Rule 1 - General Provisions of the Rules of Court 2) Sun Insurance Office, Ltd. v. Asuncion, G.R. Nos.
v. Asuncion, G.R. Nos. 79937-38, 13 February 1989,
1) Manchester Development Corp. v. Court of Appeals, G.R. No. 75919 7 May
1987 149 SCRA 562
• Manchester bought property from City Land, paid 3M; City Land later declared
the forfeiture of the 3M
• Machester filed a complaint for damages and specific performance (execution
of a contract of sale) with prayer for issuance of a TRO
> Complaint: body of the complaint alleged 78Million as damages, but this
was not specified in the prayer
> Thus, paid docket fee based on the action being for specific performance;
incapable of pecuniary estimation without consideration of the damages
• Underassessment brought to the attention of the SC; SC ordered investigation
• Manchester amended complaint: emanated any amount of damages in body;
retained prayer
• TC ordered Manchester to rectify amended complaint and specify amounts
• Manchester specified in the body 10M, but again not in the prayer
SC: the docketing fee should be assessed by considering the amount of damages
as alleged in the original complaint.
Manchester doctrine: The Court acquires jurisdiction over any case only upon
the payment of the prescribed docket fee. An amendment of the complaint
or similar pleading will not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts sought in the amended
pleading.
• Thus, in the present case the trial court did not acquire jurisdiction
over the case by the payment of only P410.00 as docket fee.
• Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. For all legal purposes there is no such
original complaint that was duly filed which could be amended.
Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court are null
and void.
• Omission in the prayer of amount of damages clearly intended for
no other purpose than to evade the payment of the correct filing
fees; compounded when it amended and deleted all amounts
Court ordered: all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body
of the pleading but also in the prayer, and said damages shall be considered
in the assessment of the filing fees in any case.
Any pleading that fails to comply with this requirement shall not be accepted
nor admitted, or shall otherwise be expunged from the record.
170 SCRA 274
• Tiong filed a complaint for refund of premiums on a fire insurance policy
against Sun Insurance.
> Body of the complaint alleged P50M as damages, but prayer contained
no such claim. Hence, only P210 was paid as docket fees.
• Case went under investigation for underassessment of docket fees, and
docket fees were re-assessed.
• Tiong amended complaint alleging P10M as damages in the prayer, but
P44M in the body. Paid docket fees of 39k based on the reassessment of the
clerk of court, which in turn was based on the 10M prayer.
• Sun Insurance filed a petition for certiorari w/ CA questioning this.
• Thus, Tiong later filed a supplemental complaint, alleging additional
damages (20M so total damages P64M)
> During pendency of petition before SC, it paid additional docket fees.
• Sun Insurance: docket fees paid still insufficient. Pursuant to Manchester,
court did not acquire jurisdiction.
SC: ordered Clerk of Court to reassess filing fee based on original complaint and
supplemental complaint
• The principle in Manchester could very well be applied in the present case.
The pattern and the intent to defraud the government of the docket fee due
it is obvious not only in the filing of the original complaint but also in the
filing of the second amended complaint.
> However, in Manchester, petitioner did not pay any additional docket
fee until the case was decided by this Court.
> In the present case, a more liberal interpretation of the rules is called for
considering that, unlike Manchester, private respondent demonstrated
his willingness to abide by the rules by paying the additional docket
fees as required. The promulgation of the decision in Manchester must
have had that sobering influence on private respondent who thus paid
the additional docket fee as ordered by the respondent court.
• Still insufficient contention: a matter which the clerk of court of the lower
court should determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
1) Where the filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow payment of the fee within
a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
2) The same rule applies to permissive counterclaims, third party claims
and similar pleadings, which shall not be considered filed until and
unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond
its applicable prescriptive or reglementary period.
3) Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading,
 or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It
shall be the responsibility of the Clerk of Court or his duly authorized
deputy to enforce said lien and assess and collect the additional fee.
3) Ayala Corp. v. Madayag, G.R. No. 88421, 30 January 1990, 181 SCRA 687
• Sps Sabio vs Ayalo Corp: an action for specific performance with damages
• Ayala Corp: MTD; RTC no jurisdiction; failure to specify amount of exemplary
damage in body & prayer; incorrect payment of docket fees
> Also, docket fees should be paid based on the assessed value of the real
properties involved
• RTC denied MTD: citing 3 rd par of Sun Insurance: awards claims not specified
SC: RTC wrong. The phrase "awards claims not specified in the pleading" refers
only to "damages arising after the filing of the complaint or similar pleading”
for then it will not be possible for the claimant to specify nor speculate as to the
amount thereof.
The amount of any claim for damages, therefore, arising on or before the filing
of the complaint or any pleading, should be specified.
• While it is true that the determination of certain damages as exemplary or
corrective damages is left to the sound discretion of the court, it is the duty
of the parties claiming such damages to specify the amount sought on the
basis of which the court may make a proper determination, and for the
proper assessment of the appropriate docket fees.
• The exception contemplated as to claims not specified or to claims although
specified are left for determination of the court is limited only to any
damages that may arise after the filing of the complaint or similar pleading
for then it will not be possible for the claimant to specify nor speculate as to
the amount thereof.
