o Another letter of demand was sent,and this time,
respondent’s counsel replied, stating that the obligation
"is not actually existing but covered by
contemporaneous or subsequent agreement between the
parties …
o In his Answer, respondent disclaims any liability on the
instrument
o Respondent filed a Demurer to Evidence
o RTC: Granted demurer and dismissed the compliant
o CA: Affirmed the dismissal of the complaint
o Petitioner failed to present any evidence to
prove the existence of respondent’s alleged loan
obligations, considering that respondent denied
petitioner’s allegations in its complaint.
ISSUE/S && RATIO
WON the CA erred in holding that petitioner failed to
establish the genuineness, due execution and authenticity of
the subject loan documents- YES.
There was NO SPECIFIC DENIAL in respondent’s
answer.
o The pertinent rule on actionable documents is found in
Rule 8, Section 7 of the Rules of Court which provides
that when the cause of action is anchored on a
document, the genuineness or due execution of the
instrument shall be deemed impliedly admitted unless
the defendant, under oath, specifically denies them, and
sets forth what he claims to be the facts.
o It is not true, as the Bank claims, that there is no need to
prove the loan and its supporting papers as Velarde has
already admitted these. Velarde had in fact denied these
in his responsive pleading. And consistent with his
denial, he objected to the presentation of Marquez as a
witness to identify the Exhibits of the Bank, and
objected to their admission when these were offered as
evidence.
o Though these were grudgingly admitted anyway,
still admissibility of evidence should not be equated
with weight of evidence
o A reading of respondent’s Answer, however, shows that
respondent did not specifically deny that he signed the
loan documents.
o What he merely stated in his Answer was that the
signature appearing at the back of the promissory note
seems to be his. 
o Respondent also denied any liability on the promissory
note as he allegedly did not receive the amount stated
therein, and the loan documents do not express the true
intention of the parties
o Respondent reiterated these allegations in his
"denial under oath," stating that "the promissory
note sued upon, assuming that it exists and bears
the genuine signature of herein defendant, the
same does not bind him and that it did not
truly express the real intention of the parties
as stated in the defenses
o Respondent’s denials do not constitute an effective
specific denial as contemplated by law.
o Songco vs. Sellner: defendant must declare under oath
that he did not sign the document or that it is otherwise
false or fabricated.
o In fact, respondent’s allegations amount to an implied
admission of the due execution and genuineness of the
promissory note.
o The admission of the genuineness and due execution of
a document means that the party whose signature it
bears admits that he voluntarily signed the document or
it was signed by another for him and with his authority;
that at the time it was signed it was in words and figures
exactly as set out in the pleading of the party relying
upon it; that the document was delivered; and that any
formalities required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are
waived by him.
o Clearly, both the trial court and the Court of Appeals
erred in concluding that respondent specifically denied
petitioner’s allegations regarding the loan documents,
as respondent’s Answer shows that he failed to
specifically deny under oath the genuineness and
due execution of the promissory note and its
concomitant documents.
o Therefore, respondent is deemed to have admitted the
loan documents and acknowledged his obligation with
petitioner; and with respondent’s implied admission, it
was not necessary for petitioner to present further
evidence to establish the due execution and authenticity
of the loan documents sued upon.
o Respondent claims that he did not receive the net
proceeds in the amount of ₱988,333.00 as stated in the
Loan Release Sheet dated September 23, 1983.
o The document, however, bears respondent’s signature
as borrower. Res ipsa loquitur
o Respondent has already impliedly admitted the
genuineness and due execution of the loan documents.
No further proof is necessary to show that he undertook
the obligation with petitioner. "A person cannot accept
and reject the same instrument."
ASIAN CONSTRUCTION v MENDOZA
FACTS
o Respondent Lourdes K. Mendoza, sole proprietor of
Highett Steel Fabricators (Highett), filed before RTC
Caloocan a Complaint for a sum of money against
petitioner Asian Construction and Development
Corporation
o Respondent alleged that petitioner purchased from
Highett various fabricated steel materials and supplies
amounting to ₱1,206,177.00
o Despite demand, petitioner failed and/or refused to pay;
and that due to the failure and/or refusal of petitioner to
pay the said amount, respondent was compelled to
engage the services of counsel.
o Petitioner moved for a bill of particulars on the ground
that no copies of the purchase orders and invoices were
attached to the complaint to enable petitioner to prepare
a responsive pleading to the complaint.
o RTC: Denied
o Accordingly, petitioner filed its Answer with
Counterclaim denying liability for the claims and
interposing the defense of lack of cause of action
o RTC: ruled in favor of Respondent Highett.
Ordering Petitioner Asian to pay
o CA: Affirmed with modification the Decision of the
RTC
ISSUE/S && RATIO
WON the charge invoices are actionable documents- NO

Respondent Highett wins. Even if the documents are not
actionable documents, preponderance of evidence shows
that supplies and materials were delivered to petitioner
Corporation
o Petitioner Asian Construction: charge or sales invoice is
not an actionable document; thus, petitioner’s failure to
deny under oath its genuineness and due execution does
not constitute an admission thereof.
o Respondent was not able to prove her claim as
the invoices offered as evidence were not
properly authenticated by her witnesses.
o Respondent Highett: Charge invoices are actionable
documents
o The charge invoices are not actionable documents
o SEC. 7 R8. Action or defense based on document. –
Whenever an action or defense is based upon a written
instrument or document, the substance of such
instrument or document shall be set forth in the
pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may
with like effect be set forth in the pleading.
o A document is actionable when an action or defense is
grounded upon such written instrument or document
o In the instant case, the Charge Invoices are not
actionable documents per se as these "only provide
details on the alleged transactions."
o These documents need not be attached to or stated in
the complaint as these are evidentiary in nature
o In fact, respondent’s cause of action is not based on
these documents but on the contract of sale between the
parties.
o But although the Charge Invoices are not actionable
documents, we find that these, along with the Purchase
Orders are sufficient to prove that petitioner indeed
ordered supplies and materials from Highett and that
these were delivered to petitioner.
o In this case, except for a bare denial, no other evidence
was presented by petitioner to refute respondent’s
claim. Thus, we agree with the CA that the evidence
preponderates in favor of respondent.