HENCE, the trial court may either order said claim to be expunged from the
record as it did not acquire jurisdiction over the same or on motion, it may allow,
within a reasonable time, the amendment of the amended and supplemental
complaint so as to state the precise amount of the exemplary damages sought
and require the payment of the requisite fees therefor within the relevant
prescriptive period
*** the contention of petitioners that since the action concerns real estate, the
assessed value thereof should be considered in computing the fees. Such rule
cannot apply to this case which is an action for specific performance with
damages although it is in relation to a transaction involving real estate. Pursuant
to Manchester, the amount of the docket fees to be paid should be computed on
the basis of the amount of damages stated in the complaint.
4) Dee v. Harvest All Investment Limited, G.R. Nos. 224834 & 224871, 15 March
2017, 820 SCRA 585
• Harvest All el al, as stockholders of Alliance Select Foods, filed a complaint
against Alliance and its Board members
> Alliance suspended its annual stockholders meeting pending subscription
of its complete subscription to its Stock Rights Offering (SRO)
> Harvest All et al: if we wait for complete subscription, they will be
deprived of their full voting rights proportionate to their existing
shareholding
• Alliance: lack of juris; failed to pay the correct docket fees; Harvest All
should’ve paid P20 Million, more or less, in filing fees based on the SRO which
was valued at Pl Billion.
• Both RTC and CA agreed that filing fees should be based on SRO: all intra-
corporate controversies always involve a property in litigation. there can be no
case of intra-corporate controversy where the value of the subject matter cannot
be estimated
• RTC dismissed: bad faith on part of Harvest All et al since no showing of
willingness to abide by rules; BUT CA reversed: bad faith cannot be assumed
[liberal interpret].
SC: docket fees correctly paid.
depending on the nature of the principal action or remedy sought, an intra-
corporate controversy may involve a subject matter which is either capable or
incapable of pecuniary estimation.
• primarily for the recovery of a sum of money = considered capable of
pecuniary estimation; MTC or RTC depending on the amount of the
claim
• where the basic issue is something other than the right to recover a sum
of money and recovery of money is purely incidental = incapable of
pecuniary estimation; RTC
In this case, Harvest All, et al.'s prayer for nullity, as well as the concomitant relief
of holding the 2015 ASM as scheduled in the by-laws, do not involve the recovery
of sum of money.
> Mention of SRO merely narrative to emphasize the dilution of their
voting interest
*** Verily, the deletion of Section 21 (k) of Rule 141 and in lieu thereof, the
application of Section 7 (a) [fees for actions where the value of the subject matter can
be determined/estimated], 7 (b) (1) [fees for actions where the value of the subject
matter cannot be estimated], or 7 (b) (3) [fees for all other actions not involving
property] of the same Rule to cases involving intra-corporate controversies for the
determination of the correct filing fees, as the case may be, serves a dual purpose:
1. on the one hand, the amendments concretize the Court's recognition that
the subject matter of an intra-corporate controversy may or may not be
capable of pecuniary estimation;
2. and on the other hand, they were also made to correct the anomaly created
by A.M. No. 04-2-04-SC dated July 20, 2004 (as advanced by the Lu obiter
dictum) implying that all intra-corporate cases involved a subject matter
which is deemed capable of pecuniary estimation.
In view of the foregoing, and having classified Harvest All, et al.'s action as one
incapable of pecuniary estimation, the Court finds that Harvest All, et al. should be
made to pay the appropriate docket fees in accordance with the applicable fees
provided under Section 7 (b) (3) of Rule 141 [fees for all other actions not involving
property] of the Revised Rules of Court, in conformity with A.M. No. 04-02-04-SC
dated October 5, 2016.
The matter is therefore remanded to the RTC in order:
(a) to FIRST Determine if Harvest, et al.'s payment of filing fees in the amount of
₱8,860.00, as initially assessed by the Clerk of Court, constitutes sufficient compliance
with A.M. No. 04-02-04-SC;
(b) if Harvest All, et al.'s payment of ₱8,860.00 is insufficient, to require Harvest, et al.' s
payment of any discrepancy within a period of fifteen (15) days from notice, and after
such payment, proceed with the regular proceedings of the case with dispatch; or
(c) if Harvest All, et al.'s payment of ₱8,860.00 is already sufficient, proceed with the
regular proceedings of the case with dispatch.
Rule 2 - Cause of Action
1) Bayang v. Court of Appeals, G.R. No. 53564, 27 February 1987, 148 SCRA 91
• Juan Bayang filed a complaint for quieting of title with damages against
Benigno Biong, but lost the case
• Later however Biong surrendered possession of the land in favor of Bayang.
Bayang then filed another case, this time for recovery of the income (copra and
coconut) from the land during the time that he was dispossessed of thereof
• Biong: motion for summary judgment: res judicata
SC: Summary judgment appropriate. No genuine issue in view of res judicata.
Res Judicata Requisites:
1) the former judgment must be final
2) it must have been rendered by a court having jurisdiction over the subject
matter and the parties
3) it must be a judgment on the merits
4) there must be between the first case and the second case identity of parties,
identity of subject matter and identity of cause of action.