PTA OF ST. MATHEWS v METRO BANK
FACTS
o Spouses Ilagan applied for and were granted a loan by
the Metropolitan Bank and Trust
Co₱4,790,000.00secured by a Real Estate Mortgage
over the parcels of land
o Upon default, an extrajudicial foreclosure was
conducted with Metropolitan Bank and Trust Co being
the highest bidder and for which a Certificate of Sale
was issued in its favor.
o During the period of redemption, the respondent Bank
filed an Ex-Parte Petition for Issuance of a Writ of
Possession by posting the required bond which was
subsequently approved
o St. Mathew Christian Academy of Tarlac, Inc. filed a
Petition for Injunction with Prayer for Restraining
Order  against the respondent Bank and the Provincial
Sheriff of Tarlac.
o RTC: Metropolitan Bank is now entitled to a writ of
possession, it being mandatory even during the period
of redemption.
o St. Mathew Christian: filed the petition for injunction
on the ground that it cannot be ejected being a third
party.
o St. Mathew Christian Academy is practically
owned by the mortgagors, spouses Denivin and
Josefina Ilagan. 
o St. Mathew Christian Academy is practically
owned by the mortgagors, spouses Denivin and
Josefina Ilagan. Firstly, the lease to St. Mathew
by the Ilagans, as lessor, was for a period of one
year from the execution  o
o Secondly, the lease was not registered and
annotated at the back of the title, and therefore,
not binding on third persons
o Thirdly, the spouses are the owners or
practically the owners of St. Mathew. Even if it
has a separate personality, nevertheless,
"piercing the veil of corporate entity"  o
o Pending resolution of the motion for reconsideration of
the said Joint Decision, herein petitioners Parents-
Teachers Association (PTA) who are teachers and
students of SMCA, filed a Motion for Leave to file
Petition in Intervention
o Trial court reversed its earlier Order by ruling that
petitioners’ intervention would have no bearing on the
issuance and implementation of the writ of possession.  real property or any part thereof is situated, in the case
o Thus, it directed that the writ be implemented by
placing respondent Metropolitan Bank and Trust
Company (MBTC) in physical possession of the
property
o Petitioners filed a Patition for Certiorari and Prohibition
o CA: Dismissed
o Considering that in this case the writ of
possession had already been issued petitioners’
remedy was to file a petition that the sale be set
aside and the writ of possession cancelled.
Instead, petitioners filed the instant Petition
for Certiorari.
ISSUE/S && RATIO
WON petitioners are THIRD PARTIES against whom no
writ of possession may be issued against- NO
Petitioners are not "Third Parties" against whom the
writ of possession cannot be issued and implemented.
o In this case, we find that petitioners’ right over the
foreclosed property is not adverse to that of the
judgment debtor or mortgagor. As such, they cannot
seek the quashal or prevent the implementation of the
writ of possession
Section 7 of Act No. 3135 explicitly authorizes the
purchaser in a foreclosure sale to apply for a writ of
possession during the redemption period by filing an ex
parte motion under oath for that purpose "in the
registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of
property registered under the Mortgage Law" with the
Regional Trial Court of the province or place where the
of mortgages duly registered with the Registry of
Deeds.
o Upon filing of such motion and the approval of the
corresponding bond, the law also directs in express
 terms the said court to issue the order for a writ of
possession.
o Exception: Barican v IAC obligation of a court to issue
an ex parte writ of possession in favor of the purchaser
in an extrajudicial foreclosure sale ceases to be
ministerial once it appears that there is a third party in
possession of the property who is claiming a right
adverse to that of the debtor/mortgagor.
o Ordinarily, a purchaser of property in an extrajudicial
foreclosure sale is entitled to possession of the property.
Thus, whenever the purchaser prays for a writ of
possession, the trial court has to issue it as a matter of
course.
o However, the obligation of the trial court to issue a writ
of possession ceases to be ministerial once it appears
that there is a third party in possession of the property
claiming a right adverse to that of the debtor/mortgagor.
o Where such third party exists, the trial court should
conduct a hearing to determine the nature of his adverse
possession
o In this case, we find that petitioners cannot be
considered as third parties because they are not
claiming a right adverse to the judgment debtor.
o Petitioner-teachers and students did not claim
ownership of the properties, but merely averred actual
"physical possession of the subject school premises"
o As such, it would be specious to conclude that the
teachers and students hold the subject premises
independent of or adverse to SMCA
o In fact, their interest over the school premises is
necessarily inferior to that of the school. Besides, their
contracts are with the school and do not attach to the
school premises. Moreover, the foreclosure of the
current school premises does not prevent the SMCA
from continuing its operations elsewhere.
o At this point, it is relevant to note that in the Joint
Decision dated August 16, 2005, the trial court found
that SMCA was not a third party and was therefore
bound by the said writ of possession
o MBTC thus correctly argued that petitioners did not
have superior rights to that of SMCA over the subject
property because their supposed possession of the same
emanated only from the latte
o Since petitioners’ possession of the subject school
premises stemmed from their employment or
enrollment contracts with the school, as the case may
be, necessarily, their right to possess the subject school
premises cannot be adverse to that of the school and of
its owners.
o As such, the petitioners cannot be deemed "third
parties" as contemplated in Act No. 3135, as amended.
WON the lack of authority to sign the certificate of Non
Forum Shopping attached to the Petition for Issuance of
Writ of Possession should be considered as not being filed
at all- NO
Certificate of Non Forum Shopping mandatory only for
INITIATORY PLEADINGS.
o The lack of authority to sign the certificate of non-
forum shopping attached to the Petition for Issuance of
Writ of Possession was an insignificant lapse.
o Petitioners: lack of authority to sign the certificate on
non-forum shopping attached to the Petition for the
Issuance of the Writ of Possession rendered the same
worthless and should be deemed as non-existent
o MBTC: application for a writ of possession is a mere
incident in the registration proceeding which is in
substance merely a motion, and therefore does not
require such a certification.
o It bears stressing that a certification on non-forum
shopping is required only in a complaint or a petition
which is an initiatory pleading.
o In this case, the subject petition for the issuance of a
writ of possession filed by private respondent is not an
initiatory pleading.  adjustment upon every renewal
o Although private respondent denominated its pleading
as a petition, it is more properly a motion.
o What distinguishes a motion from a petition or other
pleading is not its form or the title given by the party
executing it, but its purpose.
o The purpose of a motion is not to initiate litigation, but
to bring up a matter arising in the progress of the case
where the motion is filed
o It is not necessary to initiate an original action in order
for the purchaser at an extrajudicial foreclosure of real
property to acquire possession.
o Even if the application for the writ of possession was
denominated as a "petition", it was in substance merely
a motion.
o Indeed, any insignificant lapse in the certification on
non-forum shopping filed by the MBTC did not render
the writ irregular. After all, no verification and
certification on non-forum shopping need be attached to
the motion.
o Hence, it is immaterial that the certification on non-
forum shopping in the MBTC’s petition was signed by
its branch head. Such inconsequential oversight did not
render the said petition defective in form.
FUJI TELEVISION v ESPIRITU
FACTS
o Arlene S. Espiritu ("Arlene") was engaged by Fuji
Television Network, Inc. ("Fuji") asa news
correspondent/produce
o Arlene’s employment contract initially provided
for a term of one (1) year but was successively
renewed on a yearly basis with salary
o Sometime in January 2009, Arlenewas diagnosed with
lung cancer
o She informed Fuji about her condition. In turn, the
Chief of News Agency of Fuji, Yoshiki Aoki, informed
Arlene "that the company will have a problem renewing
her contract
o Arlene and Fuji signed a non-renewal contract where it
was stipulated that her contract would no longer be
renewed after its expiration
o In consideration of the non-renewal contract, Arlene
"acknowledged receipt of the total amount of
US$18,050.00 representing her monthly salary from
March 2009 to May 2009
o However, Arlene affixed her signature on the
nonrenewal contract with the initials "U.P." for "under
protest."
o The day after Arlene signed the non-renewal contract,
she filed a complaint for illegal dismissal with NLRC
o Alleged that she was forced to sign the
nonrenewal contract when Fuji came to know of
her illness and that Fuji withheld her salaries
and other benefits when she refused to sign
 o LA: Dismissed the complaint, applying the 4 fold test,
Arlene was not a regular employee but an independent
contractor
o NLRC: Reversed LA.
o Arlene was a regular employee with respect to
the activities for which she was employed since
she continuously rendered services that were
deemednecessary and desirable to Fuji’s
business
o Petition for Revoew filed by Fuji
o Fuji: Arlene was hired as a stringer, and it informed her
that she would remain one.
o She was hired as an independent contractor and
it had no control over her work.
o CA:  Arlene was a regular employee because she was
engaged to perform work that was necessary or
desirable in the business of Fuji
o Arlene was illegally dismissed because Fuji
failed to comply with the requirements of
substantive and procedural due process
necessary for her dismissal since she was a
regular employee.
o Fuji filed Petition for review on certiorari under Rule 45
was filed
o Arlene filed a manifestation: stating that this court may
not take jurisdiction over the case since Fuji failed to
authorize Corazon E. Acerden to sign the verification.
(office manager and resident interpreter)
ISSUE/S && RATIO
WON petition for review should be dismissed as Corazon
E. Acerden, the signatory of the verification and
certification of non forum shopping of the petition, had no
authority to sign the verification and certification on behalf
of Fuji- NO. THERE WAS SUBSTANRTIAL
COMPLAINCE
o Fuji: Corazon was authorized to sign the verification
and certification of non-forum shopping because Mr.
Shuji Yano was empowered under the secretary’s
certificate to delegate his authority to sign the
necessary pleadings, including the verification and
certification against forum shopping
o Arlene: the authority given to Mr. Shuji Yano and Mr.
Jin Eto in the secretary’s certificate is only for the
petition for certiorari before the Court of Appeals
o Fuji did not attach any board resolution
authorizing Corazon or any other person to file a
petition for review on certiorari with this court.
o Shuji Yano and Jin Eto could not re-delegate the
power that was delegated to them
o The special power of attorney executed by Shuji
Yano in favor of Corazon indicated that she was
empowered to sign on behalf of Shuji Yano, and
not on behalf of Fuji
o Section 4(e) of Rule 45 requires that petitions for
review should "contain a sworn certification against
forum shopping as provided in the last paragraph of
section 2, Rule 42."
o Section 5 of the same rule provides that failure to
comply with any requirement in Section 4 is sufficient
ground to dismiss the petition
o Effect of non compliance. Uy v Landbank: The
requirement regarding verification of a pleading is
formal, not jurisdictional. Such requirement is simply a
condition affecting the form of pleading, the non-
 compliance of which does not necessarily render the
pleading fatally defective. Verification is simply
intended to secure an assurance that the allegations in
the pleading are true and correct and not the product of
the imagination or a matter of speculation, and that the
pleading is filed in good faith. The court may order the
correction of the pleading if the verification is lacking
or act on the pleading although it is not verified, if the
attending circumstances are such that strict compliance
with the rules may be dispensed with in order that the
ends of justice may thereby be served.