• Possession vs income just splitting hairs to split a cause of action: income only
a consequence of the possession of property
• SC also noted that from the filing of the first case in 1970 by Bayang, Biong was
already in possession of the property. Yet, during the pendency of the case,
Bayang made no move to amend his complaint to include a claim for the
income.
• Bayang should’ve filed a supplemental complaint. To allow recovery by
subsequent suit would violate the rule on multiplicity of suits and splitting of
causes of action since these damages spring from the same cause of action.
• No unjust enrichment: whatever right he might have had is now deemed waived
because of his neglect.
2) Swagman v. Court of Appeals, G.R. No. 161135, 8 April 2005, 455 SCRA 175
• Swagman Hotels obtained a loan from Christian, evidenced by 3 PNs ($50k each)
with different due dates, but all payable after three years
• A year later, Christian: terminate loans! Pay 150k now plus interest!
• Christian à RTC: complaint for a sum of money
• Swagman Answer: Lack of Cause of Action; loans not yet due!
• RTC: yes, time of complaint not yet due. But as of decision, 2 already due. So pay
ka na. Also, Section 5 of Rule 10: a complaint which states no cause of action may
be cured by evidence presented without objection.
• Issue: May a complaint that lacks a cause of action at the time it was filed be cured
by the accrual of a cause of action during the pendency of the case?
• SC: complaint should be dismissed.
Unless the plaintiff has a valid and subsisting cause of action at the time his action
is commenced, the defect cannot be cured or remedied by the acquisition or accrual
of one while the action is pending, and a supplemental complaint or an amendment
setting up such after-accrued cause of action is not permissible.
the curing effect under Section 5 is applicable only if a cause of action in fact exists at the
time the complaint is filed, but the complaint is defective for failure to allege the essential
facts.
3) Ceroferr v. Court of Appeals, G.R. No. 139539, 5 February 2002, 376 SCRA 144
• Ceroferr Corp vs. Santiago: complaint for damages and injunction (stop using my
lot as a jeepney terminal saka pay lost income!)
• Santiago: luh part ng lot ko yun; may permit ako. PLUS: complaint did not state a
cause of action.
SC: petitioner Ceroferrs cause of action has been sufficiently averred in the complaint.
If it were admitted that the right of ownership of petitioner Ceroferr to the peaceful use
and possession of Lot 68 was violated by respondent Santiagos act of encroachment
and fencing of the same, then petitioner Ceroferr would be entitled to damages.
A defendant who moves to dismiss the complaint on the ground of lack of cause of
action, as in this case, hypothetically admits all the averments thereof.
• The test of sufficiency of the facts found in a complaint as constituting a cause
of action is whether or not admitting the facts alleged the court can render a
valid judgement upon the same in accordance with the prayer thereof.
• The hypothetical admission extends to the relevant and material facts well
pleaded in the complaint and inferences fairly deducible therefrom.
Hence, if the allegations in the complaint furnish sufficient basis by which the
complaint can be maintained, the same should not be dismissed regardless of the
defense that may be assessed by the defendants.

4) BPI Family v. Vda. De Coscolluela, G.R. No. 167724, 27 June 2006, 493 SCRA
472
• Sps Coscolluela obtained a loan from FEBTC (now BPI); loan account was
treated as a single account
> Loan amounted to P13M, evidenced by 67 promissory notes, secured by a
REM over their land in Bacolod
> Loan contained an acceleration clause; in case of breach FEBTC may
extrajudicially foreclose
• Outstanding balance not settled: FEBTC filed a petition for extrajudicial
foreclosure only for P4M, specifically for promissory notes 1-33
• During pendency of foreclosure proceedings, FEBTC also filed a complaint for
collection of sum of money (the remaining = P8M; covered by PN 34-67)
• Coscolleula in its answer: LITIS PENDENCIA!!! Splitting causes of action!!
Later, demurrer to evidence!!
• TC denied; PNs diff amounts; each loan different (FEBTC: true, true, separate
loads kayo as evidenced by PNs)
SC: splitting causes of action. For the failure of respondent to pay her loan obligation,
petitioner had only one cause of action arising from such non-payment
Test for splitting: whether the entire amount arises from one and the same act or
contract or the several parts arise from distinct and different acts or contracts.
A mortgage creditor may institute two alternative remedies against the mortgage
debtor, either a personal action for the collection of debt, or a real action to foreclose
the mortgage, but not both. Each remedy is complete by itself. If the mortgagee opts
to foreclose the real estate mortgage, he thereby waives the action for the collection
of the debt and vice versa.
5) Enriquez v. Ramos, G.R. No. L-16797, 27 February 1963, 7 SCRA 265
• Enriquez et al sold to Ramos 11 parcels of land in QC. Ramos paid P5k as down
through a check, while the balance (96k) was secured by REM over 12 parcels of
land
• Ramos failed to comply with some conditions under the mortgage so Enriquez et
al instituted an action for foreclosure of mortgage
• Ramos: MTD! Previous case filed for recovery of P2,500 from check! Mortgage
already due and demandable so splitting causes of action
SC: no splitting because causes of action different for each:
a. Previous case: unlawful stop payment order; distinct debt not covered by
security
b. Present case: non-payment of balance
6) Umale v. Canoga, G.R. No. 167246, 20 July 2011, 654 SCRA 155
• Umale leased from Canoga Park a property in Ortigas for 2 years, the
agreement being he’ll use it as a parking lot. This is because Canoga bought
that lot with the condition that no shopping malls or commercial
establishments shall be built thereon without consent of Ortigas and Co.
• Umale violated lease by construction resto
• Thus, Canoga filed a case for unlawful detained. MTC and RTC ruled in favor
of Canoga. On MR, civil case dismissed: premature
• Canoga appealed to CA. During pendency of appeal, filed a second case for
unlawful detainer this time for expiration of the lease
SC: no litis pendentia. the cause of action in the second case was not yet in existence
at the time of filing of the first ejectment case since the lease wasn’t expired yet
Litis pendentia requisites:
1) identity of the parties in the two actions
2) substantial identity in the causes of action and in the reliefs sought by the
parties
3) identity between the two actions should be such that any judgment that
may be rendered in one case, regardless of which party is successful, would
amount to res judicata in the other
No substantial identity of causes of action:
3 Tests whether two suits relate to a single cause of action:
1) Same Evidence Test (whether same evidence would support and sustain
both 1st and 2nd causes of action)
2) Whether defenses in one case may be used to substantiate the complaint in
the other
3) Whether the cause of action in the second case existed at the time of the
filing of the first complaint.
7) Pantranco v. Standard Insurance, G.R. No. 140746, 16 March 2005, 453 SCRA 482
• Gacale driving a passenger jeepney; trailed by Pantrnco bus in Nueva Ecija; while
in a curve, bus hit rear side of the jeepney and sped away
• Gacale claimed from Standard Insurance. Total cost of repair was 21k but Standard
Insurance only paid 13k
• Standard and Martina now claiming against Patrancto before the RTC
• Patranco: MTD: less than jurisdictional amount of 20k at the time AND misjoinder
of parties
SC: totality rule + permissive joiner
Misjoinder does not warrant dismissal. Also, joinder correct. Permissive joinder of
parties requires that:
(a) the right to relief arises out of the same transaction or series of transactions;
(b) there is a question of law or fact common to all the plaintiffs or defendants;
and
(c) such joinder is not otherwise proscribed by the provisions of the Rules on
jurisdiction and venue.
there is a single transaction common to all, that is, Pantranco’s bus hitting the rear
side of the jeepney. There is also a common question of fact, that is, whether
petitioners are negligent. There being a single transaction common to both
respondents, consequently, they have the same cause of action against petitioners.

To determine identity of cause of action, it must be ascertained whether the same

evidence which is necessary to sustain the second cause of action would have been
sufficient to authorize a recovery in the first. Here, had respondents filed separate
suits against petitioners, the same evidence would have been presented to sustain
the same cause of action. Such joinder of parties avoids multiplicity of suits and
ensures the convenient, speedy and orderly administration of justice
 Rule 3 - Parties to Civil Actions
1) Law firm of Laguesma v. COA, G.R. No. 185544, 13 January 2015, 745 SCRA
269
• Clark Development Corporation (CDC), a GOCC, approached the law firm of
Laguesma for assistance in labor cases
• Without approval from the the Office of the Government Corporate Counsel
(OGCC), services were rendered
• Eventually the request for approval was denied. OGCC held that retainer
agreement between CDC and Laguesma can’t be followed. Laguesma only
entitled to fees on a quantum meruit basis.
• Leguesma filed a petition for certiorari assailing the denial.
• OGCC: Leguesma not a real party in interest! It is CDC since the subject of the
assailed decision was the denial of the corporation's request for clearance
SC: Leguesma real party in interest, while CDC is a necessary party.
1) Leguesma real party in interest
"A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit."
• net effect of upholding or setting aside the assailed COA rulings would be to either
disallow or allow the payment of legal fees to Laguesma law firm. It therefore
stands to either be benefited or injured by the suit, or entitled to its avails. It is a
real party-in-interest.
2) CDC is a necessary party
Necessary party - "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."
• If the petition is granted, then the officers are relieved of liability to petitioner. If
the rulings of respondents are upheld, then it is the Board of Directors that will be
liable to Laguesma law firm. Any relief in this case would be incomplete without
joining the members of the Board of Directors.
* it was, erroneous for OGCC to bind CDC a government entity, to pay petitioner on a
quantum meruit basis for legal services, which were neither approved nor authorized
by the government. Even granting that petitioner ought to be paid for services
rendered, it should not be the government's liability, but that of the officials who
engaged the services of Laguesma without the required authorization.
2) Crisologo v. JEWM Agro Industrial, G.R. No. 196894, 3 March 2014, 717 SCRA
644
• JEWM filed an action for for cancellation of lien w/ prayer for WPI to cancel
the judgment lien of Sps Crisologo upon his property
• However, Sps Crisologo were not impleaded as defendants.
• Sps Crisologo’s counsel: Very Urgent Manifestation questioning the authority
of the said court to restrain the execution proceedings
• JEWM opposed: Spouses Crisologo not parties in the case.
• Sps Crisologo à Omnibus Motion: recognize us as parties!
> No motion to intervene was, however, filed as the Spouses Crisologo
believed that it was unnecessary since they were already the John and Jane
Does named in the complaint.