o On the other hand, the lack of certification against
forum shopping is generally not curable by the
submission thereof after the filing of the petition
o Section 5, Rule 45 of the 1997 Rules of Civil Procedure
provides that the failure of the petitioner to submit the
required documents that should accompany the petition,
including the certification against forum shopping, shall
be sufficient ground for the dismissal thereof.  petition have been made in good faith or are true and
o The same rule applies to certifications against forum
shopping signed by a person on behalf of a corporation
which are unaccompanied by proof that said signatory
is authorized to file a petition on behalf of the
corporation.
o Although the general rule is that failure to attach a
verification and certification against forum shopping is
a ground for dismissal, there are cases where this court
allowed substantial compliance.
o GUIDELINES: respecting non-compliance with the
requirement on, or submission of defective, verification
and certification against forum shopping:
o A distinction must be made between non-compliance
with the requirement on or submission of defective
verification, and noncompliance with the requirement
on or submission of defective certification against
forum shopping.
o As to verification, non-compliance therewith or a defect
therein does not necessarily render the pleading fatally
defective. The court may order its submission or
correction or act on the pleading if the attending
circumstances are such that strict compliance with the
Rule may be dispensed with in order that the ends of
justice may be served thereby.
o Verification is deemed substantially complied with
when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs
the verification, and when matters alleged in the
correct.
o As to certification against forum shopping, non-
compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need
to relax the Rule on the ground of "substantial
compliance" or presence of "special circumstances or
compelling reasons."
o The certification against forum shopping must be
signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as
parties to the case. Under reasonable or justifiable
 circumstances, however, as when all the plaintiffs or
petitioners share a common interest and invoke a
common cause of action or defense, the signature of
only one of them inthe certification against forum
shopping substantially complies with the Rule.
o Finally, the certification against forum shopping must
be executed by the party-pleader, not by his counsel. If,
however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a
Special Power of Attorney designating his counsel of
record to sign on his behalf.
o Being a corporation, Fuji exercises its power to sue and
be sued through its board of directors or duly authorized
officers and agents. Thus, the physical act of signing the
verification and certification against forum shopping
can only be done by natural persons duly authorized
either by the corporate by-laws or a board resolution
o In its petition for review on certiorari, Fuji attached
Hideaki Ota’s secretary’s certificate, authorizing Shuji
Yano and Jin Eto to represent and sign for and on
behalf of Fuj
o Likewise attached to the petition is the special power of
attorney executed by Shuji Yano, authorizing Corazon
to sign on his behalf.
o The verification and certification against forum
shopping was signed by Corazon
o The secretary’s certificate does not state that Shuji
Yano is prohibited from appointing a substitute. In fact,
he is empowered to do acts that will aid in the
resolution of this case.
o This court has recognized that there are instances when
officials or employees of a corporation can sign the
verification and certification against forum shopping
without a board resolution.
o In sum, we have held that the following officials or
employees of the company can sign the verification and
certification without need of a board resolution: (1) the
Chairperson of the Board of Directors, (2) the President
of a corporation, (3) the General Manager or Acting
General Manager, (4) Personnel Officer, and (5) an
Employment Specialist in a labor case.
o While the above cases do not provide a complete listing
of authorized signatories to the verification and
certification required by the rules, the determination of
the sufficiency of the authority was done on a case to
case basis.
o The rationale applied in the foregoing cases is to justify
the authority of corporate officers or representatives of
the corporation to sign the verification or certificate
against forum shopping, being ‘in a position to verify
the truthfulness and correctness of the allegations in the
petition.
o Corazon’s affidavit states that she is the "office
manager and resident interpreter of the Manila Bureau
of Fuji Television Network, Inc." and that she has
"held the position for the last twenty-three years
o As the office manager for 23 years, Corazon can be
considered as having knowledge of all matters in Fuji’s
Manila Bureau Office and is in a position to verify "the
truthfulness and the correctness of the allegations in the
Petition."
o Thus, Fuji substantially complied with the requirements
of verification and certification against forum shopping.

PRORIETY OF PETITIONS FOR REVIEW IN LABOR
CASES
o Article 223 of the Labor Code does not provide any
mode of appeal for decisions of the National Labor
Relations Commission.
o However, the finality of the National Labor Relations
Commission’s decisions does not mean that there is no
more recourse for the parties.
o In St. Martin Funeral Home v. National Labor Relations
Commission, this court cited several cases and rejected
the notion that this court had no jurisdiction to review
decisions of the National Labor Relations Commission.
o This court then clarified that judicial review of National
Labor Relations Commission decisions shall be by way
of a petition for certiorari under Rule 65 w the CA,
citing hierarchy of courts
o From the Court of Appeals, an aggrieved party may file
a petition for review on certiorari under Rule 45.
o A petition for certiorari under Rule 65 is an original
action where the issue is limited to grave abuse of
discretion. As an original action, it cannot be
considered as a continuation of the proceedings of the
labor tribunals
o A petition for review on certiorari under Rule 45 is a
mode of appeal where the issue is limited to questions
of law.  evidence and the governing law, rules and
o In labor cases, a Rule 45 petition is limited to reviewing
whether the Court of Appeals correctly determined the
presence or absence of grave abuse of discretion and
deciding other jurisdictional errors of the National
Labor Relations Commission.