• Despite many motions filed by Sps Crisologo to be recognized as parties, there
were all denied by the RTC for their failure to file a motion to intervene and
were later declared as in “default”
• CA affirmed. Sps Crisologo filed a petition for certiorari before SC.
• JEWM: Spouses Crisologo lacked the legal standing to file a Rule 65 petition
since they were not impleaded in the proceedings.
> Also, not not indispensable parties since their rights over the properties had
been rendered ineffective by the final and executory Decision of the RTC
which disposed unconditionally and absolutely the subject properties in
favor of its predecessor-in-interest (Sy Sen Ben)
SC: Sps Crisologo indispensable parties.
1) In an action for the cancellation of memorandum annotated at the back of a
certificate of title, the persons considered as indispensable include those whose
liens appear as annotations pursuant to Section 108 of P.D. No. 1529
> Here, undisputed is the fact that Spouses Crisologo’s liens were indeed
annotated at the back of TCT Nos. 325675 and 325676. Thus, as persons with
their liens annotated, they stand to be benefited or injured by any order
relative to the cancellation of annotations in the pertinent TCTs.
> As indispensable parties, Spouses Crisologo should have been joined as
defendants in the case. The reason behind this compulsory joinder of
indispensable parties is the complete determination of all possible issues,
not only between the parties themselves but also as regards other persons
who may be affected by the judgment.
2) Motion to Intervene not necessary
Although Intervention under Rule 19 could have been availed of, failing to use this
remedy should not prejudice Spouses Crisologo. It is the duty of RTC-Br. 14,
following the rule on joinder of indispensable parties, to simply recognize them.
Through a cursory reading of the titles, the Court would have noticed the adverse
rights of Spouses Crisologo over the cancellation of any annotations in the subject
TCTs.
3) This case is an exception to the rule on standing in petitions for certiorari: denial
of due process; prevent multiplicity of suits and to expedite the swift
administration of justice
GR: The ‘person aggrieved’ under Section 1 of Rule 65 who can avail of the special
civil action of certiorari pertains only to one who was a party in the proceedings
before the court a quo, or in this case before the COA.
However, it must be remembered that the absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even to those present. To turn a blind eye to the
said nullity and, in turn, rule as improper the recourse to Rule 65 by the lack of legal
standing is to prolong the denial of due process to the persons whose interests are
indispensible to the final disposition of the case.
3) Chua v. Torres, G.R. No. 151900, 30 August 2005, 468 SCRA 358
• Jonathan issued a check in favor of Caltex as payment for purchase of diesel.
Check bounced.
• Caltex, through Beltran and Torres, sued Christine, Jonathan’s sister. Warrant
of arrest issued against her
• Due to the humiliation caused by this, Christine sued Beltran and Torres.
Jonathan was named as a “necessary party-plaintiff.”
• RTC, upon motion of defendants, dismissed the case since Jonathan did not
sign the verification and certificate of non-forum shopping even if Christine
did.
SC: Dismissal wrong. While the rules don’t distinguish as to the type of plaintiff
that must sign, Jonathan was a misjoined party. What his actions or inactions, it
is inconsequential.
1) Not a real party in interest
• "Interest" within the meaning of the rule means material interest, an interest in
issue and to be affected by the decree, as distinguished from mere interest in
the question involved, or a mere incidental interest.
• In this case, the subject complaint does not allege any rights of Jonathan Chua
violated by respondents, present any rights of his to be enforced, or seek in his
behalf any rights to the avails of suit. In fact, if he alone filed the case, the complaint
would be dismissed on the ground that the complaint states no cause of action.
2) Not a necessary plaintiff either
• Necessary parties are those whose presence is necessary to adjudicate the whole
controversy, but whose interests are so far separable that a final decree can be
made in their absence without affecting them.
• Explaining why Jonathan was impleaded, Chrisitine said that he is a necessary
party because he is the one who really issued the check. The court, however, said
that such fact, if proven, would only establish the malice of respondents in filing
the BP22 case but does not create the need to require Jonathan’s participation as a
necessary party
• In effect, witness lang sya
3) Effect of misjoined party
RTC was wrong in dismissing the case. A misjoined party has no business in
participating in the case as a plaintiff in the first place and it would make little sense to
require the misjoined party in complying with all the requirements expected of
plaintiffss
4) Sulo ng Bayan, Inc. v. Araneta, G.R. No. L-31061, 17 August 1976, 72 SCRA
347
• Sulong Bayan Inc filed a complaint against Araneta for recovery of a tract of
land
• Complaint: the plaintiff is a corporation with members composed of natural
persons who allegedly cultivated the same land since the Spanish Regime
• Araneta: MTD! Complaint states no cause of action; corp not a real party in
interest; must be members
• Sulo ng Bayan: ha? Class suit kami
SC: complaint should be dismissed for failure to state a cause of action
• the people whose rights were alleged to have been violated by being deprived
and dispossessed of their land are the members of the corporation and not the
corporation itself. The corporation has a separate, and distinct personality from
its members.
• Not a class suit: a class suit does not lie in actions for the recovery of property
where several persons claim ownership of their respective portions of the
property, as each one could allege and prove his respective right in a different
way for each portion of the land, so that they cannot all be held to have identical
title through acquisitive prescription.