o When a decision of the Court of Appeals under a Rule
65 petition is brought to this court by way of a petition
for review under Rule 45, only questions of law may be
decided upon
o This Court is not a trier of facts. Well-settled is the rule
that the jurisdiction of this Court in a petition for review
on certiorari under Rule 45 of the Revised Rules of
Court is limited to reviewing only errors of law, not of
fact, unless the factual findings complained of are
completely devoid of support from the evidence on
record, or the assailed judgment is based on a gross
misapprehension of facts. Besides, factual findings of
quasi-judicial agencies like the NLRC, when affirmed
by the Court of Appeals, are conclusive upon the parties
and binding on this Court
o In a Rule 45 review, we consider the correctness of the
assailed CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of
questions of law raised against the assailed CA decision
o If the NLRC ruling has basis in the evidence and the
applicable law and jurisprudence, then no grave abuse
of discretion exists and the CA should so declare and,
accordingly, dismiss the petition.
o If grave abuse of discretion exists, then the CA must
grant the petition and nullify the NLRC ruling, entering
at the same time the ruling that is justified under the
jurisprudence. In our Rule 45 review, this Court must
deny the petition if it finds that the CA correctly acted

PACANA V ROVILA WATER SUPPLY
FACTS
o Petitioners Rebecca Pacaña-Contreras and Rosalie
Pacaña, children of Lourdes Teves Pacaña and Luciano
Pacaña, filed the present case against Rovila Inc., Earl,
Lilia, Dalla and Marisa for accounting and damages
o Petitioners: their family has long been known in the
community to be engaged in the water supply business;
o They operated the "Rovila Water Supply" from
their family residence and were engaged in the
distribution of water to customers in Cebu City.
o The petitioners alleged that Lilia was a former trusted
employee in the family business who hid business
records and burned and ransacked the family files.
o Lilia also allegedly posted security guards and
barred the members of the Pacaña family from
operating their business
o She then claimed ownership over the family business
through a corporation named "Rovila Water Supply,
Inc." (Rovila Inc.)  o Save for the grounds for dismissal which may
o Upon checking with SEC the petitioners claimed that
Rovila Inc. was surreptitiously formed with the
respondents as the majority stockholders.
o In forming the respondent corporation, the respondents
allegedly used the name of Lourdes as one of the
incorporators and made it appear in the SEC documents
that the family business was operated
o Used the Pacaña family’s receipts and the
deliveries and sales were made to appear as
those of the respondent Rovila Inc. 
o Petitioners filed the complaint in their own names
although Rosalie was authorized by Lourdes through a
sworn declaration and special power of attorney (SPA)
o Respondents filed a first motion to dismiss on the
ground that the RTC had no jurisdiction over an intra-
corporate controversy
o At the subsequent pre-trial, the respondents manifested
to the RTC that a substitution of the parties was
necessary in light of the deaths of Lourdes and Lucian
o That they would seek the dismissal of the
complaint because the petitioners are not the
real parties in interest to prosecute the case.
o RTC Pre-trial Order: one of the issues submitted was
whether the complaint should be dismissed for failure
to comply with Section 2, Rule 3 of the Rules of Court
which requires that every action must be prosecuted in
the name of the real party in interest
o Respondent: again filed an MTD. Petitioners are not the
real parties in interest, that they have no valid cause of
action against respondents
o RTC: denied the MTD for having been filed out of time
(after filing of the aanswer).
be raised at any stage of the proceedings, the
motion to dismiss based on the grounds invoked
by the respondents may only be filed within the
time for, but before, the filing of their answer to
the amended complaint
o Thus, even granting that the defenses invoked
by the respondents are meritorious, their motion
 was filed out of time as it was filed only after
the conclusion of the pre-trial conference.
o Respondents filed a petition for certiorari under Rule 65
of the Rules of Court with the CA invoking GAD in the
dismissal of their MTD
o Deceased spouses Luciano and Lourdes, not the
petitioners, were the real parties in interest
o Furthermore, they seasonably moved for the
dismissal of the case and the RTC never
acquired jurisdiction over the persons of the
petitioners as heirs of Lourdes and Luciano
o CA: Granted.  RTC committed grave abuse of
discretion as the petitioners filed the complaint and the
amended complaint as attorneys-in-fact of their parents
o Petitioners are not the real parties in interest and
cannot bring an action in their own names.
Petitioners should first be declared as heirs
before they can be considered as the real parties
in interest.  Luciano and Lourdes has already been appointed
o The CA agreed with the respondents that they
alleged the following issues as affirmative
defenses in their answer: 1) the petitioners are
not the real parties in interest; and 2) that they
had no legal right to institute the action in behalf
of their parents.
o That the motion to dismiss was filed after the
period to file an answer has lapsed is of no
moment.
o In denying the motion to dismiss, the RTC judge
acted contrary to established rules and
jurisprudence which may be questioned via a
petition for certiorari.
o In denying the motion to dismiss, the RTC judge
acted contrary to established rules and
jurisprudence which may be questioned via a
petition for certiorari.
o Petitioners: CA unjustly allowed the motion to dismiss
which did not conform to the rules.
o Specifically, the motion was not filed within the
time for, but before the filing of, the answer to
the amended complaint, nor were the grounds
raised in the answer.
o Citing Section 1, Rule 9 of the Rules of Court,
the respondents are deemed to have waived
these grounds, as correctly held by the RTC
o Respondents: Argued that they moved for the dismissal
of the case during the pre-trial conference due to the
petitioners’ procedural lapse in refusing to comply with
a condition precedent, which is, to substitute the heirs
as plaintiffs. Besides, an administrator of the estates of
o Grounds invoked in their motion to dismiss
were timely raised, pursuant to Section 2,
paragraphs g and i, Rule 18 of the Rules of
Court. 
ISSUE/S && RATIO
WON Respondent’s MTD was timely filed- NO
The CA was incorrect and used as basis the old 1940 and
1964 ROC where the ground of failure to state COA could
be raised at any time
o Petition for certiorari under Rule 65 is a proper remedy
for a denial of a motion to dismiss attended by grave
abuse of discretion
o Barrazona v RTC Court held that while an order
denying a motion to dismiss is interlocutory and non-
appealable, certiorari and prohibition are proper
remedies to address an order of denial made without or
in excess of jurisdiction.
o Under the present Rules of Court, this provision was
reflected in Section 1, Rule 9, and we quote:
o Section 1. Defenses and objections not pleaded. —
Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction
over the subject matter, that there is another action
pending between the same parties for the same cause, or
that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.
o Notably, in the present rules, there was a deletion of the
ground of "failure to state a cause of action" from the
list of those which may be waived if not invoked either
in a motion to dismiss or in the answer.  filed within the time for, but before the filing of, the
o Another novelty introduced by the present Rules, which
was totally absent in its two precedents, is the addition
of the period of time within which a motion to dismiss
should be filed as provided under Section 1, Rule 16
and we quote: Within the time for but before filing the
answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made on any of the following
grounds
o Thus, jurisprudence governed by the 1940 and 1964
Rules of Court to the effect that the ground for
dismissal based on failure to state a cause of action may
be raised anytime during the proceedings, is already
inapplicable to cases already governed by the present
Rules of Court which took effect on July 1, 1997. As
the rule now stands, the failure to invoke this ground in
a motion to dismiss or in the answer would result in its
waiver.
o The motion to dismiss in the present case based on
failure to state a cause of action was not timely filed
and was thus waived
o Applying Rule 16 of the Rules of Court which provides
for the grounds for the dismissal of a civil case, the
respondents’ grounds for dismissal fall under Section
1(g) and (j), Rule 16 of the Rules of Court, particularly,
failure to state a cause of action and failure to comply
with a condition precedent (substitution of parties),
respectively
o Rule 16 of the Rules of Court provides for the period
within which to file a motion to dismiss under the
grounds enumerated. Specifically, the motion should be
answer to the complaint or pleading asserting a claim.
Equally important to this provision is Section 1
o Rule 9 of the Rules of Court which states that defenses
and objections not pleaded either in a motion to dismiss
or in the answer are deemed waived, except for the
following grounds: 1) the court has no jurisdiction over
the subject matter; 2) litis pendencia; 3) res judicata;
and 4) prescription.
o Therefore, the grounds not falling under these four
exceptions may be considered as waived in the event
that they are not timely invoked.  argument, both in their motion to dismiss and in their
o Both the RTC and the CA found that the motion to
dismiss was only filed after the filing of the answer and
after the pre-trial had been concluded.
o Because there was no motion to dismiss before the
filing of the answer, the respondents should then have
at least raised these grounds as affirmative defenses in
their answer
o In the present petition, the petitioners reiterate that there
was a blatant non-observance of the rules when the
respondents did not amend their answer to invoke the
grounds for dismissal which were raised only during the
pre-trial and, subsequently, in the subject motion to
dismiss
o Our examination of the records shows that the CA had
no basis in its finding that the respondents alleged the
grounds as affirmative defenses in their answer.
o The respondents merely stated in their petition for
certiorari that they alleged the subject grounds in their
answer. However, nowhere in the petition did they
support this allegation; they did not even attach a copy
of their answer to the petition.
o Clearly, other than the respondents’ bare allegations,
the CA had no basis to rule, without proof, that the
respondents alleged the grounds for dismissal as
affirmative defenses in the answer
o The respondents, as the parties with the burden of
proving that they timely raised their grounds for
dismissal, could have at least attached a copy of their
answer to the petition.  party entitled to the avails of the suit.
o That the respondents did not allege in their answer the
subject grounds is made more apparent through their
comment, that it was only during the pre-trial stage that
they verbally manifested and invited the attention of the
lower court on their grounds for dismissal. I
o The rules are clear and require no interpretation.
Pursuant to Section 1, Rule 9 of the Rules of Court, a
motion to dismiss based on the grounds invoked by the
respondents may be waived if not raised in a motion to
dismiss or alleged in their answer
o On the other hand, "the pre-trial is primarily intended to
make certain that all issues necessary to the disposition
of a case are properly raised. The purpose is to obviate
the element of surprise, hence, the parties are expected
to disclose at the pre-trial conference all issues of law
and fact which they intend to raise at the trial, except
such as may involve privileged or impeaching matter.
[SUB]
WON petitioners are real parties interest- YES
WON the heirs of spouses Panaca are indispensable
parties- YES
o The failure to implead the indispensable parties in this
case, was not a ground for dismissal. Petitioners were
ordered to implead the heirs of spouses. It is in their
failure to do so that would warrant the dismissal.
o Real party in interest is the party who stands to be
benefited or injured by the judgment of the suit, or the
o On the other hand, an indispensable party is a party in
interest without whom no final determination can be
had of an action
o In contrast to a necessary party, which is one who is
not indispensable but who ought to be joined as a party
if complete relief is to be accorded as to those already
parties, or for a complete determination or settlement of
the claim subject of the action.
o If a suit is not brought in the name of or against the real
party in interest, a motion to dismiss may be filed on
the ground that the complaint states no cause of action.