5) Sumaljag v. Literato, G.R. No. 149787, 18 June 2008, 555 SCRA 53
• During the pendency of a case over a parce of land filed by Josefa against her
sister and the latter’s husband, Josefa died
• Josefa’s counsel, Atty. Puray, filed a notice of death and substitution of party,
asking that Josefa be substituted by Judge Sumaljag
> prior to Josefa’s death, she executed a quitclaim in favor of Remismundo, who
in turn sold the land to Judge Sumaljag
SC: Sumaljag cannot substitute Josefa; not one of those enumerated under the Rules.
at most, Sumaljag can be said to be a transferee pendente lite whose status is pending
with the lower court
The "legal representatives" that the provision speaks of refer to those authorized by law
- the administrator, executor or guardian who, under the rule on settlement of estate of
deceased persons, is constituted to take over the estate of the deceased.
• the reason for the Rule is to protect all concerned who may be affected by the
intervening death, particularly the deceased and her estate. plain common sense
tells us that the transferee who has his own interest to protect, cannot at the same
time represent and fully protect the interest of the deceased transferor
• counsel could have validly manifested to the court the transfer of Josefa's interests
in the subject matter of litigation pursuant to Section 19, Rule 3. But this can
happen only while the client-transferor was alive
• Josefa's death certificate shows that she was single at the time of her death. The
records do not show that she left a will. Therefore, her heirs are her surviving
sisters and the children of her deceased sister, Lourdes who should be her legal
representatives. Menendez, although also a sister, should be excluded for being
one of the adverse parties in the cases before the RTC.
*The question as to whether an action survives or not depends on the nature of the
action and the damage sued for:
• In the causes of action which survive, the wrong complained [of] affects primarily
and principally property and property rights, the injuries to the person being
merely incidental
• while in the causes of action which do not survive, the injury complained of is to
the person, the property and rights of property affected being incidental.
Since the question involved in these cases relate to property and property rights, then
we are dealing with actions that survive so that Section 16, Rule 3 must necessarily
apply.
 applicant to determine if the applicant complies with the income and property
6) Del Castillo v. Jaymalin, G.R. No. L-28256. 17 March 1982, 112 SCRA 629 standards prescribed in the present Section 19 of Rule 141—that is:
• Severo claiming damages for death of son against Bitranco ○ The applicant's gross income and that of the applicant's immediate
family do not exceed an amount double the monthly minimum wage
• Before resting its case, Severo died
of an employee;
• Counsel filed a motion to admit amended complaint: Deed of ○ The applicant does not own real property with a fair market value of
Assignment: transferred his rights under the case before his death to son more than Three Hundred Thousand Pesos (PhP 300,000.00).
in law, Wenceslao ● If the trial court finds that the applicant meets the income and property
• RTC: dismissed; since Severo died before conclusion of case, action died requirements, the authority to litigate as indigent litigant is automatically
with him. granted and the grant is a matter of right.
• SC: No. Sec 17 Rule inapplicable; ● However, if the trial court finds that one or both requirements have not
• Although no immediate and formal substitution, ok lang mere formality been met, then it would set a hearing to enable the applicant to prove that
• The action did not die with him the applicant has "no money or property sufficient and available for food,
shelter and basic necessities for himself and his family."
• The action was transferred before he died
○ In that hearing, the adverse party may adduce countervailing
where an assignable right has been transferred before action brought, the
evidence to disprove the evidence presented by the applicant; after
proceeding ought to be instituted in the name of the assignee; and where an
which the trial court will rule on the application depending on the
assignment is effect pendente lite, it is proper to have the assignee substituted for the
evidence adduced.
original plaintiff.
● In addition, Section 21 of Rule 3 also provides that the adverse party may later
still contest the grant of such authority at any time before judgment is
If such substitution should not be effected and the transfer of the right of action
rendered by the trial court, possibly based on newly discovered evidence not
should not be brought to the attention of the court, the original plaintiff, if successful
obtained at the time the application was heard.
in the litigation, would hold the fruits of the action as a sort of trustee for the use
● If the court determines after hearing, that the party declared as an indigent is
and benefit of his assignee
in fact a person with sufficient income or property, the proper docket and
other lawful fees shall be assessed and collected by the clerk of court.
7) Sps. Algura v. LGU, G.R. No. 150135, 30 October 2006, 506 SCRA 81 ○ If payment is not made within the time fixed by the court, execution
• Sps. Algura filed complaint for damages against Naga City Govt and officers shall issue or the payment of prescribed fees shall be made, without
arising from illegal demolition house prejudice to such other sanctions as the court may impose.
• Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent
Litigants
> petitioner Antonio Algura's Pay Slip showing a gross monthly income of
P10,474. and a net pay of P3,616. for the month of July 1999 and a
> Certification issued by the Office of the City Assessor of Naga City, which
stated that petitioners had no property declared in their name for taxation
purposes.
• RTC: disqualified under Rule 141
• The court should not immediately dismiss if the indigency is not proven,
merely a lien on the judgment
• Test of indigency:
• gross income and that of immediate family is not more than 2x the
min wage
• Real property with FMV of more than 300k

● In the light of the foregoing considerations, therefore, the two (2) rules can
stand together and are compatible with each other.
● When an application to litigate as an indigent litigant is filed, the court shall
scrutinize the affidavits and supporting documents submitted by the
 Rule 4 - Venue of Actions
1) BPI v. Hontanosas:
nullity of REM: Real action
Sps. Silverio and Xm Facultad & Development Corporation et al: filed an action to
declare the nullity of the promissory notes, real estate and chattel mortgages and
continuing surety agreement against BPI
> Contracts executed as security for a loan of 17.9M; only paid 13M
> Case filed in Pasig City where XM Facultad has its principal place of business
> BPI Answer and MTD: improper venue! Real action so file where property is loc
SC: Venue properly laid.
with respect to mortgage, the rule on real actions only mentions an action for
foreclosure of a real estate mortgage. It does not include an action for the cancellation
of a real estate mortgage.
2) BPI Family v. Yujuico, G.R. No. 175796, 22 July 2015, 763 SCRA 486
action to recover deficiency: personal action
> City of Manila expropriated parcels of land located in Tondo owned by Sps
Yujuico but mortgaged to Citytrust, predecessor of BPI
> BPI extrajudicially foreclosed: sold for 10M, now suing for deficiency
> Filed a case in Makati RTC
> Sps Yujuico filed their answer but did not assert improper venue. They only
asserted improper venue in their Reply to the comment of BPI on their MR
when their MTD was denied
- argues that recovery of deficiency is supplemental to foreclosure, a real
action. Recovery of deficiency is therefore a real action
SC: Recovery of deficiency is a personal action, for it does not affect title to or
possession of real property, or any interest therein. Hence, Makati, where petitioner’s
main office is located, is a proper venue.
> Further, unless the defendant seasonably objects, any action may be tried by a
court despite its being the improper venue.
> Hence, it would be improper to dismiss the case on the ground of improper
venue, considering that the respondents had not raised such ground in their
Motion to Dismiss.
3) Gochan v. Gochan, G.R. No. 146089, 13 December 2001, 372 SCRA 256
action for specific for performance w damages, but prayer seeks conveyance of
properties: real action
> Respondents Gochan sold their shares in Felix Gochan Corp and Mactan Realty
Development corp to petitioners Gochan for 200m
> Petitioners asked to execute a PN; respondent Crispo inserted that in addition to
the 200M, ffs are considerations for the sale: a) Lot & Fishpond in Gochan
compound; b) Land in Villas Magallanes (Cebu) c) New Gem Building
> Respondents filed an action for specific performance with damages in the RTC of
Cebu City, seeking the conveyance of the said properties
> Petitioners Answer: action involves real property; allege value and pay correct
docket fees!
SC: Actually, petitioners correct; action in this case is actually a real action.
> where a complaint is entitled as one for specific performance but nonetheless prays
for the issuance of a deed of sale for a parcel of land, its primary objective and
nature is one to recover the parcel of land itself and, thus, is deemed a real action.
In such a case, the action must be filed in the proper court where the property is
located.
> to execute in favor of appellant the conveyance requested there is need to make a
finding that he is the owner of the land which in the last analysis resolves itself
into an issue of ownership.
4) Marcos-Araneta v. Court of Appeals, G.R. No. 154096, 22 August 2008, 563
SCRA 41
> Irene Marcos filed a complaint before RTC of Batac Ilocos Norte for conveyance
of hares of stock, accounting, and receivership angainst the Benedicto Group
w/prayer for TRO:
- Benedicto created FEMII and Benedicto Group created UEC. Benedicto as
trustor placed shares of stock in the 2 corp in his name and Benedicto group
- When Irene wanted to get it the shares, they refused
> Benedicto group: MTD; venue improperly laid! Irene not a resident of Batac.
Forbes park yan uy (household staff of Marcos Mansion in Batac testified) à
RTC granted
- Also, real action to ah! Ultimately involves FEMII’real properties
> Irene: MR; Batac resident ako:
- *shows CTC*; amended complaint, impleaded Rubio and Reslin, residents
of Batac, as plaintiffs, specifically trustees (amendment still a matter of
right; MTD not considered a responsive pleading for purposes of
amendment)
> RTC: ok amended complaint cured venue nice one Irene
SC: venue improperly laid
1) WON inclusion of Batac residents cured improper venue –no
Trustees: when there is more than one plaintiff in a personal action case, the
residences of the principal parties should be the basis for determining proper venue.
> Ratio: to prevent the plaintiff from choosing the residence of a minor plaintiff
or defendant as the venue.
> not one of the three can be considered as principal party-plaintiffs; they may be
accorded the right to prosecute a suit, but only on behalf of the beneficiary who
must be included in the title of the case and shall be deemed to be the real party-
in-interest.
2) Not a real action
Irene seeks to compel recognition of the trust arrangement she has with the
Benedicto Group. The fact that FEMII's assets include real properties does not
materially change the nature of the action, for the ownership interest of a
stockholder over corporate assets is only inchoate as the corporation, as a juridical
person, solely owns such assets.