However, the dismissal on this ground entails an
examination of whether the parties presently pleaded
are interested in the outcome of the litigation, and not
whether all persons interested in such outcome are
actually pleaded
o Both indispensable and necessary parties are considered
as real parties in interest, since both classes of parties
stand to be benefited or injured by the judgment of the
suit
o At the inception of the present case, both the spouses
Pacaña were not impleaded as parties-plaintiffs.
o The Court notes, however, that they are
indispensable parties to the case as the alleged
owners of Rovila Water Supply. Without their
inclusion as parties, there can be no final
determination of the present case.
o They possess such an interest in the controversy that
a final decree would necessarily affect their rights,
so that the courts cannot proceed without their
presence. Their interest in the subject matter of the
suit and in the relief sought is inextricably
intertwined with that of the other parties
o With these discussions as premises, the Court is of the
view that the proper remedy in the present case is to
implead the indispensable parties especially when their
non-inclusion is merely a technical defect. To do so
would serve proper administration of justice and
prevent further delay and multiplicity of suits.
o Pursuant to Section 9, Rule 3 of the Rules of Court,
parties may be added by order of the court on motion of
the party or on its own initiative at any stage of the
action. If the plaintiff refuses to implead an
indispensable party despite the order of the court, then
the court may dismiss the complaint for the plaintiff’s
failure to comply with a lawful court order.
o Although there are decided cases wherein the non-
joinder of indispensable parties in fact led to the
dismissal of the suit or the annulment of judgment, such
cases do not jibe with the matter at hand. The better
view is that non-joinder is not a ground to dismiss the
suit or annul the judgment. The rule on joinder of
indispensable parties is founded on equity
o The operative act that would lead to the dismissal of the
case would be the refusal to comply with the directive
of the court for the joinder of an indispensable party to
the case
o Obviously, in the present case, the deceased Pacañas
can no longer be included in the complaint as
indispensable parties because of their death during the
pendency of the case. Upon their death, however, their
ownership and rights over their properties were
transmitted to their heirs, including herein petitioners
o Court acknowledged that the heirs, whose hereditary
rights are to be affected by the case, are deemed
 indispensable parties who should have been impleaded
by the trial court.
o Therefore, to obviate further delay in the proceedings of
the present case and given the Court’s authority to order
the inclusion of an indispensable party at any stage of
the proceedings, the heirs of the spouses Pacaña, except
the petitioners who are already parties to the case are
Lagrimas Pacaña-Gonzalez who intervened in the case,
are hereby ordered impleaded as parties-plaintiffs
JP JUAN & SONS v LIANGA INDUSTRIES
FACTS
o In a complaint originally filed with the City Court of
Manila on plaintiff JP Sons sought recovery from
defendant Lianga Industries of the sum of P900.00,
representing the unpaid balance of office equipment
amounting to P1,890.00 sold and delivered by plaintiff
to defendant under a purchase order, copy of which
was duly annexed to the complaint.
o City Court: In favor of Plaintiff. Defendant appealed
o Defendant’s Answer: "denied specifically material
allegations referring to its purchase of the office
equipment, its partial payment and refusal and failure to
pay the unpaid balance of P900.00 despite repeated
demands
o It also alleged as a "special and affirmative
defense" that "it has no obligation to pay to the
plaintiff the amount or sum of money claimed in
the complaint."
o Defendant did not deny under oath the authenticity
of the purchase order annexed to the complaint, as
required by Rule 8, section 8 of the Revised Rules of
Court.
o LC: Ruled in favor of Plaintiff.
o Upholding plaintiff's position: "when
defendant's answer denies the allegations of the
complaint because the defendant 'has no
knowledge or information sufficient to form a
belief' and 'specifically denies' other allegations,
said denials are in fact mere general denials
amounting to admissions of the material
allegations of the complaint."
o "The facts alleged in plaintiff's complaint are of
the kind that plainly and necessarily must be
within defendant's knowledge, and of which
the defendant cannot logically pretend
ignorance, ..." and that "The material allegations
of the complaint must, therefore, be deemed as
admitted by the defendant ..." 
o "Said material allegations deemed admitted by
the defendant, the defendant purchased from the
plaintiff office equipment listed in the Purchase
Order No. 001/62, a photostatic copy of which
was attached to the complaint as Annex A, the
authenticity of which has not been denied under
oath.
 o CA: Certified the appeal to the SC since there were no
facts which were disputed.
ISSUE/S && RATIO
WON the lower court erred when it ruled that defendant
failed to specifically deny the actionable documents
(purchase order)- NO
o No error was committed by the Court below in ruling
that defendant-appellant's "specific denials" are in law
general denials amounting to admissions of the material
allegations of the complaint and in rendering judgment
on the pleadings, in accordance with the settled doctrine
in this jurisdiction based on the provisions of Rule 8,
section 10 and Rule 9, section 1 in relation to Rule 19,
section 1 and Rule 20, section 3 of the Revised Rules of
Court.
o El Hogar v Filipo: "Defendant's answer wherein it
merely 'denies generally and specifically each and
every allegation contained in each and every paragraph
of the complaint,' is but a general denial. It is not a
specific denial under section 7 of Rule 9, because it
does not deal specifically with each material allegation
of fact, nor does it set forth the substance of the matters
upon which the defendant relies to support his denial.  when such matters were plainly within its knowledge
o It does not serve the purpose of requiring the
defendant to make a specific denial, which is to
compel him to specify the matters which he
intends to disprove and disclose the matters
upon which he relies to support his denial,
thereby limiting the issues and avoiding
unnecessary delays and surprises.
o "An unexplained denial of information and belief of a
matter of records, the means of information concerning
which are within the control of the pleader, or are
readily accessible to him, is evasive and is insufficient
to constitute an effective denial
o The form of denial  ... adopted by the appellants,
although allowed by the Rules of Court (referring to
lack of sufficient knowledge or information) must be
availed of with sincerity and in good faith, — certainly
neither for the purpose of confusing the adverse party
as to what allegations of the complaint are really put in
issue nor for the purpose of delay."