3) CTC not sufficient proof of residence in this case
One can easily secure a basic residence certificate practically anytime in any Bureau
of Internal Revenue or treasurer's office and dictate whatever relevant data one
desires entered; Irene procured hers only after MTD granted

5) Hi-Yield Realty, Inc. v. Court of Appeals, G.R. No. 168863, 23 June 2009, 590
SCRA 548 derivative suit: principal office of corp
• Roberto Torres on behalf of Honorio Torres & Sons, Inc (HTSI) à RTC of
Makati: annulment of REM and foreclosure sale over two parcels of land in
Marikina and Quezon City.
> Makati principal office of HTSI
> Filed against controlling stockholders of HTSI and petitioner Hi-Yield
who w/o authority from BOD incurred loan obligations and used HTSI’s
property as collateral
• Petitioner: MTD! Improper venue
SC: Venue properly laid kasi derivative suit to
Section 5, Rule 1 of A.M. No. 01-2-04-SC states:
SEC. 5. Venue. - All actions covered by these Rules shall be commenced and tried in
the Regional Trial Court which has jurisdiction over the principal office of the
corporation, partnership, or association concerned. Where the principal office of the
corporation, partnership or association is registered in the Securities and Exchange
Commission as Metro Manila, the action must be filed in the city or municipality
where the head office is located.
*** A derivative action is a suit by a shareholder to enforce a corporate cause of action.
• Under the Corporation Code, where a corporation is an injured party, its power to
sue is lodged with its board of directors or trustees.
• But an individual stockholder may be permitted to institute a derivative suit on
behalf of the corporation in order to protect or vindicate corporate rights whenever
the officials of the corporation refuse to sue, or are the ones to be sued, or hold
control of the corporation.
• In such actions, the corporation is the real party-in-interest while the suing
stockholder, on behalf of the corporation, is only a nominal party
6) PBCOM v. Lim, G.R. No. 158138, 12 April 2005, 455 SCRA 714
whether the action against the sureties is covered by the restriction on
venue stipulated in the PN
• Tri-Oro Intl obtained a loan from PBCOM secured by a PN, with Lim and
Calderon as surety under a surety agreement
> PN: “the venue for any legal action that may arise out of said note shall be
Makati City to the exclusion of all other courts.”
• Tri-Oro default; PBCOM à RTC of Manila: Complaint for collection of sum of
money against debtor and surety
• Surety: MTD! Improper venue Makati dapat duh
• PBCOM : separate causes for action: breach of PN and violation of surety
agreement
SC: Venue stipulation controls.
> the SA was entered into to facilitate existing and future loan agreements.
Petitioner approved the loan covered by the PN, partly because of the SA that
assured the payment of the principal obligation.
> The circumstances that related to the issuance of the PN and the SA are so
intertwined that neither one could be separated from the other. It makes no
sense to argue that the parties to the SA were not bound by the stipulations
in the PN.
Notably, the PN was a contract of adhesion that petitioner required the principal debtor
to execute as a condition of the approval of the loan. It was made in the form and
language prepared by the bank.
• By inserting the provision in the ON petitioner also restricted the venue of actions
against the sureties. The legal action against the sureties arose not only from the
SA, but also from the PN.
7) Ochoa v. Chinabank, G.R. No. 192877, 23 March 2011, 646 SCRA 414
rule on venue not applicable to extrajudicial foreclosure
Petitioners was contending that since the petitioners’ complaint for Annulment of
Foreclosure, Sale, and Damages was bound by the restrictive stipulation on venue
in the REM (RTC of Paranaque) then so should the bank’s Petition for Extrajudicial
Foreclosure of Mortgage. Thus, petition must be filed with the same court.
SC: no. Rules on venue applies to ACTIONS. Actions = suit in a court of justice
Extrajudicial foreclosure is NOT an action.
• Unlike an action, an extrajudicial foreclosure of real estate mortgage is
initiated by filing a petition not with any court of justice but with the office
of the sheriff of the province where the sale is to be made.
• Thus, Act 3135 governs: Sec. 2: Said sale cannot be made legally outside of
the province in which the property sold is situated;
8) Philippine International Trading Corp. v. M.V. Zileena, G.R. No. 102904,
venue stipluations cannot oust PH courts of juris
• PTIC shipped bags of Portland cement from China to Manila through
Zileena Navigation
• Goods were damaged / lost; so Zileena Nav à RTC of Makati: recovery of
value of bags with prayer for issuance of preliminary attachment
• Zileena: lift attachment! RTC: no sorry; Zileena: sige na pls! Ito
counterbond; RTC: ok g
• Zileena: MTD hehe improper venue! Par 10 of contract: “10. This Agreement
shall be governed by the construed in accordance with Singapore Law and
all disputes arising hereunder shall be subject to the exclusive jurisdiction
of the High Court of Singapore. “
SC: Stipulation void saka estopped ka na Zileena.
1) Stipulation Void: It can not be admitted that a provision of this character has the
effect of ousting the jurisdiction of the courts of the Philippine Islands in the matter
now before it. An express agreement tending to deprive a court of jurisdiction
conferred on it by law is of no effect
2) Estopped:
a) Filing of two motions for the lifting of the writ of attachment;
b) The submission of a memorandum in support of the urgent motion to discharge
the writ of attachment (p. 77, Rollo);
c) The posting of a counterbond to dissolve the writ of attachment;
d) The filing of a demurrer
e) The filing of a reply to petitioner’s opposition to the motion to dismiss.