o Its claim that it tendered an issue with its "affirmative
defense" of "having no obligation to pay to the plaintiff
the amount or sum of money claimed in the complaint"
was correctly held by the Court below to be a mere
conclusion not premised on an allegation of material
facts.
o Its "specific denial" of the material allegations of the
complaint as to its purchase of the office equipment
from plaintiff under the purchase order annexed to the
complaint and refusal to pay the unpaid balance of
P900.00 due thereon, without setting forth the substance
of the matters relied upon to support its general denial,
and it could not logically pretend ignorance as to the
same, therefore, failed to properly tender an issue.
o Furthermore, its failure to deny under oath the
authenticity of the purchase order annexed to the
complaint, as required by Rule 8, section 8 of the
Revised Rules of Court was properly deemed an
admission of the genuineness and due execution
thereof.
 o The Rules further require in Rule 7 section 5 that "every
pleading of a party represented by an attorney shall be
signed by at least one attorney of record in his
individual name" and that "the signature of an attorney
constitutes a certificate by him that he has read the
pleading and that to the best of his knowledge,
information and belief, there is good ground to support
it; and that it is not interposed for delay" with the
express admonition that "for a willful violation of this
rule, an attorney may be subjected to disciplinary
action."
o The cooperation of litigants and their attorneys is
needed so that the salutary objectives of these Rules
may be attained
ASIAN CONSTRUCTION v SANNAEDLE
FACTS
o This case stemmed from a Complaint for Sum of
Money filed by respondent Sannaedle against petitioner
Asian Construction.
o The complaint alleged that petitioner and
respondent executed a Memorandum of
Agreement wherein Petitioner Asian was
engaged to supply and erect insulated panel
systems at various pavilions at the Philippine
Centennial Exposition Theme Park, specifically
for the Phase I Project, for an agreed amount of
US$3,745,287.94.
o Pursuant to said agreement, petitioner Asian made
various payments amounting to US$3,129,667.32
leaving a balance of US$615,620.33.  because it raised special and affirmative defenses in its
o Respondent claims that it made several written demands
for petitioner to pay the said balance, but the latter
continuously refused to heed its plea.
o Petitioner filed its Answer with Counterclaim
o Respondent then moved for judgment on the pleadings
on the ground that the Answer admitted all material
allegations of the Complaint and, therefore, failed to
tender an issue. 
o Thus, respondent deems that petitioner’s
Answer, in effect, admitted the existence of the
Memorandum of Agreement and its failure to
pay the balance despite repeated demands.
o RTC Makati: Ruled in favor of Respondent. Petitioner
ordered to pay
o Answer of the petitioner failed to tender an
issue, respondent argued that the present action
is for collection of the amount of
US$615,620.33 which amount represents the
balance of the payment under the Memorandum
of Agreement, Annex B of the Complaint
entered into between [respondent] and
[petitioner] which was not denied in the
Answer. 
o CA: Affirmed RTC
o MR Denied
ISSUE/S && RATIO
WON judgment on the pleadings is proper- YES
o Petitioner: Judgment on the pleadings is not proper,
Answer.
 o It asserts that with this specific denial, a genuine
issue of fact had been joined to the extent that a
judgment on the pleadings could not be made.
o Respondent: Petitioner’s Answer admitted the material
allegations of its complaint regarding the cause of
action, which is collection of sum of money.
o Sec. 1 R34. Judgment on the pleadings. – Where an
answer fails to tender an issue, or otherwise admits the
material allegations of the adverse party’s pleading, the
court may, on motion of that party, direct judgment on
such pleading. However, in actions for declaration of
nullity or annulment of marriage or for legal separation,
the material facts alleged in the complaint shall always
be proved.
o Judgment on the pleadings is proper when an answer
fails to tender an issue, or otherwise admits the material
allegations of the adverse party’s pleading.
o An answer fails to tender an issue if it does not comply
with the requirements of a specific denial as set out in
Sections 8 and 10, Rule 8 of the 1997 Rules of Civil
Procedure, resulting in the admission of the material
allegations of the adverse party’s pleadings.
o Where a motion for judgment on the pleadings is filed,
the essential question is whether there are issues
generated by the pleadings.
o In a proper case for judgment on the pleadings, there is
no ostensible issue at all because of the failure of the
defending party’s answer to raise an issue.
o The answer would fail to tender an issue, of course, if it
does not deny the material allegations in the complaint
or admits said material allegations of the adverse
party’s pleadings by confessing the truthfulness thereof
and/or omitting to deal with them at all.
o Here, it is irrefutable that petitioner acknowledged
having entered into a Memorandum of Agreement with
respondent and that it still has an unpaid balance of
US$615,620.33.
o While petitioner allegedly raised affirmative defenses,
i.e., defect in the certification of non-forum shopping,
no legal capacity to sue and fortuitous event, the same
cannot still bar respondent from seeking the collection
of the unpaid balance.
o Other than these affirmative defenses, petitioner’s
denial neither made a specific denial that a
Memorandum of Agreement was perfected nor did
it contest the genuineness and due execution of said
agreement.
o First, the allegations in the [petitioner’s] Answer do not
make out a specific denial that a Memorandum of
Agreement was perfected between the parties.
o Second, the [respondent] does not contest the due
execution and/or genuineness of said Memorandum of
Agreement. I
o The defenses raised by [petitioner] cannot prevent the
[respondent] from seeking the collection of the amount
of US$615,620.33. The express terms of the
Memorandum of Agreement, the genuineness and due
execution of which are not denied by the [petitioner].
o It cannot assert the said defenses in order to resist the
[respondent's] claim for the aforesaid sum of money,
especially where it has been sufficiently shown by the
allegations of the Complaint and the Answer that the
[petitioner] is clearly liable for the payment thereof